Mimi Kolesar, HUD Office of Affordable Housing, provided valuable assistance through her timely and insigthful comments on early drafts.
Debbie Jakubowski performed her usual stellar work in preparing the report for printing.
However, the authors are responsible for any errors or mistakes in the report. The opinions expressed in this report are solely those of the author.
Tenacity and heated argument mark the long debate about the relative role of tenant-based assistance in housing policy and practice. The traditional argument for TBA, or demand-side subsidies, is based on cost: arguably over the long term (e.g., 20 years) TBA is much less expensive than project-based, or supply-side subsidies. The traditional argument for project-based subsidies is that it adds permanently to the supply of affordable housing. Regardless of the facts of this debate, however, the "dominant logic" of nearly all housing delivery organizations favors the construction or reconstruction of housing.
Nonetheless, policy makers and practitioners are increasingly recognizing that addressing well and for the long term the complex housing and community development problems we face requires the blending or integration of diverse, complementary resources. Further, non-housing values are appropriately pushing housing policy to serve more than just housing values. Perhaps the most significant of these non-housing values are the overlapping ones of neighborhood and self-sufficiency.
Neighborhoods or communities matter--the location of housing can significantly influence the life outcomes of residents. Recognizing that residential location, employment, and earnings are linked is one part of this neighborhood effect. Also, welfare reform has promoted the value of self-sufficiency, that the receipt of public assistance should be conditioned by the requirement that those who receive this assistance have an obligation, helped by those who provide the assistance, to move toward and perhaps eventually achieve self-sufficiency. Well-designed housing policy can help poor, lower-skilled persons obtain and maintain employment and increase earnings and can improve the life outcome opportunities for families, especially for children.
TBA potentially plays a much more significant role in self-sufficiency and neighborhood or community outcomes than project-based subsidies for several reasons. It can come on line much more quickly and easily. It is more plastic or fluid--it can be molded on a household-by-household basis to fit the context and objectives of assisting particular households. It can be used in a much more deconcentrated way, relative to both project and neighborhood, and be more spatially decentralized--TBA has a stealth advantage over project-based assistance. Finally, it has a much better ability to reach very low income households.
The challenge facing housing agencies is two-fold: (1) overcoming the dominant logic, and associated skill set, that is usually pre-disposed to construction and reconstruction and (2) making connections to a broad range of supportive services and resources necessary for providing more than simple housing affordability assistance.
To explore the use of HOME funds for TBA, this report summarizes the experiences of Oregon, Missouri, and Connecticut. Oregon has used in each and every year of its administration of the HOME program about 15 percent of its HOME funds for TBA, and has nearly always tied the receipt of such funds to self-sufficiency objectives. The primary, but not only, subrecipients in Oregon are community action agencies. While Oregon has very explicitly required a self-sufficiency objective for TBA, it has provided great flexibility to its subrecipients regarding both the nature and extent of self-sufficiency and how to achieve it. Although controversies and impediments occasionally marked Oregon's history of using HOME TBA for self-sufficiency, none have been seriously detrimental or problematic to using TBA for self-sufficiency. Oregon's experience demonstrates that when a state administering agency and its subrecipients are committed to HOME TBA-self sufficiency connection, the connection can be continually and effectively pursued.
Missouri has probably used more HOME funds, and a greater percentage of its HOME funds, for TBA than any other state, about 20 percent for each and every year it has administered the HOME program. Like Oregon, most of its subrecipients are community action agencies. Unlike Oregon, Missouri permits a variety of TBA options but mandates no particular option. However, subrecipients tend to use the TBA program solely as a traditional housing affordability assistance program, using the federal preference system and working on a first-come, first-served basis from waiting lists. Some rural subrecipients, however, use the program as a voucher program and not a certificate program.
Connecticut began its administration of the HOME program with a relatively very heavy emphasis on TBA. In 1992, 38 percent of its HOME allocation for TBA and intended to use 25 percent in 1993 and again in 1994. However, Connecticut actually used only 15 percent in 1993 and none in 1994. Its 1992 TBA program was run by public housing authorities as traditional housing affordability assistance in the manner of the Section 8 certificate program. In 1993, however, the state initiated a TBA program designed to provide homeless people living in 19 transitional housing facilities a bridge between transitional living and permanent housing. The state administrator of the HOME program, the Department of Housing, contracted with the Department of Social Services to run the Bridge Rental Subsidy Program, DSS subcontracted with a statewide community action agency to work with 19 transitional living facilities, who were responsible for identifying TBA recipients, preparing self-sufficiency plans for them, and providing them with supportive services. For several reasons, Bridge was unable to use most of the TBA set aside for it, and Connecticut ended the program after 36 months, using only a portion of the first year's allocation of TBA and none of the second year's.
Successfully using HOME for TBA for self-sufficiency requires a commitment by both the state and its subrecipients to the values of self-sufficiency. It requires subrecipients who have knowledge and experience in both housing and supportive services, who know how to prepare individual self-sufficiency plans, provide, or ensure access to, supportive services, and work with the private housing market. Since TBA for self-sufficiency is non-routine, state HOME managers need to ensure flexibility at the subrecipient level and both the state and its subrecipients need to be able to learn and adapt.
A state agency managing the HOME program can use HOME funds for TBA in one of three management contexts. It can leave resource cooperation and provision entirely to its subrecipients (decentralization); it can directly support and assist its TBA subrecipients through other resources it manages (facilitation); or it can orchestrate a statewide effort to ensure resources for self-sufficiency (collaboration). The more directive a state agency is regarding the use of HOME TBA for self-sufficiency (i.e., the more it prescribes who will receive the TBA assistance, the services to be provided, or the goals to be achieved), the more a state agency should consider moving from decentralization to collaboration.
No case study state used HOME TBA explicitly for the self-sufficiency related objective of mobility--using TBA to provide housing for lower income households in areas that are job-rich or have higher socioeconomic status. Because place matters, housing lower income households in job-rich areas or areas with higher socioeconomic status may significantly help achieve self-sufficiency objectives.
Self-sufficiency objectives can range from the minimal to the extensive. Within the context of TBA, states face policy tradeoffs. Using TBA simply for housing affordability assistance is administratively easiest and probably results in the most efficient use of TBA (i.e., one canserve the maximum number of households at the least cost). Using TBA for increasingly ambitious self-sufficiency objectives or using it for increasingly more ambitious mobility objectives (i.e., from housing people in job-rich areas to housing people in areas with higher socioeconomic status) is administratively more difficult and invariably serves fewer households at the same cost than traditional housing affordability assistance. However, provided that the management and policy skills and commitment are available, the use of TBA for such purposes may be more cost-effective in the long run because it serves more significant policy values.
