Will Handing Public Housing Projects to Private Developers Hurt the Poor?

Originally published in Pacific Standard on February 6th 2015.
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On a Wednesday night in early January, 21-year-old Ronald Hunter Jr.—a homeless and mentally ill man living in Buffalo, New York—froze to death. The overnight temperature hit two degrees, but with the fierce wind that night, it felt more like 20 below zero. The medical examiner’s autopsy confirmed that hypothermia killed Hunter. His story is not atypical; homeless people from across the country died last winter from freezing temperatures.

Tragedies like these, especially in the dead of winter, bring the lack of decent and affordable housing into sharp relief. Walk through the streets of any major city (and, increasingly, many suburbs) and you’ll likely see clusters of homeless people huddled under blankets, under folded cardboard boxes, sleeping on sidewalks, on top of park benches. A report released this past fall by the National Center on Family Homelessness estimated that one in 30 American children are now homeless—a record phenomenon attributed to the rising number of families living in poverty, a dearth of affordable housing, and the consequences of widespread domestic violence.

But beyond homelessness, there are other serious, less visible, and less well-understood housing problems with which millions of Americans regularly struggle. The Joint Center for Housing Studies at Harvard found that, in 2012, more than four-fifths of those earning $15,000 annually—roughly how much a full-time worker makes at the federal minimum wage—spent more than 30 percent of their income on housing; two-thirds paid more than 50 percent. With stagnant wages, the financial burden weighs heavily on the middle class too, and is trending upwards.

The housing policy world has a term it uses to refer to the millions of people living in precarious, overcrowded, and unsafe conditions: “housing insecure.” It’s an apt, yet nebulous way to characterize all those who worry about their long-term access to safe shelter. These people aren’t homeless, but they’re vulnerable—often one emergency or missed paycheck away from eviction. Their day-to-day plight, however, is less apparent to the public.

Most people do not get the help they need. Due to high demand, federal housing assistance serves just a quarter of all eligible households. With few vouchers and interminably long waiting lists, more than 2.2 million people rely on public housing to help them get by. But despite the growing need, the federal government has been moving further away from the idea of a state-run public housing system.

Through a new program known as Rental Assistance Demonstration, existing public housing units are slated to be “converted” into something that looks more like the Section 8 voucher program, under which tenants live in privately owned or managed units that are publicly subsidized. Congressional funding for public housing has declined over the years, as support for the program fell and the deteriorating units became more difficult to properly maintain. Consequently, more than 260,000 affordable units have been demolished or removed from the public housing program since the mid-1990s and 10,000 additional units are lost each year because they fail to meet acceptable health and safety standards. Many of these people are forced to double up with family or take to shelters and the streets.

Now with the potential to bring in copious amounts of new funding from private companies, Department of Housing and Urban Development Secretary Julian Castro has dubbed RAD “the answer” to housing issues in many struggling communities.

                                                               

But the long-term consequences of RAD are not yet known. When Congress authorized the demonstration program in 2012, 60,000 public housing units were approved for transfer to private developers—just five percent of the nation’s public housing stock. These developers are incentivized to rehab and manage the units in exchange for tax credits and subsidies, codified within contracts that last for 15-20 years. Yet since its original passage, HUD and a coalition of public housing authorities, developers, and other stakeholders have been lobbying the government to lift the demonstration cap beyond the 60,000 units so that any and all public housing authorities can access these new private funding streams.

Their efforts are succeeding. Included in the $1.1 trillion spending bill that Congress passed in December was a provision to raise the RAD cap from 60,000 units to 185,000 units, or essentially every project sitting on the waiting list.

Not everyone is thrilled about how fast things are moving. Many housing advocates and civil rights lawyers worry that the program will fail to ensure long-term affordability and safeguard tenant protections. Their concerns are warranted: In the past, when the government has relied on private capital to fund low-income housing, many affordable units were turned into market-rate rentals once the developers paid off their 30-year mortgages. And in earlier efforts to rehab buildings through public-private partnerships, thousands of public housing units were destroyed without ever being replaced.

California Democratic Representative Maxine Waters, the ranking member of the House Financial Services Committee, sent a letter to President Obama asking him to reconsider RAD. She urged him to allocate more direct federal subsidies to public housing authorities, rather than relying on private developers to salvage the program. “Put simply,” she wrote, “if the price of accessing private capital is to put public ownership at risk, then that price is too high.”

