Before leaving for the 2009 summer recess, Congress made great strides in passing housing appropriations for fiscal year 2010. The House passed the U.S. Department of Housing and Urban Development (HUD) appropriations bill, and the Senate Appropriations Committee adopted its version of the HUD appropriations bill. The full Senate expects to consider the bill upon its return in September. Then it’s on to conference -- perhaps before the start of the next fiscal year.
In a solid vote for H.R. 3288, the House approved $1 billion in appropriations for the Section 202 program and $8.7 billion to renew project based section 8 contracts. With an increase of $235 million, the committee pointed to the expansion of senior housing as one of its major themes and priorities, increasing funding for a long neglected HUD program in the face of a growing vulnerable senior population. The $1 billion dollars will be allocated as follows: $744 million for new capital advances and new project rental assistance; $128 million for PRAC renewals; $90 million for service coordinators and congregate housing grant renewals; $25 million for Assisted Living Conversion grants, emergency capital repairs, and for the first time substantial capital repair grants; and $20 million for pre-development grants. For the first time, as well, the bill provides $2 million for technical assistance grants to help providers submit good, strong applications for both Section 202 and Section 811 grants.
The bill provides $350 million for the Section 811 program, a $100 million increase over last year’s funding. Citing years of underfunding, the bill provides up to $214 million for capital advances and PRAC, $48.9 million for PRAC renewals, and $87.1 million for renewals and amendments of expiring tenant-based rental assistance for persons with disabilities.
For both the Section 202 and 811 programs, the Appropriations Committee expressed their support for combining tax credits with capital advance funding and urged HUD to be a better partner in facilitating mixed finance projects rather than obstructing their development.
For the renewal of Project-Based Section 8 contracts, the House continued their support for 12 month funding of all contracts. The bill provides a total of $8,706,328,000 for Project-Based Section 8 renewals, including an advance appropriation of $393,672,000 and not less than $232 million for the costs of contract administration. The advance appropriation means that if there is a delay in passage of the FY 2011 appropriations bill, there will be sufficient funding to renew contracts that come due for renewal in the first quarter of fiscal year 2011, just as there is an advance appropriation for the start of FY 2010 to cover the first quarter in case there is a delay in passing the FY 2010 appropriations bill.
In the Senate, starting with a lower allocation, the Senate Appropriations Committee provided $785 million for the Section 202 program. That’s $20 million more than last year’s appropriation. For capital advances and new PRAC amounts and PRAC renewals, $542 million will be available. Like the House, the committee made $90 million available for service coordinators, $25 million will be available for the Assisted Living Conversion Program and emergency capital repairs, and $20 million will be provided for pre-development grants.
For the Section 811 Supportive Housing for Persons with Disabilities, the Senate provides $265 million, a $15 million increase over last year’s appropriation.
For Project-Based Section 8 renewals, the Senate provides $8.1 billion, equal to the appropriation for FY 2009. This amount should be sufficient to fund all contracts for the full 12 months and includes $400 million as an advance appropriation in 2011.
The House also included funding for new project-based assistance to be used in conjunction with the refinancing of the older 202 properties. This funding will protect seniors without rental assistance from displacement after refinancing and rehabilitation.
Finally, the House bill does not include funding for the administration’s Choice Neighborhoods Program. Instead, the House provides $250 million for HOPE VI, the program for revitalizing public housing communities. The Senate, however, did fund Choice Neighborhoods, provided that HUD gives them a plan for the use of the funds. We think that the initiative could provide funding to revitalize neighborhoods of public and assisted senior housing concentrations, both single and multifamily housing and provide opportunities for collaboration of HUD and HHS in creating models of housing and health and related supportive services.
Once again, both bills include, as an administrative provision, authority to refinance and rehabilitate the oldest cohort of Section 202 properties, those built between 1959 and 1974. The provision also permits marking rents up to budget in a refinancing which will be necessary if substantial rehabilitation is undertaken as part of a refinancing. The provision is similar to the language included in S. 118, AAHSA’s Section 202 reform bill and was included at our request in case the authorizing legislation is not acted on. However, we will encourage Congress to include language that is lifted directly from S.118 to provide for an extended use period and to strike the requirement for a cost benefit analysis. HUD has yet to implement the provision from last year’s appropriation bill because the cost benefit analysis requirement is unworkable.
You can view AAHSA’s budget chart here.