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New Resources Can Reduce Homelessness Substantially--If We Use Them Wisely

April 13, 2021

On April 9, the U.S. Department of Housing and Urban Development (HUD) allocated $5 billion to cities and states to address homelessness through the HOME program, which provides grants to state and local governments to create affordable housing for low-income households.

Soon to follow is another $5 billion to increase the number of Section 8 Housing Choice Vouchers allocated to public housing agencies across the nation, with the explicit objective of reducing homeless. With that influx of resources for affordable housing—unprecedented since the 1970s—we can start to win the war against homelessness. We can begin to house the half million Americans found homeless on a single night and the more than three times that many who experience homelessness at some time during a year. That will only happen if the federal government and communities base their policies and programs on the evidence built up over decades. Much of that evidence is summarized in the book Marybeth Shinn and I published last year, In the Midst of Plenty: Homelessness and What to Do About ItThe evidence tells us that:

  • People who experience homelessness are deeply poor, but only a small share of families and individuals living in deep poverty become homeless.
  • The most effective policies to reduce homelessness focus on people currently experiencing it or are at immediate risk of doing so. Policies that try to prevent homelessness among the broader group of people with poverty-level incomes are not as effective, because predicting who will fall into homelessness is difficult. While a few communities have developed tools to make such predictions, they have been only moderately successful.
  • Providing long-term housing assistance ends homelessness for people experiencing it, including people with physical and mental health challenges. They can be housed successfully through a Housing First approach that provides supportive services but does not require their use. 
  • Some have argued that targeting long-term rental subsidies to people experiencing homelessness may induce people to go to the street or a shelter to gain access to this assistance. That is not the case. Shelters and the streets are dangerous and traumatic places.  Research has shown that people do not go there to “game” the system.
  • Building housing with financing that depends on multiple layers of public subsidy is slow, expensive, and wasteful.  Decades of research and current community experience support this point. More straightforward approaches house people sooner and at a lower total cost.
  • Building housing projects that concentrate poor people is known to have perverse consequences for the health, safety, and economic outcomes of children and adults, exacerbating racial inequities. Housing vouchers are much less likely to create concentrations of poverty and are used successfully by people of color.

Building on What We Know

So how can we capitalize on what we know about what does and doesn’t work? For starters, the new Housing Choice Vouchers should define homelessness narrowly as staying in a shelter or on the street, as HUD’s homeless assistance programs have done since they were created in the 1990s. Further, the public housing agencies that administer vouchers should be required to work with their local homeless systems (Continuums of Care) to identify people experiencing homelessness or who are at immediate risk.

The new HOME funds should be used in one of the following ways, depending on a data-driven assessment of each community’s needs: 

1. Develop permanent supportive housing for people with mental and physical health challenges, using a Housing First approach.  Most communities do not have enough supportive housing, and this should be the highest priority use of the HOME funds.

2. Where the supply of supportive housing is adequate but other affordable housing is in short supply, identify resource-rich locations where housing can be developed or preserved. Restrict rents to levels that are affordable for people with Housing Choice Vouchers. Do not use multiple layers of subsidy attached to the development to reach the poorest renters. Instead, rely on Housing Choice Vouchers to do that. This “split subsidy” approach will reduce the inefficiencies, time delays, and potential for fraud and waste associated with housing production programs, and make it more feasible to locate the housing outside areas of concentrated poverty.

3. Use the flexibility of the HOME program to add more tenant-based rental assistance to the Housing Choice Vouchers available for people experiencing or at immediate risk of homelessness. Many communities around the country do not need to augment their supply of rental housing, they just need more rent subsidies so that people with poverty-level incomes can afford the housing that exists.

Apart from HUD programs, short-term rental subsidies administered by the Department of the Treasury will address the risk that people will be evicted when the COVID-induced eviction moratorium ends. HUD programs should be reserved for people who need long-term housing assistance. 

Looking ahead, more funding is needed for Housing Choice Vouchers.  Five billion dollars is not enough to meet the need.  Meanwhile, the resources that have just been added should be used in ways that will make the best start, by focusing on people currently experiencing homelessness and relying on evidence for the most effective approaches.

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