Following on the heels of a budget compromise in Congress last week to keep the government open, the Trump Administration on Monday unveiled its own federal budget proposal for fiscal year 2019. It calls for cutting a hefty $3.6 trillion to the federal deficit, including slashing programs that directly impact the real estate industry and affordable housing.
At the same time, the Trump 2019 budget seeks increased defense spending and money to fund the partial construction of a southern border wall.
The 160-page proposal would eliminate $1.7 trillion in funds for entitlement programs, including Medicare, food stamps, social security and agricultural subsidies. It covers the fiscal year beginning October 1, 2018, through September 30, 2019. Congress just passed its own budget deal for fiscal 2018 and 2019 on Friday, though, and as is customary for presidential budget plans, lawmakers will likely choose to ignore or substantially tweak the White House proposal.
Trump’s budget would nibble at the edges of the housing market, according to an analysis of the budget proposal by Inman News, namely: the proposed elimination of Department of Housing and Urban Development (HUD) programs supporting affordable housing and a $4 billion cut to the agency’s rental assistance programs. In total, HUD would stand to lose $9 billion in funding under Trump’s plan.
Additionally, the proposal calls for reductions to the Federal Emergency Management Agency’s (FEMA) so-called Flood Hazard Mapping and Risk Analysis Program, which has been cited as a key to reducing insurance rates for some homeowners by calculating the true risk of inland flooding.
The real estate industry’s largest trade group, the National Association of Realtors (NAR), provided a statement to Inman saying its leaders were looking closely at the Trump budget proposal, but the organization declined to take a stance on the budget by Monday afternoon.
“The National Association of Realtors is focused on ensuring that the White House and Congress understand the importance of housing and property ownership to our families, local communities and the overall health of the nation’s economy,” said NAR President Elizabeth Mendenhall in the statement emailed to Inman. “We look forward to working closely with administration leaders and lawmakers in the days and months ahead, and will be a leading voice for our 1.3 million members on any budget proposals that might affect important real estate-related programs.”
Entitled, “Efficient, Effective, Accountable: An American Budget,” the Trump budget proposal diverges mightily from typical budgetary plans, which historically set out to create a framework from which to balance the budget over a 10-year period. The proposed cuts add up to more than $3 trillion but fall short of balancing the budget thanks in part to tax revenue slashed away in the massive tax reform bill, the “Tax Cuts and Jobs Act,” which Congress voted to pass and Trump signed into law at the end of 2017.
Despite the proposed cuts and a rosy economy, the Trump Administration acknowledged that the deficit would likely rise to $450 billion by 2027, according to The Washington Post — a far cry from the budget surplus of $16 billion it predicted by the same period less than a year ago.
“Budgets are aspirational documents and seldom have a real impact on spending,” U.S. Rep. Mark Meadows, chairman of the conservative Freedom Caucus, told The Washington Post on Monday. “Certainly I applaud the president’s willingness to address our military, veterans and many suffering from the opioid abuse epidemic. I am not investing much time critiquing the budget when it has little to do with what Congress actually spends.”
At a glance:
- The Low-Income Home Energy Assistance Program – Proposal to eliminate Office of the Administration for Children & Families’ 37-year-old program to assist low-income households with heating and cooling bills. For fiscal year 2017, the program received $3.09 billion from the Department of Health and Human Services.
- The Home Investment Partnerships Program – Considered the largest federal block grant, The Home Investment Partnerships Program was designed to spur the development of affordable housing nationwide, both through construction and the execution of state and local strategy implementation. The Trump administration calls for eliminating the program.
- The Self-Help and Assisted Homeownership Opportunity Program – The Housing and Urban Development Program grants funds to eligible nonprofit organizations to purchase development sites for low-income families. The program was authorized by the Housing Opportunity Program Extension Act of 1996 under then-President Bill Clinton. The Trump Administration recommends the program be eliminated.
- Flood Hazard Mapping and Risk Analysis Program – FEMA’s flood hazard mapping program identifies flood hazards, assesses flood risks and partners with states and communities to provide accurate flood hazard and risk data to guide them to mitigation actions. Flood hazard mapping is crucial to the National Flood Insurance Program. The Trump Administration calls for cuts to the program.
- HUD Rental Assistance Program – The Department of Housing and Urban Development administers five rental assistance programs that subsidize rents for low-income families: the Public Housing program, the Section 8 Housing Choice Voucher program, the Section 8 Project-Based Rental Assistance program, the Section 202 Supportive Housing for the Elderly program, and the Section 811 Supportive Housing for Persons with Disabilities program. Together, these programs serve more than 4 million families and make up well over three-quarters of HUD’s budget. The Trump Administration calls for cuts to the program.
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