Rental Assistance. Introduction. Types of Rental Assistance

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1 Rental Assistance Introduction A disability advocacy group, the Technical Assistance Collaborative, found that in 2000, there was not one single housing market in the country where a person with a disability receiving SSI benefits could afford to rent a modest efficiency or one-bedroom unit.¹ In a study conducted in 2001by the National Low Income Housing Coalition, Alaska was ranked #7 among the top ten least affordable states for rental housing. With a SSI payment of only $874 per month, approximately 74% of that payment is needed to cover the average Fair Market Rent for a modest housing unit.² Without some additional form of rental assistance, persons with disabilities who want to establish a home of their own would be hard pressed to meet any other basic needs such as utilities, food, clothing or transportation. The intent of this document is to assist policymakers, people with disabilities, human service providers, housing developers and disability advocates to understand the issues related to providing rental assistance and to identify some of the resources that affect the supply of this resource. The paper contains a summary of the different types of rental assistance that have been developed in Alaska, along with an examination of some of the challenges associated with providing this service. Also included is a list of the existing rental assistance programs around the state. The information contained herein is somewhat fluid and subject to policy and funding changes at many levels. For the most current information, please refer to the contact numbers listed in the resource section. Types of Rental Assistance There are three basic types of rental assistance, which tend to originate from either the U.S. Department of Housing and Urban Development (HUD) or the U.S. Department of Agriculture (USDA). They are: Project Based Rental Assistance Tenant Based Rental Assistance (Vouchers) Grant Programs Project Based Rental Assistance Project based assistance is essentially a rent subsidy that is attached to a particular housing unit to make it affordable for low-income persons. The Public Housing Division of the Alaska Housing Finance Corporation (AHFC) manages approximately 1,700 units of subsidized housing in 15 communities around the state. Regional housing authorities own and operate approximately 1,078 rental units for Native Americans. Under the current Native American Housing and Self-Determination Act (NAHASDA), these rental units are referred to as currently assisted stock or CAS. When a person applies for a subsidized unit, their income sources are examined and, if they meet certain low-income guidelines, their rent is calculated at 30% of that adjusted gross income. The housing provider executes a written agreement with HUD for payment of the difference between what each tenant pays and what HUD determines is the cost to operate the housing. Another form of project-based housing is HUD s Section 811/202 program. The Section 811 program is designated for low-income persons with disabilities and the 202 program is designated for low-income elderly persons over the age of 62. Under the Section 811 program, disabilities are separated into three major categories: physical disability, developmental disability and chronic mental illness. The person with the disability must be 18 years of age or older and the disability must impede three or more areas of major life activity and be likely to continue indefinitely. Both programs require that the sponsor agency establish a single-asset non-profit housing organization to oversee the development and management of each 811/202 property. Each HUD region receives an allocation of Section 811 funds annually, which are made available to nonprofit organizations through a national competition announced by HUD. Because of limited funding ($121.2 million dollars in FY 2001), the Section 811 program is extremely competitive. After the units open, the initial subsidy period is five years, with options to renew. To be eligible, a renter must be at 50% of the median income for the area where the housing is located.

