HUD cuts reflect strategy shift on homeless services

When the U.S. Department of Housing and Urban Development (HUD) announced $355 million in local Continuum of Care grants in early May, including more than $26 million for New York City, respected nonprofit homeless service providers were alarmed because in a strategy shift, the Obama administration cut grants for emergency shelters, threatening approximately 500 beds across the city. 

During this most recent round of grants, projects were ranked based on the “housing first” concept that emphasizes finding homes for people before addressing other chronic issues. While HUD said these kinds of projects are often cheaper and more successful than “transitional” housing – which is an intermediate step often used to prepare residents for more independent living – some advocates said it penalized 11 programs that are effective at driving people with underlying addiction or mental health issues into permanent homes.

Transitional housing helps homeless individuals by providing shelter for a limited time that can include various supports, such as drug counseling and job training. Although a Department of Homeless Services (DHS) official said it was exploring funding options to keep affected emergency or transitional programs operating at current levels, many service providers are making plans to shut down these programs.

“While transitional housing programs play an important temporary role for people experiencing homelessness, permanent supportive housing has demonstrably better outcomes at a lower cost,” HUD spokesman Charles McNally said. “Given the data supporting Housing First and the limited resources overall to address homelessness, HUD structured the competition to incentivize a switch from transitional housing to permanent supportive housing and rapid rehousing.”

This shift in strategy has been in the works for over two years now. HUD warned agencies of the new rating scale as far back as 2013, the spokesperson said, and offered to provide “general guidance” to help wind down unfunded projects and move clients to other services. A May 16 “recap” of the funding process, written by HUD’s Special Needs Assistant Programs Director Norm Suchar and sent to providers, said that Congress had urged HUD to make the program more competitive and noted that “funding for the CoC Program has been just enough to continue existing levels of assistance.”

Susan Wiviott, CEO of The Bridge, a nonprofit which operates 840 units of transitional and specialized housing in the Bronx, Manhattan and Queens, said it would close a nine-bed transitional facility on E. 117th Street at the end of this month after it lost a $103,000 grant.

“I think there’s room in a place like New York City for lots of different kinds of programs,” she said. “I think the programs that are being cut, ironically, are some really good programs that have done a lot.”

She said it wasn’t a “huge number” of slots, but noted it would still be detrimental, particularly for those who preferred the apartment-style units to the larger, congregate settings. Though The Bridge won’t push anyone out, it won’t refill the beds as people leave. But because the building has restrictions on its use, Wiviott said it will stay empty until the organization can find funds to support other programs there.

Other nonprofits affected by the cuts include Bowery Residents’ Committee in Manhattan and Project Hospitality on Staten Island, according to media reports. Project Renewal President and CEO Mitchell Netburn called the cuts “misguided” and said they would hurt the organization’s goal of helping people with long-term substance abuse issues. Its Renewal Farm program, which relocates clients outside the city to help them recover far from the people and neighborhoods that encouraged their drug use, would be directly affected.

The loss of beds will be felt acutely in New York, where nearly 58,000 residents sleep in shelters and another 3,000 or so sleep outside. To respond to the peak levels of homeless New Yorkers, Mayor Bill de Blasio created the HOME-STAT program to better track and address chronically displaced residents. Following a 90-day review of the city’s approach to homeless services, the administration also reorganized DHS to focus on managing intake and shelter inspections while the Human Resources Administration will focus more on prevention and rental assistance. The city also added $170 million to pay for shelter operations this year and proposed adding another $194 million in the fiscal year that starts in July.

McNally, the HUD spokesman, disputed that the grants represented a cut, noting that the money allocated to the city represented $17 million in additional funding – “the highest increase of any jurisdiction nationwide.” According to HUD’s award reports, the biggest portions of that increase included $11.4 million for a 293-unit affordable housing building in Brooklyn, and more than $675,000 more for Common Ground, the city’s largest provider of supportive housing.

In a joint letter to the New York Times, Mary Brosnahan, president and CEO of the Coalition for the Homeless, and Joshua Goldfein, an attorney at the Legal Aid Society’s Homeless Rights Project, argued that while the reductions were “deplorable,” many poor New Yorkers were still protected from eviction from emergency housing because of the “right to shelter” that requires the city to shelter those who are homeless by “reason of physical, mental or social dysfunction,” they wrote.

But Alexander Horwitz, the Doe Fund’s chief of staff, said that even so, services weren’t necessarily guaranteed. “While we have the right to shelter in New York, we don’t have a mandate of services, and that is one of the things we believe causes this incredible congestion in the system,” he said.

Two of the Doe Fund’s three programs will face a loss of $3 million, affecting 75 transitional slots that guarantee housing only after residents complete courses and other steps toward self sufficiency. Up to three people cycle through each bed per year. While the funding can be used toward other projects such as improving social services and security, he still called the reallocation “doubly injurious” because while permanent housing embraced by the Obama administration was often effective for families, there were thousands of single adults returning from prisons into shelters and unprepared for living in apartments.

“They’re missing basic reading and math skills, they’re missing any kind of work history, and they’re missing the soft skills of living on the outside,” Horwitz said. “So taking money away from the programs that help the drivers of the single adult population for permanent housing really serves absolutely nobody.”

DHS spokeswoman Lauren Gray said the agency reached out to nearly all of the affected programs. “We are evaluating the impact of these federal funding cuts in New York City and steps that we may be able to take to mitigate the impact for our clients,” she said. “We value the work of our not-for-profit partners, including the DOE Fund, BRC and others, and we look forward to working with them to address this problem.”

Horwitz said the Doe Fund would pressure HUD to restore its funding for the affected transitional housing slots and that officials from the de Blasio administration and the City Council were assessing how to restore the tear in the safety net. “It may be a long road here,” he said. “But we do believe that what’s right for so many New Yorkers in need will eventually prevail. We just don’t know how yet.”