Friday, May 4, 2012

State HFA Efforts to End Homelessness

Ending homelessness is one of the few political issues to receive bipartisan attention; however most programs and bills which target homelessness are temporarily funded and do not address the long-term issues.  Despite the economic downturn, homelessness declined by one percent over the past three years.  The decrease is primarily attributed to The Homelessness Prevention and Rapid Re-Housing Program, funded through the American Recovery and Reinvestment Act.  This program provided $1.5 billion federal dollars to prevent recession–related homelessness, however it will sunset this fall.  As a result, homelessness will again increase as it had been for the previous decade.  Federal agencies, including Housing and Urban Development, Health and Human Services, and Veteran’s Affairs have established long-term programs to address homelessness; however funding for many of these services do not receive bipartisan support. 

Insufficient federal funding streams have pushed responsibility to the state level.  In general, efforts to address long-term homelessness that focus on “bricks and mortar” housing receive more funding at the state level, while supportive services are the first programs to be cut.  States primarily support affordable housing thru state housing finance agencies.  HFAs have the ability to issue Mortgage-Revenue Bonds and Multifamily Bonds; therefore many HFAs are self-sustaining and very little of their budgets rely on state appropriations.  As a result, HFAs have the discretion to invest in affordable housing in a number of ways.  Typically, investing in affordable homeownership opportunities help households earning 50% to 120% AMI, while investing in multifamily opportunities help households earning 80% AMI and below.  In order to end-homelessness, HFAs can provide capital for supportive housing projects, offer rental assistance programs, and prioritize tax credit units that serve extremely low-income populations. 

Unfortunately, efforts to increase homeownership take priority over efforts to end-homelessness.  In Oregon, a state with 7,104 homeless individuals on any given night, spends only 1.2% of its HFA budget on programs to end homelessness.  Washington’s HFA only serves households earning 30– 20% AMI; as a result the agency can not provide housing for most homeless individuals.  Washington’s Department of Commerce has established a Housing Trust Fund to address these needs, but they operate on a budget nearly one eighth the size. 

Minnesota Housing Finance Agency exceeds other states’ efforts to prevent and end long-term homelessness.  MHFA provides two state-level rental assistance programs that provide 1,800 vouchers to extremely low-income individuals.  However, these non-capital efforts only account for three percent of the annual budget.  Meanwhile, homeownership opportunities account for 38% of the budget.  Over the past ten years, states such as Minnesota, Oregon, and Washington have created innovative programs and funding streams to end long-term homelessness, but decreasing federal support requires improved effort and increased attention from traditionally progressive state housing finance agencies.

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