The Trump administration’s “skinny” budget, which lays out high-level funding proposals for congressional consideration, proposes to fundamentally change the federal housing assistance system. The budget recommends combining five major federal housing assistance programs—housing choice vouchers, public housing, project-based rental assistance, Section 202 (supportive housing for the elderly), and Section 811 (supportive housing for people with disabilities)—into a single, state-administered block grant.
The administration estimates this change would cut existing funding roughly in half (PDF), from $58.4 billion to $31.7 billion. This reduction would necessarily lead to fewer households receiving housing assistance. In 2024, the US Department of Housing and Urban Development reported that the five housing assistance programs in question funded units that housed 4.5 million households. Based on Urban Institute analysis, we find the proposed changes would reduce that number to 2.4 million households.
Although the skinny budget is unlikely to pass in its current form, any change that turns housing assistance programs into a single block grant would scale back already limited assistance at a time when housing is increasingly unaffordable for many.
How would the skinny budget proposals affect housing assistance?
The current housing affordability crisis has several causes, a key one being that not enough housing has been built to meet demand, leading to increasing pressure on households with low incomes. Housing assistance, which is meant to alleviate some of this pressure for households with low incomes, is not an entitlement, currently reaching only about 1 in 4 eligible households.
In 2024, the five major housing assistance programs funded 5.1 million housing units that—when accounting for occupancy rates—housed 4.5 million households. The Housing Choice Voucher Program is by far the largest of the five programs (2.8 million units), followed by project-based assistance (1.3 million units), public housing (870,000 units), and Sections 202 (120,000 units) and 811 (34,000 units).
The programs function in different ways and have different costs, with some programs funding buildings and others supporting people to rent in the private market. Overall, reducing the budget to $31.7 billion would immediately reduce the number of funded units by about 2.3 million, leaving support for just 2.8 million units. Assuming occupancy rates stay consistent, only 2.4 million households would receive assistance.
Block granting also could lead to increased costs for states. States likely would need to increase their capacity to administer the block grant and provide additional funds for housing agencies to increase staffing and build systems to replace current federal processes.
Seniors, people with disabilities, and other families would lose needed housing assistance
The budget also institutes a cap on rental assistance for “able bodied adults,” with the stipulation that “a majority of rental assistance funding through the States would go to the elderly and disabled.”(PDF) While we do not know how Congress would implement a requirement to limit assistance to households with adult members who are able to work, it’s difficult to see how cuts would leave units for any of these households.
The magnitude of the cuts also would assuredly cut assistance for senior and disabled households as well. Currently, 42 percent of households receiving assistance are headed by seniors, and 33 percent of nonsenior households have a head, spouse, or cohead with a disability. Across the five programs, 1.88 million household heads were 62 or older, and 860,000 younger household heads had a disability. The resulting 2.7 million households outnumber the proposed cuts once occupancy rates are taken into account, meaning some elderly people and people with a disability currently receiving assistance would likely lose it.
Block granting could cause reductions in housing assistance
Research provides clear evidence that shifting program funding to block grants from allocations based on actual counts of people assisted and concrete costs would lead to cuts in program funding and in the number of people served over time. It’s easier to reduce a block grant appropriation number or keep it steady and allow the value to erode from inflation, than it is to reduce an appropriation that accounts for actual people served or actual changes to costs over time.
Federal funds for the Temporary Assistance to Needy Families program, for example, have remained unchanged since they were enacted in 1996. At that time, 68 of every 100 families with children in poverty received assistance. By 2020, only 21 of every 100 of these families did.
If we assume block grant funding remains static, a 2 percent increase in housing costs annually would mean another 500,000 households would lose assistance in 10 years. If housing costs increased by 5 percent, the drop would be more than 1 million additional households in 10 years.
Housing costs and changes in housing costs vary considerably across the country. We simply do not know how any block grant system for housing assistance would allocate funding or account for housing cost increases. It is likely, however, that places experiencing rapid housing-price increases would see the real-world value of assistance drop more quickly.
Income changes also could limit the value of housing assistance. Assisted households pay a share of their income toward housing (typically 30 percent). If the economy slips, incomes will too, leading to lower tenant contributions toward rent and higher per unit assistance costs. If programs don’t account for that possibility, cost pressures to cut back on assistance will become stronger when households may need it more.
Ultimately, the administration’s proposal to reduce funding for housing assistance by block granting major housing assistance programs would severely decrease housing stability. More than 2 million households would lose their housing immediately, and hundreds of thousands more could lose their housing in the years to come. Amid a nationwide affordable housing crisis, the proposal runs directly counter to the needs of many Americans.
Let’s build a future where everyone, everywhere has the opportunity and power to thrive
Urban is more determined than ever to partner with changemakers to unlock opportunities that give people across the country a fair shot at reaching their fullest potential. Invest in Urban to power this type of work.
