Rolling Back Inclusion
Tracking the assault on community developmentThe Democracy Collaborative is deeply concerned that the antipathy or outright hostility of both the current administration and the current Congressional majority to the federal infrastructure of community development will translate into irreparable harm to the low income communities, especially communities of color, who continue to struggle with the legacy of decades of disinvestment, discrimination, and dispossession. We believe—along with the rest of the community development field—that robust, effective federal action is necessary to expand the access of marginalized communities to affordable housing, good jobs, and an equitable share in America's prosperity. In order to help communities across the country—both rural and urban—speak up in a moment in which the administration has made clear its intentions to scale back or dismantle these key federal frameworks, we will be tracking the new federal attacks on inclusive community development here, along with state-level measures enabled and encouraged by the new federal context.
After much speculation, President Trump's Budget Blueprint for fiscal year 2018 has officially been released. The drastic cuts to community development programs and funding proposed by the plan, if enacted, could roll back decades of slow and steady progress on the ground in low-income and economically disenfranchised communities. This guide outlines where inclusive community development is under attack in the Administration's budget proposal and what could be lost if President Trump's budget were approved.
The Trump administration's budget drafts propose cutting $54 billion from domestic discretionary spending to enable a matching increase in defense spending. The list of programs being reduced or eliminated is extensive. Included on the list of targets for elimination are many community development programs, including the Appalachian Regional Commission, Capacity Building for Community Development and Affordable Housing, Community Development Block Grant, Community Development Financial institutions Fund Grant, Economic Development Administration, Minority Business Development Agency, Neighborhood Reinvestment Corporation, and the Northern Border Regional Commission.
The budget outline recently released by the Office of Management and Budget for the next fiscal year proposes a 13.2 percent cut to HUD funding. This release confirms similar preliminary numbers reported by the Washington Post last week. Under the budget proposal, the Community Development Block Grant program, the HOME Investment Partnerships Program, the Choice Neighborhoods program, and the Self-help Homeownership Opportunity Program would be eliminated.
The Trump Administration released the outline of the budget today, with massive proposed cuts to community development programs. Over $6 billion in cuts are proposed for HUD, including the elimination of most community development funds in the agency (p. 25-26). The USDA would have it's budget cut by 21 percent with a $95 million reduction to the Rural Business and Cooperative Service (p. 11-12). The Small Business Administration would see a 5 percent decrease in spending, which is achieved in part by cuts to PRIME technical assistance grants (Program for Investment in Microentrepreneurs), Regional Innovation Clusters, and Growth Accelerators (p. 45). Regional economic development agencies such as the Appalachian Regional Commission, the Delta Regional Authority, the Northern Border Regional Commission, and the Denali Commission would be eliminated (p. 5). The United States Interagency Council on Homelessness would be eliminated (p. 5). Within the Department of Commerce, the Economic Development Administration and the Minority Business Development Agency (p. 13). The Community Development Financial Institutions (CDFI) Fund grants would be completely eliminated (p. 37).
The Community Development Block Grant program, a program that has garnered support from both sides of the aisle over the past 42 years, would be completely eliminated if the Trump Aministration has its way. The HUD program provides funding at the community level for public services, affordable housing, public facilities improvements, parks, healthcare and childcare facilities, community and recreation centers, and disaster relief. Since 1975, the program has provide $150 billion in flexible federal funding to local communities, allowing them to determine their greatest needs.
Democratic Senators denouced possible Trump Administration HUD budget cuts as "unconscionable" in a letter to Secretary Ben Carson on Friday. The letter cautions the potential health consequences to families with children, the elderly, and people with disabilities if public housing goes unmaintined. The letter also calls directly upon Carson to take responsibility for the agency and uphold the core mission of HUD as he claimed he would do in his confirmation hearings by fighting the budget cuts.
The Washington Post is reporting that the Trump administration is considering drastic cuts to the budget for the Department of Housing and Urban Development, including sharp reductions in federal support for public housing, the elimination of the Community Development Block Grant Program and the Choice Neighborhoods, and millions of dollars of cuts in rental assistance to the poor, veterans, the disabled, and the elderly.
A preliminary budget plan reveals that the Trump Administration may cut the budget for the Department of Housing and Urban Development by 14 percent. The Community Development Block Grant Program would be completely cut, according to the document. The HOME Investment Partnerships Program and Choice Neighborhoods are also on the chopping block.
Along with important environmental programs, inclusive community development will also be impacted by the Trump Administration's planned EPA budget cuts. The funding for EPA Brownfields Program, which helps communities, states, and tribes clean up and safely redevelop contaminated properties will be cut by 44 percent. State grants for brownfield redevelopment will also be cut by 31 percent.
