President Biden’s FY 2023 Budget & What it Means for Affordable Housing & Community Development

President Biden’s FY 2023 Budget & What it Means for Affordable Housing & Community Development

On March 28, 2022, President Biden sent his $5.8 trillion FY 2023 Budget to Capitol Hill.  The President’s Budget is not binding on Congress but does indicate the Administration’s spending and revenue priorities for the year.  The House and Senate Budget Committees will complete hearings on the Budget this week, and then various House and Senate committees will hold hearings on the Budget provisions within their jurisdiction.

The Biden Budget cuts projected deficits by more than $1 trillion over the next ten years and calls for a number of revenue raisers, including a new twenty percent minimum tax on American households worth over $100 million.  The minimum tax would apply to standard taxable income and unrealized income.  Other revenue items from the FY 2023 Biden Budget include raising the corporate tax rate from 21 percent to 28 percent and increasing the top income tax rate on individuals from 37 percent to 39.6 percent.  The Budget also includes a proposal to provide a discretionary basis boost for bond-financed Low-Income Housing Tax Credit (LIHTC) properties, and it makes permanent the New Markets Tax Credit, indexing the current $5 billion annual amount for inflation after 2026.  The Treasury Department’s so-called Green Book contains detailed descriptions of the revenue proposals in the Biden Budget.

The Budget does not reflect the tax code changes, including the LIHTC provisions, from the Build Back Better Act (BBBA) currently being negotiated by Congress and the Administration.  In order to avoid disrupting the negotiations, the Administration elected instead to include in the Budget a “deficit-neutral reserve fund” that serves as a placeholder for the President’s BBBA agenda.

On the spending side of the ledger, the Budget includes a robust affordable housing agenda, including $35 billion in mandatory Department of Housing and Urban Development (HUD) funding to address the shortage of affordable housing.  Other housing and community development highlights include the following:

  • $32.1 billion for Tenant-Based Rental Assistance (a $6.4 billion increase from 2022).
  • $15 billion for Project-Based Rental Assistance (a $1.5 billion increase from 2022).
  • $8.78 billion for the Public Housing Fund (a $974 million increase from 2022).
  • $3.77 billion for Community Development Block Grant Program (CDGB) (a $295 million increase from 2022).
  • $1.95 billion for the HOME Investment Partnerships program (a $600 million increase from 2022).
  • $250 million for Choice Neighborhoods Initiative (a $50 million increase from 2022).
  • $3.576 billion for homeless assistance (a $576 million increase from 2022).
  • $287.7 million for persons with disabilities (Section 811) (a $60.7 million increase from 2022).
  • $455 million for Housing Opportunities for Persons with AIDS (a $25 million increase from 2022).
  • $966 million for housing for the elderly (Section 202) (a $111 million increase from 2022).
  • $1 billion for Native American Programs (a $175 million increase from 2022).
  • $175 million for the Self-Sufficiency Programs (a $20 million increase from 2022).
  • $200 million for the Section 515 direct rental housing program (a $150 million increase from 2022).
  • $1.602 billion for the Section 521 Rural Rental Assistance and Section 542 voucher programs (a $107 million increase from 2022).
  • $400 million for the Office of Lead Hazard Control and Healthy Homes (a $40 million increase from 2022).
  • $250 million for a Green and Resilient Retrofit Program (a $250 million increase from 2022, because the program is new).
  • $86 million for Fair Housing and Equal Opportunity (a $13.4 million increase from 2022).

We anticipate a busy schedule for Congress in the upcoming months.  We are continuing to work with our Hill champions and industry partners on including our affordable housing agenda in an appropriate legislative vehicle, and hope you will continue your good work to encourage Members of Congress to help on that effort.  We also want to remind you to mark your calendar for our June 15th Washington Housing Forum.  We are again partnering with our AHTCC colleagues on this event, and we hope to see you in D.C.