National Alliance on Mental Illness
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Housing and Homelessness

Access to decent, safe, and affordable housing remains a tremendous challenge for adults living with severe mental illnesses. Unfortunately, in virtually every part of the United States, people with severe mental illnesses are struggling to find quality housing they can afford. Many people with the most severe and disabling mental illnesses also need access to appropriate services and supports so that they can successfully live in community-based housing, which promotes their independence and dignity.

Unfortunately, the U.S. Department of Housing and Urban Development (HUD) and many state and local agencies responsible for administering our nation's affordable-housing system do little to alleviate this struggle to access community-based housing and supports. Historically HUD has made little effort to understand the real implications and bitter reality of recent federal housing policies - policies that have reduced the federally subsidized housing units available to people with severe mental illnesses and other disabilities.

The largest and most formidable barrier to housing is affordability. Data compiled by the Technical Assistance Collaborative (TAC) reveals that individuals with severe mental illness living on Supplemental Security Income (SSI) are at 18.5% of area median income and must pay (on average) 105% of their monthly income to rent a modest one-bedroom apartment. This affordability crisis is compounded by policies enacted by Congress in the 1990s permitting public and assisted-housing providers to designate housing developments as "elderly only" – estimates from TAC indicate that these have resulted in more than 273,000 units of affordable housing being lost to non-elderly people with disabilities. Without additional resources, too many adults with severe mental illnesses will likely end up homeless or remain unnecessarily in inappropriate settings (e.g., homeless shelters and local jails and prisons).

The FY 2004 HUD Budget – Funding Fails to Keep Pace With Increased Demand

The FY 2004 Omnibus Appropriations bill (HR 2673), now pending before the Senate, contains funding for important housing programs at HUD including the McKinney-Vento Homeless Act, Section 811 supportive housing and the Section 8 rental voucher program.

HUD Section 811 – For FY 2004, the Omnibus spending bill freezes Section 811 at $250.57 million. The Section 811 program provides funding to non-profit organizations to develop group homes and other community housing options that serve adults with severe disabilities, including severe mental illnesses. These are known as capital advances and project-based assistance (PRACs) that are used by non-profit sponsors to increase the stock of affordable housing for specific disability populations. In addition, 25% of Section 811 funding goes toward the "mainstream" tenant-based rental assistance program (monthly rent subsidies for individual eligible low-income tenants to select their own housing).

This year, both the capital advance/project-based and tenant-based ("mainstream") sides of the Section 811 program face a continued challenge with respect to renewal of expiring rent subsidies. This burden is expected to exceed 20% of all 811 funding in FY 2004 – a massive drain on the limited resources available from the Section 811 program for new housing. For FY 2004, $213.3 million will be available for new capital advances/project-based subsidies and tenant-based subsidies. This is $16.9 million LESS than HUD just recently allocated for the FY 2003 awards for the capital advance and tenant-based sides of the 811 program – a cut in program funding resulting directly from the growing renewal burden – especially on the tenant-based side where renewals will exceed $42 million in FY 2004. This growing renewal burden is expected to consume all HUD 811 funding in a few short years.

McKinney-Vento Homeless Assistance – The FY 2004 Omnibus spending bill funds programs under the McKinney-Vento Homeless Assistance Act at $1.267 billion ($47 million above last year). The McKinney-Vento Homeless Assistance Act includes a range of permanent housing and service programs such as Shelter Plus Care, SHP (permanent supportive housing), Emergency Shelter Grants, and Section 8 Moderate Rehab and Single Room Occupancy. Nearly all of these permanent and transitional housing programs serve currently or former homeless adults with severe mental illnesses and/or co-occurring substance abuse.

For FY 2004, the requirement for a minimum 30% set-aside of overall homeless program funding for development of permanent housing serving homeless people with disabilities will continue (as will the requirement for a 25% local match for services). NAMI supports this policy as the most effective means of developing at least 150,000 units of permanent supportive housing and taking a major step toward ending chronic homelessness among people with severe mental illness over the next decade. More importantly, Congress and the Bush Administration continue to support full funding for the costs associated with renewing all expiring rent subsidies under the Shelter Plus Care (S+C) program (estimated to cost $194 million in FY 2004), ensuring that formerly homeless adults with severe mental illnesses will not be placed at risk of losing subsidized housing through no fault of their own.

Section 8 Vouchers – The FY 2004 Omnibus spending bill includes $19.371 billion for the Section 8 rental voucher program (the amount estimated to renew all current Section 8 vouchers under lease). However, Congress did not fund President Bush’s request for $36 million for FY 2004 for new vouchers targeted to non-elderly people with disabilities who have lost, or will in the future lose, access to housing as a result of the designation of assisted and public housing as "elderly only." FY 2004 will mark the second consecutive year that Congress was unable to allocate new funding for this purpose, despite the fact that housing authorities and assisted housing managers are continuing to move forward in implementing these "elderly only" policies.

NAMI Recommendations

NAMI recommends that Congress and the Bush Administration pass a strong FY 2005 HUD budget and enact federal policies to make the affordable housing system more responsive to the needs of non-elderly adults with severe mental illnesses. In particular, Congress and the President should:

  • Enact increases for the Section 811 to keep pace with the growing burden associated with renewing expiring PRACs and tenant-based rent subsidies,
  • Continue efforts to promote development of permanent supportive housing targeted to chronically homeless individuals with disabilities through McKinney-Vento and ensure renewal of all expiring Shelter Plus Care rent subsidies,
  • Authorize and fund the "Samaritan" and "ELHSI" initiatives to move toward ending chronic homelessness and provide new resources at HHS and other agencies to finance ongoing services in permanent supportive housing developed by HUD’s McKinney-Vento program,
  • Revive a separate allocation of new rental vouchers targeted to the non-elderly people with disabilities adversely impacted by "elderly only" designation, and
  • Pass legislation (HR 1102) establishing a National Housing Trust Fund focused on production of new rental housing targeted to extremely low-income households (including SSI beneficiaries).

January 2004