2 A project-based program designed to assist homeless individuals is HUD s Section 8 Moderate Rehabilitation Single Room Occupancy (SRO) Program. This program was created in 1987 to provide rental assistance to homeless individuals in rehabilitated single room occupancy housing. The program is now a component of the Continuum of Care/Homeless Assistance Program. SRO units may provide food preparation and sanitary facilities individually or in a shared setting. Public housing authorities and private non-profit organizations are eligible applicants for SRO funding. However, private non-profit agencies must contract with a public housing authority for administration of the SRO rental assistance. To be eligible for SRO rental assistance, a unit must require at least $3,000 worth of rehabilitation to meet HUD s physical condition standards (PCS). Once the rehabilitation is completed, the SRO is eligible for up to 10 years of rental assistance that can be renewed. This program has been used to convert old hotels, schools and other public buildings into housing units for homeless individuals. To date, the only project in Alaska that has been developed under this particular program is the Adelaide in Anchorage. This 73-unit facility was developed by Anchorage Neighborhood Housing Services, and is managed by its subsidiary, Anchorage Mutual Housing Association. Owners of properties developed under the USDA s Section 515 (Rural Rental Housing) or Section 514 (Farm Labor Housing, which includes fisheries) programs can receive rental assistance for these properties under the USDA Section 521 program. Administered by the USDA s Rural Housing Service, this program will provide project based rent subsidy for tenants whose income is at or below 80% of the median income for area where the housing is located. Rent subsidy agreements are renewable every five years. Tenant Based Rental Assistance Tenant based assistance is rental assistance that stays with the tenant under certain conditions when they move from unit to unit. The largest tenant based program in Alaska is the Housing Choice Voucher Program (formerly called Section 8), administered by AHFC s Public Housing Division. AHFC manages approximately 2,700 vouchers in 11 Alaskan communities including Anchorage, Fairbanks, Homer, Juneau, Kenai, Ketchikan, Kodiak, Mat-Su, Petersburg, Sitka, and Valdez. The only way AHFC receives additional vouchers is through Congressional appropriation. For example, in FY2001, AHFC received a new increment of 310 vouchers. Included in this increment was a 50-voucher set-aside for persons with Medicaid waivers. The Housing Choice voucher enables persons who are at or below 50% of the median income in their area to lease housing units from privat e landlords who are willing to participate in the program. These landlords must enter into an agreement with a public housing authority to charge rent that does not exceed the FMR for that locale and ensure that their unit(s) will be kept to HUD s housing quality standards. To obtain a Housing Choice Voucher, a person must apply to the nearest AHFC Public Housing office. Applicants may qualify for and request a local preference for conditions like displacement due to natural disaster, domestic violence, homelessness, a rent burden of 50 percent or more of income, families with a terminally ill member, working families, elderly or disabled families, and veterans. Following the preference determination, applicants may have to be placed on a waiting list. Twice each year, AHFC issues letters to all persons on the waiting list to determine whether they still are in need of a voucher. Recipients of these letters who fail to respond are then withdrawn from the waiting list. When a person approaches the top of the voucher waiting list, they receive a notice to meet with AHFC staff who will then conduct a more thorough examination of income sources and calculate the degree of rent subsidy they will qualify for. The applicant then attends a voucher briefing where they are informed of the program parameters and instructed on how to complete the necessary paperwork. After the briefing, voucher holders are given an initial 90 days to shop for a housing unit. The shopping period may be extended for three additional 30-day increments under certain conditions. Once a unit is selected, AHFC will arrange for a housing quality standards inspection. Depending on the outcome of the inspection, AHFC will complete the voucher process. When a landlord enters into a new voucher agreement, they are expected to commit to the program for an initial 12 months UNLESS the landlord must evict for cause. After the initial one-year commitment, the agreement with AHFC converts to a month-to-month arrangement.

