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The forecast on federal housing dollars for next year so far: partly sunny. Last week, the Senate appropriations committee voted for a housing budget about the same size as last year, with modest hikes for big programs like the Community Development Block Grant and the $1.6 billion HOME program for low-income housing rehab.

The good news from the budget talks is that several proposals are now circulating in Washington, D.C. to start up a new program that would take up something the feds generally avoid: actually build new units of affordable housing. Senate housing appropriations committee chair Kit Bond’s version, the “Housing Needs Act of 2000,” calls for a $1 billion block grant to build more low- and very low-income housing. It also tinkers with Section 8 rules to increase the value of vouchers in “tight rental markets” like New York’s.

Congress has “woken up to the fact that mere vouchers alone won’t solve the [housing] problem,” said Conrad Egan of the National Housing Conference, a coalition of public and private housing developers. “We have to start producing new units.” Egan added that the final appropriations package would most likely include a pilot project, not a full-fledged national program.

The bad news: neither the House nor the Senate has promised to add in any new dollops of dough for Section 8 vouchers, even though President Clinton, in his budget request, asked for 120,000 more of them. Section 8 vouchers now subsidize rents for some 76,000 families in New York–and there are more than 200,000 families on the waiting list.

“I think what will happen at the end of the day is that everything will be funded at the current levels,” said Egan. “We’ll be OK. But that doesn’t mean we’re meeting the need.”

Washington watchers expect that final budget negotiations for the next fiscal year may be wrapped up by the end of the month.

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