Designing Rent Subsidy Programs:Lessons Learned

National Alliance to End HomelessnessNational Conference

Tom Albanese

July 13, 2011

Objectives

• Discuss lessons from HPRP

• Understand variety of rental assistance strategies, withfocus on

– Tailoring rental assistance based on individualized assessments

– Use of progressive, assessment-based engagement

• Understand how to establish and leverage creativepartnerships

Program Design Decisions

• Service interventions

– Type

– Duration

– Intensity/Amount

• Limitations: $, funder requirements, admin/fiscal capacity

• Decision-making

– At intake

• Initial screening and assessment

– Ongoing

Rental Assistance/Subsidy

Challenge: develop time-limited rental subsidy program forhouseholds without sufficient income to pay rent and utilitiesin even a very modest apartment.

– Investigate and select one or more subsidy models (e.g.,income-based, unit-based, declining).

– Develop qualification and prioritization criteria.

– Define client expectations for keeping the subsidy, includingfrequency of re-assessment.

– Define the criteria and process for early termination of a subsidy,including due process rights for the tenant and procedures forappeal.

Rental Assistance/Subsidy - Approaches

• One-Time/Lump Sum vs Ongoing

– One time assistance can be coupled with ongoing “as needed”assistance

• Income based Subsidy (e.g., 30% of adjusted grossincome)

– Can be deep or shallow

– Assurance that rent will be paid even if HH income changes

– May inhibit HH from increasing income, moving to smaller, moreaffordable unit

– Difficult to budget without past experience/data

– Cliff effect

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Rental Assistance/Subsidy - Approaches

• Fixed Subsidy

– Could be based on the rent cost, household size, apartment size, orsome other factor (e.g., $300 for a two bedroom apartment, $400 for athree bedroom unit).

– Fixed and does not vary, regardless of income changes.

– Can be deep (sufficient to pay all or a majority of the monthly housingexpense) or very shallow (paying just a small proportion).

– Based on analysis of rental market and of how much subsidy theprogram’s target population would need to obtain or retain housing inthat market.

– Challenge: deep enough to enable the majority of assisted households tomaintain housing, but shallow enough to avoid the cliff effect

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Rental Assistance/Subsidy - Approaches

• Graduated/Declining Subsidy

– Income based or fixed

– Subsidy declines in “steps” based on fixed timeline, case plan milestonesuntil household ability to assume housing costs.

– Steps known in advance and can act as deadlines for increasing income.

• Combination of above

– Example: fixed, shallow subsidy with ability to adjust under certainconditions

• All of the above can serve as “bridge subsidy”

– Temporary assistance to help obtain/maintain housing until a longer termor even permanent subsidy becomes available.

– Requires confidence that longer-term subsidy is available and whenavailable

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HPRP: What Have We Learned?

HPRP Year 1:

• Rental assistance:

– 60% of prevention clients

– 46% of RRH clients

• 44% of people participated 30 days or less

• 92% exited the program within 6 months (180days) of program entry

• 94% exited to permanent housing

– 90% to rental housing

HPRP: What Have We Learned?

• Housing barrier-focused assessment and serviceintervention decision-making

– Housing screening barriers – what a landlord may use to‘screen-out’ applicants (e.g., income, credit history, rentalhistory, etc.)

– Housing retention barriers - problems that caused pasthousing loss and may cause future housing loss (e.g.,income, past issues as predictors of potential future issues,etc.)

HPRP: What Have We Learned?

• Program design flexibility – within constraints ofHPRP Notice

• Target population influences program design and viceversa

• Client needs vary – no “one-size fits all”

• Greater individualization and flexibility requires…

– Different payment processing & admin/fiscal capacity

– Close monitoring of budget vs actual expenditures

– Ongoing, progressive assessment with participant

– More supervision

– Fair, transparent decision-making; right to appeal

HPRP: What Have We Learned?

• Operationalizing “just enough” approach

– Alameda, San Jose, San Francisco, Lancaster: Casemanagers use a budgeting tool and process with clients todetermine the specific gap needed to be filled.

– Little Rock: Also uses an agreement that outlines “need-based”principle of the program. Continuous communication betweenclient and case manager. Reassessments conducted whenevera plan objective is met.

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HPRP: What Have We Learned?

• Partnerships are critical

• Landlords = most valued resource

• Housing Authority and other privately owned subsidizedhousing

• Know the rental market and establish partnerships

– Landlords are essential partners – identify and develop lasting, mutually beneficialrelationships

– Staff must be housing market “experts” – awareness of options and knowing howto access all types of housing options is job #1

– Tailor landlord “incentives” to fit the local housing market, landlords risk-toleranceand the client’s barriers.

– Consider specializing staff functions (e.g. Housing Locator)

• Mainstream benefits & community-based providers

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HPRP: What Have We Learned?

• Arlington County, VA:

– Created new Housing Locator position, who helps clientsnegotiate with landlords to reduce or absolve rental arrears andfees.

– Partners with Virginia Cooperative Extension for financialeducation (one-on-one counseling and group workshops).

– Connects households to employment and training servicesthrough Arlington Employment Center. An AEC case managerprovides dedicated support to HPRP households.

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HPRP: What Have We Learned?

• Where homelessness cannot be prevented, it can be ended quicklyfor the overwhelming majority of households

• Most households will successfully exit homelessness with limitedassistance

• Households with moderate to severe housing barriers may requiremore intensive and/or expensive assistance to exit homelessness –but most can still succeed with temporary assistance

• Assuring households can sustain housing does not mean householdswill no longer experience housing or life problems or that they willachieve “affordable” housing.

• Everyone is housing ready (programs need to be client-ready)

Additional Resources:

HUD Homeless Resource Exchange: www.HUDHRE.info

– Designing and Delivering HPRP Financial Assistance

NAEH: www.endhomelessness.org

– Rapid Re-Housing: Creating Programs that Work

– Homelessness Prevention: Creating Programs that Work