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July 12, 2021

Maximizing New Federal Resources to Address Homelessness and Prevent Housing Loss

A person stands in a hallway unlocking an apartment door.Strategic deployment of federal funds can help to house the most vulnerable populations and to increase pathways to permanent housing. Photo credit: U.S. Department of Housing and Urban Development

In this article, Richard Cho and William Snow discuss federal resources to help reduce homelessness.


The more than $30 billion in rental housing funds included in the American Rescue Plan (ARP) provide a historic opportunity to make measurable progress towards ending homelessness and preventing housing loss in America. By leveraging the new funds from ARP, in addition to the funds already awarded through the CARES Act, communities can help more households obtain stable housing. In this article, we draw on the Framework for an Equitable COVID-19 Homelessness Response, which was developed by several national housing and homeless organizations, to show how communities can apply the unprecedented federal resources to address homelessness effectively and equitably. “As the health and economic impacts of the pandemic began to take hold,” says Ann Oliva from the Center on Budget and Policy Priorities, “the partner organizations came together with the goal of supporting people experiencing or at-risk of homelessness by providing tools to help communities make equitable policy and program design decisions and maximize the use of incoming federal funds.”

We looked at the potential impact of four main funding sources that can support short-term reductions in homelessness and prevent households from eviction and housing loss:

  1. $46 billion for the Emergency Rental Assistance Program (ERAP) through the Consolidated Appropriations Act of 2021 and ARP;
  2. $4 billion in COVID-19 Homeless Emergency Solutions Grants (ESG-CV) through the CARES Act;
  3. $5 billion in Emergency Housing Vouchers through ARP; and
  4. $5 billion in HOME through ARP.

(See American Rescue Plan Resources Could Help House Hundreds of Thousands of Households Experiencing Homelessness, a companion article that provides more detail on how to effectively allocate ARP resources).

If used strategically, these funds can help households facing the most acute and urgent housing needs through various service interventions ranging from preventing evictions or the loss of current housing to re-housing people from shelters or the streets to permanent housing. To maximize the effectiveness of these resources, we recommend communities target these funds in the following way:

  • Provide emergency assistance to help renters keep their housing. As many families accrue rent debt and face possible eviction, ERAP can provide assistance with rent and utility arrears. Programs can also use ERAP funds for up to 3 months of prospective rent, which can help previously evicted or homeless households cover their first few months of rent in their units.
  • Increase shelter capacity in communities with high unsheltered populations. Communities can use their ESG-CV funds to assist households that have lost their housing and need access to shelter or services. ESG-CV funds can be used to fund congregate and noncongregate shelter options as well as homeless outreach services.
  • Rehouse households experiencing homelessness with lower barriers with short-term rental assistance. Although shelter is an important step to address immediate safety concerns, shelters should be a short-term solution only. Communities can use ESG-CV and HOME-ARP tenant-based rental assistance to provide a pathway out of the streets and shelters to quickly move households into their next housing situation. These short-term housing subsidies should be paired with housing search and navigation and stabilization services tailored to meet each household’s unique needs.
  • Rehouse households experiencing homelessness with higher barriers with housing vouchers. Emergency housing vouchers provide long-term housing subsidies, often with housing navigation or ongoing wrap-around services, for people exiting homelessness. Communities should consider what service package will be necessary to keep these households stably housed. Communities can use ESG-CV to fund those supportive services as well as other federal, state, and local funding sources.
  • Create more targeted affordable or permanent supportive housing. Communities should use their HOME-ARP funding to add much-needed units, building a stronger homeless response system for the future. The lack of affordable housing units that can serve people experiencing or who formerly experienced homelessness — especially the shortage of permanent supportive housing — has hampered our ability to adequately address homelessness and the HOME resources is one way to add housing options for this important population.

All of these federal programs flow through state or local governments, which have considerable discretion in how they allocate these funds within the eligible uses. State and local governments should consider the following questions when determining the most effective and equitable use of these resources:

  • How are we ensuring that resources go to the highest need neighborhoods and communities that experience disproportionate rates of rental arrears and housing loss?
  • How are we ensuring that the lowest-income households are being prioritized for assistance?
  • Are we matching the right level and duration of rental assistance based on household barriers and needs?

Administering jurisdictions have unique opportunities with the funding described above. The key to successful implementation will be to build partnerships and to work together to strategically tailor the use of resources to meet specific community needs. Communities should strive to match housing and supportive service resources based on each household’s needs, with the goal of serving as many households as possible with the level of resources that will result in stable housing.

Continuums of Care have been charged with the responsibility to coordinate efforts to prevent and end homelessness. As local experts on homelessness assistance, they are well-positioned to partner with local and state recipients of these funds to best target the resources to serve those who are most vulnerable. Successfully using these resources is not merely measured by the total number of people receiving housing and services — it is about looking at whether households got the level of housing assistance and services required for them to achieve long-term housing stability. It will also be about targeting highly vulnerable populations and being willing to dedicate more resources to house them. But if done right, that housing will be permanent, which will save the service response system money over time but more importantly, will finally end homelessness for people who have struggled for so long. If deployed strategically, these funding sources can limit the in-flow of people into homelessness, make stints of homelessness as brief as possible, and build the pipeline of new permanent and interim housing units.

 
 
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