Fred Karnas, Jr.
Deputy Assistant Secretary for Special Needs Programs
U.S. Department of Housing and Urban Development
Senate Committee on Banking, Housing,
and Urban Affairs
Subcommittee on Housing and Transportation
May 23, 2000
Mr. Chairman and Committee members,
thank you for the opportunity to represent Secretary Cuomo and
the U.S. Department of Housing and Urban Development today. There
is no question that homelessness remains one of the most pressing
social problems facing this nation. You are to be commended for
your interest in finding ways to improve our nation's response
to this crisis.
Thank you also to my fellow panelists.
I have worked with all of their organizations for many years
and, while we may differ on the appropriate policies to end homeless,
there is no question we share a common commitment to ending this
Mr. Chairman, as you know, addressing
homelessness has been a top priority throughout President Clinton's
administration. The President has consistently sought and Congress
has granted increases in HUD's homelessness assistance budget
and the Administration has transformed the way the Federal government,
in cooperation with our local governmental and non-profit partners,
is attacking homelessness. Almost universally, communities argue
that this approach, called the Continuum of Care, has been a
successful tool for addressing the needs of persons who become
homeless because it balances local decision-making and flexibility
with strong national performance goals. For this reason, HUD
strongly opposes moving from the current Continuum of Care performance-based
approach to a formula-based process of distributing homelessness
To understand why the Department
feels so strongly, it is important to be aware of both the philosophical
foundation of the Continuum of Care approach and the practical
results of this process.
The Continuum of Care initiative
had its genesis in President Clinton's May 1993 Executive Order
calling for a "single coordinated Federal plan for breaking
the cycle of existing homelessness and for preventing future
homelessness." The Interagency Council on the Homeless,
a working group of the Deomestic Policy Council chaired by the
Secretary of HUD and co-chaired by the Secretaries of the Department
of Health and Human Services and the Veterans Administration,
was charged with carrying out the mission by reviewing existing
programs and identifying areas for improvement. The Continuum
of Care emerged from this interagency effort. The primary initiator
was HUD's Office of Community Planning and Development (CPD),
under the leadership of then-Assistant Secretary Andrew Cuomo.
CPD had the lead administrative role in both staffing the Interagency
Council and operating HUD's homelessness assistance programs.
The process began in June 1993
when CPD conducted the first of 18 interactive forums throughout
the country to solicit comments and insights form the homelessness
assistance community. By the time the last of these forums was
held in February 1994, HUD had heard from thousands of not-for-profit
providers of services and housing, advocates, economic and community
development leaders, state and local government officials, and
homeless and formerly homeless persons. To supplement the input
from the forums, HUD sent a questionnaire to more than 12,000
organizations and individuals asking for recommendations. HUD
then completed an analysis of the problem and, in cooperation
with its federal partners, crafted a plan of action, entitled
Priority: Home!! The Federal Plan to Break the Cycle of Homelessness.
Forum participants and survey
respondents reported that there was little or no comprehensive
planning at the local level, that their efforts to address homelessness
remained fragmented, and invariably their focus was on short-term
emergency assistance. HUD, which administers more than 80 percent
of the targeted homeless funds, proposed a two-fold response.
First, implement the Continuum of Care as a new, seamless system
for providing both housing and services to help homeless people
- with a special emphasis on achieving independence and self-sufficiency.
Second, increase federal funding to adequately address the problem
of homelessness. This two-track proposal was adopted as the centerpiece
of the Federal Plan.
It is one thing to propose a
new policy; it is another to implement it. A new set of administrative
procedures and program reforms was required. Instead of focusing
solely on the quality of an individual project with no connection
to the larger community's efforts to address homelessness, HUD
staff developed ways to reduce fragmentation at the local level.
Programs were retooled and, within the limitations of the existing
statutes, a process was designed that provided incentives for
collaborative planning and local priority setting - but still
ensured that national performance measures would be met.
The Continuum of Care strategy
fundamentally challenged both the perceptions of and solutions
to homelessness while revolutionizing America's response to the
problem in several fundamental ways:
First, it redefines homelessness
as more than simply a housing problem - and re-focuses attention
beyond "band-aid" fixes to long-term solutions. Priority: Home! The Federal Plan
to Break the Cycle of Homelessness acknowledged that homeless
people need housing, but often also need other support services
including job training, drug treatment, mental health services,
and domestic violence counseling.