The Trump adminstration hopes to increase military spending by $54 billion. To help pay for this spending, the administration plans to essentially eliminate all funding for the Community Development Financial (CDFI) Fund. The CDFI Fund, a branch of the Treasury Department, helps distressed urban and rural communities with loan funding and local development. The CDFI Fund also oversees the New Markets Tax Credit Program (NMTCP), a program that generates $8 in private investment for ever $1 of tax credit.
In documents obtained by the New York Times, the Trump Administration revealed that it would “all but eliminate” the Community Development Financial Institutions (CDFI) Fund. Trump hopes to increase military spending by $54 Billion and cut nonmilitary discretionary domestic programs by the same amount, and the CDFI Fund appears to be one of the programs on the chopping block. The CDFI Fund offers grants for community banks and other financial institutions and local development in economically depressed communities.
Among other reductions and elimination in funding for popular programs like the Corporation for Public Broadcasting, a memo from the OMB proposes cuts to the funding for the Neighborhood Reinvestment Corporation, which operates under the name NeighborWorks, and which provides key training and technical support for community developers across the country. According to the Neighborworks America website, "for every $1 of federal appropriation we award, NeighborWorks organizations are able to attract another $91 to expand local impact."
The GOP hopes to repeal federal approval for state auto-enrollment retirement savings plans for private workers. Resolutions have been passed by the House and has now been received by the Senate.
A new bill proposed in Texas attacks affordable housing by requiring developers to jump through excessive hoops during the planning stages of low-income housing. The new bill requires developers to notify "any neighborhood organization," including private homeowners associations, within a 5-mile radius of the construction site before submitting an application for state low-income housing tax-credits. Low-income housing experts in the state are calling it one of the harshest NIMBY bills ever proposed.
Two new bills introduced in the Texas State legislature will needlessly complicate the application process for low-income housing tax credits. These additional complications would create massive barriers for new affordable housing in the Lone Star State. The bill was introduced by a state representative who pledged to "stop low-income government housing" during her campaign.
The "Local Zoning Decisions Protection Act of 2017" would eviscerate federal databases, keeping communities in the dark about patterns of segregation and disparities in access to affordable housing.
A GOP-led Congress is moving to disapprove a California law designed to automatically enroll low-income workers in IRA-type savings plans and prevent other states from launching similar programs. In addition to calling into question conservatives committment to respecting states' rights, the move could potentially impact millions of workers ability to save.
New GOP resolution aims to repeal a regulation of prepaid debit card companies before the rule even takes effect. The rule, which was scheduled to take effect in October, would protect users of the prepaid cards, which are popular among low-income people who can't qualify for a traditional credit card. The rule would require the companies to disclose hidden fees, protect users against loss, theft, and unauthorized charges, and limit overdraft fees.
Two recently introduced bills to do away with HUD's 2015 Affirmatively Furthering Fair Housing rule and its accompanying mapping and data tools are part of long history of opposition to proactive neighborhood desegregation efforts.
Some developers are already putting investments in Low Income Housing Tax Credits and affordable housing developments on hold in anticipation of a slash in corporate tax rates.
The Trump administration's proposed plan to cut the business tax rate from 35 percent to 15 percent has already reduced the value of the Low Income Housing Tax Credit, limiting resources for the leading mechanism for funding affordable housing in the United States.
Two new bills have been introduced that would essentially repeal the new Affirmatively Furthering Fair Housing regulation which was implemented under Obama. The new legislation would undermine communities' ability to remedy racial segregation and disparities in access to affordable housing.
Trump signs directives to reverse regulations intended to protect consumers from bad investment advice and loosen Dodd-Frank regulations on banks and other major financial companies.
On his first day in office, the Trump administration undoes an FHA mortgage fee cut for first-time homebuyers and low-income borrowers. The cut, implemented by the Obama administration last-minute and which would have become effective on Jan 27, would have reduced the insurance premium by a percentage point to 0.60 percent.
While possible elimination of popular agencies such as the Corporation for Public Broadcasting and the National Endowment for the Arts have garnered a lot of public anger, several agencies focused on community development in some of the most poverty-stricken areas are also at risk of being eliminated if Congress approves Trump's proposed budget.
Trump's proposed $6.2 billion cut to HUD would dramatically reduce New York's ability to provide public housing to more than 400,000 people. The New York City Housing Authority's (NYCHA) funding is composed of 60 percent HUD federal funding; preliminary estimates are that a $6 billion cut to HUD funding would lead to a devastating $350 million drop in NYCHA's budget for 2018.
