4.3 "The Skinny Budget"

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 4.3 "The Skinny Budget"

By Marianne Lynch, Executive Director 

The current proposed U.S. budget includes a 7 billion dollar cut to Housing and Urban Development (HUD). For those of you who are unfamiliar with this department, it oversees the housing voucher system (formerly known as section 8), provides support for the HOME grant, the Community Development Block Grant (CDBG), provides loans through programs like SHOP and FHA, oversees fair housing laws, and much more. HUD touches many areas of American life, particularly for those who are low to moderate income.

The proposed federal budget would completely cut the HOME program, CDBG, SHOP and significantly impact the voucher program. For Habitat, the loss of HOME, CDBG and SHOP would be devastating to our ability to provide homeownership opportunities to families we serve and the absence of vouchers will put an undue burden on our many partners, as well as the communities themselves. Each of these programs provides positive economic investment to the communities they impact, creating significant concerns about how the cuts will affect an already stressed affordable housing market.

That being said, I would like to share with you, our stakeholders, how these programs positively impact our local economy. Right now, Habitat Montco is building four new townhomes in Bridgeport, due in part to funding from the HOME program, through Montgomery County. These funds are by no means the only source of investment in this project, but they have provided the key resources to encourage buy-in from our major project sponsors. When complete, the Bridgeport homes will appraise for market value and the families that live there will pay a mortgage that will help Habitat Montco to continue to build homes in more communities around the county. They will also pay taxes back to the community, providing much needed income to keep up essential services and maintain a vibrant, strong school system. In addition to taxes paid, these families will use their purchasing power in Bridgeport, patronizing local shops and restaurants, and also buying items needed when moving into a new home. Overall, the economic impact of building new homes in Bridgeport is well in advance of 1 million dollars…This return on $400,000 provided by HUD through the HOME grant, seems like a good investment at a 60% return. This is just one way HUD investments create stronger communities.

 

The CDBG program is another tool that communities use to create economic investment. This flexible grant program provides funds to both non-profits and municipalities for community improvement, depending upon how the funds are distributed. In Montgomery County, these funds are used for essential upgrades in municipalities such as new sidewalks, façade upgrades for Main Street areas, renovating or building new recreation areas, equipment replacement in community buildings and so much more. Investments in infrastructure attract new businesses, customers and potential residents.

In the non-profit community, dollars offered by CDBG are used to help fund initiatives similar to Habitat’s Critical Repair program. These low-cost repair programs provide homeowners an opportunity to fix aging housing stock, improve curb appeal, and allow elderly residents to remain in their homes rather than going into a nursing facility. In total, the cost of CDBG is 4.3 billion dollars per year and provides a feasible alternative for seniors to age in their homes. The cost to maintain one senior in a skilled care facility through Medicare can be more than $4000 per month. Just enrolling 2 percent of the more than 55 million seniors on Medicaid/Medicare in a nursing facility would cost the U.S. 5.2 billion dollars…for one year. By addressing items that compromise safety, security and access to their homes, CDBG can save taxpayers a significant amount of money.

While it is clear that the current adminstration is attempting to "cut the fat" in federal spending, it is less clear how disinvestment in housing infrastructure will achieve this goal. Before these proposed cuts, affordable housing opportunities were at a crisis point in the U.S. for low-income families – according to the Urban Institute’s mapping America’s rental crisis, there are just 28 units available for every 100 people seeking a safe place to live. With these cuts, the burden on taxpayers will shift, not lessen.

Investment in housing is a long-term investment in the future. In a recent Harvard Joint Center for Housing Studies, results showed once again that children who grow up in stable housing (such as those built by Habitat) perform better in school, have less behavioral issues, have less illnesses and generally have a more positive outlook on the future. Adults in stable housing have less hospitalization, less sick days from work and experience less anxiety and depression. Seniors who are able to remain in stable housing such as their own homes, are happier, healthier and avoid the prohibitive cost of skilled care.

As a leader of an organization dedicated to safe, decent housing for all, I ask you to get involved. Please join us for a build, learn about the families who partner with us, attend a house dedication and reach out to your congressional representative to tell them that housing matters – to all of us.