Characteristics and Dynamics of Homeless Families with Children. 2.4 Barriers to the Use of Assisted and Affordable Housing Programs by Parents Leaving Homelessness and Their Children

10/01/2007

The assisted and affordable housing programs have almost 3.5 million units of subsidized rental housing large enough for families with children, and it is likely that about 720,000 million of these units turn over each year (Exhibit 6). By comparison, there are only 55,000 parents who are homeless at a point in time who need mainstream subsidized rental housing (Exhibit 2) and perhaps three times (166,000) that number over the course of a year. In theory, then, with a ratio of more than 4 to 1 between units available and units needed, the assisted and affordable housing programs should provide a substantial source of permanent housing for families leaving homelessness.

However, there are also serious barriers to the use of assisted and affordable housing by homeless families:

  • Competition from housed families who get on waiting lists for assisted housing programs;
  • Affordability issues already touched upon in the discussion of HOME and the LIHTC;
  • Shifting priorities for assisted and affordable housing programs that may make those programs less available as permanent housing for homeless families;
  • Requirements for occupancy of assisted and affordable housing other than rent;
  • Discrimination against people who have been homeless and against racial and ethnic minorities; and
  • Inappropriate locations of some assisted housing developments.

Competition from Housed Families with Severe Housing Needs. Families living with extreme housing cost burdens or in substandard or overcrowded conditions have a strong incentive to get on waiting lists for vouchers and public and assisted housing projects. HUD’s most recent estimates show that, in 1999, there were 1.8 million housed12 families with children, incomes below 50 percent of area median, and rent burdens greater than 50 percent of income or living in housing with severe physical problems. Most of these families (1.4 million) had incomes below 30 percent or area median, which is about the equivalent of the poverty level. In addition to the 1.8 million families considered by HUD to have “worst case needs” for housing assistance, another 600,000 were in crowded conditions (Nelson et al., 2003)

Thus, more than 2 million housed families are in direct competition for assisted housing with the 50,000 families who are homeless and seeking mainstream assisted housing. Some of these housed families may recently have experienced a drop in income or a change in household composition, or they may expect their poverty to be temporary, or they may have other reasons for not placing themselves on waiting lists for assisted housing. However, at any point in time, many families with severe housing needs will have been on waiting lists for assisted housing for months or for years. Under a first-come-first-served system or a system that provides only an income-based preference for extremely low-income households, these housed families will be selected from waiting lists ahead of homeless families entering the waiting lists more recently.

One approach used by homeless service providers for overcoming this barrier is to help families apply for assisted housing as soon as they have entered a shelter or a transitional housing facility, so that when they are ready to move to permanent housing some months in the future, they will be at the top of the list. How successful this approach can be depends on the length of waiting lists for assisted housing, which varies a great deal from location to location. It also may not help much for implementing a policy that tries to get families out of shelters or transitional housing facilities and into permanent housing as quickly as possible.

A more direct approach is to persuade PHAs to give people who are homeless a preference for receiving a voucher or a vacant public housing unit. PHA staff (and boards of directors) may be reluctant to establish a general preference for people who are homeless, especially in a jurisdiction where there is a large shelter population, for fear of crowding out other needy families who are precariously housed. In addition, PHAs or private owners of assisted housing developments may be reluctant to add families with histories of special needs to rental developments that already have a concentration of families with challenges.

An alternative is for providers in the homeless service system to negotiate with PHAs, or with owners of Section 8 projects, for a set-aside of vouchers or of units in a development for occupancy as needed by graduates of the provider’s program. It is important for advocacy organizations and providers to remember that PHAs are not the only providers of assisted housing and to take the effort required to reach out to private owners of Section 8 projects. The fact that the Section 8 projects in an area have many different owners in a local area may actually have some advantages, because special arrangements may be simpler to achieve than with PHAs. For a PHA such arrangements may imply policy decisions for all of the public housing projects—or vouchers—in a local area and require the approval of the PHA board.

Affordability of HOME and LIHTC Rents. The median income for homeless families is only 41 percent of the poverty income level, and most HOME and LIHTC rents are not affordable even by families with incomes at 100 percent of poverty, unless those families are using a housing voucher. There may be some homeless families that have incomes at a level low enough that they need affordable housing but high enough to afford HOME and LIHTC flat rents. For example, some parents may become homeless because of domestic violence or temporary behavioral health issues but have sufficient human capital to have jobs at which they earn between 40 and 60 percent of area median income at the time they leave homelessness for permanent housing.

