Proposed HUD FY 2013 Program Budget

Washington, D.C., February 14, 2012 - As you know, the Obama Administration released its proposed Fiscal Year (FY) 2013 federal budget on February 13, 2012.  Following-up on its successful 2011 congressional effort to: (1) reduce the size of the FY 2012 HUD program budget and the amount of direct appropriations misused by HUD for a groundless expansion of in-plant regulation; and (2) subject the HUD program budget to proper congressional oversight and accountability for the first time ever, MHARR has now analyzed the specific HUD program FY 2013 budget request and justifications for your consideration at the March 2012 MHARR meeting in Tunica, Mississippi.  Based on that analysis, shown below is a brief outline of certain key aspects of the proposed program budget, together with relevant comments.

1. The program overall budget request for FY 2013 -- $8 million in total authority -- is higher than the $6.5 million approved by Congress for FY 2012 (even though the direct appropriation portion would remain at $4 million).  HUD, however, does not explain why more spending authority is needed when it acknowledges, in the same document, that “in [FY] 2011 industry production dropped to historical low levels that are not expected to recover through [FY] 2013.”  (MHARR will oppose this increase).   

2. The justification states that HUD will not seek a label fee increase in 2013 due to the “fragile manufactured housing market.”  This is a change from the FY 2012 budget justification, in which HUD indicated that it would seek a per section label fee increase to $60.00 and is a further positive outcome of MHARR’s 2011 congressional engagement on the program budget, during which MHARR repeatedly stressed that under the Manufactured Housing Improvement Act of 2000, any change in the label fee needed to be justified by HUD and approved by Congress in an annual appropriations act.  (MHARR supports HUD’s position). 

3. The only element of the program that would see a significant funding increase under the proposed FY 2013 budget is funding for the monitoring contract.  HUD thus states: “The bulk of the increase in the operating budget from fiscal years 2012 and 2013 is planned re-procurement of the monitoring contract, resulting in the regulatory portion of the program increasing from $4 million in 2012, to $5 million in 2013.”  Again, though, HUD fails to explain why the cost of the program monitoring contract, last awarded when production was at a higher level, would increase given “historically” low production levels that HUD itself does not project to increase appreciably during FY 2013.  (MHARR will oppose this increase).   

4. The justification states that “there are no plans to collecat user fees from the dispute resolution and installation programs in fiscal year 2013.”  (MHARR will investigate this further).

5. HUD funding for State Administrative Agencies (SAAs) would remain at FY 2012 levels, even though the states, unlike the monitoring contractor, are responsible for consumer protection for an increasing number of new and existing homes.  (MHARR strongly opposes this continuing HUD misallocation of program funds in conjunction with item 3, above).

6. No changes in program staffing levels are proposed.  Program staffing thus remains at historically high levels even though industry production is at historically low levels.  (MHARR will oppose this position).

HUD’s proposed FY 2013 budget request, including the above-described specific items, will be discussed in detail at the March 2012 MHARR meeting in Tunica, Mississippi, after which MHARR will once again take an aggressive position on the proposed HUD program budget in Congress during the FY 2013 appropriations process.      

On a closely related matter, it’s worth noting that the HUD justification document cites positive fire safety statistics for post-HUD Code homes from the July 2011 National Fire Protection Association (NFPA) report, “Manufactured Home Fires” (corrected in critical respects by NFPA after MHARR’s August 3, 2011 letter to NFPA’s president) as proof that the federal program “works”  -- i.e., as justification for its request for more tax dollars -- yet has refused to preempt state and local fire sprinkler requirements based on the same data showing that the HUD Code fire safety standards “work” by meeting the preemptive federal benchmark of “reasonable protection.”  Because the current HUD fire safety standards, as shown by the NFPA report, “work” -- providing “reasonable” fire safety without sprinklers – there is no statutory basis for the MHI-HUD “conditional” fire sprinkler standard accepted by the Manufactured Housing Consensus Committee (MHCC) in October 2011.