The U.S. Department of Housing and Urban Development using a formula annually allocates 40 percent of the available funds to states and 60 percent to general local governments that, as of the end of the previous fiscal year, are metropolitan cities, urban counties, or consortia. Before these allocations are made, HUD funds Tribes and insular areas and uses some funding for technical assistance and other purposes.
States and units of general local governments, urban counties, and consortia known as HOME participating jurisdictions or "PJs," use their funds to acquire, rehabilitate, or construct housing, to provide tenant-based assistance; and to support security deposit, homeownership, and other activities. All activities must be based on the priorities described in the PJ's housing strategy or application for HUD funding called a Consolidated Plan and must be matched with non-federal resources.
A state can run its own HOME program in its entirety, or distribute all or some funds to general local governments who, in turn, run HOME programs or projects on behalf of the state in their capacity as state subrecipients. PJs can use state recipients, which are public agencies or subrecipients which nonprofit organizations to administer all or a portion of their HOME Programs.
The HOME Program, which will be a decade old in 2000, has evolved since its inception in 1990 and the first program regulations in December 1991. With ten regulations in between, some as a result of statutory changes, others as a result of HUD's work to refine the program, HUD published in September 1996 a final rule.
Each PJ must "invest" or use its HOME funds for rental housing--whether using TBA or acquiring, rehabilitating, or constructing units--so that at least 90 percent of the families served have annual incomes no greater than 60 percent of adjusted median family income for the area. Every four dollars used for HOME TBA must be matched with one dollar of non-federal funds. HUD's April 1994 rule expanded the eligible sources of match to include a PJ's contribution towards a non-HOME funded rental assistance program.
A PJ must select families in accordance with written tenant selection policies and criteria that ensure the subsidy is given to only very low- and low-income families whose income levels are assessed up front and then annually to ensure they continue to be low-income. The contract for payment of the subsidy can be between the PJ and the owner or between the PJ and the family. The monthly subsidy can not exceed the difference between a rent standard for the unit size established by the PJ and 30 percent of the family's monthly adjusted income.
The "rent standard," or the amount the unit should rent for, can be based on local market conditions (starting with the April 1994 rule), or be at least 80 percent of the federal Section 8 existing housing Fair Market Rent, or no more than the FMR or HUD-approved community-wide exception rents used under HUD's Section 8 Rental Certificate Program. No more than 20 percent of the units can exceed the fair market rent by up to 10 percent. Each tenant must contribute towards rent.
HUD's interim rules in December 1992 and June 1993 (as a result of the Housing and Community Development Act of 1992) made two significant changes to TBA. Though TBA still had to serve low- and very-low income families as it does today, the 1992 Act eliminated the provision requiring PJs to use Section 8 waiting lists to determine who would receive the subsidy. Instead, PJs were allowed to use selection criteria "reasonably related" to the federal preferences applicable to public housing admissions and receipt of Section 8 vouchers and certificates under the 1937 Housing Act: families who occupied substandard housing or who were homeless or lived in a shelter; families who paid more than 50 percent of their annual income for rent; and families who were involuntarily displaced.
Second, it permitted PJs to administer stand-alone security deposit programs rather than requiring the administration of a security deposit program, though optional, only in conjunction with TBA.
Further regulatory change (April 1994 rule) clarified the phrase "reasonably related to the Federal preferences" to mean that at least 50 percent of the families assisted qualify for one of the federal preferences or would qualify (if not for TBA) for one of the preferences. The effect of the 1992 statutory amendment and HUD's regulatory guidance was to permit the establishment and use of locally created preferences for the distribution of TBA. HUD's July 1995 rule clarified the use of TBA to assist special needs populations by describing the use of TBA in conjunction with the provision of services and by clarifying PJs' ability to provide a preference for persons with a specific disability if the disability type is identified in the Consolidated Plan as having an unmet need.
In 1996, the Balanced Budget Act suspended the use of federal preferences for FY 1996, and HUD's FY 1997 and 1998 appropriations bills extended the suspension through September 30, 1998. HUD's 1997 TBA guide discussed the suspension of federal preferences and the use of local preferences. The 1999 Appropriation Act, however, effective October 21, 1998, repealed the use of federal preferences altogether.
In addition to selecting low- and very-low income families based on locally designated preferences, PJs can, as they have been able to, select families currently living in units that are designated for acquisition or rehabilitation under the PJ's HOME program.
Overall, TBA represents a very minimal level of HOME funding. From the beginning of the program through FY 1997, state and local PJs have used about 3 percent of their HOME funds for TBA, which is also the percentage of HOME funds used for TBA in FY 1997.
Studies indicate, for example, that Section 8 certificates are 40 percent to 100 percent less expensive over a 20-year period compared to new construction Section 8 housing.(1) What makes exact comparisons more difficult is the extent to which housing conditions and neighborhood conditions can be measured and compared. Leaving housing conditions aside, certificate and voucher holders tend to reside in better neighborhoods than residents of project-based housing, even when public housing is excluded from consideration (and before notions of poverty deconcentration became very salient).(2) As discussed later, this can be an important argument for tenant-based assistance.
The argument for supply-side assistance generally rests on the point that it adds permanently, or at least for a longer term, housing units that are available to lower-income households. Proponents of supply-side subsidies often add that in some markets the supply of housing available is such that its price and/or quality make demand-side assistance infeasible because affordable (relative to a standard like the fair market rent) units are unavailable. These debates, even arguments, have a long and well-discussed history in housing policy. But two other issues need to be raised in this demand versus supply discussion.
The first argument is that the nature of our current assisted housing delivery system centers on the construction or reconstruction of housing and its financing. The dominant logic, the essential nature and purpose, of housing subsidy deliverers is to build and finance housing. Asking a housing deliverer to use housing resources for tenant-based assistance is almost like asking the Army to provide air support or asking the Air Force to secure a beachhead. Part of this dominant logic relates to what makes money: the construction and financing of housing makes money for a wide variety of people in the subsidized housing industry, from community based organizations, to public authorities and agencies, to many parts of the private sector housing industry. In other words, an understandable and very significant bias exists in the housing delivery system for project-based assistance and against tenant-based assistance. This bias or dominant logic is very difficult to overcome.
