Introduction

REPORT OBJECTIVE

This report responds to Congress' request that the Secretary of Housing and Urban Development (HUD) "conduct a comprehensive review and evaluation of each program under Title IV of the Stewart B. McKinney Homeless Assistance Act," as specified in the Housing and Community Development Act of 1992, Section 1409. It describes the findings contained in studies of the six homeless programs administered by HUD.

The findings contained in the six program evaluations support the Administration's recommendations as presented in the publication Priority Home! The Federal Plan to Break the Cycle of Homelessness, U.S. Department of Housing and Urban Development, March 1994. The findings also support the Department's proposal to consolidate the various McKinney Act homeless programs and help State and local governments develop a continuum of care that can assist homeless persons achieve maximum independence in permanent housing with services, as needed.

The six programs reported on are:

1. Emergency Shelter Grants Program (ESG)
2. Supportive Housing Demonstration Program (SHDP)
3. Section 8 Moderate Rehabilitation for Single-Room Occupancy Dwellings (SROs).
4. Supplemental Assistance to Facilities to Assist the Homeless
5. Single Family Property Disposition Initiative (SFPDI)

HUD commissioned evaluations for all programs except SFPDI, which was examined by a HUD Task Force and reported on by the Government Accounting Office (GAO).

Although the congressional directive also called for a survey of "homeless individuals and families assisted under each program in various jurisdictions," insufficient staff and resources prevented timely and meaningful completion of that task for inclusion in this report. There is, however, sufficient participant information within the reports that cover the Title IV McKinney Act programs to support the preliminary findings on the homeless individuals and families who have been assisted.

Legislative History and Synopsis of McKinney Programs and HUD Administration

In July 1987, Congress enacted the Stewart B. McKinney Homeless Assistance Act (P.L. 100-77) to establish distinct assistance programs for the growing numbers of homeless persons. Recognizing the variety of causes of homelessness, the original McKinney Act authorized 20 programs offering a multitude of services, including emergency food and shelter, transitional and permanent housing, education, job training, mental health care, primary health care services, substance abuse treatment, and veterans' assistance services.

Between fiscal years 1987 and 1994, Congress appropriated $5.1 billion to implement McKinney Act programs, according to the Interagency Council on the Homeless, and 9 Federal agencies were asked to implement the 20 authorized programs.

Funding was offered through a variety of mechanisms: 6 programs provided funds through a formula or block grant process, 10 used a competitive process, and 3 received no funds to distribute until after FY89. HUD had direct responsibility for administering five of the programs and nearly 70 percent of the 1994 budget authorizations.

Between 1987 and 1994 Congress appropriated approximately $3.1 billion for five of the McKinney Act programs reviewed in this report. The sixth HUD program, SFPDI, was not a McKinney program. In 1983 a program for disposing of HUD- owned single-family properties was created. It was broadened in 1985 to permit homeless providers to purchase or lease HUD homes at discounts. No appropriations were necessary for program operation. A brief description of the six HUD- administered programs follows.

• Emergency Shelter Grants Program. This program provides formula (block grant) funding for emergency shelter and essential services.
• Supportive Housing Demonstration Program. This competitive program funds a variety of grantees to provide transitional and permanent housing, particularly for homeless families and persons with special needs or handicaps. Initially funded as a demonstration, the program was renamed the Supportive Housing Program and made permanent in the Housing and Community Development Act of 1992. The program was also expanded to fund services only, Safe Havens, and Rural Homeless Housing.
• Section 8 Moderate Rehabilitation for Single-Room Occupancy Dwellings. This competitively awarded program provides funding to owners of SRO housing in the form of rental assistance payments on behalf of homeless individuals, in conjunction with the rehabilitation of the facility. The program provides permanent housing for previously homeless tenants.
• Shelter Plus Care. Congress added this program to HUD's repertoire in FY90, and provided the first funding in FY92. Funds are competitively awarded for rental assistance. Grantees must match the value of rental assistance with an equal value of supportive services. The target population is homeless persons living on the streets or in emergency shelters with severe mental illness, chronic substance abuse problems, or AIDs.
• Supplemental Assistance for Facilities to Assist the Homeless. This competitive program funded innovative projects that met the immediate and long-term needs of the homeless, as well as projects already receiving funds under ESG and SHDP. The broad and flexible range of assistance permitted program expansion, capital improvement, and startup of new, needed supportive services. In 1992, SAFAH was incorporated into the Supportive Housing Program.
• Single Family Property Disposition Initiative. Originally, this program was not a McKinney program. It was created in 1983 under the HUD Secretary's broad legislative authority to dispose of single-family properties. In 1985, it was broadened to allow HUD to sell or lease foreclosed single-family properties to nonprofit organizations, or to State or local governments to provide temporary shelter for homeless persons. In 1992, the Housing and Community Development Act recognized it as a McKinney initiative.

