If lawmakers can reach a budget agreement, it could add up to $25 billion for domestic discretionary spending. That will have a tremendous impact on programs big and small in housing and community development world. While the agreement cannot turn back the hands of time, it may stem the tide of budget cutting that has accelerated since enactment of the Budget Control Act and the implementation of the across the board cut, or sequester, which was required by the legislation.

Community development funding is the foundation upon which thriving communities have been built, providing resource-strapped cities, towns and villages with the opportunity to expand access to affordable housing, community and healthcare facilities, grocery stores and other services that create jobs and stabilize the local economy. However, federal investments in community development, measured as a share of the Gross Domestic Product (GDP), have fallen over 75 percent in the last 30 years.


In the HUD budget, for example, the House Appropriations Committee spent some $115 million less than the Senate on vouchers and rental assistance.  The House, while it increased Homeless grants, the amount is still less than the budget request and less than the Senate. The House effectively transferred funding slated for the National Housing Trust Fund to fund HOME Housing Investment Partnership.  The Senate Appropriations Committee restored the cuts to vouchers and rental assistance and increased Homeless funding by $100 million. While the Senate Committee did not redirect Housing Trust Fund money, it did reduce HOME by 93 percent, from $900 million to about $60 million.  

The House and Senate Agriculture Appropriations Committees did better than the budget request on rural housing. However, there are many indications that the rural housing may need an additional $200 million for rental housing subsidies.

For an example of a small program, HHS has Community Economic Development grants, which are used by local community development organizations to lend and invest in businesses that create jobs for low-income people. The House Appropriations Committee approved $30 million for this program, the Senate zeroed it out.

Despite these deep cuts in resources, the community development sector continues to employ the resources that exist to serve communities in need of revitalization, working to meet the evolving needs and challenges of both urban neighborhoods and rural areas. Despite the declining resources and uncertainty brought on by congressional gridlock on funding, the industry has continued to make a difference by using public funds to leverage private investments, build broad-based alliances, applying rigorous standards to the community investments that they make. As a result of this model, taxpayers get a very high rate of return on their investment.

A budget agreement would not only help better fund federal community development programs that fall under the domestic discretionary funding, but it may also open the door for tax extender legislation including programs like the New Markets Tax Credit (NMTC). The NMTC is another tool community development professionals have been using since early 2000 to grow business and job opportunities in low-income areas across the country. In fact, the NMTC has helped create of 750,000 jobs and leverage nearly $70 billion in total investments to capital-starved communities with high rates of poverty and unemployment.

Let’s hope Congress can work together and make this happen before that door closes. 

Rapoza is president and principal of Rapoza Associates, a D.C.-based lobbying and government relations firm.