Process Evaluation: HUD Section 811 Project Rental Assistance Program

Process Evaluation: HUD Section 811 Project Rental Assistance Program

A new study sponsored by HUD’s Office of Policy Development and Research analyzes the experience of 12 state housing agencies in implementing a new housing assistance model to HUD’s Section 811 Supportive Housing for Persons with Disabilities program. “HUD Section 811 PRA Program: Process Evaluation” is the second report in a multi-phase evaluation designed to assess the implementation and effectiveness of this new model of housing assistance for extremely low-income, nonelderly adults with disabilities.

Created in 1991, the Section 811 program has generated approximately 35,000 housing units for very low-income, nonelderly persons with disabilities. Historically, the program has paired interest-free capital advances with project rental assistance contracts (PRAC) to nonprofit organizations to develop housing in group homes and small rental development projects. The passage of the Frank Melville Supportive Housing Investment Act of 2010 brought significant reforms to the Section 811 program, including the introduction of the project rental assistance (PRA) option, which restructures the Section 811 program to fund project-based rental assistance for nonelderly individuals with disabilities in integrated and affordable housing projects whose capital costs are funded through low-income housing tax credits (LIHTC), HOME funds, or other sources.

The PRA option responds to the U.S. Supreme Court’s 1999 decision in Olmstead v. L.C. to enable people with disabilities to live in the least restrictive settings possible that meet their needs and preferences. The PRA option dovetails with federal and state efforts to rebalance Medicaid systems away from institutional or nursing home care and toward home and community-based services. The lack of affordable housing, however, has presented a significant barrier to implementing these home and community-based solutions. The PRA option spurs additional community-based housing by encouraging partnerships at the state level among housing and health and human service agencies to create integrated housing linked with voluntary services and supports for nonelderly individuals with disabilities. By requiring scattered-site units in projects in which no more than 25 percent of the units are set aside for Section 811-eligible households and individuals, the PRA option leverages other housing subsidy programs as capital sources to finance the creation of new units to serve the Section 811 PRA program.

Beginning in fiscal years 2012, 2013, and 2014, HUD issued Notices of Funding Availability (NOFAs) for the new Section 811 PRA program. In 2013, HUD began working with 12 state housing agencies to receive PRA demonstration grants. In March 2015, a second award was made to 25 state housing agencies. In total, the two funding rounds are expected to create approximately 7,500 housing units for individuals who are nonelderly and have disabilities.

Program Evaluation

In addition to creating the PRA option, the Melville Act required an evaluation of the implementation and effectiveness of the 811 PRA program. This report represents the second of two reports that are part of the Phase I evaluation of the 811 PRA program and is focused on the experiences of grantees funded in fiscal year 2012. Broadly, the report analyzes the partnerships created by state housing and health and human service agencies, the populations served, the housing and supportive service strategies, and major challenges and successes.

Partnership Structure

The PRA program required partnerships between the state housing agencies that are responsible for identification of properties, contract of units, and allocation of PRA subsidies, and the state Medicaid and health and human services agencies that are responsible for outreach, referral, and delivery of appropriate services and supports to 811 PRA residents.

States that built on existing partnerships had a better understanding of the target population and were able to rely on existing communication mechanisms and outreach and referral procedures and launch the program more quickly. The program required regular communication and collaboration between partners, cross-training, and more time and resources for implementation than originally expected. Medicaid partner agencies are concerned about maintaining their program staff after the end of the Money Follows the Person Rebalancing Demonstration Grant program. The report notes that Medicaid waiver programs can be used to fund this staff.

Target Population and Program Outreach

Eligibility for the PRA program is limited to extremely low-income, nonelderly individuals with disabilities who are between the ages of 18 and 61 at the time of move-in. Participants in the 811 PRA program must also be eligible for community-based long-term care services provided under the state’s Medicaid program or a similar state program that funds services and supports in the community. Through the demonstration, states could further target the program to people in institutions, homeless, or at risk of institutionalization or homelessness. The selected target population informs the way that a program performs outreach to reach potential participants and the necessary programmatic supports. For example, the process for transitioning a person from an institution to community-based housing is different from the process for working with a person experiencing homelessness with immediate housing needs.

The process evaluation suggests that a centralized referral model and waiting list can be an effective approach to assist with outreach and referrals.

Housing Strategies and PRA Applicants and Participants

Overall, the pace of units contracted to the program and leased has been slower than anticipated. The research suggests that it was difficult to identify property owners who both had units that met the program’s eligibility criteria and were willing to enter into 30-year use restriction agreements for the program. Property owners who had not participated in other HUD-assisted programs were discouraged from learning HUD’s administrative systems. In addition, grantees reported that many existing programs, such as the Low-Income Housing Tax Credit Program, fund supportive housing projects with a share of units for persons with disabilities that exceeds the PRA 25 percent maximum.

The grantees also reported that the contract rents they proposed in the 811 PRA program were not attractive enough to property owners. In many cases, the rents offered under the 811 PRA program were below the rents available through other subsidy programs such as the Housing Choice Voucher Program.

The study found that LIHTC has been a critical instrument to recruit properties and units to the program. All properties participating in the program were funded at least in part by tax credits and 79% of PRA units were primarily financed by tax credits.

Interest in the PRA program is extensive and, although results are modest, the program appears to be reaching the target population. A total of 3,270 individuals applied to the PRA program during the first 18-month period. Through June 2016, the PRA program assisted 133 households with rental assistance. The program is assisting in large part persons coming from institutions or at risk for institutionalization (50% of PRA residents); with a median age of 50 years; with extremely low-incomes ($8,886 average adjusted annual income or about 16% of the Area Median Income where PRA residents live); and with incomes relying mostly on social security, supplemental security income, or both.

Future Research

HUD is currently implementing the second phase of the evaluation of the Section 811 PRA program. Phase II will continue to evaluate the implementation of the PRA program, but will also assess the impact and cost of this model of housing assistance in a subset of states that have made more progress leasing units.

The Phase II evaluation includes a survey of residents to learn about their quality of life, the quality of the housing and neighborhoods in which they live, and their ability to access the services and supports they need to maintain tenancy. Phase II also includes matched HUD, Medicaid, and Medicare data to learn about the program’s cost and early impact on housing and health outcomes, compared to the traditional 811 program, to other HUD-assisted programs for persons with disabilities, and to similar Medicaid beneficiaries who do not receive HUD assistance. The Phase II evaluation is expected in spring 2019.