For families who are able to obtain Housing Choice Vouchers, HOME and LIHTC developments can serve as available housing in which to use the voucher. This is not always the case for LIHTC developments, which, depending on the part of the country in which they are located, often are permitted to have rents above the voucher program’s payment standard. This happens in locations that have relatively low private market rents (on which voucher payment standards are based) compared with local median incomes (on which LIHTC maximum rents are based).

One of the ways to make HOME and LIHTC developments available for families leaving homelessness, with and without vouchers, is for providers to negotiate with owners for a set-aside of units within the development to be made available, as needed, to the provider’s clients seeking permanent housing. A good time to do this is when the rental housing developer is applying to the state or locality for an allocation of HOME dollars or LIHTC tax credit authority, because such a commitment may make the proposed development score higher in the competition for these resources. On a system-wide level, advocates can encourage the state and local agencies administering the affordable housing programs to give such arrangements priority in the competitions for HOME and LIHTC.

Shifting Priorities of Housing Programs. The most recent enacted legislation affecting the assisted housing programs, the Quality Housing and Work Responsibility Act (QHWRA) of 1998, accelerated a trend toward giving PHAs more discretion over both the management of their waiting lists and the rents charged for assisted housing. The earlier system of Federal preferences, which included homelessness and otherwise favored the poorest households, was replaced by requirements that 75 percent of the newly issued vouchers go to households with incomes below 30 percent of area median, and that only 40 percent of households newly admitted to public housing or project-based Section 8 have such extremely low incomes.

Because the income-based subsidy formula is such a powerful force in targeting assisted housing to the poorest households and because of decisions made by many PHAs to continue to serve the neediest households, the incomes of families in the assisted housing programs did not change much following the enactment of QHWRA. As of 2001, 71 percent of families and individuals living in public housing had incomes below 30 percent of area median, and 75 percent of families using vouchers had these extremely low incomes (HUD, 2002.) However, there is a parallel and growing trend to move away from 30 percent of income rents in order to create incentives to work within the assisted housing programs.13 A number of PHAs have been given the authority to do this under a demonstration called Moving to Work. In addition, under the basic QHWRA authority, PHAs may establish preferences for families with employment income. Furthermore, current proposals for “rent reform” favored by some PHA interest groups could make alternatives to 30 percent of income rents applicable to the assisted housing programs as a whole (Public Housing Directors Association, 2005).

Meanwhile, the Bush Administration has proposed legislation that would make fundamental changes to the Housing Choice Voucher program, renaming it the Flexible Voucher program and to turning it into a block grant with even broader discretion for PHAs to set priorities for the families and individuals who get vouchers and to alter the subsidy formula (HUD, 2005a). Possibly the most important aspect of this proposal has already been enacted in the most recent appropriation of HUD funds. Unless reversed by later appropriations acts, the voucher program now provides a fixed pot of money to a PHA, rather than the amount needed to maintain the current size of the voucher program regardless of the incomes of the households actually served by the program. This has created powerful incentives for PHAs to avoid serving the neediest families or to shrink the size of the program (the number of vouchers in use) below historical levels. Both possibilities are extremely threatening to the potential use of vouchers for enabling families leaving homelessness to achieve permanent housing.14

Another shift in the priorities for Federal programs that may affect the availability of subsidized housing for families with children is the increased emphasis on using HOME for homeownership rather than rental activities. However, even though there is now a set-aside of HOME funds that must be used for first-time homebuyer programs, the fundability of HOME funds means that so far there has not been an appreciable drop in the overall percentage of HOME funds used for rental housing production or for tenant-based rental assistance (HUD, 2005b).

Occupancy Requirements. Both PHAs and private owners are permitted by law and regulation to screen tenants for their ability to be lease-compliant tenants before offering them a unit in a public housing or Section 8 project. Screening often includes checks on credit history, on criminal records of household members, and on whether the family has a history of eviction from rental housing for nonpayment of rent or for other lease violations. Such screening may be difficult for some parents attempting to move from homelessness to permanent rental housing. Providers in the homeless service system report, in particular, that many of their clients have been evicted from housing in the past. Many have lived in assisted housing at some point in their lives, and some are barred from waiting lists for vouchers and public housing because they have outstanding debts to the PHA.

In the past, PHAs were less rigorous than private owners of Section 8 projects in screening families before admitting them to public housing. That is now changing, as PHAs attempt to create mixed-income communities in public housing developments. In addition, the retirement from the public housing stock of many of the most distressed public housing developments means that PHAs that formerly would take virtually anyone in order to fill vacant units no longer feel that pressure to the same extent.