Trump's proposal for the discretionary spending budget has been released. From the USDA to the Commerce Department to the HUD, important community development programs and funding sources were hit hard accross the board. The Washington Post details the cuts within each department.
Under Trump's proposed budt the Neighborhood Reinvestment Corporation, a program commonly known as NeighborWorks America, would be completely defunded. NeighborWorks America is a congressionally chartered nonprofit organization that provides support for community development and affordable housing. Just in 2016, the program created or maintained more than 53,000 jobs, helped 21,000 people become homeowners, assisted 360,000 other families find affordable housing, made repairs to more than 55,000 homes, and provided financial education to more than 116,000 individuals. It's estimated that in 2013, NeighborWorks helped 1.6 million homeowners avoid foreclosure, in addition to ranking as the third largest homebulider that year.
In addition to major funding cuts from most federal agencies, 19 independent federal agencies are being cut alltogether. These 19 agencies include 6 agencies related to community development: Interagency Council on Homelessness, Appalachian Regional Comission, Delta Regional Authority, Northern Border Regional Commission, Denali Commission, and the Neighborhood Reinvestment Corporation (NeighborWorks America). The Washington Post details the role of each of these organizations.
The $6.2 billion in HUD budget cuts proposed by the Trump Administration are the largest cuts in housing aid since the Reagan administration. It's estimated that more than 200,000 families, seniors, and people with disabilities who use the key HUD assistance programs being slashed would be in immediate risk of homelessness. Trump will also make the cuts in USDA rural rental assistance programs made during the Obama administration permanent.
Trump's recently unveiled budget plan would slash or eliminate programs that provide help for the lowest-income Americans. In fact, the budget hurts the working poor in rural and small towns, the core of Trumps supporters, the most, according to some experts. If carried out, the budget would eliminate the Community Development Block Grants, the Interagency Council on Homelessness, the Home Investment Partnership Program, the Community Development Financial Insititutions Fund Grants, and regional development agencies such as the Denali Commission in Alaska. These programs serve some of the most distressed communities of the coutry.
Urban Habitat has released a statement opposing the over $6 billion in cuts proposed for HUD, calling upon people rise up against the administration's inhumane policies "by placing local and regional self-governance on the frontlines of resistance."
A potential $6 billion budget cut to HUD is coming at a time when more Americans are in need of affordable housing and funding has already been cut in past years. If HUD's draft budget is implemented, the National Low Income Housing Coalition (NLIHC) estmates that 200,000 housing vouchers, 10,000 senior housing units, and 6,800 units for people with disabilites would be lost. Beyond housing, HUD's programs have a ripple effect through local economies, improving education and health outcomes and creating jobs. A cut to the HUD budget this big would have destructive results extending beyond affordable hosuing.
Despite having pledged under oath to protect HUD programs during confirmation hearings, even going so far as to say "when it comes to entitlement programs, it is cruel and unsual punishment to withdraw those program before you provide an alternative route," Carson has barely reacted to the proposed $6 billion in cuts to HUD.
In Massachusetts, low-income housing is being delayed due to the falling value of Low-Income Housing Tax Credits caused by Trump's campaign promise to lower the corporate tax rate. Community development experts in the state say that projects six to 12 months from construction are most at risk. In addition to the falling value of LIHTCs, the possible budget cuts on the horizion for HUD, including the Community Development Block Grant Program and Federal HIstoric Tax Credit program, have affordable housing advocates and developers worried about a broader threat to affordable housing.
HUD may face a $6 billion budget cut next year, and about $4 billion of the cuts are to the departments community development programs. The other $2 billion in cuts mostly come out of public housing programs with assistance for the elderly, veterans, and Native Americans as the worst hit. HUD's federal rental assistance programs help 4.1 million people, including 1.4 million children, afford safe housing each year.
The Right to the City Alliance has released a statement on the proposed $6 billion in budget cuts, comdemning them as "yet another blatant attack on communities of color, immigrants, indigenous communities, differently-abled peoples, women, trans and gender nonconforming people. They are an attack on the fabric of our communities and on millions of low-income and working families who are struggling to find or keep permanent jobs and housing." RTC instead calls for investment in "healthy, safe, and sustainable communties."
With preliminary budget documents showing a $6 billion dollar cut to HUD, Ben Carson will need to both clarify his position on key HUD programs and take immediate action if he "means to preserve HUD's core functions and hope local officials get the support that they need to do their work." Housing Choice Vouchers, HOME, Community Development Block Grants, and Choice Neighborhoods Initiatives will be totally cut according to the plans. The Office of Native American Programs may also be cut by more than a quarter.
