Senate Budget Hurts Housing

The proposed Senate budget, approved this afternoon, includes alarming cuts for housing and homeless programs. The budget zeroes out appropriated funding for the NC Housing Trust Fund, instead allowing the diversion of mortgage settlement funding meant for housing counseling and legal services to substitute as a short-term fix. The proposed budget also eliminates critical funding for homeless programs.

The NC Housing Trust Fund (NCHTF), created 25 years ago, is the only state-appropriated resource that provides permanent housing for the homeless, survivors of domestic violence, and persons with disabilities; it ensures that seniors and persons with disabilities can continue living on their own homes through rehab and modification; it produces energy-efficient affordable housing; and, it provides successful, entry-level homeownership.

“This is the time for the state to invest in critical housing programs, not cut them” said Chris Estes, executive director of the NC Housing Coalition. “The mortgage settlement funds were meant to help distressed homeowners, not to plug budget holes. As we recover from a serious housing crisis, we need a robust Housing Trust Fund to help ensure the development of safe, affordable housing and we also need strong housing counseling and legal services to help homeowners avoid foreclosure.”

In the past, the state has invested as much as $19M per year for the NCHTF. In recent years that had been cut down to $10M and in 2011, the NCHTF was reduced to $7.8 million. The Senate’s proposed budget zeroes out the entire 2012 appropriation for the Housing Trust Fund. Similarly, the House budget includes a one-time reduction of $4.3 million to the NCHTF. Both the House and Senate proposals suggest that the NC Housing Finance Agency should divert money from mortgage settlement funds to replenish the cut.

The mortgage settlement funds are the result of a landmark legal settlement with five of the nation’s largest mortgage servicers. The $30 million received by the NC Housing Finance Agency is intended, under the terms of the settlement, to help distressed homeowners through housing counseling and legal assistance.

Funding for Homeless Programs Also Cut

The proposed Senate budget, like the House budget, eliminates homeless programs funding for the Interagency Council for Coordinating Homeless Programs (ICCHP). This $250,000 in funding, through the Social Services Block Grant is the only line item in the budget that is targeted to the homeless. Homeless service providers across the state leverage this funding to access $23 million each year in federal funding for a variety of homeless programs. The ICCHP is also responsible for research that has been used to significantly reduce long-term, disabled (chronic) homelessness by more than half in the Asheville, Greensboro, and Wilmington areas.  This year, the ICCHP was planning to prioritize funds to realize similar decreases among homeless veterans and families.

“Leaving out vital homeless funding is shortsighted,” says Denise Neunaber, Executive Director of the NC Coalition to End Homelessness. “Cutting this funding doesn't balance the budget. What it does is cost us more money by not addressing the high costs of homelessness, jeopardizes millions in federal funding, and sends a signal that our State doesn't care about our most vulnerable citizens."