Housing Solutions for Homeless Services Providers

Presenter: Darin Lourds and Nancy McGraw, Corporation for Supportive Housing

The Corporation for Supportive Housing (CSH) promotes the formation of permanent housing for homeless people and families in local communities. CSH defines supportive housing (SH) as “a cost-effective combination of permanent and affordable housing with services that helps people live more stable, productive lives.” Clients living in SH include formerly homeless individuals, youth, and families; people with persistent substance abuse issues and/or mental illness or serious health problems such as HIV/AIDS; and individuals discharged to homelessness from the criminal justice system or other institutions.

Temporary interventions often include an uncertain length of stay and mandatory program requirements, clients may feel isolated and their dependency reinforced. SH is permanent, independent living in which a participant can belong to a community and maintains personal responsibility for his or her behavior and ability to pay rent. While the delivery of services is mandatory in permanent supportive housing, acceptance of those services is not a criteria for participation.

Types of SH include dedicated buildings, rent-subsidized apartments, mixed-income buildings, long-term set asides, and single family homes, and can include anywhere from 5 to 500+ units. The type of housing provided should be appropriate to your organization and to the clients you are serving.

Services offered take on different forms, depending on the housing project. They are flexible and can include mental health and alcohol and substance abuse services, independent living skills development, community-building activities, and vocational counseling/job placement services. Tenants choose whether to use available services and take steps to make a difference in their own lives.

SH has shown to be a cost-effective solution. Studies show that services alone can cost the same as housing a person while offering services. A University of Pennsylvania study of 5,000 homeless clients with mental illness in New York showed a savings of $16,000 per unit of supportive housing per year in public service use. SH has been linked to a decrease in emergency room visits, detoxification services and incarceration rates, and more than 80% of clients remained in housing for at least one year.

SH can be created and operated by a variety of agencies, including homeless, mental health and other service providers, a neighborhood-based nonprofit affordable housing provider, public housing authorities, private developers and landowners, and providers whose sole purpose is the creation and operation of supportive housing.

Some areas may implement initiatives to create an environment favorable to the development of SH, such as demonstrating that SH provides a permanent asset to the community through a pilot project. A project can take 2 to 3 years to complete and includes acquisition, construction and securing financing. Ongoing funding sources and providers for operating and services must be established early in the planning process.

SH models accessing existing housing are referred to as “housing first” or “scattered site housing.” Housing can be retrofitted and services added at a single site. Residents are integrated into the community, moved directly from the street to private market housing and provided a service component emphasizing housing maintenance. This can be used to sell the program to the private market – along with funding secured for services.

In scattered site housing, a provider might use existing apartments in the community, taken “as is” – no construction or renovation. Building owners are typically private landlords who own large and small apartment buildings or 2- to 4-family homes. The provider does not own units, but might master lease. Master leasing is a good option in buildings that have vacancy issues. Key components of master leasing include:

Identifying privately owned buildings that are vacant or nearly vacant where the building owners are interested in entering into a long-term lease.

Negotiating improvements to the residential and common areas of the building prior to executing the lease.

Contracting with one or more organizations to provide on-site support services and property management.

Five key components should be addressed when approaching SH development:

• 1. Power – People who have formal authority and responsibility for SH need to make this their issue and provide political power and support.
• 2. Money – Funding for all components (capital, operating and services) of SH projects should be available and reliable.
• 3. Habits – People and organizations interact with each other to create and sustain SH as part of their normal ongoing routines.
• 4. Technology and Skills – Skilled practitioners at all levels can effectively deliver results.
• 5. Ideas and Values – A new understanding of the problems to be solved through SH and new definitions of performance or successes are widely shared.

The undertaking of a project encompasses three phases:

• 1. Feasibility – During this phase of project conceptualization, produce a vision statement and project goals, assemble a development team, complete preliminary site selection, develop estimates of project development and operating budgets, and create a financing plan.
• 2. Predevelopment – Community work begins as the package is put together. During this phase, program partners are identified, site control gained and site plans created, regulatory and other community approvals acquired, and funding applications submitted and are under review.
• 3. Development – Products of this phase include site construction and oversight, formal relationships with partners, use of construction financing and permanent financing documents, start-up project marketing and lease, utilities turned on, etc., Staff should be hired and trained and the project shifted to property management and service staff. 

