PROGRAM HIGHLIGHTS

NA = Not Applicable

1. Shelter Plus Care Renewals and SRO renewals are funded under the Housing Certificate Fund and are included in the totals for all vouchers.

SUMMARY OF BUDGET ESTIMATES

1. SUMMARY OF BUDGET REQUEST

The fiscal year 2001 Budget proposes $1.2 billion for total Homeless Assistance, including $1.095 billion for Homeless Assistance Grants, and $105 million for approximately 18,000 Incremental Section 8 Vouchers for permanent housing for families and individuals. In addition, $37 million is separately included in the Housing Certificate Fund for Shelter Plus Care renewals, and $7.5 million reflected in the Housing Certificate Fund Justification for Section 8 Single Room Occupancy renewals. Grant funds will provide an estimated 14,500 transitional beds and an estimated 11,000 permanent beds, all linked to supportive services. The vouchers will provide permanent housing for homeless individuals and families who otherwise would likely have great difficulty in securing permanent housing. This Budget proposes to use up to 1 percent of the funds appropriated for technical assistance and management information systems support, as was authorized previously. This Budget also proposes to shift the source of funding for Shelter Plus Care renewals to the Housing Certificate Fund.

The mission is to help homeless persons and families break the cycle of homelessness; and to move to permanent housing and self-sufficiency. In recognition of the success of HUD's approach to helping America's homeless, HUD was awarded the prestigious Harvard University/Ford Foundation Innovations in American Government Award in 1999 for the Continuum of Care program. Since its inception in 1986, only 125 programs have been bestowed this honor. The Continuum of Care policy was recognized by the John F. Kennedy School of Government as a means for maximizing homeless resources. The Continuum of Care was found to help more homeless people find stable homes at a significantly lower cost per person. To build on this success, over the next 5 years, the Department intends to accomplish two overarching objectives: to hold communities fully accountable to develop and deliver their continuum of care systems; and, to help every homeless individual and family within our programs achieve permanent housing and self-sufficiency.

The homeless program supports HUD's mission to help all Americans live in suitable conditions and share in our nation's prosperity. The homeless program is a primary contributor to the Department's Strategic Goal #3, "Promote Self-Sufficiency and Asset Development by Families and Individuals." Objective 3.1 is to increase the percentage of the U.S. population represented by communities which have developed continuum of care systems. The homeless program, particularly with the assistance provided by vouchers, also directly supports Strategic Goal 1: "Increase the Availability of Decent, Safe, and Affordable Housing"; Strategic Goal 2: "Ensure Equal Opportunity in Housing for all Americans"; and Strategic Goal 4: "Improve Community Quality of Life and Economic Vitality." It is anticipated that 83 percent of the population will be represented by the end of 1999; and that this will increase to 84 percent by the end of 2000 and 84.5 percent by 2001. Under this same objective there are other indicators for this goal which the Homeless Assistance Grants Program contributes:

• the percentage of participants leaving from HUD transitional housing who move to permanent housing is projected to increase to 36 percent in 2000 and 37 percent in 2001;
• the total number of HUD transitional beds that are linked to services will increase by 13,000 in 2000, bringing the cumulative number of transitional beds in funded applications to 167,000 by the end of 2000. The transitional beds funded will further increase by 14,500 in 2001, for a total of 181,500 is projected by the end of fiscal year 2001. HUD plans to track actual HUD funded transitional beds, but this data will not be available until next fiscal year;
• the total number of permanent beds that are linked to services will increase by 10,000 in 2000, bringing the cumulative number of permanent beds in funded applications to 91,000 by the end of 2000. Permanent beds funded will further increase by 11,000, for a total of 102,000, by the end of 2001. HUD plans to track actual HUD funded permanent beds, but this data will not be available until next fiscal year; and
• the Federal, State, local or private sources that HUD homeless funds leverage will continue to be at least at a ratio of 1 to 1.5 ($1.50 will be leveraged for every HUD homeless assistance dollar provided to communities).

