House Votes to Terminate Key Foreclosure Program

“Last week, the U.S. told the United Nations that addressing homelessness here at home is a human rights obligation. Cutting vital housing programs gives the lie to those obligations — and damages our credibility as a leader in the world community.” — Maria Foscarinis, NLCHP executive director

by Whitney Gent

WASHINGTON, D.C. — The House of Representatives voted on March 16 to terminate the Neighborhood Stabilization Program, one of the Obama administration’s key foreclosure response programs. This vote came despite the devastating impacts the recession and foreclosure crisis continue to have on neighborhoods across the country — including increased homelessness.

Recent studies show a dramatic rise in homelessness — especially family homelessness — in the wake of the recession and the foreclosure crisis. In 2010, family homelessness increased by an average of 9 percent in cities across the country, and more than six million people have been forced to live “doubled up” with family or friends out of economic necessity.

The termination of the Neighborhood Stabilization Program is part of the new House’s efforts to curtail the federal deficit via massive budget cuts. The existing House budget proposal (H.R. 1) would reduce spending by $60 billion from last year’s budget. If this legislation passes, the National Alliance to End Homelessness has estimated that 161,000 people who would be housed with government assistance will become homeless instead.

The proposed cuts to housing and neighborhood stabilization programs come less than one year after the release of the first ever comprehensive Federal Strategic Plan to Prevent and End Homelessness.

Maria Foscarinis, executive director of the National Law Center on Homelessness & Poverty (NLCHP), said, “The proposed cuts threaten to send more families over the edge into homelessness, at a time when homelessness has already reached levels not seen since the Great Depression. Funding for affordable housing should be increased — not cut.”

Additionally, H.R. 1 would cut $5.5 billion from HUD programs. Housing for disabled people and seniors would be hit hard, with $210 million cut from housing for people with disabilities and $551 million cut from senior housing.

Also, $1 billion would be cut from Community Health Centers, which includes Health Care for the Homeless funding. Another $1 billion will be cut from public housing capital needs. And $70 million will be eliminated from Legal Services Corporation funding.

Santa Cruz activists held this large March Against Foreclosures on Nov. 30, 2011. Following the march, some people occupied a vacant bank building owned by Wells Fargo.  Bradley Stuart photo

Santa Cruz activists held this large March Against Foreclosures. Bradley Stuart photo


Jeremy Rosen, policy director at NLCHP, added, “Cutting funding to programs that keep people in their homes, while increasing funding to homelessness programs just doesn’t make sense. It would mean we’re allowing the problem to get worse — allowing more people to fall into homelessness — before we try to help. This is unacceptable.”

In contrast, the current Democratic budget proposal would provide $200 million in new funding for HUD’s homeless assistance grant funding, which would permit HUD to implement the HEARTH Act and provide housing to more homeless persons. Other critical affordable housing and human services programs would receive level funding.

Foscarinis said, “Last week, the U.S. told the United Nations that addressing homelessness here at home is a human rights obligation. Cutting vital housing programs gives the lie to those obligations — and damages our credibility as a leader in the world community.”

A number of other foreclosure response programs are on the chopping block amid the budget negotiations. In March, the House voted to end the Federal Housing Administration’s short-refinance program and the Emergency Mortgage Relief Program. The Home Affordable Modification Program will be considered for termination in the next two weeks.

The National Law Center on Homelessness & Poverty’s mission is to prevent and end homelessness by serving as the legal arm of the national movement.

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