Two Year Budget Agreement Passed by Congress—Impact on Affordable Housing Programs

CARH’S BROADCAST E-MAIL – Legislative Update

November 2, 2015

Last week, Congress passed, H.R. 1314, the Bipartisan Budget Act of 2015. President Obama signed the bill into law today, a day before the government would have been in default without the agreement. The legislation provides for a two year federal budget framework. The debt limit would be raised (technically suspended), allowing Treasury to borrow funds until March, 2017. The annual spending caps, known as sequestration, would be lifted for two more federal fiscal years, through September 30, 2017.

However, this is not the end of the work on federal spending measures, even for Fiscal Year (FY) 2016. Appropriations bills for individual programs still need to be considered and passed prior to the beginning of each new fiscal year. This budget agreement should be beneficial for several affordable housing programs in the funding levels for FY 2016. The suspension of the budget caps provide additional funding allocations for the individual appropriations subcommittees. This reallocation will need to take place prior to December 11, when the current Continuing Resolution (CR) for FY 2016 expires and the anticipated Omnibus Appropriations bill is passed for the remainder of the year.

The Bipartisan Budget Act contains additional provisions, more than may be typical for such budget laws. The Bipartisan Budget Act also includes partnership tax audit reforms, such as changing the rules, effective 2018, on which party controls tax decisions for IRS audit purposes, and simplifying the process for multi-layered partnership structures. These new provisions should simplify requirements because fewer amended returns and amended K-1s should be needed to reflect changes during IRS audits.

CARH will continue to focus on funding for all affordable housing programs, but in particular the Department of Housing and Urban Development’s (HUD) HOME program and Rural Development’s (RD) Section 521 Rental Assistance (RA) program. As CARH members know from previous broadcast emails (dated July 20, July 9, and June 23), funding for the HOME program was severely cut by the Senate Appropriations Committee. H.R. 2577, as reported by the Senate Appropriations Committee, would fund the program at $66 million, essentially eliminating the program. Many believe that funding for many programs under the jurisdiction of the Transportation and HUD (THUD) Subcommittee were cut as a way to demonstrate to the leadership in the Senate and House the draconian nature of the spending caps. Now with the spending caps lifted for two years, it is vital that CARH members continue in grassroots efforts Congress to restore funding for the HOME program and provide catch up funding for RA.

HOME Program

CARH has been an active member of the HOME Coalition, a coalition of affordable housing advocates. According to the HOME Coalition’s new report, The HOME Investment Partnerships Program’s Impact on America’s Families and Communties, the Senate Appropriations Committee’s proposed cut to HOME would result in 36,000 fewer affordable homes, 36,000 fewer jobs, and $2.3 billion in less local economic activity. The report also includes information on HOME’s impact in all 50 states and more than 100 HOME Success Stories. The HOME program should receive at least $1.060 billion as requested by HUD.

Section 521 Rental Assistance

The Section 521 RA program has been the subject of much attention by Congress and CARH (see recent broadcast emails dated October 20, September 24, and August 11). The short-term Continuing Resolution (CR) permits RD to receive a greater allocation of funding for the RA program than they used last year at this time and also gives the Secretary the ability to waive the re-renewal prohibition for the terms of the legislation, which expires on December 11, 2015. Within the last few days, many CARH members who had not received RA monies for the last two months have received RA payments. Contracts that are set to renew during October 1-December 11 are being renewed, with a methodology that reflects actual RA usage of properties versus state wide averages.

RD staff have stated that while Congress deleted the re-renewal language, this provision does not give them the authority to back-fill RA contracts that ran out of RA prior to September. This position is obviously in conflict with what Congress stated and clearly intended in the CR. This was made very clear at the October 21st hearing of the Senate Agriculture Appropriations Subcommittee, by Chair Jerry Moran (R-KS) and Ranking Member Jeff Merkley (D-OR).  Both Senators stressed that it was their intent, using language from the Administration and cleared with the Agency, that RD should backfill missed FY 2015 RA payments.

Officially, RD remains steadfast that the budget request of $1.172 billion will be sufficient to fund RA contracts in FY 2016. However, that is clearly erroneous information. All budget and economic forecasts refute this position, with estimates of at least the need for an additional $221 million in funding needed for all the RA needs. As with the HOME program and the THUD Appropriations Subcommittee, it is important that with the reallocation of the budget, additional budget authority be provided to the Agriculture Appropriations Subcommittee and support additional funding of the RA program. It is also imperative that Congress direct RD to backfill RA contracts from FY 2015 and that the re-renewal language remain out of the FY 2016 appropriations bills.

Recommended Action for CARH Members

It is vital that you email your members of Congress on both the HOME program and the RA program over the next three weeks. You can also write a message on your Congressman’s Facebook page or Twitter if you are able to use social media. We recommend email (or an email followed by a phone call) so that there is a written expression of interest. Letters are not recommended as all mail has to go through extra precautions before delivery to Congressional offices and may arrive too late. A form letter or form email may not be given the appropriate weight as they can be seen as less than genuine. Your email should discuss the importance of the programs. Any examples or details of the budget impact on you, your business, your complexes or your residents should be included.

CARH members have had residents contact their members of Congress on the RA program.  Please ask your residents to contact their members of Congress, explaining to them that the loss of RA could mean that their rent contribution would increase because the government would no longer be able to meet contract obligations. We also recommend making it as easy as possible for your residents to make contact, such as renting a van or bus to take residents to their local Congressional field office. Again, emphasize that the re-renewal language needs to be removed, outlining the problems that developed in FY 2015.

CARH members should stress that the funding level of $66 million recommended for the HOME program by the Senate Appropriations Committee would essentially eliminate the program. The HOME program is an important tool for both new construction and preservation transactions throughout rural communities.

The House of Representatives will be in recess next week for Veterans Day. Most members will be in their district offices. This would be the perfect opportunity for CARH members to schedule appointments in these offices and to also schedule property tours so that your Representatives and their staffs can see the work of these important affordable housing programs.

Click here to contact your Senators.

Click here to contact your Representatives.

Please inform the CARH national office if any meetings are scheduled during this time and also keep our office appraised of any communications that you receive from your representatives and any follow-up we may need to do here when members and staff are back in Washington.

If you have any questions or need any additional information, please do not hesitate to contact CARH at 703-837-9001 or

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