3 HUD Grant Programs Over the past ten years, HUD has developed a number of grant programs that include rental assistance as one of many eligible activities to choose from. The decision on whether to select that option rests with the applicant. Due to the time-limited nature of these grants, agencies that do opt to provide rental assistance usually require their clients to apply for longer-term housing vouchers such as Housing Choice. Here in Alaska, the following grant programs have been used to provide rental assistance: Housing Opportunities for Persons With AIDS (HOPWA) Supportive Housing Program (SHP) Shelter+Care Formula grants (HOME & NAHASDA) Under the HOPWA program, persons with HIV/AIDS who are at or below 80% of the area median income can receive rental assistance. HOPWA grant terms are generally three years. The program is administered out of Juneau, Anchorage and Fairbanks, but assistance can be provided to eligible persons throughout the state. If assistance is provided in an area where Housing Choice Vouchers are not available, rental assistance continues as long as HOPWA funding is available. The program operates under essentially the same guidelines as the voucher program and units must pass the housing quality standards inspection. The Supportive Housing Program (SHP) is one of the Continuum of Care Homeless Assistance programs designed to assist homeless individuals and families. Funds are awarded annually through a national competition. After an initial term of 3 years, SHP grants may be competitively renewed on an annual basis. Although funds are awarded competitively, HUD uses a formula to estimate the approximate amount it will award to each area called a Pro Rata Share. Between 1999 and 2001, the Pro Rata Share for Alaska has been approximately $800,000. These limitations have created a renewal crunch in recent years to the extent that no new SHP projects have been introduced in quite some time. Two agencies in Anchorage have been using SHP funds to provide rental assistance for homeless persons with mental illness. In Juneau, an interagency group used SHP funds to provide rental assistance for up to six months while helping homeless persons to tap into other community resources. Another program funded under the Continuum of Care Homeless Assistance umbrella is the Shelter+Care (S+C) program. This is a designated rental assistance program for homeless persons with disabilities. Each S+C grant must be matched in the aggregate by supportive services that are equal in value to the amount of rental assistance awarded and appropriate to the needs of the population to be served. Individual S+C programs can be crafted to provide either tenant-based, project-based or sponsorbased assistance. Since only public housing agencies are eligible to apply for S+C, they are allowed to form partnerships with a sponsor agency that may perform both the housing and supportive services. One advantage to the sponsor-based option is that a sponsor agency only has to commit to serving a certain number of clients so the choice of housing sites remains flexible. Currently in Alaska, AHFC is administering sponsor-based S+C programs in Anchorage and Bethel. After an initial term of 5 years, S+C grants may be competitively renewed on an annual basis. In 2001, S+C renewals were funded under a separate appropriation, thus relieving local Continuums that were already burdened with multiple SHP renewals. There are two grant programs that are awarded annually through formula allocations. The HOME program is administered by HUD s Community Planning and Development (CPD) office. The State of Alaska and Municipality of Anchorage each receive HOME funds. The Native American Housing & Self Determination Act (NAHASDA) is administered by HUD s office of Native American Programs (ONAP). NAHASDA funds are awarded to Tribally Designated Housing Entities. Both of these funding programs include tenant -based rental assistance as an allowable option. To exercise that option, the entitlement entity must identify this activity in an annual plan as prescribed by CPD or ONAP. To date, the only Alaskan recipient to offer tenant-based assistance with its HOME allocation has been the Municipality of Anchorage. This program assists approximately 35 seniors with emergent housing needs until they are able to secure a Housing Choice voucher.

4 Issues for Consideration While state officials and housing providers work to expand the amount of funding available to assist lowincome renters, there are a number of other issues that can seriously affect the success of a rental assistance program. One of the most prevalent barriers voucher holders face is a low supply of available units that are priced within the FMR limits and are owned by landlords willing to participate in rental assistance programs. Even when a prospective renter locates such a unit, an added barrier may be its inability to pass the housing quality standards inspection. This has been particularly problematic in many rural communities where do-it-yourselfers have not built to code. To remedy this situation, funding agencies such as AHFC, USDA and DHSS have developed home modification programs to correct housing quality standards deficiencies and mitigate other problems related to accessibility. Incentives have also been incorporated into a number of housing development grant programs to expand the amount of affordable rental housing in rural Alaska. For persons with a disability, the process of obtaining rental assistance can be a daunting task. Application forms are often long and difficult to complete. Persons placed on a waiting list may be dropped if they fail to respond to periodic requests for updated information. Persons lacking transportation or experience in securing housing on their own may need assistance with the housing search and execution of a rental agreement. To address this need, a growing number of agencies in Alaska such as Catholic Social Services and Southcentral Counseling Center have added housing placement to their range of services. Due to the labor intensive nature of assisting people to complete applications, driving them to housing sites and negotiating with landlords, such services can be quite expensive to provide. While rental assistance makes housing affordable for persons with disabilities on a month-to-month basis, a significant barrier to using that assistance can be initial moving and deposit costs. These up-front costs can easily exceed the amount of a monthly disability check and have, on occasion, actually prevented or delayed the placement of persons in a permanent housing situation. Agencies such as the Municipality of Anchorage s Safe City Program, faith-based organizations and neighborhood housing services have provided this type of assistance, but knowing who those agencies are and when they have limited funds available has been difficult to track. One Juneau agency, St. Vincent depaul, has converted their deposit assistance program into a revolving loan fund in hope of developing a more reliable resource. Though many of the mainstream rental assistance programs such as Housing Choice and NAHASDA appear likely to continue for years to come, all of the programs listed above are subject to renewal and appropriation by Congress. Particularly vulnerable are the grant programs such as SHP and Shelter+Care. Project-based programs such as the HUD 811/202 and USDA 521 appear relatively stable, but they may also be affected by a shift in the political winds.

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