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Housing Update: NAMI Urges Congress To Address Looming Crisis In The HUD Shelter Plus Care Program

Action Needed To Prevent Nearly 900 Formerly Homeless Individuals With Severe Mental Illnesses From Becoming Homeless Again

For Immediate Release, March 23, 2000
Contact: Chris Marshall

As many NAMI advocates know first-hand, the HUD Shelter Plus Care (S+C) program is a critical permanent housing resource for adults with severe mental illnesses. Many S+C (as well as Supported Housing Program (SHP) permanent housing) projects that were begun in the mid and early 1990s are now facing a funding crisis as 5-year rent subsidies are now coming up for renewal. In states and communities across the country, this housing is at risk because local officials are giving low priority ratings to rent subsidy renewals as part of HUD's "Continuum of Care" process for allocating federal homeless funds at the local level.

The result is that formerly homeless adults with severe mental illnesses are now, and for the foreseeable future will be, at risk of losing subsidized housing through no fault of their own. The solution that NAMI supports is to shift renewals for all expiring S+C and SHP permanent housing rent subsidies into the HUD Section 8 program. This will ensure that access to subsidized housing for formerly homeless adults with severe mental illnesses is not subject to the local "Continuum of Care" process and the limited resources in the federal homeless program. NAMI is pleased that the Clinton Administration is supporting this shift and will be pushing for Congress to do the same.

FY 2000 Emergency Funding Needed

However, while the "fix" proposed in the president's FY 2001 budget effectively addresses the long-term solution to the S+C renewal crisis, it does nothing for those projects whose rent subsidies were not renewed in the 1999 round of "Continuum of Care" funding. This crisis affects about two dozen S+C and SHP projects that house nearly 900 people - nearly all of them formerly homeless adults with severe mental illnesses. In the case of these projects, rent subsidies are already expiring and people are facing imminent risk of homelessness. To save these programs, emergency funding is needed as part of the FY 2000 supplemental appropriations bill now before Congress.

On March 9, the House Appropriations Committee responded to the current crisis facing these S+C and SHP permanent housing programs and allocated an additional $6.2 million to fund one-year renewals of all these expired rent subsidies. NAMI is deeply grateful to the following members for their leadership in adding these funds to the FY 2000 supplemental appropriations bill: VA-HUD Subcommittee Chairman James Walsh (R-NY), VA-HUD Subcommittee Ranking Member Alan Mollohan (D-WV), Rodney Frelinghuysen (R-NJ), John LaFalce (D-NY), Jerry Weller (R-IL) and Jack Quinn (R-NY). NAMI is now urging all senators to support emergency funding to renewed these expired rent subsidies by adding $6.2 million to their version of the FY 2000 supplemental appropriations bill later spring.


Contact all members of Congress and urge them to support both a permanent fix to the S+C rent subsidy renewal crisis (budgetary shift of all 5-year rent subsidies to Section 8) and supplemental funding for all subsidies that were recently denied renewal funding. All members of Congress can be reached through the Capitol switchboard at 202-224-3121 or through the policy page of the NAMI website at and click on "Write to Congress."

When contacting members of Congress it is important to remind them that:

  • HUD and Congress have never failed to renew an expiring rent subsidy for an otherwise eligible, lease-compliant low-income household. Failure to address the S+C crisis - by prospectively shifting renewals to Section 8 and passing an emergency $6.2 million for one-year renewals - will result in formerly homeless people with severe mental illnesses being forced back into homelessness;

  • HUD bears responsibility for the current situation, primarily for not taking this issue seriously and dodging accountability by setting up a "Continuum of Care" process that is overly complicated and allows local officials to discriminate against housing that serves predominantly formerly homeless people with mental illnesses;

  • The S+C and SHP permanent housing tenants served by these programs are not going to understand that they are losing their housing because of a bureaucratic process known as the "Continuum of Care," likewise, they are not going to understand - nor should they need to understand - that they are losing their housing because of politics in Congress over a homeless reauthorization bill;

  • It is simply unacceptable for HUD to hide behind the "Continuum of Care" process as an excuse for these nearly 900 people with severe disabilities facing homelessness again; likewise, it is wrong for Congress to allow politics over homeless legislation to get in the way of solving this problem.

Background on the Shelter Plus Care (S+C) and SHP permanent housing programs

S+C is part of the federal Homeless Assistance Program. It funds permanent housing with supports for homeless people with disabilities, most of them are people with severe mental illness. S+C rent subsidies have 5-year terms (by statute) and applicants must request 5 year renewal funding, but such funding is contingent upon a) success in being selected through the local "Continuum of Care" process, and b) successful funding for that Continuum of Care application.

As a model, S+C is proven to end homelessness among people with the most severe disabilities who need supports and services linked to housing in order to ensure a permanent break from the cycle of shelters, jail and the streets. A recent survey compiled by Abt Associates found that 20% of households entering the Shelter Plus Care program had no income at all and that over 98% of S+C tenants continue to live at incomes below $12,000 (many of them on SSI because of severe mental illness). By the end of FY 2000, there will be 28,816 units of S+C housing on line, (53% tenant-based, 29% sponsor-based, 14% project-based and 4% SROs) - clearly, the major federal housing resource for addressing homelessness and mental illness.

For the FY 1999 round of HUD homeless "Continuum of Care" funding, $23 million (5-year contract periods) of rent subsidy renewals were not funded, meaning that nearly 900 formerly homeless people with severe disabilities - mostly adults with severe mental illnesses - are now at risk of becoming homeless again. Every Congress and Administration - regardless of party - over the past 30 years has renewed all expiring federal rent subsidies (Section 8). Not renewing these S+C and SHP permanent housing subsidies would be a historic first, i.e. individuals with a rent subsidy losing their housing. Moreover, this tragedy would fall hardest on the most disabled and vulnerable Americans. It is important to remember that up until now, a lease compliant Section 8 holder has never lost a rent subsidy through no fault of their own.

HUD's FY 2001 budget proposal seeks to shift funding for these renewals into the Section 8 program - a desperately needed long-term fix for both S+C and the overall $1 billion federal homeless program. However, this proposal does nothing to help the nearly 900 people now at imminent risk of becoming homeless again - for these individuals (and their communities) a $6.2 million supplemental appropriation is needed for FY 2000. This emergency "fix" is contained in HR 3613 (LaFalce-Weller). Beyond the crisis faced in the current fiscal year, the problem of non-renewal of S+C rent subsidies is expected to get substantially worse over the next few years as more and more S+C projects come up for renewal in 2001 and 2002.

Where have S+C and SHP permanent housing rent subsidies not been renewed thus far?

S+C non-renewals: Columbus, OH, Birmingham, AL, Phoenix, AZ, Jefferson County, CO, Rockford, IL, Topeka, KS, Bangor and Portland, ME, Boston, MA, Dakota County, MN, Springfield, MO, Camden, NJ, Erie County, NY, San Antonio, TX, Chittenden County, VT and Bellingham, WA. SHP permanent housing non-renewals: Alameda County, CA, Joliet, IL, Covington, KY, Westchester County, NY and Alexandria VA.