HUD Testimony

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Testimony of Roy A. Bernardi, Assistant Secretary for Community Planning and Development, U.S. Department of Housing and Urban Development, before the U.S. Senate Committee on Banking, Housing and Urban Affairs, Subcommittee on Housing and Transportation

March 6, 2002

Chairman Reed, Ranking Member Allard and Members of the Subcommittee, thank you for the opportunity to testify before you today. On behalf of Secretary Martinez I want to extend our commitment to work with you to improve this nation's response to the problem of homelessness.

HUD has a long history of addressing homelessness. Since the McKinney-Vento Act's beginning in 1987, HUD has administered an array of Federal homeless assistance programs. The programs provide emergency, transitional, and permanent housing for homeless persons. HUD's programs also provide for, by law, a variety of supportive services, such as job training and mental health treatment. Many hundreds of thousands of men, women, and children who have no place to call home have been assisted by these programs.

Secretary Martinez intends to continue and even enhance our efforts related to homelessness. The Bush Administration has set a goal of ending chronic-or long-term-homelessness within 10 years. This is a bold goal. This is a goal that will require many Federal, State and local partners. But this is a goal that together we can and will achieve.

The Federal Interagency Council on the Homeless was recently reactivated and will be critical in ending chronic homelessness. The member agencies of the Council elected Secretary Martinez as Chairman and Secretary Tommy Thompson of the Department of Health and Human Services (HHS) as Vice Chairman. At the meeting, Philip Mangano was appointed as Executive Director of the Council. Mr. Mangano is the former director of the Massachusetts Housing and Shelter Alliance and has extensive experience in the field of homeless programs and policy. The Council will be, among other activities, assessing current Federal homeless efforts, reducing duplication among programs, and identifying ways to effectively prevent homelessness. HUD looks forward to working closely with the other member agencies of the Council.

Let me provide some background on HUD's present homeless assistance efforts. The Department administers four McKinney-Vento homeless assistance programs. Three of these are competitive: the Supportive Housing Program, Shelter Plus Care, and the Section 8 Single Room Occupancy or SRO Program. The fourth program allocates funds by formula, the Emergency Shelter Grants Program. Together, they provide over 70 percent of all Federal McKinney funds administered by six Federal agencies. In 2002, Congress appropriated and HUD will be awarding over $1.1 billion in homeless assistance for these four programs.

To streamline the administration of these programs, in 1995 HUD implemented the Continuum of Care approach. Prior to that time, individual projects were submitted to Washington for review and HUD picked which ones it thought were most important for each community. The Continuum calls on communities-not individual projects--to identify their needs related to homelessness-both housing and services. State and local government, non-profit agencies including faith groups, as well as foundations, businesses, and homeless and formerly homeless persons come together in this effort. The community collectively identifies the inventory of resources they currently have to address their various homeless needs. Any unaddressed needs, or gaps, in the system are what communities can request HUD to fund. Applicants can request funds for any or all of the three competitive HUD programs. Communities prioritize the projects they want funded and if eligible, and funds are available, HUD awards local projects based on the community's prioritized list. The continuum approach has helped coordinate housing and services for a population that is very needy and often difficult to effectively serve.

Let me briefly summarize the outcomes of this past competition to give you a sense of the magnitude and impact of these HUD programs. Over 450 continuums applied for funding in 2001. With many individual continuums representing several cities and in some cases entire States, a significant portion of America has a continuum. In fact, a full 90 percent of all Americans now live within existing continuums. These continuums submitted 3,275 projects for funding of which HUD was able to fund 78 percent. With the $950 million awarded, HUD will be supporting the operations of 70,000 beds. When combining the housing and services the funds support, approximately 229,000 persons will be assisted on any given day.

The current approach is helping many people, but given the need on the streets of cities throughout this nation, we must do much more. National studies indicate that at any point in time there are over 600,000 persons who have no home. Many are homeless only a short time and with short term housing and services they can transition towards self-sufficiency. However, a much smaller number are homeless for extended periods of time and suffer from disabilities. As Dr. Dennis Culhane from the University of Pennsylvania has pointed out in recent research, this relatively small portion of disabled single homeless persons consumes a large share of public services. To the extent we can provide permanent housing and support for this population, the savings in resources can be used to serve many more homeless persons who only need short-term assistance.

Currently HUD is actively pursuing four major policy initiatives to meet the goal of ending chronic homelessness established by Secretary Martinez. The first is a joint task force made up of HUD, HHS, and the Department of Veterans Affairs. The second initiative is Policy Academies for States and local leaders. The third initiative is improving the annual competition to help drive this effort. Fourth, HUD proposes to consolidate its homeless assistance programs.

Joint Task Force. HUD and HHS have been meeting since February 2001 and VA has recently come on board. The group's purpose is to seek ways to increase the use of mainstream Federal supportive service funds so that HUD need not devote a majority of its funds to services. Instead HUD can once again focus on its core mission-the provision of housing. The wide range of HHS service programs have been represented at the Federal task force. Sharing information about each other's programs has been an important and fruitful first step of the group. As part of this process, HUD solicited input on how it could improve its national grants application. Recommendations regarding supportive services were provided by HHS and incorporated by HUD into this year's application process.