Key points for developing a project:

Have the capacity or find it.

Assess and mitigate community support issues.

Coordinate the financing sources and subsidies.

Understand the needs of the potential tenants.

Have a plan, and stick to it!

Resources:

Visit the CSH website (www.csh.org) for comprehensive information, free downloads and other resources aimed at helping nonprofits and government develop SH projects. These include a “Toolkit for Ending Long-Term Homelessness” that provides profiles of SH programs and projects across the country and sample documents from programs profiled (www.csh.org/toolkit), and an interactive “Financing Supportive Housing Guide” that provides details on all major federal financing resources and links to regulations, tools and resources on a variety of topics (from how to use Medicaid in SH to understanding Low Income Housing Tax Credits). Links to current funding opportunities and details on relevant state programs can be found at www.csh.org/financing.

B. Using Federal Surplus Property to Expand Housing and Services

Presenter: Laurel Weir, National Law Center on Homelessness & Poverty

McKinney-Vento Homeless Assistance Act

Under Title V of the McKinney-Vento Homeless Assistance Act, 42 U.S.C. 11411, surplus federal property is available to state and local government agencies and nonprofit organizations to provide services to homeless persons. Properties are available at no cost through either lease or deed. About $105 million of federal property has been used to provide services to homeless people.

Types of property available include housing, warehouses, child care centers, office buildings, vacant land, and structures that can be used offsite. Eligible uses for the property include shelters, transitional housing (no more than two years), job training, mental health care, substance abuse treatment, child care, soup kitchens and food pantries, health care, and administrative services.

The process:

• HUD screens federal agencies for property suitable for homeless services. Surplus property listings are published every Friday in the Federal Register (see www.gpoaccess.gov). The properties that are listed remain frozen for 60 days.
• Interested communities or groups must submit a Notice of Interest (NOI) to HHS within those 60 days. The completed application is due 90 days from when HHS receives the NOI. Application requirements include a description of the organization, description of program, proof of ability to finance and operate the program, and an environmental statement.
• HHS will approve the project if the application meets the statute’s requirements.
• Approved agency or groups must negotiate the lease or deed.

Problems often encountered by applicant/providers:

• Permanent housing is not a permitted use.
• Property must be used primarily for homeless people.
• Must be able to show financial and technical ability to operate the program – this makes collaborations important.
• Difficult application process.
• Problems with the property – asbestos, radon contamination, deterioration.
• Leasing rather than acquiring by deed – leased properties remains federal property and not subject to local zoning requirements; deeded properties are subject to local zoning laws.
• NIMBY (Not in My Back Yard) issues –avoid these by working with the community and each other as early as possible in the process.
• Insufficient outreach – no federal website lists all the properties currently available
• Length of time before property put to use.
• HHS length of time to approve application – should be 25 days but HHS often asks for additional information, lengthening the process.
• Once acquired, property must be developed within three years or it can be repossessed or the state might levy property tax.

Base Closure Property

The Base Closure Community Redevelopment and Homeless Assistance Act of 1994 removed base closure properties from Title V of the McKinney Act. The 1994 Act requires that the needs of homeless persons be considered in determining how to use base closure property.

Timing of 2005 base closure process:

(List includes 180 military installations, of which 33 are major bases.)

• Commission holds hearings over the summer and transmits closure and realignment recommendations to President on September 8.
• President has until 9/23/05 to approve or disapprove recommendations in their entirety – if approved, list is transmitted to Congress.
• List becomes binding unless both Houses of Congress pass a joint resolution of disapproval within 45 legislative days.

After the recommendations become law:

• Other federal agencies get first crack at property, then the military department with authority over the property publishes a list of available property in Federal Register.
• During the federal screening process, the community must form a Local Redevelopment Authority (LRA) to convert the closed base to nonmilitary uses. The LRA is any authority or instrumentality that the state or local government has established and that the DoD (Office of Economic Adjustment) recognizes as the entity responsible for developing the reuse plan.
• After DoD approves the LRA, LRA must advertise availability of the former base property in a newspaper of general circulation in the community and announce that it is receiving “notices of interest.”
• After LRA completes outreach, it has 270 days to generate a redevelopment plan and a homeless assistance submission. LRA must negotiate with the homeless providers who submit notices of interests and develop legally binding agreements. There is flexibility under the Act in determining how to meet the needs of homeless people, through giving property directly or negotiating agreements to meet needs through cash or other resources and assistance. For example, LRA could create jobs or offer job assistance training on the former military base, sell property for commercial uses and put the money from the sales into a trust fund, sell the property and use the proceeds to buy property in a more convenient area, or could rehabilitate the base housing and use it for permanent housing for homeless people.
• The Department of Housing and Urban Development (HUD) has to approve the LRA plan, ensuring that it properly takes into account the needs of homeless persons and balances them with the community’s need for economic development. DoD also approves the plan.

