On April 14, 2011, almost halfway into federal fiscal year 2011, Congress passed a 2011 budget. This new budget makes substantial cuts to federal housing programs, including a 16% cut to the Community Development Formula Block Grant program, 12% to the HOME program, 18.2% to the Public Housing Capital Fund and 3.1% to the Public Housing Operating Fund. While Section 8 Vouchers get increases over 2010  in both tenant-based (1.2%) and project-based (8.4%), they are both below the Administration’s 2011 request (by 5.8% for tenant based and 1.1% for project based).

As noted in our Inside Edge on the proposed 2012 budget, the cuts to CDBG mean potentially serious cuts to HPD. If  New York City chooses to distribute the cuts equally across all CDBG programs, New York City’s Department of Housing Preservation and Development would face a cut of 16% of 1,190 staff, or about 190 positions. This would fall to a large extent on its code enforcement staff, with a potential loss of  50-60 inspectors. The loss of 12% of HOME funding could impact on both development projects or staff since HOME funds are used for both purposes.

Public housing also takes cuts in both operations and capital expenses. While both these funds have been historically underfunded, the hit to the capital fund is particularly hurtful given the huge backlog in capital repairs needed by housing authorities in general.