The fiscal year 2001 funds would be used for renewing a portion of the vital housing and supportive services projects already established, as well as for providing funding for new projects that will fill housing and services gaps in local communities. HUD homeless assistance funds are also used for Supportive Services only projects that are linked to housing provided by other organizations. The 1999 and 2000 Appropriations Acts require a 25 percent match for all HUD-funded services. This requirement is also included in the fiscal year 2001 Budget. Further, these funds are expected to leverage other public and/or private funds at a 1:1.5 ratio, or more. Under the Continuum of Care (CoC) strategy, localities and States are encouraged to develop and maintain assistance systems which integrate programs and services for the homeless or potentially homeless. The Department's performance measures include goals for the number of HUD transitional housing and HUD permanent housing beds. Achievement of these goals is impacted by local decisions, as the CoC allows communities to choose the types of assistance that they provide, based on their priority needs. HUD funds are used for both new projects and the renewal of existing projects that are reaching the end of their grant terms. The demand for renewal assistance--to ensure that homeless persons are not forced back onto the streets and into emergency shelters--is significant.

Macro-economic factors such as increases in or continuing high levels of unemployment, the lack of low-skilled jobs for persons leaving welfare, and increases in the cost of housing impact the incidence of homelessness. In addition, factors such as rates of domestic violence, substance abuse, and the incidence of disabilities, which are associated with homelessness, also impact the number of homeless persons and families at any given time. Moreover, HUD's ability to transition people into permanent housing is constrained by local housing markets, by the ability to place people in employment, and the availability of financial support for these individuals. The CoC system addresses the issues that lead to homelessness through a community-based process that provides a comprehensive response to the different needs of homeless individuals and families. The CoC process encourages and helps ensure the creation of linkages to other housing and community development programs (Section 8, CDBG, HOME, HOPWA and State and local programs), as well as to the mainstream social service programs critical to the success of homeless assistance efforts (Medicaid, State Children's Health Insurance Program, Food Stamps, Temporary Assistance for Needy Families (TANF) and services funding through the Mental Health and Substance Abuse Block Grant, Workforce Investment Act, and the Welfare-to-Work grant program). A comprehensive and coordinated housing and service delivery approach helps communities plan for and provide a balanced response to homelessness. Communities establish cost-effective continuums that identify and fill gaps in housing and services that are needed to move homeless families and individuals into permanent housing. The CoC system attempts to serve the specific needs of all homeless sub-populations within a particular community. It is an inclusive process that is coordinated with non-profit organizations, State and local governmental agencies, housing developers and service providers, private foundations, local businesses and the banking community, neighborhood groups, and homeless or formerly homeless persons.

The requested grant funding of $1.1 billion, a $75 million increase over the fiscal year 2000 enacted level, reflects the still significant unmet need for this vital assistance. HUD remains unable to meet the significant demand for either housing or supportive services for the homeless. In each of the last 7 years, there has been a substantial gap between requested and awarded homeless assistance grants. While $750 million was awarded during the 1999 competition, this represented only 62 percent of the fiscal year 2001 requested funds. Similarly, only 61 percent of the projects were funded. Furthermore, these numbers do not take into account the number of agencies who did not submit grant proposals, knowing their programs would not likely be funded given the keen competition for limited funds.

The over 2-to-1 ratio of demand outweighing funding availability reflects the continuing need for homeless-related assistance. The requested increase in homeless assistance funding for the year 2001 would keep HUD at the forefront of addressing the nation's homelessness problems, and would help to reduce the gap between supply and demand in homeless assistance funding.

The 1999 survey of 30 major cities by the U.S. Conference of Mayors indicated that requests for shelter increased over two-thirds in the surveyed cities during 1999, by an average of 11 percent, and people remain homeless for an average of 7 months. Lack of affordable housing led the list of causes of homelessness identified by the city officials.

