The Department of Housing and Urban Development was the focus of three hearings this week: one confirmation hearing in the Senate Banking Committee for Deputy Secretary nominee Pam Patenaude, and two hearings with Secretary Ben Carson in the House and Senate Appropriations Transportation, Housing, and Urban Development (T-HUD) Subcommittee to address the FY 2018 HUD budget proposal.

Senate and House T-HUD Hearings

Secretary Ben Carson first addressed the Senate Appropriations T-HUD Subcommittee on Wednesday and then the corresponding House subcommittee on Thursday morning. Recordings of both the Senate and the House hearings are available online.

In both the House and the Senate, most members were baffled and disappointed by the cuts proposed in the budget. In her opening statement, Senate THUD Chair Ranking Member Susan Collins (R-Maine) said, “The budget caps for 2018 will require a budget that is the product of thoughtful consideration.  Unfortunately, the request before us today does not reflect that consideration.”

Many of the Secretary’s comments focused on a broader image of HUD, which he hopes he can run more like a business and prioritize HUD’s mission to focus on rental assistance. He also insisted that federal fiscal responsibility is critical to ensuring the success of all Americans.

In the Senate, every member present questioned the logic behind eliminating the Community Development Block Grant (CDBG) program. Nearly every member in the House hearing mentioned CDBG as well.  Secretary Carson explained that the current fiscal situation required him to make tough choices and he prioritized rental assistance. The budget suggested that state and local governments should step in with funding, but the Secretary offered no ideas on if or how that could happen. Secretary Carson also repeatedly praised public-private partnerships like the Rental Assistance Demonstration program, but did not offer any solutions as to how partnerships could be reached if federal incentives like CDBG and HOME are eliminated.

The steep regulatory burdens facing public housing authorities was also raised in both the Senate and the House hearings. Senator Shelley Moore Capito (R-W.V.) said that “small PHAs are begging for flexibilities” and that PHAs she has met in West Virginia know the best way forward because of their long experience they have in the industry. Senator John Boozman (R-Ark.) also highlighted the regulatory burden of small and medium PHAs and praised Moving to Work, which the Secretary said he supports.

Many lawmakers criticized the cuts to the Public Housing proguram, particularly the devastating $1.2 million cut to the Capital Fund. Senate T-HUD Ranking Member Jack Reed (D-R.I.) commented to Carson that the cuts to the Capital Fund would create the same types of health hazard situations that the Secretary claims to want to address, particularly lead. Senator Brian Schatz (D-Hawaii) called the cut “draconian and cruel” and also noted that deferring more maintenance to public housing would cause further health issues for residents. In the House, Rep. Katherine Clark (D-Mass.) noted the 2010 HUD estimate of $26 billion in deferred maintenance to public housing and said the cuts would undermine efforts underway to address health hazards and modernize public housing.

House T-HUD Chair Mario Diaz-Balart (R-Fla.) asked for clarification on the proposed rent reforms in the budget, asking for a timeline on how the department intends to work with Congressional authorizers and if their budget would require modifications if the increased rents are not implemented. The Secretary said he looked forward to collaborating with authorizers. Representative Clark also questioned the proposal, noting that a constituent in her district would see a significant increase in her rent if the policy proposal were enforced. Secretary Carson pointed out that there would be hardship waivers from rent increases.

Appropriators have signaled that they intend to start drafting bills, despite the fact that neither the House nor the Senate have drafted budget resolutions or set the overall spending level for the upcoming fiscal year. The Budget Control Act cap for FY 2018 is $5 billion below current spending levels, though it is unclear whether Congress will abide by the caps. The President’s budget requests a $54 billion cut to non-defense discretionary spending, like HUD.

HUD Deputy Secretary Confirmation Hearing

On Tuesday the Senate Banking, Housing and Urban Affairs Committee reviewed the nomination of Pam Patenaude of New Hampshire to be the next HUD Deputy Secretary. Ms. Patenaude, a housing veteran of thirty years, was introduced by Sen. Jean Shaheen (D-N.H.).  In the audience in support for Ms. Patenaude was Former Senate Majority Leader Bob Dole, who is now a prominent member of the faculty of experts housed at the Bipartisan Policy Center (BPC) here in Washington.  Ms. Patenaude heads BPC’s Housing Department.  Patenaude’s nomination was supported in writing by 30 housing organizations, including NAHRO.

In her testimony, Ms. Patenaude stressed her experience, her long and dedicated commitment to affordable housing. She also highlighted her work over her career at HUD in various positions, including as Assistant Secretary for Community Planning and Development, and at other industry organizations such the New Hampshire Housing Finance Authority, the Urban Land Institute, the BPC, and currently her work at the Terwilliger Center.

During the approximately 90-minute hearing, Patenaude was asked repeatedly about the Trump Administration’s FY 2018 budget and her support of that budget request.  Elimination of HOME and CDBG, cuts to the Housing Choice Voucher program and steep cuts impacting the Public Housing Operating and Capital Funds were mentioned by many who believed that her support for the 2018 budget contradicted her long and distinguished career in support of widely held affordable housing goals. 

Ms. Patenaude explained that the 2018 budget was prepared well before her nomination; that cuts to CDBG for example were necessary for reasons including the adequacy of the dollars currently being provided; that many of the objectives of CDBG could be handled through the administration’s infrastructure legislation and that other affordable housing tools such as the LIHTC were still available to meet current needs.  She also stressed the importance of regulatory reform and the need to stimulate an increase in private sector involvement in meeting affordable housing needs should the President’s budget be approved as written.  Ms. Patenaude did more than once stipulate her support for the President’s budget during the Q&A portion of the hearing. 

The panel vote on her nomination is expected in the coming weeks, after which the entire Senate must vote to confirm her nomination. You can read Patenaude’ s testimony and Chairman Crapo’s opening statement here.  

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