Despite Carson's confirmation hearings, in which he called rental assistance progrmas and public housing "life saving" and promised not to pull the rug out from under people relying on federal programs to obtain affordable housing, the recently released HUD budgets contradict Carson's statements. The preliminary budget cuts of $6 billion would eliminate Community Development Block, the HOME Program, and funding for maintianing public housing. There would also be $300 million cut from rental assistance programs for veterans, $42 million cut from senior housing, $29 million cut from housing for people with disabilities, and $150 cut from Native American housing block grants.
The Affordable Housing Credit Improvement Act of 2017 seeks to increase the Low-Income Housing Tax Credit by 50 percent. The bill, similar to one introduced in 2016, would expand the program to allow some students to qualify for LIHTC housing, and facilitate the development of housing for Native Americans, boost developments projects for extremely low-income occupants, and prohibit states from including local approval or local contribution provisions as a requirement for qualification.
11 Senators are co-sponsoring a bipartisan bill that would expand and strengthen the federal Low-Income Housing Tax Credit. The Affordable Housing Credit Improvement Act of 2017 would expand the Low-Income Housing Tax Credit by 50 percent. It is estimated that if passed, the legislation would help create 1.3 million affordable homes in the next 10 years, adding about 400,000 units to the projections under the current program.
Keywords: Article, HUD, Low-Income Housing Tax Credit
Housing assistance provided by HUD could see drastic cuts under new fiscal policies being considered by the White House and Congress. A massive corporate tax cut, coupled with increased military spending and a matching decrease in funding to domestic discretionary programs, could mean that some 5 million Americans may lose their housing assistance.
The New York Times has reported that it has obtained documents that show that the Community Development Financial Institutions Fund “would be all but eliminated” by Trump Administration budget cuts. The $258 million dollar program, which helps banks, credit unions, and loan funds in low income communities with development efforts, costs Americans about $0.79 each. The CDFI Coalition has released a statement opposing the elimination of the CDFI Fund in response to the news.
Although Trump has not yet moved to fulfill his campaign trail promise to lower the corporate tax rate, the affordable rental housing has already been hit hard. With investors anticipating a lower tax rate, the value of Low Income Housing Tax Credits, which fund about 90 percent of low income housing in the country, have dropped significantly since the election of Trump. Investors are even pulling out of existing projects, leaving developers scrambling to fill the funding gaps.
Retired neurosurgeon Ben Carson has officially been confirmed as the department of Housing and Urban Development (HUD) secretary. Carson has no government experience and had previously said that he was not qualified to run HUD or for government service. Carson’s positions on many key HUD programs remain unclear.
Ben Carson, a former neurosurgeon, has been confirmed to head the Department of Housing and Urban Development (HUD). He has voiced support for some important inclusive housing programs, such as the Low-Income Housing Tax Credits (LIHTC) program. However, many are concerned about Carson’s lack of experience and conservative position.
Trump’s promise to lower the corporate tax rate from 35 percent to 15 percent continues to have a negative impact on the development of low income housing. The value of the Low-Income Housing Tax Credits dropped significantly around the time of the election, and this led investors around the country to hold off on planned affordable housing projects. Not only will low-income families in need of affordable shelter be affected, it’s likely to also be felt by workers in the construction industry.
Trump’s soon to be released “skinny” budget will likely eliminate the Community Development Financial Institutions (CDFI) Fund. The CDFI Coalition, a group of more than one-hundred community development lenders and investors to low-income communities, has expressed concern that the Trump administration hopes to dismantle the Fund, which primarily goes to those communities that Trump claims he hopes to help—struggling inner cities and rural towns. Last year the CDFI Fund financed over 11,000 businesses and helped create 33,000 affordable housing units.
Minnesota affordable housing projects come up short as funding for low-income housing is hurt by Trump’s promises of a significant corporate tax cut.
In California, a state struggling with sky high rents and affordable housing shortages, the uncertainty about the corporate tax rate and the Low-Income Housing Tax Credit market, has created distress. The tax credit program is the largest source of funding for affordable housing, and according to the California Housing Partnership, the downturn could mean a drop in funding for low-income housing of $250 million this year.
Both the state of Illinois and the Trump administration are suggesting severe budget cuts. Chicago, a city that has seemingly caught Trump’s attention as an example of his outdated vision of “inner cities,” could be profoundly affected by draconian austerity measures and cuts to social services from both levels.