Second, it encourages communities
to develop a comprehensive plan
- The Continuum restructures the relationship among federal,
state and local governments, nonprofits, and other community
stakeholders by engaging citizens in a common planning process
to craft a comprehensive system of housing and services for homeless
Third, it awards "performance-based
grants." A successful
Continuum of Care includes: (1) outreach; (2) emergency shelter;
(3) transitional housing with appropriate services; and (4) permanent
housing or permanent supportive housing. While not all homeless
people need access to each component, all four must be present
and coordinated within a Continuum of Care. A winning application
is one that focuses on a coordinated community-based strategy
that emphasizes independence and self-sufficiency to the maximum
A 1996 study by the Columbia-Barnard
Center on Urban Policy confirmed the impact of these changes
through a series of case studies of local communities. Among
The concept of "community
participation" has expanded, bringing together a broad-based
group of public and private stakeholders. In the past, these
stakeholders did not have the incentive to plan together.
HUD has created valuable fiscal
incentives for communities to think "outside their boxes,"
to define the structural causes of homelessness. Further, this
policy encourages communities to design comprehensive systems
of housing and services to help homeless people find permanent
housing and prepare for independent community living.
This has required community
groups to take the time to develop a deeper understanding of
existing local resources, needs, service gaps and funding priorities.
Communities are rewarded for planning proactively rather than
relying on traditional reactive, crisis-oriented responses.
Since the inception of the Continuum
of Care policy HUD has regularly engaged in a dialogue with our
non-profit and governmental partners that has further refined
and improved the Continuum of Care process. In 1996, we asked
communities, as part of their Continuum of Care application,
to prioritize the projects they would like funded in their communities,
recognizing that local decision-makers had much more knowledge
than the Department to decide which projects should be funded
first, or which ones needed to be funded before others to make
the service system work. In 1997, communities were given the
responsibility of determining how renewals should be funded.
This year, based on dialogue with our local partners, we are
asking for legislation in the President's budget that would further
improve the way permanent housing renewal projects are funded
by automatically funding them out of the Section 8 Housing Certificate
Fund, ensuring that these critical investments are preserved.
It is no secret that early on
in the implementation of the Continuum of Care policy, the Department
had serious concerns about the management aspects of the annual
application process that includes over 400 Continuums and 3,000
project applications. However, over the years, the Department
has instituted internal changes in the process, including computerizing
significant portions of the process that have mitigated some
of the early concerns. Currently, we believe we have achieved
an appropriate balance between the management demands of the
process and our programmatic goals of ensuring national performance
The result of the policy and
management changes are significant:
The number of communities
that have replicated the Continuum of Care approach continues
to increase. Since 1993,
HUD's primary strategy has been to foster the Continuum of Care
by including it within the framework of the agency's Consolidated
Plan, undertaken by every large community and State in the nation.
As a result, 83 percent of the U.S. population currently resides
in communities with Continuum of Care strategies. HUD's target
for the year 2002 is 86 percent. Our most recent tally indicates
that 646 cities 1,860 counties and two territories are covered
by Continuums (many continuum partnerships include multiple counties).
The number of transitional
and permanent housing units linked to supportive services has
Increasing the number of formerly homeless persons in programs
that provide transitional and permanent housing with supportive
services (e.g. job training, counseling and mental health services)
is a clear indicator of success. With the inception of the Continuum
of Care, HUD has significantly increased the number of these
units (units with services) funded. As of 1999, HUD has funded
approximately 235,000 such units. This figure is up from an estimated
164,000 in 1996. The number is expected to grow to over 258,000
by the end of 2000.
The number of formerly homeless
persons moving from transitional housing to permanent housing
has increase significantly.
Helping more homeless people access and remain in permanent housing
is the ultimate goal of the Continuum of Care effort. Transitional
housing provides shelter and supportive services for up to two
years, although clients are often ready to move well before the
end of the two-year time limit. It is critical that permanent
housing be available when persons are ready to move from transitional
housing. Well over 300,000 people have moved to permanent housing
a result of HUD's Continuum of Care funding. The number of persons
with disabilities - including mental illness, substance addiction,
HIV/AIDS, other physical disabilities - being assisted increased
from 2,816 in 1992 to over 69,000 in 1999.
The funding base for homelessness
assistance has been significantly broadened. A key factor in a community's success in obtaining
Continuum funding is its ability to leverage additional public
and private dollars. States, cities and counties, as well as
non-profit organizations, foundations, and businesses provide
leveraged resources in two ways. First, there are statutory match
requirements for a Continuum of Care funding. This program feature
encourages local Continuum of Care programs to seek, find and
secure public and private resources to develop needed housing
and service programs.