This dominant logic, however, is increasingly facing a environment that encourages much more flexibility in how housing subsidies are used. Part of this changing environment is the increasing use of collaborations to deal with complex problems. The private, for-profit sector and the public sector (much more recently) are recognizing that solving complex problems for the long term requires a melding of skills and resources that no single organization possesses; that the skills and resources essential to an organization's effectiveness increasingly reside outside of the organization's boundaries and of management's direct control; and that the uncertainty and rapid change in our environment require the acceleration of learning, the reduction of uncertainty, and the facilitation of strategic thinking that often is best accomplished by combining the insight and understanding of different organizations.
More and more organizations, even public agencies, do not stand alone "doing their own thing." They adjust, they give up some of their authority, to work with other organizations to solve common problems or attain common objectives. This is perhaps best seen in housing by the growing importance of supportive services.
But another part of this changing environment rests with the increasing priority of non-housing values in housing policy. Probably the most significant of these are the two overlapping values and priorities of neighborhood and self-sufficiency. A growing body of research generally concludes that neighborhoods matter--the location of housing can significantly influence the life outcomes of residents.(3) Neighborhoods with low concentrations of poverty positively affect residents' chances for success.
While the positive affect of good neighborhoods and the adverse affect of poor neighborhoods, especially on young adult employment and outcomes for children, are now acknowledged, the specific mechanisms or processes by which this occurs are less well known. Generally, the quality of local services, especially education; socialization by adults (including the importance of role models); peer influences; social networks; exposure (or lack of exposure) to crime and violence; and physical distance and isolation, especially in regard to employment opportunities, interact to produce positive or adverse neighborhood affects on residents.(4) As David Rusk notes, bad communities can overwhelm good programs.
The overlap between neighborhood effects and self-sufficiency rests in the nexus of the spatial mismatch hypothesis, which as originally formed generally states that serious limitations on black residential choice combined with the steady dispersal of jobs from central cities are responsible for low rates of employment and low earnings of black workers. More recent research suggests that the spatial mismatch hypothesis applies more generally to lower skilled workers regardless of race and whose residences may be outside the inner city, and that many of the studies that support the hypothesis understate the true importance of job accessibility in partially determining the relatively poor employment and earnings of such workers.(5)
Employment location, residential discrimination, and lack of affordable housing combine to form the core of spatial mismatch, but several variables converge to make spatial mismatch especially pernicious. These factors include high commuting costs to employment (largely due to reliance on public transportation and the relative lack of reliable automobile ownership), discrimination in hiring by many suburban/urban fringe employers and the reluctance by many minorities to undertake job search in job-rich areas for fear of not being socially accepted; the difficulty in getting information about job availability in suburban/urban fringe areas; the importance of personal connections in securing employment; and the high transportation costs in seeking employment.
Clearly, location, employment, and earnings are linked and welfare reform has heightened this important aspect of self-sufficiency. A significant foundation value of welfare reform with widespread appeal and support is that the receipt of public assistance should be conditioned by the requirement that those who receive this assistance have an obligation, if at all possible, to move toward and perhaps eventually achieve self-sufficiency. And that those that provide such assistance have an obligation to help move recipients toward self-sufficiency as well. Of course, there will always be people who cannot make much of a move toward self-sufficiency due to age or disability and other factors beyond their control or initiation. But most can act to reduce if not eliminate their dependency on the receipt of public assistance and begin or increase their employment hours and earnings. It is not surprising that so many of the early (and first-time) connections in welfare reform dealt with transportation and TANF agencies determining where public transit is located, where TANF recipients live, and where entry-level job openings are and will tend to be located.
Where TANF recipients live can be very important in their employment and earnings experiences. Welfare recipients who live in job-rich neighborhoods are more likely to find work in close proximity to their homes than recipients who live in job-poor neighborhoods. Better geographic access directly affects welfare recipients by lowering their commuting distances and thus their commuting costs.(6) Given the characteristics of low-skilled workers and the location of employment openings, this location impact affects many if not most low-skilled, low income households.(7)
So far in welfare reform, transportation and child care assistance have waxed more prominent than housing assistance. But one might suggest that housing may become more important as welfare reform continues, as the population needing employment becomes more difficult to employ and as many of those who became employed in the first year or two of welfare reform begin to exit from their first or second jobs. And the priority given by the public to the concept of self-sufficiency is directed not only at welfare recipients.
A study of four counties in California shows, for example, that welfare recipients living in Section 8 housing work a higher number of hours than do those in pubic housing because Section 8 housing offers recipients residential choice and mobility that improves their employment opportunities.(8) Housing policy goals should go beyond simply providing shelter. This is especially important because providing significant housing subsidies only to a relatively small number of equally deserving persons creates significant horizontal inequities. Unfortunately, housing practitioners have little experience in using housing policy in such a way. In fact, the traditional use of housing subsidies has tended to produce the opposite results. One study, for example, concludes that raising the fair market rents (increasing the housing subsidy) has a significant, negative impact on work effort as measured by either earnings or labor force participation and a significant, positive impact on welfare participation. The subsidized housing notch (the point at which recipients lose their housing benefits) is very important for work effort. Combining housing subsidies and Medicaid benefits with welfare can produce remarkable marginal tax rates.(9)
Tenant-based assistance potentially plays a much more important role in self-sufficiency than does project-based assistance for several reasons. What are the advantages of tenant-based assistance relative to self-sufficiency?
One advantage is that housing assistance can come on line much more quickly and easily compared to project-based assistance. It may only be days, rarely more than months, after receipt of funding for tenant-based assistance before a household actually receives assistance. Construction and reconstruction usually take years. A related part of this on-line ease is that TBA is much more incremental, much less lumpy than project-based assistance. For example, it may be reasonable to have a sound housing assistance program with a very small number of TBA households, with new households gradually coming on line. It is difficult to build a rental development of only five or 10 units, and one cannot add a couple of units a month to the initial project. This means, among other things, that TBA can be much more decentralized administratively and that administering agencies need not have the same threshold size and skill level compared to a sponsor building a rental project.
Second, TBA is more moldable, more plastic or fluid than project-based assistance. Not only is TBA put on line much more easily and quickly than project-based assistance, it can be molded on a household by household basis to fit the context and objectives of assisting a particular household. This fluidity advantage relates to the purpose of using TBA within the context of self-sufficiency and the progress or lack of progress made by the recipient. TBA can be used as an initial incentive to get a household to begin behaving in ways to promote self-sufficiency. It can be used as a reward, provided only after a threshold or benchmark progress has been made by a household. The withdraw of TBA can be used to penalize a household that has made no move toward self-sufficiency or has otherwise behaved below threshold performance requirements. As a reward or incentive, TBA can be used as part of a more comprehensive continuum of housing whereby a household starts with TBA, eventually moves onto more permanent project-based rental assistance, and then possibly to homeownership.
