HUD Secretary Announces More Funds for Affordable Housing Under FY2010 Budget

By Keat Foong, Executive Editor Washington, D.C.— U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan has announced HUD’s budget for Fiscal Year 2010. The budget includes measures to “substantially” increase funding for Section 8 tenant-based rental vouchers; increase funding for, and fully fund, the Community Development Block Grant (CDBG) program; and contribute $1 billion towards the National Housing Trust Fund (NHTF). The gross budget authority proposed for HUD for FY2010 is $46.344 billion, a 10.8 percent increase over the gross budget authority of $41.833 billion for FY2009.In a teleconference with reporters, Secretary Donovan suggested a renewed focused by HUD on rental housing. Secretary Donovan said the most effective and quickest tool to help the lowest income families is the Section 8 voucher program. He said the FY 2010 HUD budget is proposing a $1.8 billion increase in effective funding for that program. This amount is achieved through $1.1 billion in new budget authority and the reversal of a $750 million rescission in the program under the Bush Administration. He commented that it has been determined that profits will not be available from Fannie Mae and Freddie Mac to help fund the NHTF, as originally mandated under the Housing and Economic Recovery Act of 2008 legislation. Candidate Obama, he said, had pledged to fund NHTF. The $1 billion in the budget will get the NHTF funding “started,” he said. The Affordable Housing Trust Fund was created to build, rehabilitate and preserve 1.5 million units of housing for the lowest income families over the next 10 years.Secretary Donovan also said HUD is proposing to replace the Hope VI program with a new $250 million Choice Neighborhood Initiative that will invest in distressed and public housing, among other investments. He said the three areas of focus for the budget are: responding to the housing crisis; addressing new national priorities; and changing the way HUD does business. “We are cutting or consolidating programs that don’t work and, instead, investing in programs that do work,” said Secretary Donovan. “The HUD budget will put in place systemic reform and policy innovation, and harness private sector capital and talent as well as new kinds of partnership and collaboration to respond to the nation’s housing crisis, address new national priorities, and change the way HUD does business.” Highlights from HUD’s FY2010 Budget [Click here for HUD’s homepage] include:- The budget will make targeted investments to help rebuild the economy through reinvigorating housing construction for low- and moderate-income families by infusing the Affordable Housing Trust with $1 billion in capital.- A new $250 million Choice Neighborhoods Initiative will build on the lessons of HOPE VI and revitalize high poverty neighborhoods through transformative investments in distressed public and assisted housing and closer linkages with school reform and early childhood interventions.- To address those families struggling during the economic crisis, the budget will provide targeted increased funding for Section 8 tenant based rental vouchers.- A $550 million increase in funding for the CDBG program, reflecting President Barack Obama’s pledge to fully fund the program, with a call for updating a formula that is more than 30 years old and new performance accountability.- The budget also makes targeted investments in energy innovation to contribute to our nation’s long term economic growth and recovery, including: –A $25 million Rural Innovation Fund to test and rapidly disseminate innovative efforts to revitalize rural communities and a $25 million University Community Fund, which consolidates current programs to leverage the critical role of higher educational institutions in urban and rural communities.–A $100 million Energy Innovation Fund to spur private sector investment in the energy efficiency of the Nation’s housing stock. –A $150 million new Sustainable Communities Initiative to spur a new generation of metropolitan and rural efforts to integrate transportation, housing and land use planning and decisions in a way that maximize choices for residents and businesses, lowers transportation costs, saves energy and improves quality of life.–A new Transformation Initiative will generate programmatic savings through rigorous evaluation and technology investments.“We went line by line, to see where we could cut spending in order to invest in effective programs that contribute to our nation’s long term economic growth and recovery,” said Secretary Donovan. “This budget addresses the nation’s current housing crisis by finding savings and making targeted investments to help grow the economy and keep people in their homes.  I look forward to the consideration and approval of this budget in Congress.”