On the campaign trail, Trump proclaimed that he would protect federal programs for helping low-income and elderly Americans. However many of his cabinet appointees have expressed very different views and hope to elimate or reduce social safety net programs. Already Trump's budget office has alluded to future cuts to the Legal Service Corporation, Appalachian Regional Commission, Americorps, and the Neighborhood Reinvestment Corporation.
A massive new investment in infrastructure may be one of the only measures that retains bipartisan support in Washington. With plans circulating and Trump’s campaign promise to deliver $1 trillion in investment, the type of infrastructure that this funding pays for could have enduring impacts—positive or negative—on people and place. A “WPA 2.0” could be one way to “develop new systems of infrastructure that can help ameliorate the impacts of urbanization and climate change” and use federal infrastructure funding to lift up both communities and people.
Bipartisan bills to protect the US Treasury's New Markets Tax Credit, which provides key funding to poor rural and urban zip codes, were introduced in the House and Senate. NMTCs have created an estimated 750,000 jobs and brough $75 billion in total capital investment to low-income communities. The New Markets Tax Credit Extension Act of 2017 would make the program permanent if passed.
In the face of cuts to federal spending on community development and affordable housing, Cities could fund low-income housing without federal support using a luxury housing tax as has been used in New York City.
A senior advisor at HUD was recently fired for criticizing Trump's portrayal of "inner cities as if they are the ailments of American society and should be exterminated and swiftly removed" during the campaign.
Uncertainty in the low-income housing tax credit marketplace is stalling affordable housing development in Massachusetts. This could potentially affect 23 projects and more than a thousand units in the state.
After pressure from over 2,000 private and public organizations in every state, bipartisan legislation to make the New Markets Tax Credit permanent has been introduced in both the House and Senate.
HUD will begin an investigation into predatory lending, neglect of foreclosed properties, and discrimination in communities of color by One West Bank, which was previously headed by Steve Mnuchin, Trump's Treasury Secretary.
The FBI has released hundreds of pages on the 1970s Trump Management Co. housing discrimination case. During the case, which was later settled, the Trump company was accused of racially discriminatory rental practices, including telling potential black tenants that rental costs were twice as high as the actual cost and using a racial code written on rental applications.
Uncertainty about financing affordable housing in Pittsburgh shows how Trump policies could disrupt plans to provide low-income housing in cities across the nation. City officials now worry about displacement, gentrification, and people being pushed out of their communities if these programs don't continue.
Corporate tax reform, budget negotiations, implementation of HUD's Affirmatively Furthering Fair Housing rule, and the infrastructure package are high stakes policy decisions on the horizon that could have major implications for community development.
Communty development organization, banks, credit unions, businesses, chamber of commerces, non-profit groups, schools, universities, city governments, and community leaders in every state have signed a letter asking Congress to permanently authorize and expand the New Markets Tax Credit. Over 2,000 groups have called on Congress to make this economic development program permanent that is primarily used in severely distressed communities.
Trump's policies to "fix" inner cities are likely to hit the poor, immigrants, and people of color the hardest.
Trump's directive to roll back Dodd-Frank could create a sequel to the 2008 housing crisis. An economic blow such as this would be especially punishing to his core supporters.
Trump's $1 trillion infrastructure plan is missing a key economic issue--housing. Not only would federally funded housing infrastructure provide stable shelter for American families, research also shows that housing is an effective way to stimulate the economy and create jobs.
GOP plan to abolish the estate tax would result in large tax cuts for the ultra-wealthy, including many of Trump's cabinet picks.
EPA grants for brownfield redevelopment are frozen, at least temporarily, if not permanently.
Apparently, funding for brownfield development and other EPA revolving loan fund grants is not paused according to Trump transition team.
Heritage Foundation budget proposal, currently being used as a model for Trump's first proposed budget, would eliminate the CDFI Fund and Community Development Block Grants, along with many other federal government agencies and programs.
Ben Carson's HUD Secreatry confirmation hearing reveals his inconsistent positions on HUD's key programs.
The National Cooperative Business Association CLUSA (NCBA CLUSA) has released a statement opposing the proposed cuts to and elimination of several programs critical to the development and support of the work of cooperatives in Trump's budget plan. The budget proposing cutting the USDA's Rural Cooperative Development Grant (RCDG) and regional development agencies.
Analysis from Ohio shows how Trump's lean budget would impact state budgets and programs. In Ohio, federal funds make up 37 percent of the state's budget (higher than the national average of 31 percent). Many organizations in the state rely on Community Development Block Grants to fund community development at the local level. Communities in the state will lose if the Appalachian Regional Commission, Economic Development Administration, and the Minority Business Development Agency are eliminated.