Fact Sheets

Fact Sheet: Impact of the President’s 2021 Budget on Housing

Federal Budget
Housing & Homelessness

On February 10th,  President Trump presented his budget request for fiscal year 2021 (FY21) to Congress, outlining his spending priorities for the coming year.

The FY21 budget request calls for $4.8 trillion to fund government operations in the next fiscal year. This would set funding at $590 billion in non-defense discretionary spending, down from $622 billion in FY20. This includes slashing funding for the Department of Housing and Urban Development (HUD) by 15% percent. If implemented, the cuts proposed in this budget would be devastating to low-income families with children who are struggling to maintain stable housing and would result in an increase of child and youth homelessness in the U.S.

This fact sheet will look in greater detail at policy proposals in the budget that impact housing. With a few exceptions, the majority of the programs are not exclusively child-oriented, as most “children’s housing” programs deliver housing services to adults as well. Notable policy changes for particular programs are indicated below.

Federal Housing Programs

  • Tenant-Based Rental Assistance (TBRA): The budget requests $18.83 billion, which is a $5 billion decrease from the FY20 enacted level of $23.87 billion. This includes a shift of reduced funds from both rental assistance and public housing into a separate, fixed Moving to Work pot of money. Tenant based rental assistance helps subsidize housing for millions of extremely low- to very low-income families, yet access to assistance remains very limited, with only 1 in 4 eligible families receiving a subsidy. The Moving to Work program gives Public Housing Authorities (PHAs) more flexibility to administer rental assistance, but this shift to a fixed account may result in fewer families with children accessing assistance.
  • Family Unification Program (FUP):  As in year’s past, the President proposes to eliminate FUP, which provides $25 million for housing vouchers for families involved or at-risk of involvement with the child welfare system due to lack of adequate housing, as well as youth at-risk of homelessness after leaving foster care.
  • Project-Based Rental Assistance (PBRA): The budget request provides $12.6 billion, an increase of $72 million from FY20’s level of funding. It is unclear whether this is enough to renew all existing PBRA contracts. This program provides funding to landlords who rent a specified number of affordable apartments to low-income families or individuals.
  • McKinney Vento Homeless Assistance Grants: The budget proposes a small cut of $4 million from the FY20 level of 2.77 billion. These grants fund local, regional, and state homeless assistance programs.
  • Public Housing Operating Fund: The budget proposes $3.57 billion for the Public Housing Operating Fund, a decrease of $977 million from FY20. The operating funding enables local governments’ housing agencies to maintain developments, pay utility bills, and keep rent affordable for low-income families.
  • Family Self-Sufficiency Program: FSS received a $10 million increase from $80 million provided in the FY20 budget.  FSS supports families receiving a federal housing subsidy to work towards economic security through coordinating services such as child care, transportation, job training, education, employment counseling and more.
  • National Housing Trust Fund: The budget eliminates the National Housing Trust Fund. Created in 2008, it is designed to provide resources to build and rehabilitate housing, including rental housing, for low-income families. 

Policy Items to Note

  • Minimum Monthly Rent Requirements and Work Requirements: The President’s budget contains several policy changes that would result in an increase of homelessness and housing instability for millions of low-income families with children.

Specifically, the budget proposes to:

  • Increase rent for non-elderly and non-disabled families in subsidized housing by up to 30% of their gross income, or $50, whichever is higher;
  • Eliminate income deductions for medical or childcare expenses for all households;
  • Increase mandatory minimum rent for households assumed to be able to work to $150 a month, which is nearly three times more than the current minimum rent. According to the Center on Budget and Policy Priorities, increasing mandatory minimum rent would put an additional million children at risk of homelessness.
  • Allow housing authorities to impose work requirements on tenants, including families with children, without any requirement for them to offer accompanying work supports such as affordable childcare, transportation, higher education and job training programs to help parents obtain and maintain well-paying jobs. The 2019 landmark National Academy of Sciences study, A Roadmap to Reducing Child Poverty, finds that work requirements are not effective in reducing child poverty and are just as likely to increase child poverty as decrease it.

Notable Children’s Housing Items Within President Trump’s Budget Request, But Not Within the HUD Budget Request

  • McKinney Vento Education for Homeless Children and Youth (EHCY) Program: The budget proposes to eliminate the EHCY program and consolidate it, along with 28 other federal education programs, into a block grant that states could use flexibly.  The EHCY program received $101.5 million in FY20, and serves over 1.5 million students experiencing homelessness in the public-school system through providing protections and services to ensure that they can enroll in and attend school, complete their high school education, and continue on to higher education. By consolidating EHCY into a block grant, it would dilute its intended purpose and undermines the legal protections for homeless students provided by the McKinney-Vento Act.
  • Low Income Home Energy Assistance Program (LIHEAP): LIHEAP is eliminated in the FY21 budget. LIHEAP, which provides low-income households with heating and cooling assistance, has been a program with positive links to the improvement of child health and well-being and nearly a quarter of spending goes to children. Low-income families already pay a disproportionate share of their income on energy costs.
  • Runaway and Homeless Youth Programs: The President proposes flat funding for RHY programs at $113.8 million.  Funding for specific programs within RHY include: $62.6 million for Basic Runaway Centers, $51.2 million for Transitional Living Programs, and $18.6 million for Service Connection for Youth on the Streets. These programs remain underfunded despite the fact that research from the University of Chicago found that 4.2 million young people experience homelessness on their own each year, and these numbers continue to increase.
  • Legal Services Corporation (LSC). The President’s budget proposes to eliminate funding for the LSC once again. This important funding stream provides civil legal services for low income families, including representation for housing disputes. Access to civil legal services is already extremely limited in the U.S., and the overwhelming majority of low-income families facing eviction and other housing disputes do not receive representation.
  • Rural Rental Assistance Program: The FY21 budget requested $1.45 billion for Section 521 Rural Assistance Program. Over a quarter of this funding goes to children. The Rental Assistance Program’s goal is to reduce the rents paid by low-income families occupying eligible Rural Rental Housing, Rural Cooperative Housing, and Farm Labor Housing projects.

It is important to recognize that the President’s budget represents the Administration’s wish list of priorities and is non-binding for Congress. Ultimately, Congress, not the President, holds the power of the purse on setting funding levels and makes the final budget decisions during the appropriations process.

As Congress begins the FY21 budget process in the coming weeks and months First Focus on Children will continue to remind lawmakers that investments in children are essential not only to protect their health and well-being but also to secure our nation’s future economic success.

For more information, contact Cara Baldari, VP of Family Economics, Housing and Homelessness at carab@firstfocus.org.