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House Clears Housing Funding Legislation; Section 811 Funding Restored; Shortfall in Veterans Funding Addressed

July 1, 2005

By a vote of 405-18, the House cleared legislation funding the Department of Housing and Urban Development (HUD) for FY 2006, on June 30. The legislation, known as the Treasury-Transportation-HUD Appropriations bill (HR 3058), includes full restoration of funding for the HUD Section 811 program. Section 811 had been proposed for deep cuts in the President's FY 2006 budget proposal and will actually increase funding for new capital advance and project-based assistance grants in FY 2006. In addition, the House voted 225-194 to add back $100 million to the Section 8 rental voucher program for FY 2006. This brings Section 8 funding up to the President's request and will help ensure that there is sufficient funding to renew close to all of the authorized rental vouchers currently available to housing authorities across the country.

With House passage of the HUD budget, action now shifts to the Senate. The Senate Appropriations Committee is expected to take up its version of HR 3058 next month. As part of this legislation, NAMI will be urging Senators to follow the lead of the House and:

  • Restore funding to the HUD Section 811 program, with the highest priority on retaining the capital advance/project-based side of the program, and
  • Support the full request for Section 8 recommended by the Bush Administration and reject changes to the program recommended in S 771/HR 1999.

Action Requested

Advocates are urged to contact their Senators to support provisions in the House bill relative to both Section 811 and Section 8. Enter your zip code below to access a sample letter on this issue and a list of your representatives to contact now, if you do not see the box for entering your zip code, click here.

Background on the House Passed HUD Budget

HR 3058 includes a total of $37.5 billion for HUD for FY 2006, $1.547 billion above current levels and $4.32 billion above the President's request. For Section 811, the bill includes $238 million -- the same as current year funding. More importantly, the legislation firmly rejects the Bush Administration's proposal to cut Section 811 funding by $120 million and completely eliminate the capital advance/project-based side of the program. Capital advance and project-based grants to local non-profit disability organizations are the traditional form of 811 assistance and actually expand the inventory of accessible supportive housing serving individuals with severe disabilities -- including severe mental illness. This is in contrast to tenant-based rent subsidies that cannot be used to develop new supportive housing units.

Since the President's budget came out in February, NAMI (along with colleague national disability groups) fought to restore funding for Section 811. NAMI is extremely grateful for the leadership of Representative Joe Knollenberg (R-MI), Chairman of the Appropriations Subcommittee that drafted HR 3058, in restoring funding to Section 811. In the legislation, Rep. Knollenberg was able to allocate funds to the program that will actually increase funding in FY 2006 for new capital advance and project-based grants for which local non-profits will be able to compete. NAMI is also grateful to Representative Judy Biggert (R-IL) for the critical role that she played in ensuring that restored funds to Section 811 were allocate primarily to new capital advance/project-based grants.

Specifically, the House bill allocates funding within Section 811 as follows:

  • $157.1 million for new capital advance/project-based grants,
  • $78.3 million to renew expiring tenant-based rent subsidies and contract amendments (additional funds to lease up previously allocated tenant-based contracts),
  • $2.3 million for renewal of existing project-based subsidies (known as PRACs), and
  • No more than $5 million for new tenant-based rental assistance contracts.

In a legislative report accompanying HR 3058, the Appropriations Committee took the Bush Administration to task for trying to cut Section 811 and eliminate the capital advance/project-based side of the program. In doing so, they specifically rejected arguments that there is no need for additional supportive housing units or that a strategy of relying solely on tenant-based vouchers is sufficient to meet the housing needs of individuals with severe disabilities.

Click here for additional information on the HUD Section 811 program.:

Section 8 Funding Boosted

During debate on HR 3058, the House added back $100 million to the Section 8 rental voucher program. This brings Section 8 funding up to $15.63 million, or $865 million above the FY 2005 level, but still sightly more than $200 million below the amount requested by the Bush Administration. This will help ensure that housing agencies across the country have sufficient funds available to renew close to all of the authorized tenant-based vouchers (roughly 1.9 million nationwide).

In addition, HR 3058 includes $5.1 billion for Project-Based Rental Assistance (project-based contracts, i.e. rent subsidies tied to specific housing units). This is $210 million below last year and $16 million above the President's request. This fully funds all contracts including inflation and expands the use of inspectors to ensure that tenants live in decent affordable housing.

More importantly, the House bill does not include any legislative proposals to reform the Section 8 program contained in the Bush Administration's "Flexible Voucher" program (S 771/HR 1999). These proposals would allow housing agencies to direct rental vouchers to higher income households and require voucher-holders to contribute a higher percentage of their monthly income toward rent. NAMI continues to be concerned that these efforts to reform Section 8 would have a negative impact on people with disabilities living on SSI.

Click here for additional information on the Bush Administration's Section 8 proposal.:

Homeless Funds Increased

The House bill also boosts funding for programs under the McKinney-Vento Homeless Assistance Act by $100 million over current levels, increasing funding to $1.34 billion. This includes funding for permanent housing programs such as Shelter Plus Care and SHP, as well as renewal of expiring rent subsidies. In addition, HUD would required to continue directing a minimum of 30% of McKinney-Vento funds for permanent housing, with a 25% local match required for services.

During debate on HR 3058, the House rejected an amendment by Representative Mark Kennedy (R-MN) to add an additional $100 million for homeless funds, by a 59-362 vote. However, this wide margin was due in large part to concern about the offsetting funds for the Kennedy Amendment coming from Amtrak.

Veterans Medical Funding Boosted

In addition, to clearing the HUD budget, the House also passed a supplemental funding bill allocating an additional $975 million for veterans' medical care for the current fiscal year. The amendment was made necessary by a shortfall in current year funding and will prevent the VA from having to shift funding from capital accounts and other VA priorities during the current fiscal year. This shortfall is due in part tonanticipated demand for services from the VA -- especially for active duty and reserve troops returning from Iraq and Afghanistan. Of particular concern is the increase in demand for mental illness treatment services including PTSD.

On June 29, the Senate passed a separate measure appropriating an additional $1.5 billion for the current fiscal year. It is unclear at this point how these separate measures will be resolved. Pressure is mounting to address the current shortfall in veterans' medical care funding before next week's July 4th recess to ensure that this unanticipated gap in veterans' medical care is addressed as soon as possible.