Policy Academies. Another concrete outcome of our collaboration with HHS is the planning and implementation of a series of Policy Academies. Each Governor was invited to submit an application for consideration to send a team of their top mainstream health and human service officials with policy and budgetary authority to a Policy Academy conference. The top 16 states were selected to attend either of two scheduled Academies. There are plans for additional sessions. The sessions give the State Teams the opportunity to meet and plan statewide strategies on improving coordination and communication between the various agencies within the state. The goal is to assist State and local policymakers in developing an Action Plan intended to improve access to mainstream health and human services that are coordinated with housing for homeless persons.

Changes to the Continuum Application. We have carefully considered the comments of States, cities and non-profit providers as well as our Federal partners in preparing this year's application. The application will focus less on process and more on outcomes, clearly highlighting the importance of housing and mainstream services. As the Notice of Funding Availability for these funds has not yet been issued, I am prevented from providing details on the various improvements we have made at this time.

In addition to targeting homeless assistance to those most in need, we concurrently want to prevent homelessness. Homeless prevention is sensible and cost-effective. By lowering the rate of entry of people into the homeless population, service providers can more effectively aid those who are currently homeless. In addition to saving the cost of shelter and related social services, prevention efforts can also reduce the human and social costs of homelessness. Homeless prevention programs also help people to maintain steady employment and self-sufficiency, thereby generating real benefits in our communities, schools, and places of work.

The linchpin of HUD's McKinney-Vento homeless prevention effort is the Emergency Shelter Grants (ESG) Program. Up to 30 percent of an ESG grantee's funds can be used for homeless prevention. Other HUD programs can and do provide community development and housing assistance to state and local governments to assist low-income and other persons in avoiding homelessness. These include the Community Development Block Grant (CDBG) and Home Investment Partnership (HOME) Programs, Housing Opportunities for Persons with AIDS (HOPWA) Program, Section 8 Housing Choice Vouchers, and the Supportive Housing for Persons with Disabilities (Sec. 811).

There are many successful examples of prevention efforts. Let me share one involving HUD's Emergency Shelter Grant, which can be used to prevent homelessness. The Community Sharing Fund (CSF) of the St. Paul Foundation in Minnesota is considered a "last resort" emergency fund. Working through a network of 70 social service agencies in a three-county area, this recipient of ESG homeless prevention monies serves clients who are in danger of being evicted from their homes and are not eligible for help elsewhere. A thorough screening process and documentation of the eviction proceedings help staff to assess the potential for solving the housing problem through short-term cash assistance. In some cases, clients are required to attend financial management classes prior to receiving monetary assistance. Where a "reasonable" chance of success in solving the problem exists, financial awards (averaging $400) are made to the referring agency, which in turn provides a check to the landlord for payment of the rent, thus preventing a family from becoming homeless.

HMIS. Let me briefly mention our efforts related to homeless management information systems (HMIS). The Department has adopted a comprehensive approach to addressing Congressional direction to collecting homeless information in all jurisdictions and nationally. To facilitate that effort, Congress developed, with input from HUD staff, a new eligible activity in HUD's Supportive Housing Program. This initiative is resulting in many homeless projects receiving grant assistance to implement and operate HMIS systems. To further support this effort, in September 2001, we initiated a $4.1 million two-year technical assistance contract to assist Continuum of Care communities nationwide in HMIS planning and implementation activities. We are currently in the process of reviewing proposals for setting standards for local and national homeless data collection and implementing an annual homeless assessment report to Congress. It is through this HMIS effort that we will be able to better measure the performance of our progress in ending chronic homelessness and effectively assist homeless persons generally in moving towards self-sufficiency.

The Department will be submitting a proposal to consolidate its three competitive homeless programs. Communities, not Federal mandates, can end homelessness. Using the groundwork laid through the continuum process, we want to empower States and cities to more effectively solve this problem within their jurisdictions. We have been and will be meeting with public interest groups about our proposal. We are soliciting their feedback and recommendations as we develop the legislation.

The Department wants to take the best elements of the current competitive system and improve upon them. We recognize that the community-wide planning aspect of the Continuum process is a very positive feature. The coordination that is going on in communities between city agencies, non-profit organizations and other groups such as foundations and businesses is something we want to retain in our proposed program. We recognize the vital role that non-profit organizations provide in communities. They actively participate in assessing needs and prioritizing which projects should be funded. They also are usually the front-line providers of assistance to homeless persons. We will be examining how non-profits can continue to play this important role.

There are features of the current process that need to be changed. For instance, the current three programs that constitute the Continuum of Care each have different eligible applicants, different eligible activities, different match requirements, and different grant terms. It is often difficult for local organizations to negotiate through the complexity of the current array of programs. We need to provide flexibility so communities can succeed.

In addition to providing more flexibility to communities, a streamlined approach to awarding funds will significantly reduce the amount of time it takes to assist homeless persons. Through a national competition system where up to 4,000 projects must be rated and reviewed before awards are made, HUD requires nearly 18 months from the time funds are appropriated to when a homeless person is actually assisted. Under a more streamlined approach, the typical community, which has fewer than 15 projects, might review and award its projects in a matter of weeks, not months. This approach might use a formula for award that combines measures of need, strong performance standards, and incentives so as not to be confused with an entitlement. Performance standards such as those related to accessing mainstream resources for clients and placing long-term homeless persons in permanent supportive house are being considered.

In closing, HUD is committed to making a difference in the lives of those who are unfortunate enough not to have a home. We look forward to working with you to make that a reality. I am available for any questions you may have.