Clearly, the need for homeless assistance remains acute. Of the total homeless population--an estimated 600,000 are literally homeless on any given night--some suggest that the percentage of total homeless represented by families with children now exceeds 30 percent, increasing the need for stable, long-term housing with access to day care, decent education, and other family support. Other homeless persons are single adults. Some homeless persons suffer from mental illness or substance abuse, and need a variety of services beyond immediate shelter. HUD's Continuum of Care system, which coordinates Federal, State and local resources and services for homeless people, assists a growing number of homeless families and individuals in moving into transitional and permanent housing. Nevertheless, there remains a significant shortfall between the scope of the homeless population's need for assistance and the level of resources that are available.

In addition to the $1.1 billion for grants, $105 million is proposed for Section 8 Incremental Vouchers for permanent housing for families and individuals. This level of funding would support approximately 18,000 vouchers. These vouchers are intended for homeless individuals and families who would otherwise have the most difficult time in securing permanent housing resources, as determined through the approved Continuum of Care strategy. The Supportive Housing Demonstration Program and Supportive Housing Program funds through 1998 are expected to provide for the development or operation of 140,000 beds of transitional housing for homeless families and individuals. On average, usage of those beds turns over every 6 to 9 months as people receive the services and housing they need to better achieve independent living. Very frequently, however, although people are ready to graduate to permanent housing, affordable permanent housing is not available to them. These Section 8 incremental vouchers will offer them the resource they so desperately need to move into the housing mainstream at the point at which they are ready to do so.

The budget also includes $37 million in the Housing Certificate Fund for renewal of Shelter Plus Care contracts. The Shelter Plus Care program is a significant contributor to meeting the priority goal of providing permanent housing for the homeless.

This budget proposal also requests authority to use up to 1 percent of the appropriation for technical assistance activities and for the further development and operation of management information systems that support implementation and evaluation of approved programs. Recent technical assistance efforts have focused on materials to help communities address specific homeless concerns. These efforts have concentrated on permanent supportive housing, job training, targeting for mentally ill homeless persons, and Continuum of Care assistance. An allocation for technical assistance will build on the permanent supportive efforts by allowing additional site-specific consultations, and partnering effective grantees with grantees in need of technical assistance. HUD's large number of current homeless grantees has made the need for targeted technical assistance more crucial.

In addition to technical assistance, HUD needs resources to further develop and maintain its management information system efforts as they relate to homeless programs. Over 8,500 grants for HUD's various homeless assistance programs have been awarded to date and over 1,800 additional grants were awarded in the 1999 competition. HUD is currently developing a comprehensive data warehouse for current and future homeless assistance grants. With this warehouse, the Department will be able to better manage its large inventory of grants and respond in a more timely and accurate fashion to program information requests from Congress, GAO and other entities. By the end of fiscal year 1999, over 4,000 HUD funded projects were operating.

This data warehouse will address the Department's Strategic Goal #5, "Restore Public Trust in HUD," which reflects the management reform efforts underway in the Department to ensure that tax dollars are used properly and effectively, that programs accomplish what they promise, and that HUD will truly do more with less and do it better. Furthermore, integrated financial and management systems will help HUD comply with the requirements of the Government Performance and Results Act (GPRA) to collect timely, accurate data to manage programs, evaluate performance, and provide program performance results to Congress.

2. CHANGES FROM 1999 ESTIMATES INCLUDED IN 2000 BUDGET

Obligations decreased by 1.144 billion from the previous estimate, reflecting an adjustment in the timing of obligations. The 1999 Estimate in the 2000 Budget assumed that all available funds would be obligated by the end of 1999. Because the 1999 competitive awards were made in December 1999 (already into fiscal year 2000), obligation of these funds was not reflected in the 1999 actuals. The $960 million in actual obligations reflects the obligation of 1998 and prior year competitive funds that had been carried over into 1999, as well as the majority of the 1999 Emergency Shelter Grant Formula funds. Outlays decreased by $101 million from last year's estimate, reflecting slower rates of obligation for formula grants and a revised slower disbursement rate.

3. CHANGES FROM ORIGINAL 2000 BUDGET ESTIMATES

The Current Estimate reflects the 2000 Appropriations Act, and differs from the original Budget only by the absence of the $5 million for Homeless Demonstration in the current estimate. Obligations are estimated to be $1.178 billion higher than the Budget Estimate, reflecting the full obligation of grants in 2000 including the carryover from fiscal year 1999. There is no change in the outlays.