In each of these cases, the length of TBA receipt usually varies from case to case, perhaps lasting no more than six months (perhaps even less) or lasting several years. It is almost impossible to obtain this fluidity in project-based assistance. Part of the reason for this is that the assistance contract and the lease contract are separate albeit interdependent. With project-based assistance, the withdraw of assistance to a household is more difficult to accomplish because it is directly tied to a lease. The withdraw of assistance via lease arrangements is legally more cumbersome and the impact on the exit of the household on the financial health of the project must be directly considered--vacancy rates and rent-up problems can jeopardize the fiscal viability of the development.
Third, TBA can be much more deconcentrated both at the project and neighborhood levels. In other words, households using TBA can make up a small number of units in a development or in a neighborhood. Building a rental project can concentrate many low-income households in the same development and in the same neighborhood. Building mixed-income developments at relatively small scale and/or in mixed-income neighborhoods can help project-based assistance overcome site-specific concentration, but this can be very difficult to do in practice.
In the past, the funding of projects has tended, often because of intentional rating and ranking systems in the allocation of funds, to emphasize placing many low-income units/households in the same development. This issue becomes an advantage of TBA because it is arguably easier to achieve self-sufficiency if low-income households are not concentrated with many other low-income households, where role models and other resources may be available that may be unavailable when low-income households are concentrated in the same development or neighborhood.
Fourth, TBA can be much more spatially decentralized than can project-based assistance. It is often difficult, sometimes impossible, to build low income rental developments in areas where there are few low-income households or even where there are no other low-income developments. In this regard, TBA has a "stealth" advantage--there is no need for zoning changes or building permits and people cannot see a development being built. This is a critical advantage because employment opportunities for low-income people tend to be much more available in the middle or outer suburbs and in the urban fringe than in central cities. This is especially true for entry-level employment opportunities, few as they may be, that also have the potential to facilitate increased incomes, access fringe benefits, and provide potential career ladders.
Consequently, TBA much more so than project-based assistance can help locate low-income households close to where jobs are (either by helping to locate housing opportunities before employment begins or after employment begins, and in this latter case either when the household member finds employment or when the administering agency--or its partner--negotiates an employment commitment). Similarly, a key for self-sufficiency may not necessarily be accessing housing close to employment, but accessing housing that is close to transportation resources that can easily get a person to a place of employment.
Finally, and by no means last, is TBA's ability to reach much more deeply into the low-income population. Even when built with 100 percent capital grants, it is very difficult for new construction developments to reach households whose incomes are 25 percent or 30 percent below the area median income (urban areas) or even 35 percent or 40 percent below the area median income (rural areas). Depending on housing markets, TBA may be easily able to provide assistance to households with incomes of 15 percent or even less of area median income.
Some TBA advantages noted above have in practice been more potential than real. Examinations of the Section 8 certificate program show that the above advantages are usually, but not always, born out, and in a few instances the outcomes are not all that much better than project-based assistance. But to a large extent, the inability of the Section 8 certificate program to maximize its conceptual advantages rests with the nature of administering agencies' operations and procedures, not with inherent characteristics of the program. HOME-funded TBA can have none of the baggage associated with much of the Section 8 certificate program, especially if the administering agencies are different, and particularly in regard to the geographical service area of the administering agencies.
The challenge facing state housing agencies (the term state housing agency is used to refer both to state housing finance agencies and state housing and community development/affairs/services agencies) in using HOME for TBA are two-fold. One is overcoming the dominant logic, and perhaps even the associated skill set, that many housing agencies possess, a dominant logic and skill set that focuses on construction and financing and often sees housing as an end in itself. The second is developing and using administering agencies that have or can easily connect to a broad range of supportive services that are necessary for effective self-sufficiency initiatives and that have values, or a culture, that support self-sufficiency as a priority objective.
In other words, significantly using HOME for TBA may require state housing agencies to become involved in collaborations with organizations and agencies with whom they heretofore have not had much contact. It may mean that state housing agencies embark on a new path relative to the fundamental purposes of the agency and to the freedom and simplicity of entirely setting its own agenda.
The state of Connecticut received in FY 1997 $8.3 million in HOME funds while the local PJs received about $6.6 million; the state's HOME share is about 56 percent of the total HOME dollars allocated to all PJs in Connecticut. The state of Missouri received $12.2 million, about 52 percent of all HOME funds going into the state. The state of Oregon's share of HOME funds going into the state was about 52 percent, or $8.1 million.
The three states have certain similarities and differences that provide a context for housing policy generally and TBA activities specifically. Two sets of data instrumental in the use of the HOME program are Fair Market Rents and family incomes. For 1999, the nonmetropolitan Fair Market Rents for two-bedroom units ranged from a low of $657 to a high of $938 in Connecticut, while the very low income for a 3-person family ranged from $24,100 to $28,150. The same figures for Missouri are $352 to $422 for the FMRs
Table 1:
1999 - Range of Nonmetro Fair Market Rents and Very Low-Income (3-person family)
|
2BR FMR |
50% Area Median Income | |
| Oregon |
$477 - $610 |
$16,900 - $23,600 |
| Missouri |
$352 - $422 |
$15,700 - $18,050 |
| Connecticut |
$657 - $938 |
$24,100 - $28,150 |
and $15,700 to $17,300 for very low income and for Oregon, $477 to $590 and $16,900 to $18,700, respectively. Connecticut's FMRs and incomes are much higher than Missouri's and Oregon's, which are more similar to one another. However, Oregon shows a much wider range in very low incomes than either Connecticut or Missouri and a much wider range in FMRs than Missouri.
Comparing these 1999 figures with those for 1996 (not shown in table) shows relatively small changes for Connecticut: the FMRs increased by about 5.5 percent while the very low income figures rose 7 to 8 percent. Missouri experienced more but somewhat skewed change in that the low very low income figure increased nearly 16 percent while the high only 2 percent, and the FMRs increased by about 5.5 percent. Oregon experienced the most change: the low very low income figure increased by 13.4 percent compared to the high's 20.4 percent; the low FMR increased by 5.5 percent compared to the high's 19.6 percent. Most of the nonmetropolitan counties in the three states (a small number for Connecticut) tend toward the lower range in FMRs and income, and in this sense monthly rents are about 2.7 percent and 2.8 percent of annual income in Connecticut and Oregon, respectively, and 2.2 percent in Missouri, which suggests that affordability is probably more problematic in Oregon and Connecticut than in Missouri.