OVERVIEW OF HOMELESSNESS

The Federal definition of a homeless person is: An individual who (1) lacks a fixed, regular, and adequate nighttime residence and (2) has a primary nighttime residence that is (a) a supervised, publicly or privately operated shelter designed to provide temporary living accommodations (including welfare hotels, congregate shelters, and transitional housing for the mentally ill), (b) an institution that provides a temporary residence for individuals intended to be institutionalized, or (c) a public or private place not designed for or ordinarily used as a regular sleeping accommodation for human beings. (McKinney Act (P.L. 100-77, sec 103(2)(1), 101 sat. 485 (1987))

Homelessness is more than being without a home; it represents the most extreme breakdown of our housing and social service system. The homeless can be broadly classified as those who have suffered a crisis of poverty or those afflicted with chronic disabilities. As a result of abject poverty and emotional, physical, and family difficulties, the homeless generally have low self-esteem, feel little sense of accountability, and suffer from hopelessness. Homelessness means that an individual is separated from the community and its family, social, and institutional networks.

Priority Home! The Federal Plan to Break the Cycle of Homelessness, U.S. Department of Housing and Urban Development, March 1994, offered the following observations in its profile of homeless persons:

• Single unattached adults, unaccompanied by children, make up about three-quarters of homeless persons. Men outnumber women by a factor of five.
• The average age of a homeless person is the late 30s; that of mothers with children is the early 30s.
• Minorities are disproportionately represented among the homeless population, especially among homeless families.
• Seventy-five percent of all homeless persons have been in an institutional setting for some period of time; this includes prison, inpatient chemical dependency treatment centers, and hospitals for mental disorders.
• At least half of the adult homeless population has an ongoing or past alcohol- or drug-related problem.
• Homeless persons are poor, having a spending income averaging less than $200 a month, regardless of household composition.
• As many as one-third of homeless children may not be attending school regularly.
• Of the entire male homeless population, approximately 30 to 45 percent are veterans.

The 1990 Annual Report of the Interagency Council on the Homeless contained these facts about the homeless:

• More than 80 percent of all homeless families are headed by single women. Children under the age of 18 years account for 15 percent of the homeless population.
• Not all homeless individuals are unemployed. Approximately 20 to 25 percent of all homeless persons receive some wage income although, on average, that income is insufficient to live upon. As many as 25 percent of all homeless individuals are unemployable because of severe mental illness or physical disability.
• The duration of homelessness varies. Homeless families with children usually spend the least amount of time homeless, while well more than half of all homeless adults remain homeless for 1 year or longer.

The U.S. Conference of Mayors, in its latest survey of homelessness in the Nation's cities, A Status Report on Hunger and Homelessness in America's Cities: 1993, presented the following conclusions about the demographic characteristics of America's homeless:

• Single men and families each comprised an estimated 43 percent of the homeless population in 1993, which represents a significant 11-percent increase in the number of homeless families since 1992.
• The percentage of single youth increased from 2 percent to 4 percent between 1992 and 1993.
• Fifty-six percent of the homeless were African American, 27 percent white, 13 percent Hispanic, 3 percent Native American, and 1 percent Asian.
• Twenty-seven percent of the homeless were considered mentally ill, 48 percent were substance abusers, and 9 percent had AIDS or HIV-related illnesses.

When Congress created the McKinney Act, it set into motion the beginnings of a multifaceted response that utilizes and seeks more efficient coordination of Federal, State, local, private, and voluntary efforts and resources. The intended goal of this approach was to create a catalyst for increasing the resources and responses necessary to alleviate homelessness. The objectives included raising levels of self-sufficiency, self-determination, work force preparedness, life skills, income, and education among the homeless so they may achieve independent living in permanent housing. While each of the authorized McKinney Act programs plus the SFPDI contributes toward achieving the congressional intent, only the six programs that are the subject of this report and are within HUD's purview are described in the following pages. HUD'S HOMELESS PROGRAMS: ELEMENTS OF A SUPPORT CONTINUUM

The McKinney Act programs for which HUD has responsibility contain the elements of the newly proposed continuum of care for the homeless population but they fall short. A The continuum of care concept is a response to the fact that homelessness involves a variety of unmet needs -- physical, economic, social, and medical. An effective response requires a locally designed comprehensive, flexible, coordinated system of homeless assistance. Fundamental components consist of prevention strategies; an emergency shelter and assessment effort, transitional housing and necessary social services, and permanent housing or permanent supportive housing arrangements.

The following synopses of existing programs shows how the programs relate to the continuum of care concept. A limitation of the programs and an obstacle to an effective local homeless support continuum is that, while programs cover every type of homelessness, they do so through different and largely uncoordinated initiatives.

Emergency shelter is often a homeless individual's or family's first encounter with a system intended to assist, however briefly, individuals who for any reason find themselves dispossessed and alone on the Nation's streets. ESG supports provision of the most basic shelter, service, and assessment efforts. Funding can be used to improve the quality and quantity of shelter facilities, to meet the costs of operating the shelters, to provide assessment and transitional services to homeless persons, or to prevent homelessness. Administered as a block grant program, ESG has been used to expand shelter capacity and enhance the availability of services for homeless individuals and families. It has provided financial assistance to help pay utility services, security deposits, or back rent. Requiring a dollar-for-dollar match of the Federal share, ESG funds are available to States, metropolitan cities, urban counties, and territories.

