[NYAPRS Enews] TAC: New Section 811 Housing Program Legislation Introduced in Congress

[Matt Canuteson]

New Section 811 Supportive Housing Program Legislation Introduced in US
Congress

Excerpts from Technical Assistance Collaborative 

http://www.tacinc.org/Docs/HH/OpeningDoors/HTML/Issue31.htm 

 

Historically, the Section 811 program has been one of the most
successful programs available through the U.S. Department of Housing and
Urban Development (HUD) to create new supportive housing units.  

 

However, the future of Section 811 is being jeopardized by an outdated
statute and program models, excessive HUD bureaucracy, and rapidly
declining production levels.  

 

TAC and the CCD Housing Task Force are pleased to announce that on April
10, 2008, Representatives Christopher Murphy (D-CT) and Judy Biggert
(R-IL) jointly introduced groundbreaking permanent supportive housing
legislation - the Frank Melville Supportive Housing Investment Act of
2008 (HR 5772) - in the U.S. House of Representatives. This critically
important legislation will help address the enormous and unrelenting
housing crisis faced by millions of extremely low-income people with
disabilities and will spur the creation of thousands more new 811 units
every year 

by:

* Authorizing a new Section 811 Demonstration Program that fulfills the
promise of true community integration as envisioned in the Americans
with Disabilities Act; and

* Enacting long overdue reforms and improvements to the existing Section
811 production program essential for the program's long-term
viability....

 

Historically, the Section 811 program has been one of the most
successful programs available through the U.S. Department of Housing and
Urban Development (HUD) to create new supportive housing units. However,
the future of Section 811 is being jeopardized by an outdated statute
and program models, excessive HUD bureaucracy, and rapidly declining
production levels.  

 

For the fourth year in a row, HUD has proposed drastic budget cuts for
the Section 811 program that threaten the program's survival.
Fortunately, Congress has thus far rejected these cuts and has continued
to support the program with level funding of $237 million.  However,
several factors - including the high cost of Section 811 capital
provided for each new unit, the burden of renewing Section 811-funded
Mainstream vouchers, and rising development costs - have all combined to
reduce the number of new units produced nationally each year from over
3,000 units in the 1990s to only 700 units in Fiscal Year (FY) 2006 and
1,008 units in FY 2007.  

 

HUD's FY 2009 budget proposal for Section 811 would provide only $29
million for the creation of new units.  Experts calculate that fewer
than 300 new units would be produced should HUD's latest proposal become
law.  This recent budget history - along with the program's structural
problems - threaten the future viability of this important supportive
housing program....

 

Problems with the Current Section 811 Program

In addition to the problems that have plagued the Section 811-funded
Mainstream Voucher program, there are major problems associated with the
current Section 811 Capital Advance/PRAC program including those
highlighted below.  

*         Problem #1 - Developing integrated scattered-site housing with
Section 811 funding is virtually impossible due to the program's
structure.  A few entrepreneurial Section 811 developers have struggled
to use the program to purchase condominiums and cooperatives, which is
permitted under the statute.  However, this approach has been extremely
difficulty to implement - and finding the money to pay periodic
condominium assessments and rising condo fees can be a significant
problem.  

*         Problem #2 - Section 811 funding is not highly leveraged with
other affordable housing financing.  Because the amount of per unit
funding provided by HUD from Section 811 typically covers 80 - 100
percent of the cost of developing the project, mainstream affordable
housing funding streams such as the LIHTC and HOME programs are rarely
used to create Section 811 units.  The federal Office of Management and
Budget (OMB) gave a low cost-effectiveness rating to Section 811 because
the program's design does not sufficiently leverage other affordable
housing funding 

*         Problem #3 - The complexity of the Section 811 application
process means that first-time applicants are rarely successful unless
they hire a specialized Section 811 consultant that can charge $15,000 -
$25,000.  This cost can be paid for with Section 811 funds if the
project is selected by HUD, but not all consultants will work on a
contingency basis.  During recent years, a relatively small number of
disability organizations with successful track records have begun to
"corner the market" on new Section 811 funding - an outcome that has
certainly been good for them but not necessarily good for the future of
the program.

