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July 16, 2025

The OBBBA Passed. Now What Happens to Housing?

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Heart and Home is a montly column by Josh Ishimatsu

What does the One Big Beautiful Bill Act mean for affordable housing in Santa Clara County? And what can we do to help shore up our communities against these and other possible future cuts?

The One Big Beautiful Bill Act (or OBBBA, and, yes, this is the official name of the bill) has passed and been signed into law.  So what now?  And what does this all mean for affordable housing in Santa Clara County?

Appropriations vs. Reconciliation

Because of Senate procedural rules, OBBBA was passed under Reconciliation (can pass with 50+1 votes) instead of under Appropriations (which would require 60 votes). 

Appropriations vs. Reconciliation is a pretty weedy/wonky topic and not something I am fully confident in my own ability to understand and explain fully.  But, I think it provides important context for what is to come in the next couple months.

The bottom line is that the budget process is not complete.  As a Reconciliation bill, the OBBBA sets the basic framework for the budget – the tax structure and the spending on Mandatory programs (e.g., Social Security, Medicaid, Medicare, SNAP).  But Congress has NOT yet set the budget for Discretionary spending.  The annual budgeting process for Appropriations is yet to happen. This means that a lot of what we typically look for in the annual federal budget (the HUD budget, for e.g.) is still TBD.  

The Known Impact

We already know that the OBBBA is bad for the people who live in affordable housing.  Many millions of people will lose health insurance.  Santa Clara County officials estimate that the OBBBA will cut approximately $1 billion in Medicaid to residents of our county.  Food stamps, TANF, and so many other supports for the most vulnerable will be reduced.  At the same time as these cuts, there will be over $100 billion in new revenues for the Department of Homeland Security, more funding for the military, and trillions of dollars of tax cuts.

For the working-class families and vulnerable populations who are served by affordable housing, OBBBA means higher costs, less support, less services, more red tape, more people becoming homeless, more harassment by ICE…  It means that more residents of affordable housing will have a harder time paying rent.  For affordable housing providers, this means more pressure on already stretched-thin operating budgets.

Even before the potential budget cuts through Appropriations (see below), OBBBA will make affordable housing more difficult in Santa Clara County.

What Next for Appropriations

In the next couple months, Congress will be going through its annual budgeting/appropriations process, with the goal of passing a budget before the start of the next federal fiscal year (starts on October first).  Ideally, this process is finished before the end of June (but it’s been a long time since a federal budget has adhered to the intended timeline).

Earlier this week, there was the first post-OBBBA meeting of the House Transportation, Housing, and Urban Development (THUD) committee, where they released the committee’s first draft of the FY 25-26 budget  (and see the minority party committee members’ response here).  The somewhat good news is that the proposal is much closer to the current year budget than the White House’s proposed budget, including flat funding for vouchers (which is not ideal given rising housing costs but is better than the 40% cuts that the White House proposed).  See write-ups about the THUD bill here and here.  Some bad news items are the elimination of HOME, reductions of funding for public housing, housing counseling, and housing for seniors and persons with disabilities.

Moreover, Trump was able to secure votes for OBBBA from the deficit-hawk wing of his coalition by promising more cuts to the budget during Appropriations.  So, there will likely be pressure to make more cuts than what is currently proposed.  And if the budget hews more closely to Trump’s proposal, the result would be on the order of $100 million to $200 million per year less for affordable housing, community development, and homelessness solutions in Santa Clara County – i.e., making an already bad situation even worse.

However, this is not yet a done deal!  Whatever is approved in the House has to get 60 votes in the Senate (per Appropriations rules).  This means that there will be an opportunity to leverage the need for bipartisan support to force compromises on some of these possible cuts.  We can still have an impact!  As we learn more about what national actions are being organized to protect affordable housing funding in next year’s budget, we will let you know.

The Need for Locally Controlled Funding

Regardless of what happens at the national level, the proposed cuts and ongoing federal madness points to the necessity for more robust affordable housing funding at the local level.  We need more resources that we control and that are not dependent upon the DC powers that be.  While we try to preserve federal funding, we also have to proactively create our own, alternative revenue sources that can replace the funding that will continue to be at risk. 

More to come on this topic in future columns.