Written by: Internal Analysis & Opinion Writers
The Trump administration's proposed fiscal year 2026 budget includes significant reductions to the Department of Housing and Urban Development (HUD), prompting widespread concern among affordable housing leaders. The budget suggests a 43.6% decrease in HUD funding, amounting to a \$33.6 billion cut from the current \$77 billion allocation.
A substantial portion of these cuts targets the State Rental Assistance Block Grant, with a proposed reduction of \$26.7 billion. This grant supports public housing assistance, tenant-based rental assistance, and housing for seniors and individuals with disabilities. Additionally, the budget proposes eliminating the HOME Investment Partnerships Program, which funds state and local governments in creating affordable housing for low-income households.
The administration frames these cuts as a means to empower states by transforming federal rental assistance programs into state-based formula grants. This approach, according to the budget outline, would allow states to design rental assistance programs tailored to their unique needs and preferences.
HUD Secretary Scott Turner supports the proposal, stating that it encourages state and local governments to take greater responsibility. He describes the budget as a reimagining of federal involvement in affordable housing and community development, aiming to streamline and simplify existing programs to better serve the American people.
However, many housing advocates and industry leaders express deep concern over the potential impact of these cuts. David M. Dworkin, president and CEO of the National Housing Conference, warns that the proposed budget would increase homelessness and force many apartment owners and operators out of business. He emphasizes that the reductions would have a devastating effect on millions of Americans, particularly the most vulnerable populations.
Marisa Calderon, president and CEO of Prosperity Now, highlights additional worries regarding the elimination of discretionary grants under the Community Development Financial Institutions (CDFI) Fund. This fund provides critical support to financial institutions serving economically disadvantaged communities, and its removal could further exacerbate challenges in affordable housing access.
While the administration argues that the budget promotes efficiency and local control, critics contend that the cuts would dismantle essential safety nets. The proposed reductions could lead to increased housing instability, higher rates of homelessness, and the erosion of progress made in affordable housing initiatives.
The final budget for fiscal year 2026 remains subject to congressional approval, and debates are expected as stakeholders advocate for the preservation of vital housing programs. The outcome will significantly influence the future of affordable housing and the well-being of low-income communities across the nation.
