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Congress And The President Agree On Housing Funds For Adults With Severe Mental Illnesses And Other Disabilities
Federal Action Alert

For Immediate Release, 21 Oct 99
Contact: Chris Marshall

After months of difficult negotiations, Congress has passed a budget for the U.S. Department of Housing and Urban Development (HUD) that includes funds targeted to people with disabilities, including adults with severe mental illnesses. These funds are part of HUD's FY 2000 budget, and will begin flowing to local housing authorities and non-profits in a few months. The HUD budget is a part of the $99 billion FY 2000 VA-HUD Appropriations bill (HR 2684) that President Clinton signed into law yesterday.

NAMI and a number of colleague disability organizations pushed hard for these resources. Key leaders in Congress, including Representatives James Walsh (R-NY), Rodney Frelinghuysen (R-NJ), Marcy Kaptur (D-OH) and Senator Kit Bond (R-MO) played critical roles in ensuring that these resources are directed to adults with severe disabilities. NAMI owes each of them a debt of gratitude.

HUD's budget for 2000 makes a number modest, but important, increases in programs that target non-elderly people with disabilities, including Section 811, Homeless Continuum of Care and Section 8. In addition to these positive increases in the HUD budget, Congress also enacted a number of important reforms to these programs in order to make them more responsive to the changing housing needs of adults with severe disabilities. These changes were part of a larger housing authorization bill (HR 202) that passed the House by a 405-5 vote on September 27. Some of the provisions in HR 202 were added to the final version of the VA-HUD Appropriations bill, while others have been left for the Senate to take up next year.

Included below is an analysis of the funding levels and changes in key disability programs in the new HUD budget.


HUD's FY 2000 budget includes $210 million for the Section 811 program. While there is only a $7 million increase over 1999, it is the first boost for the program since 1994 when the Section 811 sustained a nearly 50% cut. It is also $7 million more than President Clinton requested for the program (in 1997 and 1998, the Clinton Administration actually proposed additional cuts for Section 811). 75% of HUD Section 811 program funds go toward capital grants and project-based rental assistance to non-profit organizations that acquire, construct or rehab housing designed to serve people with severe disabilities (in many cases, congregate housing for adults with the most severe disabilities). The other 25% of Section 811 funds go toward the "mainstream" program that are used for tenant-based rental assistance vouchers that housing authorities and non-profits compete for at the national level.

HR 202 contained a number of important changes to the 811 program that were added to the bill that the President signed into law yesterday. The first would curb HUD's authority to waive the existing size restrictions on 811 projects. Under current law, HUD is supposed to limit projects funded through the Section 811 capital advance program to 8 units (24 units for "Independent Living Centers").

HUD has routinely waived these size restrictions and allowed certain non-profits to continue building large 40 and 50 unit buildings that are open only to people with specific types of disabilities. These larger projects, in turn, often have higher vacancy rates because of lack of consumer demand to live in large disability specific housing. In fact, recent surveys have found that a growing number of consumers with severe mental illnesses prefer to live in scattered-site congregate housing that is smaller in size (4 to 8 units) and more integrated into residential neighborhoods. In addition, there is growing evidence that large congregate disability specific housing (more than 30 units) is much more likely to attract local NIMBY ("not in my backyard") opposition.

A specific provision in HUD's new budget will place a 25% limit on the amount of 811 funds that can go to projects for which the size limits are waived. In addition, Congress has directed HUD to study the impact of further restrictions on HUD's authority to waive size limits, including an analysis of per unit costs. Other provisions affecting the 811 capital advance/project-based program that were in HR 202 were excluded from the VA-HUD Appropriations bill and will be dealt with next year. These include eligibility of for-profit companies use of mixed funding sources and expanded use of project reserves.


As was noted above, 25% of 811 funds are used for tenant-based rental assistance through the "mainstream" program. This program funds allocations of 5-year rental subsidies that local housing authorities and non-profits compete for on a national basis (awardees are selected through a lottery). Individuals and families can then apply directly to housing authorities and non-profits that are awarded funds. These tenant-based vouchers enable recipients to get apartments in the private rental market by paying generally no more than 30% of their income (including Social Security disability benefits) as rent, with HUD paying the remainder.

In HUD's FY 2000 budget, no more than 25% of overall Section 811 funds can go to the "mainstream" tenant-based program - $50 million. In recent years, NAMI has fought hard to make non-profits (including NAMI affiliates, clubhouses, psychosocial rehabilitation programs, CMHCs, MHAs, etc.) eligible to compete for these funds with housing authorities. Up until 1999, many NAMI members were frustrated when their local housing authority refused to apply for 811 "mainstream" funds, despite clear evidence of massive and growing demand for affordable housing among adults with severe mental illnesses. In 1999, HUD allowed non-profits to compete for these funds for the first time (see below). For 2000, Congress went further and directed HUD to permanently allow non-profits to compete for these funds. A separate House provision, not included in the final bill, would have barred HUD from later converting 811 tenant-based assistance to Section 8 vouchers.


Like the Section 811 "mainstream" program, Section 8 provides monthly subsidies to low-income individuals and families to rent units in the private rental market. For each of the past five years, Congress has directed HUD to administer a separate allocation of Section 8 vouchers reserved solely for non-elderly people with disabilities. As in FY 1999, the FY 2000 HUD budget includes an additional $40 million for this purpose. As in the past, the justification for these vouchers is the continuing trend of "elderly only" designation of public and assisted housing that has resulted in huge losses of affordable units for non-elderly people with disabilities. This is especially the case for single adults with severe mental illnesses who are particularly disadvantaged when they apply to live in public and assisted housing.

