Sequestration Could Devastate Fed Housing Programs

Automatic government spending cuts could result in 75,000 fewer households receiving foreclosure-prevention aid along with rental and counseling services through the Department of Housing and Urban Development.

Shaun Donovan, HUD Secretary, sent that warning to lawmakers Thursday when discussing the impact sequestration could have on homeowners during a Senate Appropriations Committee.

It’s not just foreclosure counseling and prevention programs that would feel the impact of automatic cuts.

GovBudgetCutsAnother 125,000 individuals or families could lose assistance offered through the Housing Choice Voucher program, putting more people at risk of becoming homeless, Donovan told the panel. The HCV program currently provides support to families who are renting in private apartment units.

Donovan added that sequestration cuts could cause more than 100,000 formerly homeless Americans, including veterans, to be removed from their current residences or emergency housing programs.

“Much of this damage will be done through cuts to HUD’s Continuum of Care programs, under which formerly homeless families and individuals are quickly re-housed and given other assistance to move them towards self-sufficiency,” he explained.

“In addition, the sequestration cuts would eliminate some of the key funding for the nation’s shelter system for the homeless provided by the Emergency Solutions Grants (ESG) program.”

HUD programs related to home safety and rehabilitation also would take a hit, Donovan said. About 2,100 housing units for low-income families would no longer have funding available through the Home Investment Partnerships program.

“These cuts will have an even broader effect on local economies, particularly because historically, every dollar of HOME funding is leveraged with almost four dollars of other governmental or private investment for the production or rehabilitation of affordable single or multi- family housing,” Donovan said. “This will mean fewer jobs in and more harm to local construction and related industries.”