The table in the Appendix provides additional information about the three case study states. The key data in the table show (1) the wide range in 1997 population density (Connecticut's 675 persons per square mile compared to Oregon's 34 and Missouri's 78); (2) Oregon's comparatively high rate of residential building permit activity and rapid increase in home prices; (3) Oregon's relatively low percentage of AFDC/TANF recipients and relatively high rate of AFDC/TANF receipt decline between 1992 and 1997; (4) Oregon's relatively low percentage of Afro-American population ; and (5) Oregon's relatively high population growth rate between 1992 and 1996.
Three circumstances helped the state to decide quickly to set up a TBA program within HOME. First, the state had experience with a state-financed rental assistance program. In 1989, the Oregon legislature created and modestly financed (1998 appropriation of $200,000) the Low Income Rental Housing Fund, a program which continues to this day.(10)
Second, Oregon had created a relatively unique delivery system for the LIRHF, which it called the Local Partnership Program. The local partnerships were between the local public housing authority, which was generally responsible for administering the rental assistance, including inspecting homes and ensuring that the housing-related provisions of the program were enforced, and community action agencies, which were to provide supportive services to LIRHF recipients. Immediately, therefore, the LIRHF had a self-sufficiency orientation to it--all tenants receiving assistance were required to participate in a self-sufficiency program.
Third, because LIRHF programs were state funds administered by local partnerships, Oregon knew it had a local-administered match for the HOME funds. If the same partnerships were to administer the HOME TBA as were administering LIRHF, then HOME match was readily available.
From the very first, Oregon tried to blend in a near seamless fashion the LIRHF and TBA programs. This meant, in part, that the TBA was also to have a self-sufficiency orientation to it. However, the blending of the two programs did not proceed smoothly because of inconsistent statutory and regulatory requirements. For example, the contracts used for LIRHF were not acceptable for HOME TBA. The state revised the LIRHF contracts to conform with the HOME requirements, which added an administrative burden to the local partnerships who had become familiar with the old contract. In another example, the LIRHF had a maximum six months term of assistance, while the HOME program initially had a one-year lease requirement. While households who were eligible for LIRHF were also eligible for TBA, depending on the service philosophy of the local partnership, some local administrators found it difficult to switch funding sources for the same tenant.
Part of the complexity related to the match requirement. Because Oregon had two state-funded housing programs that in a very general way operated similarly to the TBA program--LIHRF and Emergency Housing Assistance--much of the match requirement was made household by household. That is, LIHRF funds might provide for four dollars of assistance and TBA for one dollar of assistance to the same household. Because LIHRF and EHA had self-sufficiency requirements, this was one way the state could mandate self-sufficiency in the HOME program: if subrecipients used LIHRF or EHA for match, then HOME TBA had to have a self-sufficiency component since HUD at this time did not explicitly permit the mandating of a self-sufficiency component. When these state-funds were no longer used as a match, the TBA requirements prevailed. It was difficult to make the two programs seamless.
Notwithstanding the increased burdens placed on the local administering agencies, the overlay approach to LIRHF and TBA worked satisfactorily for the first year, but then began to break down. In the first TBA program year, 1993, Oregon allocated $600,000 to TBA and committed nearly all of these funds, about $591,000, which assisted 235 households. However, while the state increased its TBA allocations to $900,000 in 1994 and to $1 million in 1995, the respective amount of funds actually committed was $161,000 and $256,000, which helped only 88 households in 1994 and 157 in 1995.
The reason for the turmoil was that in late 1993 the Department of Housing and Community Services was legally challenged over its requirement that all TBA recipients be enrolled in a self-sufficiency program. Although the state's definition of a self-sufficiency program was very broad, the argument was made that the state had no authority to require tenants to participate in a self-sufficiency program, a concern that primarily focused on disabled or very elderly tenants.
As a consequence of this complaint, HCS altered in 1994 its TBA program by splitting the program into a portion that could require self-sufficiency (60 percent of the TBA allocation) and a portion (40 percent of the allocation) that would be available to tenants who were exempt from self-sufficiency. The exempt households were those where at least one adult member was permanently disabled, pregnant, the primary care giver of a child under the age of 3, or someone age 62 or over. Since match was usually on a household-by-household basis, the use of LIHRF or EHA funds as match helped sustain the self-sufficiency requirement. HUD eventually permitted a self-sufficiency requirement and also permitted the direct cost of support services as a match. These decisions formally sanctioned the state's objective to mandate again a self-sufficiency requirement and eased if not eliminated the household by household matching that had been standard practice.
Although most local partnerships were able to handle the advent of the TBA program and its overlay with LIRHF, the split between a self-sufficiency program and a non-self sufficiency program became very complex and required a significant increase in reporting and other paperwork. Many local partnerships believed that the administrative costs permitted for LIRHF and TBA did not cover the actual costs of administration, and with the split of the TBA program adding significant administrative costs, many local partnerships just stopped administering the program. Of the 19 local agencies now administering TBA, only two are local partnerships between a community action agency and a local public housing authority. Although it came after most of the local PHAs declined to continue to administer the TBA program, an additional administrative burden on local PHAs was the state's introduction of the "Omni" contract--a state contract with local community action agencies in which they do one plan, one set of objectives, goals, and outcomes, for all their programs, and into which HCS folded the HOME TBA program.
But after two difficult program years, 1994 and 1995, the TBA program turned around. Oregon allocated in each of 1996 and 1997 $1 million. This time, $752,000 was committed for 1996 and $940,000 for 1997. These funds assisted 476 households in 1996 and 436 households in 1997 (the count for 1997 is lower than 1996 because households received longer terms of assistance). As mentioned above, two events occurring simultaneously caused the program to turn around. One was HUD's clarification in TBA regulations that permitted the mandating of self-sufficiency programs as a condition of TBA receipt. Second, HUD also permitted the direct cost of supportive services to be used as a match for HOME funds. Subsequent to this second change, the department permitted local administrators to use state funds that had previously been used only for rental assistance to pay for services.
Currently, the TBA program has 19 local administrators. Six are local public housing authorities, two are local partnerships, one is a community development corporation, and 10 are community action agencies. Presently, all non-participating jurisdiction areas are covered by the 19 local administrators, some of which are multi-county in their jurisdiction.
The state allocates the TBA earmarked on a county-wide basis relative to the percentage of households with incomes of 50 percent or less of median income. The state does not identify the local administering agency. So far, local agencies have volunteered to administer the program within their county or counties. If more than one agency wishes to administer the TBA program, then an agreement must be worked out at the local level. There has apparently been no acrimony over the administration decisions. For example, recently in one county the board of a community development corporation did not agree with the way the TBA administering agency (a community action agency headquartered in an adjacent county) was managing the program and decided to have the CDC administer the program. Probably because the community action agency was not headquartered in the CDC county, it readily agreed to give up administration of the program in that county.