*         Problem #4 - Because of the current HUD rules and processing
requirements for Section 811 housing development, it's not unusual for a
new project to take 5-7 years to complete. These delays jeopardize the
future of the program because - until the funds are actually spent by
the project sponsor - they remain "on the books" of the federal
government.  Unexpended funding was another reason why Section 811
received a low rating from OMB.

*         Problem #5 - Despite legislative changes to the Section 811
program (and it's companion program the Section 202 Elderly Housing
program) in the late 1990s intended to help 202/811 project sponsors
successfully leverage federal LIHTC financing, major barriers still
prevent Section 811 projects from using this important federal program.
One basic problem is that "single purpose" Section 811 group home and
independent living projects are simply too small to be financially
feasible under the LIHTC approach.  For Section 811 funding to attract
LIHTC investment, it must be used in integrated rental housing
developments that provide both supportive housing units financed with
Section 811 as well as other affordable housing units.

These unresolved Section 811 program issues have caused a significant
decline in the number of non-profit organizations that are even willing
to compete for Section 811 funding.  In the most recent funding round
which concluded in late 2007, only 140 applications were received by HUD
for the entire country!  That shocking statistic comes at a time when
states and localities are desperate for new permanent supportive housing
resources to help the millions of people with significant and long-term
disabilities who are living in restrictive settings, or who remain at
home with aging parents, or who are homeless.  The declining in 811
applications in recent years has also prompted a few federal officials
to assert that there must no longer be any need for the program - a
tragic conclusion at a time when the demand for permanent supportive
housing has never been greater....

 

Why We Need Section 811 Reforms Now!

Across the nation, millions of extremely low-income people with the most
significant and long-term disabilities face an extreme and intractable
housing crisis because they cannot afford decent, safe, and integrated
housing of their choice in the community.  Instead, they eek out an
existence in public institutions, nursing homes, Board and Care
facilities, and other restrictive settings, or live in emergency
shelters, under bridges, or on the streets of our cities.  This crisis
grows worse every day as hundreds of thousands of people with
disabilities currently living at home with aging parents begin to seek
alternative housing arrangements.

According to TAC's most recent study, Priced Out in 2006, the four
million non-elderly adults with disabilities who receive Supplemental
Security Income (SSI) must pay - on average nationally -  100% of their
monthly income to rent a modest studio apartment and 113% of their
income to rent a modest one-bedroom apartment priced at the HUD Fair
Market Rents.  This deep affordability crisis can only be addressed
through a long-term and permanent rental subsidy - like the type that
has been provided through the Section 811 PRAC for almost 20 years.  

 

Conclusion

Time is running out on the Section 811 program and the need to create
new permanent supportive housing units has never been greater.
Disability housing policy is at a critical juncture as the community
integration paradigm takes hold -  unfortunately without the housing
resources to ensure its success. Section 811 legislation that supports
this new paradigm is essential because it will provide important new
resources to ensure its implementation in states and localities around
the country.

Even a reinvigorated and modernized Section 811 program cannot be
expected to address the full extent of the unmet need for permanent
supportive  housing for people with the most significant and long-term
disabilities. However, a newly authorized Section 811 program that truly
supports community integration for people with disabilities will
symbolize a renewed, serious, and sustainable commitment from the
federal government to respond to this housing crisis.

By enacting new Section 811 legislation, Congress can ensure that a
reinvigorated Section 811 program is ready to create thousands of new
permanent supportive housing units every year without needing to double
or triple appropriation levels.  The removal of many bureaucratic
barriers that cause protracted delays in Section 811 project development
will also produce new units more efficiently.  Shifting renewal costs
associated with the flawed 811-funded Mainstream Housing Choice Voucher
program - which has drained funding away from essential permanent
supportive housing production since 1997 - also is long overdue.

TAC and the CCD Housing Task Force look forward to working with Section
811 stakeholders across the nation to ensure that this essential and
critically needed legislation is enacted as soon as possible.  More
specific information on this important legislation is available on TAC's
website www.tacinc.org as well as the CCD Housing Task Force website
www.c-c-d.org.  

 

How Can I Take Action on HR 5772:  The Frank Melville Supportive Housing
Investment Act of 2008?

To ensure that you receive regular Action Alerts on this important
legislation, please contact the following individuals:

Andrew Sperling, National Alliance on Mental Illness, andrew at nami.org  

Liz Savage, The ARC of the United States, savage at thearc.org  

 

 

 

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