NCSHA Washington Report | SPECIAL EDITION | December 23, 2022

December 23, 2022: UPDATE 

Congress has passed the FY 2023 Omnibus appropriations legislation, with the House voting this afternoon 225-201 plus one member voting present following Senate passage yesterday with a 68-29 vote. While the Senate adopted some amendments to the bill during its debate, none were relevant to our priorities. See our report below for details on how affordable housing fared.

The legislation now heads to the President’s desk for his signature. While the current Continuing Resolution runs out tonight, Congress has also passed a “deeming” rule allowing funding to continue until December 30 to provide additional time for the bill to be enrolled and signed. 

Report originally published December 20, 2022.

Culminating almost a year’s discussion and negotiating, the omnibus FY 2023 appropriations bill House and Senate appropriators released this morning contains funding for the rest of the federal fiscal year for all government programs, including HUD and USDA rural housing programs. The bill also includes language prohibiting HUD from moving forward with the Section 8 rental assistance contract administration solicitation it published earlier this year. The bill’s only tax provisions are related to retirement security, not our housing priorities or business and child tax credit provisions that were under consideration until the very last minute.

Congressional leaders have said they hope the Senate will approve the bill by Thursday and the House very soon after that. While amendments are possible, they seem very unlikely at this point. Thank you for everything you did to help us press for our priorities, some of which were achieved in this bill and some of which we will have to fight for next year. The following sections and Budget Chart include more details on the omnibus bill.

No Affordable Housing Tax Provisions Included

Despite our best efforts and yours to advance our Housing Credit priorities, the final agreement does not include tax provisions broadly, with the exception of bill language related to retirement savings. Senate Democrats and Republicans were not able to bridge the divide on tax provisions, and even those with bipartisan support, like our Housing Credit priorities, were left out of the final deal. While the odds are not in our favor, our Hill champions are exploring whether there could be opportunities to amend the bill before a final vote. We will certainly keep you informed if there appears to be any potential to add in Housing Credit provisions. In the meantime, we encourage you to continue to reach out to your Senators, in particular Republicans who could have sway with Senate Minority Leader McConnell. 

HUD Funding

Appropriators allocated $58.2 billion for the Department of Housing and Urban Development (HUD) in the FY 2023 Transportation, Housing and Urban Development (T-HUD) portion of the bill, a $4.5 billion dollar increase from FY 2022 enacted funding levels. However, nearly $3 billion of this increase is for special projects funded in the form of Economic Development Initiative (EDI) items resulting from congressionally directed spending (CDS) requests.

Key HUD program funding levels include:

• $30.3 billion for Tenant-Based Rental Assistance (TBRA) Section 8 activities, including $27.6 billion under the regular TBRA account and an additional $2.7 billion designated as emergency funding. This includes a total of $26.4 billion for renewal of tenant-based vouchers.
• $14.9 billion for Project-Based Rental Assistance (PBRA), including $13.9 billion under the regular PBRA account and an additional $1 billion designated as emergency funding.
• $8.5 billion for the public housing fund, including $5.1 billion for the public housing operating fund and $3.2 billion through the capital fund formula.
• $3.6 billion for Homeless Assistance Grants, an increase of $420 million above FY 2022, including $75 million for new construction, acquisition, or rehabilitation of new permanent supportive housing.
• $1.5 billion for the HOME Investment Partnerships Program, the same as in FY 2022, but $450 million less than was requested in the President’s Budget and $175 and $225 million less, respectively, than in the House and Senate FY 2023 proposed appropriations bills.
• $225 million under a new Preservation and Reinvestment Initiative for Community Enhancement (PRICE) program to support resiliency and preservation of manufactured housing and manufactured housing communities.
• $85 million for a new so-called “Yes in My Backyard” competitive grant program to encourage communities to improve inclusionary zoning practices and land use policies.

Section 8 Rental Assistance Contract Administration

The omnibus FY 2023 appropriations bill House and Senate appropriators released this morning contains language prohibiting HUD from moving forward with the Section 8 rental assistance contract administration solicitation it published earlier this year. Thanks substantially to your efforts, the bill includes a section stating, “None of the funds made available to the Department of Housing and Urban Development in this or prior Acts may be used to issue a solicitation or accept bids on any solicitation that is substantially equivalent to the draft solicitation entitled ‘‘Housing Assistance Payments (HAP) Contract Support Services (HAPSS)’’ posted to www.Sam.gov on July 27, 2022.”

The Senate “Explanatory Statement” also includes the following:

• Performance-based contract administrators.-The bill prohibits HUD from issuing a solicitation or accepting bids on any solicitation that is substantially equivalent to the draft solicitation entitled “Housing Assistance Payments (HAP) Contract Support Services (HAPSS)” issued by HUD on July 27, 2022. The agreement notes that this is the second draft solicitation in five years on the matter of providing PBRA support services, with HUD withdrawing a similar draft solicitation in March 2018. The agreement directs HUD to ensure that any future competition for PBCAs does not impede housing finance agencies or public housing agencies from competing on a state-basis. Should HUD determine that a subsequent draft solicitation that is not substantially equivalent to the July 27, 2022 draft solicitation is not feasible, the agreement directs HUD to include a legislative proposal as part of the fiscal year 2024 budget request. If HUD determines that a legislative proposal is necessary, HUD is directed to work with relevant stakeholders to ensure any potential legislative proposal results in effective and efficient oversight and monitoring of the PBRA program and maintains safe, stable, and affordable housing for the over 1,200,000 households living in PBRA properties across the country. In addition, the agreement urges HUD to assess the effectiveness of using resident surveys as a tool to help PBCAs conduct effective oversight.    

This is a terrific victory that means HUD cannot go forward with the draft solicitation as published or any similar solicitation. While exactly how HUD will respond is uncertain, we will have an opportunity over the next several months to continue to engage over making HUD’s next proposal better.

Rural Housing

Appropriators provided $25.5 billion for the FY 2023 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies bill, a $1.07 billion dollar decrease from FY 2022 enacted funding levels. Despite the decrease in overall funding, the bill appropriates more than $2 billion for the Rural Housing Service, $183 million more than in FY 2022. For key rural housing programs, the bill would provide:

• $1.25 billion for the Section 502 Single Family Direct Loan program, the same as in FY 2022 and $250 million less than proposed by the President’s Budget and the House-passed and Senate Democrats’ FY 2023 bills.
• $30 billion for the Section 502 Single Family Guaranteed Loan program, the same funding level as FY 2022, the President’s Budget, and the House and Senate bills.
• $70 million for the Section 515 Multifamily Direct Loan program, an increase of $20 million over FY 2022 enacted levels, but less than what the President’s Budget ($200 million), the House ($150 million), and the Senate ($100 million) requested.
• $1.5 billion for Section 521 Rental Assistance, $38 million more than in FY 2022, slightly less than the President and House proposed, and the same as the Senate draft.
• $400 million for the Section 538 Multifamily Guaranteed Loan program, $150 million more than in FY 2022, the same amount requested by the President’s Budget and the Senate and $100 million more than proposed by the House.
• $48 million for Section 542 Rural Voucher Assistance, $3 million more than in FY 2022, $10 million less than the President’s Budget and the House proposed, and $2 million less than the Senate requested.

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