Within a core set of statewide requirements, each local administering agency has flexibility in designing the program. The core requirements include the following. The TBA program offers rental assistance for terms of six months or one year to qualified tenants. Funds are also available for refundable security deposits. The rental assistance can be renewed. The rental assistance agreement is between the subrecipient and the landlord and rental payment is made directly to the landlord on behalf of the tenant. The tenant's portion of rent is 30 percent of their adjusted monthly income with a minimum rent payment of $10. Rents cannot be increased during the term of the contract. Rent payment standards are based on HUD's Fair Market rents or an area-wide exception rent approved by HUD (although other options are available, there has been no significant issue with the FMR standards). All units must meet Housing Quality Standards. All TBA recipients must have a self-sufficiency plan that contains specific activities and time lines for accomplishing the activities.
The second deals with preferences for tenant participation. In the early years of the TBA, especially in the local partnership, nearly all subrecipients used the federal preference system, or at least the preference system of the local public housing authority which may have contained a wrinkle because of a local preference. The use of the federal preference system was combined with the use of Section 8 waiting lists since many housing authorities administered the rental portion of TBA. However, as the local administering agencies became more diverse and the connection between the local housing authority and the TBA sub-grantee severed, alternative preference systems often began to be used.
The third deals with the allocation of TBA. While many subrecipients first used the local Section 8 waiting lists on a first-come, first-served basis, the method of allocation began to change as well.
Self-Sufficiency
One subrecipient, a community action agency, was involved from the very first with the TBA program as a member of a local partnership, noting that the partnership never ran smoothly because of the problems of coordinating services within a philosophy of self-sufficiency on the one hand, and housing within a context of simple affordability assistance on the other. The CAP agency withdrew from the program, as did the local housing authority, during the turmoil over mandatory self-sufficiency issue. The withdrawal was partly due to the complexity and additional work required by the dual (self-sufficiency and non-self-sufficiency) aspect of the program, but primarily because the CAP agency was an adamant believer and practitioner of the self-sufficiency model. The CAP agency came back in the 1996 program year as a subrecipient, without the local housing authority as a partner, when self-sufficiency again became a mandatory part of the program.
The CAP agency takes a rather firm stand on self-sufficiency--it imbues nearly everything it does. For example, until the advent of welfare reform the CAP agency rarely made referrals to the welfare agency because of the lack of a self-sufficiency emphasis (indeed, many of the CAP agency's clients were also concerned about getting trapped by the "system"). But since welfare reform the CAP agency and the welfare agency now cooperate because "we are now singing off the same song book." However, welfare reform is not integrated into TBA or the CAP agency's activities. The CAP agency has its own counselors and case managers, provides its own services, and often makes referrals to a wide variety of agencies who can assist the CAP agency's clients in the ways the CAP agency cannot.
The CAP agency's self-sufficiency focus is not necessarily intense, that is, the CAP agency operates on the principle that any change or learning that produces behaviors or attitudes that make the client less dependent on public assistance and more dependent on his or her own initiative is a form, and a valuable form, of self-sufficiency. Self-sufficiency does not necessarily mean working with a client until the client is earning a wage that provides earnings above the poverty level, for example. For this reason, the CAP agency is and has always been a strong believer in a six-month rent contract for TBA. Its rent contracts are six months, and while the contracts are sometimes renewed they generally end after six months. An expressed philosophy is that a 12-month contract tends to lull clients into putting off being serious about undertaking self-sufficiency initiatives until it is too late. With a six-month contract, a client knows he or she, as well as the CAP agency, must be serious about moving immediately into a self-sufficiency mode. Because its clients tend to have the most unstructured of lives, the CAP agency believes it is critical that some structure immediately begin and progress be continually shown.
An example of circumstances in which the CAP agency will extend the contract beyond six months concerns a woman who was a good candidate for self-sufficiency and with the advent of TBA began making improvements in her life. However, five months into her six-month TBA contract she became very ill. Although she had not yet been able to get a job, the CAP agency thought she was very employable. The agency extended her TBA contract rather than terminating assistance at six months. During the extension the woman recovered her health and obtained a job, and has since remain employed. In this case, the interruption in the path of self-sufficiency was not the woman's fault and the CAP agency believed she would continue to make progress once she regained her health.
Another example, but one very different, concerns two teenagers who married while in high school and who obtained a TBA contract while married and in high school. Both graduated from high school and obtained jobs during the term of the TBA contract. The CAP agency was concerned that the couple would not be able to handle well what to them was an extraordinary influx of money from a two-person, two-job household. The CAP agency extended the TBA contract, during which time the couple received budgeting counseling. Subsequently, the CAP agency felt confident that the couple would well manage their earnings. In this case, both spouses became employed and as such would have routinely seen the end of their TBA contract, but the CAP agency thought that poor money management would quickly put them in need again, so the TBA contract was extended to ensure that this did not happen. While extensions occur infrequently, the CAP agency makes extensions on a case by-case-basis.
Under the CAP's TBA program, sanctions are more frequent than extensions. If TBA recipients miss scheduled meetings or refuse to take required and previously agreed to self-sufficiency steps, the CAP agency, with appropriate and formal notification, will terminate the TBA contract. An example of a sanction concerns an unmarried household (boy friend - girl friend) in which the woman sought and obtained a job while the couple was a TBA recipient. The boyfriend, however, did not want to look for work and was willing to live off of his girl friend's earnings. This situation triggered a sanction and the withdraw of TBA because the self-sufficiency requirement applied to the household (the couple) although they were not married to one another. When the CAP agency implements a TBA sanction, it will still provide counseling and other services to the former TBA recipient. About 10 to 15 percent of TBA recipients see the start of a sanction process (i.e., the start of the formal notification process that will result in the termination of TBA assistance), but about two-thirds of these take the action needed to avoid the culmination of that process and the actual loss of TBA.
Three- and six-month follow-up subsequent to the ending of TBA shows that a large majority of former TBA recipients are able to make it once the TBA ends. And even if a few become homeless, the CAP agency believes that they still learned something of value while being a TBA recipient.