EXPLANATION OF INCREASES AND DECREASES

This Budget proposes $1.2 billion for Homeless Assistance in fiscal year 2001, including $1.095 billion for Homeless Assistance Grants and $105 million for incremental Section 8 vouchers. The $1.095 million for Homeless Assistance Grants is $75 million higher than fiscal year 2000, and the $105 million for Section 8 incremental vouchers was not enacted in fiscal year 2000. The anticipated decrease of $998 million in obligations from 2000 to 2001 represents the assumption that all outstanding funds in 2000 (including carryover) will be obligated by the end of 2000. Outlays increased by $151 million mainly reflecting the spend out of recent increases in appropriation levels.

PROGRAM DESCRIPTION AND ACTIVITY

1. Legislative Authority. The Supportive Housing, Shelter Plus Care, Section 8 Moderate Rehabilitation (Single Room Occupancy), and Emergency Shelter Grants homeless assistance programs are authorized under the Stewart B. McKinney Homeless Assistance Act of 1987, as amended.
2. Program Area Organization. Reducing homelessness is one of HUD's top priorities. Comprehensive community-based efforts are necessary to address homelessness. The Consolidated Plan serves as the community's basis for applying for homeless assistance, identifying its needs and inventory, assessing the needs of homeless citizens, and linking efforts to address homelessness together with other housing and community development resources. Continuum of Care homeless assistance programs facilitate the effective and efficient management of HUD's homeless assistance programs by:
   • reducing and preventing homelessness by supporting the creation and maintenance of community-based, comprehensive systems dedicated to returning families and individuals to self-sufficiency;
   • assisting States and local governments, in partnership with private nonprofit service providers, to use homeless funding more efficiently and effectively;
   • simplifying and making more flexible the provision of Federal homeless assistance;
   • maximizing a community's ability to implement a comprehensive system for providing assistance to homeless families and individuals;
   • enhancing the efficient and equitable distribution of homeless assistance;
   • reducing the Federal role in local decision making for homeless assistance programs;
   • reducing the costs to governmental jurisdictions and private nonprofit organizations in applying for and using assistance; and
   • advancing the goal of meeting the needs of the homeless population through mainstream programs and establishing continuum of care systems necessary to achieve that goal.

A typical Continuum of Care would include components such as outreach and assessment to identify an individual's or family's needs and connect them to appropriate facilities and services; immediate shelter as a safe, decent alternative to the streets; transitional housing with appropriate supportive services, such as job training, job placement, child care, substance abuse treatment, mental health services and instruction in independent living skills; and permanent housing or permanent supportive housing arrangements. With a Continuum of Care approach, the community can design a strategy that works best to assist homeless persons and families achieve permanent housing and self-sufficiency. The Continuum of Care model is based on the understanding that homelessness is not caused merely by a lack of shelter, but involves a variety of unmet needs--physical, economic, and social. HUD helps communities develop holistic systems through a community-based process that provides a comprehensive response to the different needs of homeless individuals and families.

HUD's primary strategy since 1993 has been to foster Continuum of Care systems in communities with significant homeless populations throughout the United States. This has been accomplished by including such a strategy within the framework of the Consolidated Plan and by encouraging joint applications and coordinated approaches when issuing Notices of Funding Availability for homeless assistance under the competitive programs. Columbia University's December 1996 study found that substantial progress has been made in getting communities to adopt a more coordinated and comprehensive approach to addressing the needs of homeless persons. It also found that with twice the amount of funds than had previously been available, the Continuum of Care system helps as many as 14 times the number of homeless persons with assistance as were previously assisted.

