Households across Utah could stand to lose crucial rental assistance under President Donald Trump’s latest budget plan.
That plan, released last week, would dramatically shrink the federal rental aid that helps keep people housed – including thousands of Utah households.
The president’s proposed budget calls for $33.6 billion in cuts from the U.S. Department of Housing and Urban Development, $26.7 billion of which would be in the form of federally based rent assistance.
That help is, in many cases, the only housing assistance available for renters making very low income, said Jim Wood, Ivory Boyer Senior Fellow at the Kem C. Gardner Policy Institute.
Wood, whose research focuses on housing, construction and related areas, authored a paper breaking down the different kinds of federal housing assistance funding benefiting Utahns. There was more than $480 million available in 2022.
“Federal housing programs provide an economic lifeline for thousands of low-income Utah renters and are the most effective programs preventing homelessness,” Wood said in a statement the Gardner Institute included in a release about the paper.
Now those programs face a “serious threat of reduced federal funding,” he said, as the state grapples with a growing homelessness crisis and hundreds of thousands of Utahns – whether they own or rent – struggle to afford housing.
Like Gov. Spencer Cox’s budget proposal to Utah legislators each year, the president’s budget is only a suggestion, since Congress holds authority over spending and will create its own budget.
But lawmakers are under pressure to find deep savings to enact Trump’s larger agenda, which includes sweeping tax cuts.
Low-Income Housing Tax Credit
The largest source of federal funding for housing in Utah is the Low-Income Housing Tax Credit, or LIHTC, program.
That program gives investors a dollar-for-dollar reduction on tax liability, in exchange for making an equity investment into affordable rental housing with below-market rents, according to a presentation by the Utah Housing Corporation.
In 2022, the program funded 1,977 housing units using $286.7 million, according to Wood’s research. And as of last year, there were around 38,000 units in 24 of Utah’s 29 counties linked to the credits — about 10% of the state’s total rental units.
Though the program isn’t specifically called out in Trump’s budget proposal, it could be at risk for another reason.
Corporate tax cuts could mean less investment because they decrease financial incentives for corporations to make equity investments in tax credits, according to an analysis by the Urban Institute.
The analysis, conducted during a round of tax cuts during Trump’s first administration, found the LIHTC program has “performed poorly when investment interest wanes.”
Other sources targeted as ‘dysfunctional’
Additional sources of federal housing funding in Utah include rental assistance, housing vouchers and project-based housing. Those sources provided $160.5 million in funding, helping 22,766 renter households in 2022.
In its request for the HUD funding cuts, the White House called the current system of federal rental assistance “dysfunctional” and proposed deep cuts to Section 8 and other housing voucher programs.
Its plan calls for cutting rental aid by about 40% and sending that money to states “to design their own rental assistance programs based on their unique needs and preferences.”
The administration adds that the budget would institute a new two-year cap on rental assistance for “able-bodied adults” and “ensure a majority of rental assistance funding through States would go to the elderly and disabled.”
In Utah, most of the funding already goes to those populations. According to a survey of the state’s 18 public housing authorities, 22.4% of households receiving vouchers in 2023 had at least one person over the age of 62, and 63.3% were home to at least one person with a disability.
The rental assistance provided to voucher holders depends on local rental rates and the income of the renter household. Renters must pay 30% of their income for rent and utilities, and the voucher covers the remainder.
That means the average rental subsidy varies widely across Utah, from $270 in the Uintah Basin to $957 in Salt Lake County.
The remaining $35.4 million available in 2022 came from a mix of several programs, including Community Development Block Grants and Emergency Shelter Grants.
Megan Banta is The Salt Lake Tribune’s data enterprise reporter, a philanthropically supported position. The Tribune retains control over all editorial decisions.