Second, HUD strongly encourages
communities to bring other supplemental resources to bear in
assisting homeless persons. HUD provides additional points during
the competitive review process to applications based on the amount
of leveraging obtained for proposed projects. These supplemental
resources provide a vital source of assistance to the projects.
Examples of supplemental resources include: donated buildings,
equipment, materials, and services, such as transportation, health
care, and mental health counseling. This year HUD has further
incentivized leveraging by providing additional points to those
applications that show a real connection between HUD Continuum
of Care funding and other mainstream federal resources intended
to assist low income persons, such as TANF, Medicaid, and mental
health block grant funding.
In 1999, every dollar of funding
awarded by HUD was matched by more than $2 in resources provided
by communities through leveraging ($1.8 billion). The Barnard-Columbia
report suggested that one of the keys to the increase in leveraging
is the inclusive process required to develop a thorough continuum.
Mr. Chairman, the success of
the Continuum of Care has translated into significant funding
for excellent projects in your home state. In 1999, seven Continuums
in Colorado were awarded just under $8.5 million to fund projects
like a new Shelter Plus Care project for homeless Veterans in
Pueblo, housing for homeless young mothers in Denver, and several
critical housing and service projects sponsored by the Colorado
Coalition for the Homeless..
Nearly as important as what the
Continuum is accomplishing is how it is accomplishing its goals
- by bringing people with energy and vision together, focusing
them on common goals, and rewarding innovative solutions. In
any given community, HUD encourages and funds an array of programs
that provide mental health services, health care, substance abuse
treatment, and day care services - all connected to housing.
Federal dollars are maximized by local dollars. Agencies are
working together - not at cross-purposes.
It is based on these successes
that the Department strongly opposes any effort to move to formula
driven approach to allocating HUD's homelessness assistance resources.
As I stated earlier, through continuing dialogue with our local
partners, we be believe we have struck the appropriate balance
between the programmatic goal of consistent and aggressive national
performance standards to break the cycle of homelessness and
the day-to-day management needs of the Department.
The Department does agree with
the Government Accounting Office's testimony regarding the need
to streamline the various HUD McKinney programs and make program
rules more consistent across programs. These changes can easily
be made with out moving to a formula-based approach, which we
believe would result in:
- a disruption in the current
local planning processes
that have built a level playing field involving equal participation
by a wide-variety of stakeholders, from service providers and
homeless persons to businesses and local government.
- a disincentive for bringing
other dollars to the fight against homelessness. As stated earlier, the current competitive
process serves as a powerful tool for leveraging other private
and public funding to address homelessness.
- reduced accountability. The current competitive process establishes
clear performance expectations and rewards those who perform.
This approach has resulted in an almost universal improvement
in the quality of both local homelessness assistance systems
and individual projects. There are numerous examples of communities
that, after losing in the competition because they did not take
the effort to address homelessness seriously, have sought technical
assistance from the Department and developed significantly improved
homelessness assistance systems. A formula-based approach guarantees
funding with no incentive for improving the quality of the system,
and reduces long-term accountability for program performance
against national standards.
The success of the Continuum
of Care approach had been acknowledged by many, from mayors like
Dennis Archer in Detroit and Alexander Pinellas in Miami-Dade
County to advocates like Sue Marshall here in the District of
Columbia, to the Harvard-Ford Foundation Innovations in Government
program which selected the Continuum of Care as one of the 10
top government innovations in 1999.
But even more importantly, it
has transformed the lives of hundreds of thousands of homeless
persons. Put simply, the Continuum of Care save lives. People
who are homeless are the poorest of the poor -- people who literally
have nowhere else to go. More than 400 partnerships across the
country have replicated the Continuum of Care, and each one has
a story to tell about people who have been rescued from joblessness,
abuse, violence, drugs, and even death as a result of the care
and services of the Continuum system. In Boston, a man who was
living in "the "weeds" received help for a medical
condition and is now a shelter volunteer living in his own apartment.
A woman in Alexandria, Virginia who had been homeless and addicted
to drugs for years was helped to overcome her substance abuse
problem and develop new job skills through a HUD-funded transitional
housing program. Today she is drug free, cares for her children,
works as a Federal contractor, and owns her own home. In Colorado,
a veteran who had spent 18 years on the streets received support
from Continuum of Care programs, which allowed him to obtain
a home and rebuild his relationship with his family. And for
children who are homeless - for whom it is often difficult to
go to school - the Continuum of Care, along with other Federal,
state, and local programs, is helping them get off to a better
start in lifr.
We believe this the time to build
on this success, not dismantle it in favor of an untested approach.
We look forward to working with
you in our common effort to end homelessness in this nation.
Content Archived: January 20, 2009