SHDP provides transitional housing for individuals and families and permanent housing for handicapped homeless persons. The transitional program enables homeless individuals who previously resided in shelters or other temporary residential settings to achieve independent living.

The Transitional Housing (TH) component of SHDP provides clients with up to, but no more than, 24 months in a transitional housing facility, during which time they are encouraged and supported in their efforts to regain permanent housing. Recipients of TH grants receive advances for housing acquisition, rehabilitation, and, in limited instances, new construction, and/or may receive 5-year grant awards for program operations and supportive services. Both types of assistance are subject to matching fund requirements and stipulate that grant recipients must provide housing and support services for a minimum of 10 years (20 years for the earliest projects).

The Permanent Housing (PH) component of SHDP has provided independent living for homeless individuals with a chronic disability. Often an alternative to institutionalization, the PH program has funded projects to provide community- based, long-term housing and supportive services. Recipients of SHDP PH grants were required to integrate the housing into aneighborhood setting and to operate a project for at least 10 years (20 years for the earliest projects). Like TH projects, PH projects have been subject to matching fund requirements.

SRO is designed to allow homeless individuals to obtain permanent housing in a setting that combines communal living with a modicum of privacy. Section 8 subsidy payments fund a project for a period of 10 years in the form of rental assistance in amounts equal to the rent, including utilities, minus the portion of rent payable by the tenants. The rental assistance funds the repayment of acquisition and rehabilitation costs necessary to create safe and decent housing.

The program targeted homeless persons capable of independent living, including those afflicted by mental illness, physical handicaps, or substance abuse. Awarded as a competitive grant, the SRO program's selection criteria encouraged, but did not require, that recipients integrate supportive services into the housing package.

S+C targets the hardest to serve homeless: those with mental and physical disabilities who are living on the street or in shelters. S+C is a competitive grant program that provides rental assistance funded by HUD that is to be matched with an equal or greater dollar value of supportive services from other Federal, State, local, or private funding sources. Four different delivery mechanisms include sponsor-, project-, and tenant-based assistance, in addition to support for Section 8 SRO facilities in the form of an operating expense subsidy. Assistance provided to projects is available for 10 years; assistance to sponsors and directly to tenants is available for 5 years. Three rounds of S+C grants have been awarded by HUD.

SAFAH assistance was available as a supplement to other McKinney programs and to support innovative homeless initiatives. Competitively awarded, assistance was available for creating new facilities and upgrading existing facilities, including emergency, transitional and permanent housing, supportive services and for operating expenses. Depending on its type, assistance remained available for 1 to 3 years.

EVALUATIONS OF HOMELESS PROGRAMS

HUD's Office of Policy Development and Research (PD&R) commissioned five of the evaluations upon which this report focuses. The evaluations were initiated prior to 1992 in response to requests by HUD assistant secretaries responsible for program administration, the Office of Management and Budget, and Congress. The amount spent on the evaluations was approximately $2.5 million. Evaluation of the sixth program, Single Family Property Disposition Initiative, was the focus of a HUD Task Force and GAO evaluation. Each evaluation was conducted using different research and evaluation methods, employing different contractors, and occurring at separate times.

In spite of the varying origins and timing of the McKinney and SFPDI program evaluations, the emerging reports resulted in a balanced and comprehensive set of findings with which to evaluate HUD's implementation of homeless programs. The individual evaluations that serve as the base for this report are:

• Evaluation of the Emergency Shelter Grants Program Final Report, August 1994, Abt Associates.
• National Evaluation of the Supportive Housing Demonstration Program: Final Report, forthcoming, Westat, Inc.
• Report to Congress on SROs for the Homeless Section 8 Moderate Rehabilitation Program, March 1990, Office of Policy Development and Research, U.S. Department of Housing and Urban Development.
• Evaluation of the Shelter Plus Care Program: Interim Report, Implementation Assessment for Round 1 of Shelter Plus Care, Vol. 1, May 1994, Abt Associates.
• Evaluation of the Supplemental Assistance for Facilities to Assist Homeless Program, September 1993, Center for Public Finance and Housing, The Urban Institute.
• Homelessness. Information on and Barriers to Assistance Programs Providing Foreclosed Property, September 1993, U.S. General Accounting Office.

REPORT ORGANIZATION

The following section consists of summaries of the evaluation findings of the six HUD-administered homeless programs. Each program is described using the following framework:

• Program Description and Administration. An overview of each program, its goals, authorization levels, and assistance mechanisms.
• Program Implementation, Funding, Costs, and Activities. Funding levels, impact of Federal funds on the project or providers' budgets, and the nature and use of funding assistance.
• Impacts on Populations Served. Describes the homeless population that each program was intended to serve, how individuals or families have been served, and the means by which they were served.

A conclusion addresses common themes among the programs.