Data Point: Homeless Assistance Program Funding: Federal Versus State and Local Assistance

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Report | July 28, 2011

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Homeless assistance programs are funded from numerous public, private, and philanthropic sources. A significant portion of total dollars expended on assistance programs at the local level is provided by the federal government, through the Department of Housing and Urban Developmentā€™s (HUD) largest homeless assistance program called the McKinney-Vento Homeless Assistance Grants, as well as through other federal programs targeted to homeless people.

In Fiscal Year (FY) 2011, HUD provided $1.905 billion in homeless assistance grants to approximately 7,500 local programs. Additionally, to combat the potential homelessness crisis brought on by the Great Recession, the federal government contributed $1.5 billion in grants through the Homeless Prevention and Rapid Re-Housing Program (HPRP) as part of the American Recovery and Reinvestment Act of 2009.

However, the majority of dollars spent on homeless assistance programs come from state and local sources. Though the exact ratio of federal to state and local funding is unknown, national experts have estimated that, at minimum, at least one state or local dollar is spent on homeless assistance programs for every federal dollar provided. This estimate is supported by data analysis of the national homeless assistance housing inventory, which reveals that greater than half (54 percent) of all program beds are fully funded by state and local dollars (see Figure 1).

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While homeless assistance program funding has increased at the federal level (from $1.891 billion in FY 2010 to $1.905 billion in FY 2011), the state and local picture is different. Although a comprehensive account of program cuts is not available, collected evidence shows that a number of states and localities have proposed cuts to homeless assistance programs for FY 2012. The Homelessness Research Institute (HRI) at the National Alliance to End Homelessness is compiling a sample of places where cuts to homeless assistance programs have been proposed: http://www.endhomelessness.org/content/article/detail/3929. Examples of proposed cuts include: Illinois, where there has been a proposal to cut $10 million in prevention programs and Washington, DC, where there has been a proposal to cut $20.5 million across all homeless assistance programs.

As more and more data becomes available on state and local budgets, evidence is piling up that homeless assistance programs are being cut across the country. Further, cuts are being made to mainstream social service programs, cash assistance, and employment programs that directly affect homelessness.

All of these cuts elevate the vulnerability of poor families and individuals and low-income workers, which heightens the risk of homelessness. Ultimately, these cuts may likely lead to increased homelessness.