Trump wants to ax affordable housing grant; rural areas will be hurt

Introduction to the Issue

Heather Colley and her two children moved four times over five years as they fled high rents in eastern Tennessee, which, like much of rural America, hasn’t been spared from soaring housing costs. A family gift in 2021 of a small plot of land offered a shot at homeownership, but building a house was beyond reach for the 45-year-old single mother and manicurist making $18.50 an hour. That changed when she qualified for a $272,000 grant from a nonprofit to build a three-bedroom home because of a program that has helped make affordable housing possible in rural areas for decades. She and her family moved in in June. “Every time I pull into my garage, I pinch myself,” Colley said.

The Proposed Cut

Now, President Trump wants to eliminate that grant, the HOME Investment Partnerships Program, and House Republicans overseeing federal budget negotiations did not include funding for it in their budget proposal. Experts and state housing agencies say that would set back tens of thousands of future affordable housing developments nationwide, particularly hurting Appalachian towns and rural counties where government aid is sparse and investors are few. The program has helped build or repair more than 1.3 million affordable homes in the last three decades, of which at least 540,000 were in congressional districts that are rural or significantly rural, according to an Associated Press analysis of federal data.

Political Limbo

To account for the gap left by the proposed cuts, House Republicans want to draw on nearly $5 billion from a related pandemic-era fund that gave states until 2030 to spend on projects supporting people who are unhoused or facing homelessness. That $5 billion, however, may be far less, since many projects haven’t yet been logged into HUD’s tracking system, according to state housing agencies and associations representing them. A spokesperson for HUD, which administers the program, said HOME isn’t as effective as other programs where the money would be better spent. In opposition to Trump, Senate Republicans have still included funding for HOME in their draft budget. In the coming negotiations, both chambers may compromise and reduce but not terminate HOME’s funding, or extend last year’s overall budget.

Some Rural Areas More Dependent on HOME

In Owsley County — one of the nation’s poorest, in the rural Kentucky hills — residents struggle in an economy blighted by coal mine closures and declining tobacco crop revenues. Affordable homes are needed there, but tough to build in a region that doesn’t attract larger-scale rental developments that federal dollars typically go toward. That’s where HOME comes in, said Cassie Hudson, who runs Partnership Housing in Owsley, which has relied on the program to build the majority of its affordable homes for at least a dozen years. A lack of additional funding for HOME has already made it hard to keep up with construction costs, Hudson said, and the organization builds a quarter of the single-family homes it used to.

A Long-term Effect

In congressional budget negotiations, HOME is an easier target than programs such as vouchers because most people would not immediately lose their housing, said Tess Hembree, executive director of the Council of State Community Development Agencies. The effect of any reduction would instead be felt in a fizzling of new affordable housing supply. When HOME funding was temporarily reduced to $900 million in 2015, “10 to 15 years later, we’re seeing the ramifications,” Hembree said. That includes affordable units built in cities. The biggest program that funds affordable rental housing nationwide, the Low Income Housing Tax Credit, uses HOME grants for 12% of units, totaling 324,000 current individual units, according to soon-to-be-published Urban Institute research.

Conclusion

The potential elimination of the HOME Investment Partnerships Program could have far-reaching consequences for rural areas across the United States. With the program’s help, over 1.3 million affordable homes have been built or repaired in the last three decades. Its loss would not only impact the immediate construction of new homes but also erode the ability of nonprofits to build affordable housing in the future. As the budget negotiations continue, it remains to be seen whether the program will be preserved, reduced, or eliminated, leaving the fate of affordable housing in rural America uncertain.

FAQs

1. What is the HOME Investment Partnerships Program?
   The HOME Investment Partnerships Program is a federal program that provides grants to states and localities to help build, buy, and rehabilitate affordable housing for low-income families.
2. Why is the program in jeopardy?
   The program is in jeopardy because President Trump’s proposed budget does not include funding for it, and House Republicans have not included funding for it in their budget proposal.
3. How many homes has the program helped build or repair?
   The program has helped build or repair over 1.3 million affordable homes in the last three decades.
4. What would be the impact of eliminating the program?
   The impact of eliminating the program would be felt in a reduction of new affordable housing supply, particularly in rural areas where government aid is sparse and investors are few.
5. Are there any alternatives to the program?
   House Republicans have proposed drawing on nearly $5 billion from a related pandemic-era fund to support affordable housing projects, but this may not be enough to replace the funding provided by the HOME program.