James Hanlon, the director of the Institute for Urban Research at Southern Illinois University-Edwardsville and a longtime public housing researcher, has been poring through HUD data to try and figure out if there’s any pattern in the line-up of specific housing projects selected for conversion, or if there are any shared characteristics among the housing authorities that have opted to participate. Hanlon notes that although the private sector has been used to fund affordable housing since the 1970s, RAD is unique in its aim to actually preserve the original units. Previous experiments have promoted demolishing aging housing rather than repairing the old units.

Private financing strategies for public housing are also spreading to cities not formally associated with RAD. New York City’s public housing authority, which lacks billions of dollars in needed capital funds, recently finalized a deal to grant private developers a 50 percent stake in nearly 900 public housing apartments across the city. It also plans to create a non-profit to solicit hundreds of millions of dollars in tax-deductible donations from the private sector.

                                                                

While experts and activists have mixed feelings about RAD, the new federal spending bill also included a significant policy win that everyone who works on affordable housing seems to be excited about. The government finally voted to authorize dedicated funding for the National Housing Trust Fund—an entity established in 2008 to provide annual dollars for building and preserving affordable housing.

However, in its current form, this is unlikely to help revive the flailing public housing program; HUD’s working rule stipulates that Housing Trust Fund revenue can only be used to fund affordable housing that is not considered traditional public housing, unless it’s through the RAD program.

But for those who hope to see Congress allocate more funds to traditional public housing, the most likely way is through the passage of Representative Keith Ellison’s Common Sense Housing Investment Act. This bill would raise a lot of new money by reforming the mortgage interest deduction—a tax break that primarily benefits wealthy homeowners. By changing the deduction into a tax credit, more low- and middle-income homeowners would be eligible for tax relief, and high-income homeowners would pay more. The plan is estimated to raise about $200 billion over 10 years. Importantly, some of this new revenue would be directed into the public housing capital fund; the legislation would also revise HUD’s rule to make traditional public housing eligible to receive Housing Trust Fund dollars.

With Congressional deadlock however, this reality is a long way off. For now, one can expect developers and housing authorities to continue striking private-public deals, with variable levels of transparency and oversight.

It wouldn’t be the first time the government, in a rush to do something, expanded a housing program rather hastily. “Hope VI, a public housing redevelopment program in the 1990s and 2000s, began as a demonstration project that had terrible oversight, assessments, and evaluations early on,” Hanlon says. “I think that there needs to be much more judicious forward movement for RAD because many of its implications are not well understood and won’t be felt for a long time.”

Perhaps RAD will turn out to be the housing panacea millions of people have been waiting for. Or maybe it will lead, once again, to the loss of affordable housing units and tenant displacement.

In this moment of doubt, hope, and desperation, “housing insecurity” just about sums it up.

‘Housing First’ Policy for Addressing Homelessness Hamstrung By Funding Issues

Originally published in The American Prospect on January 27, 2015.
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In an era of shrinking financial resources, policymakers, providers, and activists who work on homelessness prevention and care in the United States have been forced to develop new strategies. There was a time when officials at the Department of Housing and Urban Development (HUD) saw it as their responsibility to provide both housing and supportive services for homeless individuals, but now HUD now is refocusing its budget predominately on rent and housing—with the hope that other local, state, and federal agencies will play a greater role in providing supportive care. However, whether other organizations will actually be able to pick up those costs and responsibilities remains unclear.

The first major federal legislative response to homelessness was the McKinney-Vento Act of 1987, which passed both the House and Senate with large bipartisan majorities. The McKinney Act—which Bill Clinton later renamed the McKinney-Vento Homeless Assistance Act—provided funds not only for emergency shelter, transitional housing, and permanent housing, but also for job training, primary health care, mental health care, drug and alcohol treatment, education programs, and other supportive services. The consensus was that homelessness is a complex problem whose solution requires more than simply a roof and a bed.

The statutory goal of the McKinney Act was to gradually move homeless people toward stable housing and independence—a model that came to be known as “Housing Readiness.” Though this sprung from well-meaning intentions, it eventually became clear that this “gradual” approach frequently led to unwise and unfair ways of distributing welfare.

“We had this system that said homeless people essentially have to earn their way to permanent housing,” explained Ed Stellon, the senior director of the Midwest Harm Reduction Institute, and someone who has worked within the substance use and mental health treatment systems for more than 20 years. “Homeless people had to earn their way into transitional housing, make progress on certain goals, and finally when they were deemed well enough, they would earn their spot in permanent housing.”