The U.S. Conference of Mayors released "A Status Report on Hunger and Homelessness in American Cities - 1999" in December 1999. Many of the cities surveyed reported that the Federal Government's Continuum of Care policy has made a difference in their community's effort to address homelessness. Some examples of what some City officials said are:

• Charleston. The Continuum of Care policy has provided a valuable mechanism to draw on resources in surrounding counties and especially rural areas. Through the Continuum, service providers are better able to coordinate and refine services. The Continuum is slowly evolving into a forum where the efficacy of care can be addressed from a broader systemic view. Charleston hopes to use their Continuum of Care to provide information to other advocacy groups and elected officials that will further impact the allocation of resources.
• Nashville. The Continuum of Care provides an approach to services for the homeless that is more organized than it was previously. In identifying gaps, rather than guessing what they are, programs are able to target these gaps specifically. Duplication of effort and resources is reduced. The Nashville homeless service system is much less fragmented, and is better able to address the core problems of homelessness, especially how to deal most effectively with homeless people who wish to recover from addiction.
• Seattle. Adopting the Continuum of Care model has strengthened Seattle's partnerships with housing and service providers, advocates, homeless people, the private sector, general public, other funders, and other governments, especially King County and more recently, the State of Washington. The Continuum of Care has made it easier to educate the public about increasing requests for shelter and affordable housing.

1. Program Purpose. HUD's homeless assistance programs provide Federal support to one of the nation's most vulnerable populations. These grants assist localities in establishing systems that can address the needs of different homeless populations while providing coordinated Continuum of Care systems that ensure the support necessary to help those who are homeless attain permanent housing and move toward self-sufficiency.
2. Eligible Applicants/Participants. While eligibility for the individual programs varies, in general, eligible applicants/participants are States, units of local government, nonprofit organizations and public housing authorities. Broad community participation in the development and implementation of a homeless strategy is encouraged to facilitate comprehensive, effective and coordinated approaches to homelessness.
3. Eligible Activities. Recipients are authorized to carry out activities to benefit homeless individuals and families, including acquisition, rehabilitation, new construction, operations, real property leasing, tenant assistance, supportive services, and administration. These activities support the following types of projects: Emergency Assistance (prevention, outreach and assessment, and emergency shelter); Safe Haven Housing; Transitional Housing; Supportive Services Only; Permanent Housing and Permanent Supportive Housing for Homeless Persons with Disabilities; Single Room Occupancy Housing; or other projects that the Secretary determines will further the purposes of this Program.
4. Program Allocation. Emergency Shelter Grants are distributed by formula; all other funds are distributed by competition. This Budget proposes that up to 1 percent of the funds appropriated be available for technical assistance and management information systems support.

Until 1998, technical assistance was available only for the Supportive Housing Program. HUD's 1999 and 2000 proposals and Congress's agreement to expand the availability of technical assistance will enable grantees of all homeless assistance programs to better handle and overcome a variety of problems that hinder successful completion and implementation of projects. These include difficulties with capital financing for initial acquisition and rehabilitation; resistance from residents to homeless shelters in their neighborhoods; and coordination of project development, project operations, and ongoing service delivery. Technical assistance improves the ability of grantees to develop and maintain Continuum of Care systems and to effectively and efficiently provide assistance to those in need.

The 1999 Appropriations Act directed and authorized the use of funds to HUD to require information from grantees, aggregate this and other data, and work with a representative sample of jurisdictions to collect information on the unduplicated number of clients serviced and the disposition of the client exiting homeless programs. Additional funds for management information systems are needed to continue the development, implementation, operation and refinement of management information systems. It is anticipated that these systems will eventually be integrated with other Departmental systems currently under development in order to integrate homeless assistance with other housing and community development programs.

STATUS OF FUNDS

1. Authorization. Homeless assistance programs are authorized under the Stewart McKinney Homeless Assistance Act of 1987, as amended.
2. Balances Available

1. Unobligated Balances. The following table compares the program obligations with funds available by year for the Homeless Assistance Grants:

The following table compares the program obligations with funds available by year for the Homeless Assistance Programs:

b. Obligated Balances. The status of obligated balances for the Homeless Assistance Grants (with transfers in fiscal year 2000) is as follows:

The status of obligated balances for the Homeless Assistance Programs is as follows: