President Trump has repeatedly promised to "make America affordable again." But for those Americans most in need, his administration's latest budget plan would dramatically shrink the federal rental aid that helps keep millions of people housed.
In its request for the Department of Housing and Urban Development (HUD), the White House called the current system of federal rental assistance "dysfunctional" and proposed essentially ending Section 8 and other housing voucher programs. Its plan calls for cutting rental aid by about 40% and sending that money to states "to design their own rental assistance programs based on their unique needs and preferences."
It would also impose a two-year cap on rental assistance for able-bodied adults, which it said would ensure an even bigger share of federal subsidies went to the elderly and disabled.
The budget does include $25 million in housing grants for young people aging out of foster care.
In a statement, HUD Secretary Scott Turner called the budget request "bold" for reimagining aid programs that have become "too bloated and bureaucratic to efficiently function."
The proposal comes as nearly half of all renters are considered cost-burdened and as homelessness is at a record high. Advocates say that if millions of poor people barely making ends meet were to suddenly see their rental aid shrink — or even end altogether — it would tip many over the edge.
"We would see, I think, homelessness escalate in a way that has been really unprecedented, and unheard of," said Kim Johnson, policy manager with the National Low Income Housing Coalition.
Already, federal rental aid falls far short of need. It's available for only about a quarter of all people eligible for it. "Cutting that really feels like cutting into bone," said Ann Oliva, CEO of the National Alliance to End Homelessness.
The president's budget is only a suggestion, since Congress holds authority over spending and will create its own budget. But lawmakers are under pressure to find deep savings to enact Trump's larger agenda, which includes sweeping tax cuts.
Some congressional Republicans have already targeted healthcare and food aid for next year's budget, but "I don't think Congress has the appetite to enact cuts to the housing programs," says Kevin Corinth, with the conservative American Enterprise Institute. He sees the White House getting a kind of "free pass" to propose more ambitious HUD cuts that likely will not actually happen.
States would get more control over how HUD aid is spent — and more responsibility
While the White House budget blueprint would significantly shrink federal rental aid that helps millions of people, it said states could choose to pitch in with their own funding to make sure the same number of people are covered.
The plan does give states more flexibility on how they can use that smaller pool of money, by sending it in the form of block grants. Welfare funding works this way. Over time, however, many states have diverted much, if not most, of that money to things other than cash aid for poor families.
Housing advocates noted all this would be disruptive not only for tenants, but also for the millions of landlords who receive federal rental aid.
Another part of Trump's budget calls for shrinking HUD funding for homelessness by 12% and putting a two-year cap on people's eligibility for aid. It also proposes a fundamental shift in how homelessness funding is allocated that would bypass thousands of local nonprofits and give the money directly to states.
"That is very concerning to us," said homelessness advocate Oliva. "Homelessness is a very local issue. It happens in people's neighborhoods, it happens on city blocks and in city streets."
Oliva said states simply don't have the infrastructure or expertise to ensure homelessness funding can go to where it's most effective.
This change would also upend decades of federal policy by moving money away from permanent housing and toward shelters and shorter-term housing.
The impact of HUD cuts would ripple across local communities
Local advocates said the fallout from HUD cuts would affect much more than housing. "We're talking about a massive impact across communities," said Jessica Kubicki with the Housing Collective in Connecticut.
For example, people who may no longer be able to afford health insurance would be more likely to seek care in emergency rooms. The need for food aid would increase. And children in school could suffer if their parents were forced to leave their housing and squeeze in with family or friends.
"Because you've got maybe three kids sleeping in the same room, in the same bed," Kubicki said. "They're not sleeping well. They're not doing well educationally. They don't have food."
The cuts would also come on top of another impending loss of HUD funding. In 2021, as part of the COVID-era American Rescue Plan Act, the Biden administration funded 70,000 emergency housing vouchers for people without housing or at risk of losing it, and for those fleeing domestic violence.
That money was supposed to last until 2030. But it's running out faster than expected because of how much rents have spiked in recent years. HUD has told local housing authorities to prepare for emergency voucher funding to end next year — and possibly sooner.
In Connecticut, Kubicki is hoping the state can pick up that extra funding to give emergency voucher holders more time. But deep cuts to HUD's broader budget would make that even more difficult.
"This is not fixing anything," she said."This is making everything so much worse."
The case for making housing aid less generous
While Corinth of AEI does not believe Congress will slash HUD's budget, he does think it's worth asking whether federal housing programs are fair. "It makes sense to get people aid when they need it," he said, "but we don't necessarily want them to stay on it forever."
Many people receive housing subsidies for well over a decade. "If the median or fair market rent is around, say, $4,000 for a family in San Francisco, your income can get really high and you're still going to be getting those subsidies," he said.
Corinth also said when there's such a severe housing shortage like now, federal subsidies can goose the market and push up prices for everyone. He'd prefer to help people through other benefits, like tax credits.
Another way he thinks rental aid is not fair: There's not nearly enough to help most people who are eligible for it. "So I think it's very reasonable to say we should lower amounts, or have some kind of time limits," he said, "to kind of share around the resources to others." Corinth suggested a five year time limit.
Housing Secretary Turner has said the agency's ultimate goal is to "get people off subsidies and live a life of self-sustainability." On a recent trip to Arkansas, where the prospect of federal budget cuts came up, he said HUD's job is to "maximize the budget that we do have."
Layers of cuts could be "destabilizing" for the broader housing economy
Beyond rental aid cuts, the White House budget for HUD would eliminate a program that creates more affordable housing, and another that funds nonprofits to enforce fair housing laws.
Also on the chopping block: community development grants that cities can spend on everything from childcare services to home repair for seniors. The White House said that money has been used for things the federal government should not fund, like a concert plaza and skateboard parks.
Johnson, with the low-income housing coalition, said shrinking HUD funding could undermine the Trump administration's pledge to build affordable housing on federal lands. "How are you going to build affordable housing if you're also cutting the programs that make those deals pencil out for developers?" she said.
Advocates worry that HUD funding for disaster recovery could also be disrupted.
"In my own experience, folks who can get out of a disaster shelter on their own do so," said Oliva, with the homelessness alliance. But those who were already precariously housed or who have disabling conditions, she said, "without additional support, they will end up in the homeless services system."
The White House proposal to shrink HUD's antipoverty programs doesn't come in a vacuum. The administration has already pushed out thousands of agency employees and signaled more staff cuts to come. It's canceled contracts that support low-income housing, and targeted housing and community development programs at other agencies.
In a recent report on those moves, even before the White House's budget proposal came out, the National Association of Affordable Housing Lenders warned of far-reaching consequences.
"These disruptions would ripple through the broader economy, reducing construction activity, limiting job creation, and potentially destabilizing housing finance markets that depend on the certainty and liquidity provided by federal programs," the report said.
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