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Section 811 Supportive Housing Program It’s Time for Change!!!

Section 811 Supportive Housing Program It’s Time for Change!!!. Ann O’Hara Technical Assistance Collaborative Inc. New TAC/CCD Study. The Hidden Housing Crisis: Worst Case Needs Among Non-Elderly Adults with Disabilities Much higher estimates than HUD’s HUD Definition of Worst Case Needs:

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Section 811 Supportive Housing Program It’s Time for Change!!!

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  1. Section 811 Supportive Housing ProgramIt’s Time for Change!!! Ann O’Hara Technical Assistance Collaborative Inc.

  2. New TAC/CCD Study • The Hidden Housing Crisis: Worst Case Needs Among Non-Elderly Adults with Disabilities • Much higher estimates than HUD’s • HUD Definition of Worst Case Needs: • Very Low Income (50% AMI and below) renters • Paying more than 50% of income for rent • OR living in substandard housing

  3. HUD’s Worst Case Needs Report • 6 million renter households have Worst Case Needs • Elderly households • Families with children • Non-elderly disabled households without children • Other households • HUD’s estimate of non-elderly disabled households without children = 542,000

  4. CCD Worst Case Needs Estimates • Study completed by Kathryn Nelson – author of 8 HUD Worst Case Needs reports • Funded by Melville Charitable Trust • Estimates that 1.3 - 1.4 million non-elderly disabled households without children have Worst Case Needs

  5. Additional CCD Findings • CCD also estimates up to 1 million non-elderly disabled adult households with children • HUD has no estimate for this category • Total CCD estimate of non-elderly adult disabled households with and without children = 2.3 – 2.4 million households

  6. What This Study Means • Incidence of disability among Worst Case households much higher than estimated previously • 35% - 40% of all Worst Case households have non-elderly adults with disabilities rather than 9% - 12% estimated by HUD • 50% of all non-elderly households with worst case needs have adults with disabilities

  7. Section 811: What It Does and How It Works • Creates supportive housing for people with the most significant and long term disabilities who can benefit from community-based services and supports • Provides a capital advance AND a long-term Project Rental Assistance Contract to ensure that tenants pay no more than 30% of income towards housing costs • Funding provided to non-profit organizations through an annual competitive HUD NOFA • An estimated 28,000 units have been created since 1990

  8. Section 811 Models • Single purpose projects • Small group homes – no more than 8 units • Independent living rental complexes – no more than 24 units • Condominiums and cooperatives (very few units produced with this approach) • Tenant-based rental assistance

  9. Section 811 Tenant Based Assistance • Poorly managed by HUD • Funding has not provided supportive housing and has not gone to Section 811 target population • HUD “converted” Section 811 funding to Section 8 Mainstream Housing Choice Vouchers for People with Disabilities • 14,000+ Mainstream vouchers awarded primarily to Public Housing Agencies from 1997-2003 • No tracking system implemented until 2005 • Some vouchers have been provided to people without disabilities • Renewal costs now $80+ million – paid for out of Section 811 appropriation

  10. Legislative History • Formerly the Section 202 Program for Persons with Disabilities • Section 811 created in 1990 • Modified to include Tenant Based Rental Assistance in 1992 • Low Income Housing Tax Credit provisions enacted in late 1990s • Current law is outdated in terms of disability housing policy

  11. Recent Appropriations and Production Levels • Appropriations have declined from $350+ million in mid-1990s to current level of $237 million (FY’06-FY08) • $350 million in 2008 dollars would be $500 million • Recent HUD budget proposals would have cut program by 50% • New units funded annually have declined: • 3,000+ in mid-1990s • 700+ units in 2006 • 1,008 in 2007.

  12. President’s FY 2009 Budget Proposal • Administration requested only $160 million, a cut of $77 million • $87 million for Mainstream Voucher renewals • $32 million for PRAC renewals • $Only $29 million for new units (less than 300) • $10 million for “mixed finance” demo (same proposal as FY 2008 but no details ever provided by HUD)

  13. The Section 811 Program is in Trouble! • Very few units produced at time of greatest need • Outdated program models • HUD processing/bureaucracy a huge problem • Application is expensive and problematic (compare to McKinney-Vento SHP program which produces similar housing) • Only 140 applications in 2007 – most from Section 811 “experts”

  14. Key Features of Legislation • PRAC-Only Demonstration Program • Improvements to Existing 811 Program • Shifting renewal of Section 811-funded Mainstream Vouchers to Housing Choice Voucher program appropriation • Technical changes

  15. PRAC-Only Demonstration • Provides the essential project-based rental subsidy to create “deep affordability” in Low Income Housing Tax Credit and HOME-financed rental housing • Emphasizes small set-asides of supportive housing units within high quality affordable rental housing developments produced routinely by state and local government • Modeled after successful efforts in North Carolina, Louisiana, and other states and localities • Systematic links to state Medicaid policies, $ Follows the Person grants, Mental Health Transformation initiatives, and state Olmstead plans • Low per-unit cost of PRAC-Only Demonstration would produce 2,500-3,000 new 811 units every year with $80 million from “shift” of Mainstream vouchers to Section 8 appropriations

  16. PRAC-Only Rent Structure Median Income 50% AMI Rent – LIHTC/HOME 18% SSI /Section 811 Rent

  17. PRAC-Only Approach • Combine with LIHTC/HOME financed projects through Qualified Allocation Plans and/or Consolidated Plans • States/localities apply for specific number of 811 PRAC-Only units (e.g. 200 units) • States/localities create incentives/requirements for developers to include long-term set-asides of Section 811 supportive housing units (pre-development, in construction, completed projects etc.) • Applications must include systematic linkages to people with Medicaid-financed supportive services • CCD recommended no more than 25 percent 811 PRAC-Only units in any project • Examples: • 100 unit LIHTC project with 10 Section 811 units owned by for-profit • 50 unit LIHTC/HOME project with 12 Section 811 units developed by CDC

  18. Successful Models • North Carolina mandates 10% set-aside in every LIHTC project – Over 1,200 units in occupancy or in development • Average cost of “811-like” rent subsidy is $225-250 per month or $3,000 per year • Average cost of current Section 811 unit is $100,000+ in capital plus PRAC of $400-$500 per month, or $5,000-$6,000 per year • Other states/localities with similar approach include Louisiana, Pennsylvania, City of Boston, Illinois • Many states/localities interested in this cost-effective approach

  19. Improvements to Existing Program • Goals – create more units, more integrated units, more efficiently • Improve incentives to leverage affordable housing funding • Eliminate barriers to “mixed finance” Section 811 projects • Create a new category of “multi-family” Section 811 projects to encourage more integrated approaches – 811 units would not exceed 25% of total units in project • Streamline Section 811 processing and eliminate unnecessary bureaucratic requirements

  20. “Shift” Mainstream Funding to HCV Appropriation • Projected cost of 14,000+ Mainstream Vouchers in 2009 estimated at $87 million for FY 2009 • Costs will only increase in future years • Vouchers would remain permanently set-aside for people with disabilities in HCV program • Permanently addresses significant problems with this flawed program (no monitoring, little tracking, people without disabilities receiving this assistance, etc.) • Frees up significant funding for Section 811 PRAC-Only Demonstration Program

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