Federal Budgets Cut into Affordable Housing Funding

The second week of March 2012 was a busy one for the affordable housing industry. Several industry meetings were held in Washington, D.C., including NAA, NAHMA and HUD TRACS meetings.

One of the major topics discussed was funding for affordable housing programs. The picture is not particularly bright, especially for Section 8 programs and Section 202 New Construction.

Project Based Rental Assistance (PBRA) Program

The Housing and Urban Development’s (HUD) FY 2013 budget request is $1.5 billion below what is needed to fully fund all 12-month, project-based Section 8 contracts at the time these contracts are renewed. HUD’s PBRA program provides rental assistance funding to multifamily rental housing owners to help them provide housing to low and moderate income residents.

Budget CutsThe bulk of the shortfall would come from HUD’s “short fund” of two-thirds of the contracts in FY 2013, particularly those that will renew in January-September 2013, by paying only for the months of the contract that run through September. Funding for the remaining months of the short-funded contracts (October-December 2013) will be pushed into FY 2014. According to a letter sent by National Council of State Housing Agencies to the members of the House and Senate Appropriations Subcommittees on Transportation, Housing and Urban Development, and Related Agencies:

“The proposed $1.1 billion “reduction” shifts costs to future budgets without actually achieving any savings.”

Additionally, this move increases the administrative burden by requiring the reprocessing all of these contracts whenever HUD is funded by a Continuing Resolution in lieu of full-year appropriations. It also increases the complexity of administering these programs, which opens the door to more potential administrative error. HUD will be put even further behind in its ability to fund the 12-month contract terms for FY 2014. In 2007, HUD had a similar situation in cost-deferring the PBRA program. The result caused expenditure forecasting errors, contract funding shortfalls, late payments to owners, and other issues.

Turning to new construction Section 202, no funding is included in the FY 2013 budget for this program, which addresses our senior population’s needs. The Section 202 program provides very low-income elderly with options that allow them to live independently, but in an environment that provides support activities such as cleaning, cooking, transportation, etc. Through the Section 202 program, HUD provides interest-free capital advances to private, nonprofit sponsors to finance the development of supportive housing for the elderly. The lack of funding for Section 202 will have a negative impact on some of our most vulnerable citizens.

While this is not necessarily good news for our industry, the RealPage affordable team continues to participate in many of the affordable housing industry organizations. These organizations work diligently on your behalf to increase awareness and push for change. Please visit the web sites for NAHMA, NAA, CAHR, and NMHC to learn more about their efforts and to find out the latest news on our industry.

If you have any questions about affordable housing, I am always happy to answer them. Please feel free to send me an email at Gustavo.Sapiurka @ realpage.com.


General Manager. Affordable Housing Division, RealPage, Inc.

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Gustavo Sapiurka is vice president and general manager of RealPage, Inc., Affordable Housing. Previously, he was general manager of Domin-8 Enterprise Solution Affordable Housing Division and CEO of TCG Technologies, LLC. RealPage is a leading provider of software and related services to the affordable housing industry. For the past 24 years, Gustavo has been very active in the affordable housing industry as a member of community-sponsored task forces dealing with automation issues and as an active member of many non-profit organizations.

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