Advice for this year:

• Be aware of opportunities that may arise with a base closure.
• Assume that bases in your area on the list may be closed and start talking to other service provides and government agencies – including developers – about what needs could be fulfilled through the redevelopment process.
• Review the community’s consolidated plan and talk with members of the continuum of care to determine how to document the needs of the homeless population and maximize the value of the property to them.
• Partner with other groups or a state or local agency to propose the best program possible. The more you can show capacity to operate the program, the stronger your notice of interest will be. Coordination between the representatives of the homeless and local government agencies is critical. Partnering with a developer is very helpful.
• Get a lawyer to help navigate the process, file a notice of interest and negotiate the legally-binging agreement. It is essential that homeless service providers have sophisticated representation in this process (people who know real estate and transactions law). NLCHP is signing up lawyers to volunteer on a pro bono basis to assist homeless service providers on the base closure process – let us know if you are interested and we will try to connect you with someone to help.

Resources:

Check NLCHP’s website (www.nlchp.org) for developments, including legislation. Email Rebecca Troth with questions at rtroth@nlchp.org or call 202-638-2535 ext. 210.

Check each Friday’s Federal Register for new properties listed in your area (www.gpoaccess.gov), call HUD’s hotline (1-800-927-7588) to ask what federal surplus properties are available, and/or sign up for the Interagency Council on Homelessness electronic newsletter (www.ich.gov).

Go to HUD’s Community Planning and Development page for general information about surplus federal property that can be used to help homeless persons (www.hud.gov/offices/cpd/homeless/programs/). Click on the heading “Title V.”

Check Department of Health and Human Services’ Program Support Center for detailed Federal Property Assistance Program information about the McKinney Vento Title V Homeless Assistance Program (www.psc.gov/aos/federalprop/).

Question and Answer Session

Presenter: Bryant Monroe, Project Manager, Office of Economic Adjustment, DoD

Bryant Monroe helps communities deal with base closures after the closure decision is made, providing technical assistance to the community, and capturing community experience and bringing it back into the system to help develop policy. BRAC assistance is available only to government entities (including LRA) in reuse planning but no direct grants are made to homeless service providers. Conference attendees participated in a question and answer session.

Is leased space available to homeless service providers?

 No.

Is there a provision for homeless service providers to get property before the property is turned over to LRA (because the process can take years)?

The military departments are not interested in maintaining properties through interim leasing because they want the properties off their books as soon as possible.

Who would homeless service providers deal with to get an interim lease?

Work with the community. We hope to have a single point of contact in each community for BRAC… Base reclosure has to be completed within six years. The community has 12-18 months to do a reuse plan. I always counsel communities: this is a marathon, it isn’t a sprint.

What about the decline of property over the years waiting for its use?

Talk to LRA to make sure they know you want the property to be maintained. It is important to work with LRA because of their relationships with the local Congressional delegation and the local command structure.

How does one go about buying property?

For an individual, there are online auctions for public sale. Community or public entities purchase through negotiated sales. Homeless providers purchase at no cost – this is HUD driven through the LRA, who then makes the property available to the provider.

Who has preference to these properties?

1. Other DoD entities

2. Other federal entities

3. State and local governments (for public purpose)

4. Broader array of bidders

What about surplus property (excess equipment)?

We’ve seen homeless service providers get desks, vans, equipment, etc. through the LRA. Let them know what you are interested in. This is at no cost to them and is a transactional thing. If you can show the importance of the transaction, some things can go directly from the military department to the LRA (and on to you).

Contact:

Bryant Monroe, Office of Economic Adjustment

bryant.monroe@wso.whs.mil

www.oea.gov

www.defenselink.mil/brac