A different model, known as “Housing First”, has been gaining steam over the past decade. What at first sounded revolutionary now feels fairly obvious: The Housing First approach posits that the only requirement for housing should be homelessness—that shelter is a right, not a privilege. “Plus, if you have conditions like out-of-control diabetes, congestive heart failure, or schizophrenia, housing is actually part of the solution,” adds Stellon. “It’s hard to make any meaningful progress on these chronic conditions without stable housing.”

Though exact estimates are hard to come by, HUD recently reported that as of January 2014, the chronically homeless numbered some 84,291, with 63 percent of those individuals living on the streets. HUD says this number has declined by 21 percent, or 22,937 persons, since 2010—in large part because of the embrace of Housing First. (Some, however, have accused the federal government of using data gimmicks to paint a more cheery picture of progress than has actually been made.)

Nevertheless, the reality is that at the same time policymakers are embracing the idea of Housing First, fewer affordable housing units exist than ever before. According to the National Low Income Housing Coalition, federal support for low-income housing has fallen 49 percent between 1980 and 2003, and the Joint Center for Housing Studies found about 200,000 rental units are destroyed annually. Research also suggests that a supply of 8.2 million more units would be needed to house extremely low-income households, up from a gap of 5.2 million a decade earlier. Though Congress recently authorized funding for the National Housing Trust Fund—an entity that was created in 2008 to fund affordable housing proects—its budget is nowhere near large enough to meet the demand.

“We’re not doing enough to expand housing availability, and HUD can’t expand its services unless Congress allocates it more funding,” says Barbara DiPietro, the director of policy for the National Health Care for the Homeless Council.

Given the fiscal climate, HUD is looking for new ways to spend its increasingly limited budget. Consequently, the agency is moving away from the supportive services that, through the McKinney-Vento Act, once accounted for most of its spending. In 1998, for instance, 55 percent of HUD’s budget was spent on supportive services, and 45 percent was awarded for housing. By 2013, just 26 percent of HUD’s competitive homeless assistance funds went to supportive services, and 66 percent was spent on housing. According to Ann Oliva, director of HUD’s Office of Special Needs Assistance Programs, the department’s goal now is to help local communities become more strategic with existing resources and available opportunities.

To do this, HUD has been working closely with other federal agencies, especially the Department of Health and Human Services (HHS), the Department of Veterans Affairs (VA), and the U.S. Interagency Council on Homelessness. In 2008, a joint program known as HUD-Veterans Affairs Supportive Housing (HUD-VASH) launched, combining housing vouchers for homeless veterans provided by HUD, with case management and clinical services provided by the V.A. Experts agree that HUD-VASH has been quite successful in helping both vets and their families, and it’s typically held up as the poster child for future interagency collaborative efforts. However, the program came with additional appropriated dollars, and it is typically easier to convince Congress to fund programs for impoverished military veterans compared to other downtrodden groups.

One of the most significant recent changes to homelessness policy has come through the expansion of Medicaid—a key feature of the Affordable Care Act. Now that nearly all individuals with incomes up to 138 percent of the federal poverty level are eligible for health insurance in states that opt for the expansion, agencies are scrambling to enroll thousands of homeless people so that they may benefit from new streams of mandatory government spending.

But Medicaid is, at its heart, a program controlled by the states. And with some states still vigorously opposed to expanding Medicaid—despite the ACA’s mandate for the federal government to pick up nearly all of the tab for the expansion—let alone some of the flexible legislative adaptations that HHS is encouraging, consistent and widespread changes to supportive services seem unlikely in the near future.

Though Medicaid expansion presents great opportunities for providing services to the homeless, some are concerned that the more flexible federal dollars currently set aside to work with homeless people will eventually just be funneled into the larger health insurance pool, with little, if any, allocated to doing what it takes to bring those with no homes into the government support system, which is needed in order to provide preventive care.

“Going out four or five times to visit with a woman living alone under a bridge, just trying to form a relationship and build trust with her so she will feel comfortable coming in to get more help—those types of health encounters are not typically billable through health insurance,” adds Stellon, who says outreach can be one of the hardest things for him to fund. “In our current system, it’s easier to pay for someone’s amputated fingers than to build a human relationship.”

