FY 2014 Appropriations: 2.381 Billion for HUD’s Homeless Assistance Grants Justification

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Federal Policy Brief | July 10, 2013

Files: 2.381 Billion Justification (PDF | 468 KB | 2 pages)

The Department of Housing and Urban Development’s (HUD) McKinney-Vento Homeless Assistance Grants programs are the largest single source of federal funding for communities’ systems to combat homelessness, and these local systems have been remarkably successful. Due to accounting issues related to multiyear grants in this account, however, the small increases in funding since fiscal year (FY) 2011 have not been sufficient to maintain local spending at the same level. Especially now, communities are having to prepare to provide less help for homeless people due to the FY 2013 funding levels and sequestration. With hundreds of thousands of Americans living in places not intended for human habitation or in emergency shelters, undoing these cuts and making cost-effective help available should be a top priority in the final FY 2014 HUD funding bill.

The Administration’s Budget Proposal includes an important increase in funding for HUD’s McKinney programs, as have budget requests from both the Obama and Bush Administrations for the past 10 years. These Administrations have recognized that these programs are worth investing in because:

• Spending on the Homeless Assistance Grants is extremely effective. Work to end homelessness is solidly based on an interagency plan. The models are outcome-oriented and cost-effective.
• These programs address the needs of people living in the worst possible situations, with the clear goal of quickly bringing them back into housing.
• The programs also have a strong history of bipartisan support. The Bush Administration’s FY 2003 budget request announced the goal of ending chronic homelessness and began a consistent pattern of proposed increases for HUD’s homeless assistance programs. Congresses under both Democratic and Republican control have increased funding for this account.
• The programs were recently reauthorized in bipartisan legislation, known as the HEARTH Act, which pushes communities to focus on outcomes and efficiency.

The Administration’s Budget for FY 2014 would provide a total of $2.381 billion for HUD’s Homeless Assistance Grants. While this is a $450 million increase from the post-sequestration level in FY 2013, it returns to the trajectory set in the last three years of the Bush Administration, is in line with the authorization level in the HEARTH Act ($2.2 billion for FY 2010), invests in real effectiveness and results, and addresses the fact that nearly two-thirds of one million Americans remain homeless on any given night. The request breaks down as follows:

Emergency Solutions Grants -- $346 million.  This program funds emergency shelters, and also the low-cost, effective “rapid re-housing” programs that have been key to preventing family homelessness from skyrocketing during the period of high unemployment. The budget would return the basic formula grant portion of the program to $286 million, its level in fiscal years 2011 and 2012; and provide an additional $60 million for rapid re-housing programs in high-need communities. Compared to the post-sequestration FY 2013 level of $215 million, this level would mean housing instead of homelessness for 131,000 Americans.

Continuum of Care -- $2.027 billion.  Most of this amount, approximately $1.987 billion, is to continue funding at its existing level, along with a small adjustment for market rent increases in permanent housing as mandated by law. This does not mean that current programs will automatically receive renewal funding – HUD has set up a competitive grant process that encourages communities to carefully examine their Continuum of Care grants and reallocate money from less effective to more effective programs. The $1.987 billion is what is necessary to keep the amount of spending the same, even with the competitive reallocations.

In addition, the proposal includes $40 million for additional permanent supportive housing units targeted to chronically homeless people. This kind of program, at the core of the Bush Administration’s work on homelessness and continued today, concentrates on people with severe disabilities who are homeless for long periods of time, bringing them back into the mainstream in a way that saves substantial money for taxpayers by reducing the use of emergency rooms, jails, and shelters. This funding would provide approximately 5,000 additional housing opportunities. The proposal is to provide one-year contracts, a new option under the HEARTH Act that simplifies oversight and avoids the “expanding renewal burden” problem that now exists.

Funding the Continuum of Care at this level, compared to the FY 2013 level, would mean housing instead of homelessness for 77,000 people, mostly through preserving existing capacity for communities’ programs. Many of these people would be those experiencing homelessness with the most severe disabilities, including schizophrenia, severe addictions, and AIDS. Re-housing them would save taxpayers substantially more money than the homeless interventions cost, while improving their lives immeasurably.

Technical Assistance for HMIS (data system) -- $8 million. HUD’s homelessness programs succeed because they are increasingly data-driven. By helping communities implement basic monitoring systems, HUD improves the efficiency of the homelessness programs, allowing many more people to move from homelessness to housing despite its limited budget.

The $2.381 billion proposed by the Administration would ultimately mean housing instead of homelessness for approximately 213,000 people, compared to flat funding. Communities across the country understand the solutions to homelessness, and with the right level of resources, they can implement these solutions, ultimately resulting in real decreases in the number of people experiencing homelessness. As Congress makes its funding decisions for FY 2014, it must take into account our nation’s most vulnerable people and the cost-effective solutions we have to address their needs.