Unlike Section 811 "mainstream" rental assistance, only housing authorities can apply directly to HUD for these funds. HUD generally reserves half of these funds for housing authorities that elect to designate buildings as "elderly only." The rest are used to make up for assisted housing lost through conversion of assisted housing to "elderly only." HUD has been slow to spend these funds because of the difficulty housing authorities have experienced in finding not only assisted projects that are now shut off to people with disabilities, but also tenants displaced from assisted housing and those who have been barred from even applying because of their status as "non-elderly disabled."

In addition to these "elderly only" vouchers, Congress also funded 60,000 new "incremental" vouchers that housing authorities will be applying for in the coming months. HUD Secretary Andrew Cuomo pushed hard for this funding. All low-income individuals and families are eligible for these "incremental" vouchers. However, HUD is expected to give priority to housing authorities that seek to direct these vouchers to families transitioning off of welfare. Despite this, there is nothing preventing NAMI advocates from urging their housing authority to apply and place high priority on serving adults with the severe mental illnesses. Housing officials should be reminded that monthly SSI benefits average less than 25% of median income and that fair market rents for 1-bedroom and efficiency apartments consume an average of nearly 70% of monthly benefits.


The FY 2000 HUD budget adds $45 million for the Homeless Continuum of Care program (up to $1.02 billion, from its 1999 level of $975 million). The new budget also continues the 30% set aside for permanent housing and 25% match for communities choosing to fund services. NAMI supported this provision as a result of the growing trend of federal homeless funds going to services, rather than development of permanent housing opportunities for homeless adults with severe mental illnesses. HUD's Continuum of Care program (formerly the McKinney program) provides grants to states and communities for several important housing programs for homeless adults with mental illnesses including Shelter Plus Care and Moderate Rehabilitation Single Room Occupancy (SRO).

Finally, the FY 2000 budget does not include a specific directive from Congress to HUD as to whether and how to renew expiring Shelter Plus Care rent subsidies. In many communities across the country, local officials are electing not to direct their limited federal homeless funds to renew expiring rent contracts. This has created a crisis for tenants, many of them formerly homeless people with severe mental illness. Thus far, HUD has managed to work with communities to find other resources to avoid outright displacement to the street. NAMI will continue to monitor this situation to ensure that a comprehensive solution can be found that avoids increased homelessness among adults with severe mental illness.


Most of the HUD programs detailed above, while specifically targeting people with severe mental illnesses and other disabilities, are relatively modest in scope (millions, rather than billions). Taken together, they are not nearly large enough in range to meet the overwhelming demand for housing and community supports among all people with severe disabilities. By contrast, two of HUD's largest programs (HOME and CDBG), are block grants that have few restrictions outside of increasing housing opportunities for moderate and low-income households. For FY 2000, HOME is funded at $1.6 billion, while CDBG is funded at $4.8 billion. Tapping into these mainstream housing resources is critically important for NAMI advocates who want to ensure a fair share for adults with severe mental illnesses. Decisions about how these block grant funds are allocated at the local level is governed by the Consolidated Plan ("ConPlan") process. In order to be more effective in tapping these resources, NAMI advocates are urged to actively participate in ConPlan meetings in their community. More information on how to participate in the ConPlan process is available through the "Opening Doors" website (see below).


In addition to the newly enacted FY 2000 budget, HUD recently announced rental assistance funding awards to housing agencies and non-profit disability organizations as part of the agency's 1999 budget. The release of these funds means that adults with severe mental illnesses, and their families, can begin approaching the housing authorities and non-profits that were awarded funds to apply to receive tenant-based rental vouchers. On October 6, HUD Secretary Andrew Cuomo announced that $133 million in rental assistance vouchers were being awarded to provide housing for nearly 18,000 low-income individuals and families - 10,800 of them for people with disabilities. These vouchers enable recipients to get apartments by paying generally no more than 30% of their income (including Social Security disability benefits) as rent, with HUD paying the remainder. $68.6 million of this total is for the Section 811 "mainstream" program that will assist about 7,000 low-income people with disabilities. $20 million of this total is for the "designated" housing program intended to make up for the loss of public and assisted housing through "elderly-only" designation.

Housing authorities and non-profit disability organizations are the only entities that were eligible to apply directly to HUD for these funds. People with severe mental illnesses and their families, however, are now eligible to apply directly to the awardee housing authorities and non-profits to get housing assistance.

NAMI advocates are encouraged to contact these housing authorities and non-profits directly to inquire about how to apply for funds. Housing authorities that attempt to discourage applications by claiming "our waiting list is closed" should be reminded that they just received new HUD resources that can only go to low-income people with disabilities - including adults with severe mental illnesses. Remind them of the tremendous unmet need for housing and services in your community. The full list of awardees can be viewed through HUD's website at:

For more information about HUD's programs, housing opportunities for non-elderly adults with severe disabilities and information on how to advocate for more housing resources in your community, contact the "Opening Doors" website at: This website is coordinated by the Technical Assistance Collaborative (TAC) and is made possible by the Melville Charitable Trust and the CCD Housing Task Force (of which NAMI is a member organization).