Ultimately, there is only so much the government can do to advance the goal of Housing First with a depleting stock of housing units and a shrinking budget for supportive services.

“It’s a big mistake to come up with a good solution like Housing First and then to hamstring it because we don’t actually have the money for it,” says Todd Stull, the clinical director at a JOURNEYS | The Road Home, an organization that provides services and shelter to families and individuals in Illinois’s North and Northwest suburban Cook County. “One of the worst things you can do is get someone into housing for a short period of time and then they lose it. Then they lose trust in the providers.”

“We have not done well as a nation taking on poverty and implementing policies needed to address homelessness,” says Dr. Sam Tsemberis, the founder and CEO of Pathways to Housing, a national organization that first pioneered the Housing First model in 1992. “So we end up taking care of homelessness out of desperation, but we’ll be taking care of homelessness forever if we don’t take care of poverty.”

“We need more money,” adds DiPietro. “Until then, we’re just rearranging the priority list.”

The Oft-Ignored Issue of Homelessness

Originally published in the JHU Politik on April 8th, 2013.

Sometimes wars, thousands of miles away, can seem more pressing than the thousands of cold and hungry people sleeping on the streets of our communities. Too often people feel there is little they can do to actually affect long-term structural housing change. This view, while popular, is wrong.

In many ways, the Obama administration has taken some innovative steps towards ending homelessness. In 2009 the Homelessness Prevention and Rapid Re-Housing Program (HPRP) was created; it allocated funds to state and local governments to keep individuals and families in their homes and to help people who were already homeless find affordable housing. This $1.5 billion program, which was included in the $840 billion American Recovery and Reinvestment Act, worked to rehouse people, keep others off the streets with rental assistance, and provide emergency housing, security deposits, moving expenses, and other means of temporary aid. The United States Interagency Council on Homelessness (USICH), an independent agency within the executive branch, and the federal Department of Housing and Urban Development (HUD) have been leading these efforts.

Over the past four years, the number of chronically homeless people—an at-risk population often in need of mental and physical health services—fell about seven percent in 2011 and more than 19 percent since 2007. Homelessness among veterans declined more than seven percent in 2011 and 17 percent since 2009. These drops are significant, and HPRP marked the first time that such a large amount of federal funds were made available for homelessness prevention at the national level. Real tangible progress can be seen when money is invested into the prevention and eradication of homelessness. In the past five years, HUD and USICH increased the number of available beds in emergency shelters by about 15 percent, and the number of beds in longer term housing by almost 50 percent. Despite decreases among particularly at-risk individuals and military veterans, homelessness has increased among families and young people, including college graduates. The Government’s partial success highlights the need for further investment into preventing this eminently avoidable problem.

Currently, tens of thousands of underemployed and unemployed young adults between the ages of 18-24, are struggling to afford shelter; the recession has left workers in this age bracket with the highest unemployment rate of all adults. Specific information on this population is difficult to obtain-most cities have not made special efforts to identify young people who tend to avoid ordinary shelters. However, the Obama administration has begun an information gathering initiative with nine communities to seek out those young adults who live without a consistent home address. In 2011, Los Angeles attempted a count of young adults living on the street and found 3,600—however, the city had shelter capacity for only 17 percent of them.Additionally there were approximately 64,000 more families in shelters in 2011 than in 2007—an increase of about 13 percent. Also the number of families with children in “worst case” housing situations—meaning that they spend more than half of their income on housing or that they live in dangerous, substandard buildings—rose to 3.3 million from 2.2 million. Many of these families are just one financial obstacle away from losing their homes.

To be sure, some, particularly young adults, are often hesitant to reach out for governmental help. Additionally, there are others, even right here in Baltimore, who resist pressure to relocate from the streets into shelters or low-quality housing.

Mark Johnston, HUD’s Acting Assistant Secretary for Community Planning and Development, told the New York Times that homelessness could be effectively eradicated in the United States at an annual cost of approximately $20 billion. The housing department’s budget for addressing homelessness is currently around $1.9 billion. While the Obama Administration has made the right choice in extending the homelessness prevention program, it is unfortunately running on less funding than the administration’s goals require.

“The evidence is clear that every dollar we spend on those programs that help find a stable home for our homeless neighbors not only saves money but quite literally saves lives,” HUD Secretary Shaun Donovan said in a statement.

Ultimately, to address homelessness we must first realize that we indeed can.