A second subrecipient, a community development corporation, takes a very different stance towards self-sufficiency. The CDC is as committed to the self-sufficiency concept as the CAP agency, but goes about it in a very different way. The CDC is willing to sign six-month TBA contracts but prefers to sign, and mostly signs, 24-month contracts (one-year contracts renewed for another year). Every TBA recipient must sign a personal self-sufficiency contract that is set in increments of six months. If the goals of the first six months are met, the TBA is continued for the second six-month set of performance standards, and so on through to 24 months of TBA. The CDC believes that 24-month contracts give recipients the incentive to move successfully through each of their six-month set of performance standards and activities. The CDC estimates that less than 2 percent of TBA recipients receive a TBA termination sanction.
Each self-sufficiency contract contains the same six generic components. First, the recipient commits to paying timely the landlord--no late fees. To help ensure this, and to promote the learning of responsibility generally, the CDC requires the TBA recipient to come in and pick up the landlord's rent check (the TBA subsidy) and it becomes the tenant's responsibility to pay his or her portion of the rent when he or she gives the landlord the TBA subsidy check. Second, the recipient must identify at least five goals that he or she will accomplish. These goals can encompass a variety of behavior or events, such as learning to take the bus, going to school, or feeling safe. Third, recipients must take budgeting and related training. Fourth, they must undertake an assessment that indicates their life skills and the kinds of longer term skills training they need. Fifth, based in part on this assessment, the CDC refers the recipient to counseling or other support services.
There appears to be a bit more interaction between the CDC and the TANF administering agency compared to the CAP agency noted above. For example, the CDC has a training program called "human sanctuary" that primarily deals with improving one's self-image for which the TANF agency pays for all supplies. Further, about 30 percent of the CDC's TBA recipients are qualified Jobs Plus clients. There also appears to be more of a connection between the local housing agency and the CDC in that the CDC requires every HOME-financed TBA recipient to register for Section 8 assistance.
TBA Preferences and Allocation
The CAP agency altered in early 1997 its preference and allocation system. Prior to 1997, the CAP used general affirmative marketing to develop a waiting list and disbursed TBA on a first-come, first-served basis. The preference system used was the federal preference system. In 1997, the CAP agency made dramatic changes. First, the agency went to a three-day period for taking TBA applications. The agency felt this would give the disabled and the working poor a better opportunity to get TBA assistance--and the CAP agency believes this objective was accomplished. The CAP agency also decided that TBA assistance would not be offered on a first-come, first-served basis, but would be allocated on a lottery basis. The CAP agency received 285 applications and divided these into four priority groups. The first priority group were those who were homeless or were living in substandard housing. The second group consisted of those who were involuntarily displaced. The third priority went to those who were paying more than 50 percent of their income for rent. The fourth and lowest priority group were those receiving welfare (TANF recipients).
The CAP agency indicated that their self-designed allocation process took about 18 months to complete--about a year and one-half to allocate 50 rent subsidies. Moving through the first three priority groups did not take much time. But the fourth priority group was very problematic because the CAP agency could not locate many people in this category--they had moved or were otherwise unable to be located. The CAP agency was very diligent in trying to find these potential recipients if their name was randomly drawn, but this search process often took days per potential recipient, significantly lengthening the time it took to award all the assistance contracts. Consequently, many people among the lower priority groups who needed assistance did not get it or received it much later.
One of the areas in TBA that the CAP agency believes subrecipients should have more flexibility is exactly the area of preferences and allocation of TBA. Part of the problem deals with the interpretation of the affirmative marketing requirement and the extent to which TBA assistance can be targeted. The CAP agency would like to be able to offer TBA to people who need it as special circumstances or conditions arise. For example, the CAP agency runs a domestic violence center. The maximum length of stay at the center is 21 days. Nearly all the women who reach the end of the 21-day limit have as their only housing option a return to an abusive spouse. The CAP agency would like to be able to offer TBA to people whom the shelter manager certifies as having as their only housing option that of returning to a home where they are likely to again be subject to domestic violence and who need follow-up transitional assistance.
Another priority would be to offer TBA to the households of those children involved in the agency's new KID START initiative, a program that focuses on homeless children. The CAP agency believes that the affirmative marketing requirement precludes this kind of targeting of TBA. The CAP agency would like to do a lottery drawing among 50 applicants at a time, opening up the program more frequently.
The CDC also made changes in its preferences and allocation system and intends to make another change in the coming year. When the CDC took over the TBA program it chose to use the federal preference system. However, next year the CDC would like to give first priority to families with children and disabled households. One of the reasons for this was that this year the CDC received a fairly large number of TBA requests from people who were going through cancer treatment but who were unable to receive TBA because they did not rank high enough in the federal preference system.
Before this year, the allocation of TBA was based on the county's public housing authority's waiting lists using a first-come, first-served allocation. In 1998, the CDC chose not to go back to this process and instead went to a lottery system. The CDC also believes the lottery system is fairer and opens the opportunity to more people. The CDC did not use a three-day period, using only one day--but at 7:00 in the morning 80 people had already lined up at the building. Most of these were qualified right on the spot. The CDC also believe the affirmative marketing requirement prevents the allocation of TBA to those who otherwise should receive the assistance.
Administrative Burdens
Although perhaps more forcefully held by subrecipient administrators, the amount of paperwork and the reporting burden is generally acknowledged as a problem. The focal point of the complaint is the number of forms that must be completed. One subrecipient identified the nine-page contract with landlords as the single biggest paperwork obstacle, saying that it not only helps create a huge file, but confuses a few landlords, and sometimes results in even the smallest landlords hiring an attorney to review the document.
The state acknowledges the paperwork burden problem. Part of the problem may be perspective in that CAP agencies manage the state-financed Emergency Housing Assistance Program--$4.9 million for the current biennium--which is a more flexible and less administratively burdened program than HOME TBA, which must comply with multiple federal regulations.
Another issue is that many CAP agencies have minimal staff, sometimes no more than two or three staff who must manage many different programs. On top of this, substantial personnel turnover occurs in many CAP agencies. In some cases, local administrative staff may not have the time to become familiar with HOME TBA requirements and reporting.
Further, the nature of TBA recipients--their life circumstances and their mobility--add to the local administrative burden. The state, however, does admit adding requirements over time without stopping to review the entire set of requirements added through the years.
While the state administrative staff for the HOME TBA is small, about one and one-half full time equivalent positions, the state acknowledges its need to review thoroughly the paperwork requirements placed on sub-grantees with the intent of minimizing those requirements, especially the reporting requirements.