For the Housing Choice Voucher program, major responsibility for screening prospective tenants rests with the owners of the private market rental housing in which families seek to use the voucher, rather than with the PHA. However, PHAs now screen families for criminal records during the process of qualifying them to receive a voucher, and they also may disqualify households that have violated voucher program rules in the past. Private owners of rental housing may legitimately refuse to rent to voucher holders for any of the same reasons, such as poor credit history, that they may refuse to rent to unsubsidized households.

Occupancy requirements can also present a challenge for retaining formerly homeless families in assisted housing. Anecdotal information from homeless service providers suggests that eviction from public housing or loss of subsidies under the voucher program because of rule violations may be a common path into homelessness.

Ways of overcoming these barriers to the use of the assisted housing programs by families attempting to leave homelessness include making payment of outstanding housing debts and repair of other credit problems immediate goals for parents who become homeless. A homeless service provider can also play an active role in the housing search process, making assurances to an owner of rental housing that a family will continue to receive case management and other support during a period of stabilization in permanent housing. It may even be possible for some providers to guarantee rent payments—for example, based on a revolving fund set up for this purpose.

Overcoming criminal records may be more difficult, and it may be that criminal histories recent enough to bar them from admission to assisted housing may be a characteristic worth including in a typology of homeless families.

Discrimination. In addition to the legitimate reasons owners of rental housing may refuse to accept families, such as a prior history of nonpayment of rent, private owners may discriminate against families simply because they have been in shelters. The owner may believe that becoming homeless is a predictor of disruptive behavior or lease violations. And homelessness may simply bring with it a stigma with which owners do not wish to be associated. There may be a few jurisdictions that include people who have been homeless among those protected by fair housing law.

Another type of discrimination, clearly protected by fair housing law but nonetheless common, is discrimination against racial and ethnic minorities. The most recent study of housing discrimination in U.S. metropolitan housing markets, based on paired testing conducted in 2000, found that, among those seeking rental housing, African Americans received unfavorable treatment compared to Whites 21.6 percent of the time.15 For renters, the adverse treatment measured included “the availability of advertised and similar units, opportunities to inspect units, housing costs, and the encouragement and assistance from rental agents.” (Turner, Ross, Galster, and Yinger, 2002).

Parents who become homeless are disproportionately members of minority groups and are particularly likely to be African American. Based on the NSHAPC, 37 percent of parents who are homeless together with at least one child are African American, as are 45 percent of homeless parents who do not have their children with them. The proportion of homeless parents who are Hispanic is not high compared to the representation of Hispanics in the overall U.S. population, but a surprising 11 percent of homeless parents who are separated from their children are Native American. Especially in localities where the homeless population is heavily minority and the rest of the population is not, it may be difficult for parents attempting to use vouchers to rent permanent housing to find willing landlords.16

Once again, the most effective way of overcoming these barriers may be active participation in the housing search process by homeless service providers. Reaching out to owners of rental housing and informing them about the ongoing support families leaving homelessness will receive in permanent housing can help allay stereotypes associated with minority status, with disabilities, or with homelessness itself.

Inappropriate Locations. A final barrier to the use of the 720,000 units of assisted and affordable housing that turn over each year by parents who have become homeless may be that assisted housing projects and programs are located in the wrong place. This could happen in a number of ways. For example, some public housing and Section 8 developments may be located in neighborhoods where it is hard for people recovering from substance abuse to remain clean and sober, and programs helping homeless people overcome such challenges may not want to encourage their clients to seek housing in those places. Another challenge may be that some public housing or Section 8 developments in metropolitan areas may be in locations from which it is not easy to find jobs or to travel to work. Or they may require a child to leave a school in which he has become stabilized or to move away from a relative who provides important emotional support. The inflexibility of assisted housing with a fixed location also may result in parents living in places that are inconvenient for continuing their treatment programs.

In rural areas, assisted housing may be in locations too far from the locations where parents have become homeless or are receiving services to help them leave homelessness. The NSHAPC suggests that as many as 20 percent of parents who become homeless are in nonmetropolitan areas. A substantially higher proportion of assisted and affordable subsidized housing is in nonmetropolitan areas, but there nonetheless may be a mismatch between the locations of housing subsidies and the locations of homeless families. For project-based assisted housing in particular suburban and rural areas, there may be a mismatch between unit sizes and the numbers of bedrooms needed by families trying to leave homelessness for permanent housing.

Finally, victims of domestic violence may need to find permanent, affordable housing in locations where they will be safe from their abusers. Housing vouchers may be a more appropriate form of permanent housing for victims of domestic violence than public housing or Section 8 projects, especially in cities that are small enough that there are only a small number of easily identifiable public and assisted housing developments.

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