Two major state-required reports are a report of the household's status at the close of the grant (end of rental contract) and a similar report required six months after end of the grant. In both cases, the state monitors whether subrecipients submit the reports, and provides aggregate data matrices, used in part for legislative reporting. The key data relate to the length of term of the assistance, whether the advent of TBA prevented homelessness, and the whether the former TBA tenant is still receiving rental assistance or is being housed without subsidy. When the program started the state agency did not know how well or how poorly the subrecipients might administer the program, so they started by requiring a lot of documentation, double-checking them each step of the way. Now under consideration by the state is the use of a scanner to enter data from the reports so that the information in them can be aggregated and used analytically.
More flexibility is another subrecipient wish, especially in TBA preferences and allocations. The state provides no guidance for preferences, and the state's consolidated plan does not address TBA preferences. The state's intention is for sub-grantees to use the federal preferences or follow the local PHA preferences. The rub about not enough local flexibility deals with local perceptions of the federal statutory and regulatory requirements, especially the extent to which the fair housing requirement negates the ability to create local preferences.
For subrecipients who chose not to follow the Section 8 waiting lists/priorities, the state requires the subrecipients to "affirmatively market the TBA program to ensure that households who may be eligible and appropriate to receive assistance are informed of the availability of the program. In doing so, the sub-grantee may elect to: conduct marketing and outreach in accordance with the outreach criteria outlined in the local Housing Authority's Administrative Plan for the Section 8 Program; or conduct comparable marketing and outreach which meets the criteria of the Section 8 program."
Although Congress eliminated for the years October 1995 through September 1998 the federal preference system, the state did not promote or encourage subrecipients to adopt fully their own preferences because the HUD field office advised the state that the elimination of these preferences was temporary (i.e., year by year) and that if the preferences were re-installed, then all subrecipients would have to adjust immediately to follow the re-installed federal preferences.
On the other hand, subrecipients, who always had the statutory ability to adopt some local preferences, were confused about the extent to which fair housing requirements could preclude local preferences. For example, if a subrecipient granted preferences to abused children it was clear that elderly households would by and large be ignored by this preference. Would this action violate fair housing requirements? These kinds of issues were ones that neither the state nor the subrecipient had clear or comfortable answers for and as a result there was little inclination to experiment with unique local preferences.
Now that federal legislation has permanently eliminated (as of October 1, 1998) federal preferences, the state is considering being explicit about the adoption of local preferences and is reviewing its consolidated plan statements to make these adjustments. The state administering agency recognizes and generally supports the desire for more flexibility on local preferences and is considering trying to spell out more clearly the local flexibility that does exist in this area.
Another issue both the state and local administering agencies agree upon is that the administrative costs are insufficient to cover the actual local costs of administering the TBA program. By federal law, the state and local administrative agencies are limited to a 10 percent administrative fee for the HOME program, with the state largely determining the split. In Oregon, the state provides local TBA sub-grantees with a 7 percent administrative fee. However, unlike the somewhat similar Section 8 program, there is no one-time start-up fee and the overall level of funding is minuscule compared to the aggregate totals managed by most local public housing authorities. So, the HOME TBA subrecipients will never build a volume that might produce economies of scale.
In recognizing this, the state is considering ways to increase the subrecipient administrative costs, perhaps to 10 percent, by making the non-TBA portion of the HOME program pick up the state administrative costs for the TBA portion. [Note: The 10 percent administrative cost cap is program-wide and need not be applied activity by activity.] The state agency has the ability to do this because it is a centralized administrator of the HOME development programs (i.e., it does not use subrecipients for development, only for TBA). Another administrative cost problem the state may alter deals with the reimbursement nature of these costs. The state agency is considering whether it might be able to forward fund local administrative costs rather than reimbursing these costs.
Altering the match requirement is another way to ease local administrative burdens. The state now requires each subrecipient to provide the match required by the HOME program and credits this match when expended, which adds a great administrative burden to the subrecipients. However, the HOME match need not be subrecipient by subrecipient nor even program by program within the HOME program. HCS is considering whether it can move to a blanket state match (e.g., counting state funds used for emergency housing assistance) as an overall statewide match for TBA or using the match received from its HOME-financed development projects to cover the match share of TBA. However, the state is presently unsure whether these funds would aggregate to the amount required for the match.
In another attempt to make the program easier to manage at the subrecipient level, HCS has moved away from centralized training and now conducts individualized training on site along with monitoring visits. This permits more individualized attention, and the early experience appears very promising.
Self-Sufficiency
In the long term, the most significant issue, and one related to local administrative burden, deals with self-sufficiency. Since the start of the program, the state has required a self-sufficiency component, but left the specifics of this requirement relatively wide-open, depending on each subrecipient to prepare and implement self-sufficiency requirements tailored to their own skills and competencies and to the characteristics of the TBA households. The state provided a very broad, general definition of self-sufficiency that could be met with such activities as simply accessing resources or taking medication. The self-sufficiency plan, however, must be a written agreement between the subrecipient and the TBA recipient. The broad definition and the context set by the LIRHF, which provided rental assistance for six months for households who are homeless or in danger of losing their rental units due to involuntary hardship but who can benefit from local community resources aimed at transitioning the household to self-sufficiency during the grant period, implicitly encouraged short-term self-sufficiency.
Now, however, the state is entertaining notions of providing greater emphasis to the self-sufficiency requirement and a longer term perspective. This perspective suggests that a six months self-sufficiency plan or initiative may be cost-ineffective and that in the long run the HOME TBA program can be more effective if more substantial self-sufficiency endeavors are required, perhaps accompanied by up to two years of TBA. While perhaps welfare reform and the experience of several subrecipients may be moving the state into encouraging (but not requiring--this will be ultimately left to the subrecipient to determine) consideration of more substantial and longer term self-sufficiency, some subrecipients have a strong preference for smaller scale and shorter term self-sufficiency initiatives. No data or studies are available to address the issue, and it falls in the long-standing argument about whether it is better to help more people less intensely or fewer people more intensely.
Six-month contracts can help four households for every household helped by a two-year contract, other things being equal. While on the surface it may seem that a two-year self-sufficiency plan should be able to produce much more benefit than a six-months plan, much may depend on the nature of the households, the effectiveness of the subrecipient and the services provided, and the nature of the local housing and labor markets. By helping fewer households over the same time period, two-year contracts lessen the administrative costs, which are highly correlated with obtaining and contracting with new recipients. On the other hand, mandating more significant and lengthier self-sufficiency plans are apt to require more extensive and intensive support service and related administrative costs.
The self-sufficiency discussion is occurring largely between the Oregon Housing and Community Services Department and its subrecipients because although HCS has had several meetings with the state TANF agency. While these discussions have moved only slightly beyond the preliminary stage and there appears to be no significant movement in the state, there is a sincere effort to develop formal partnering between housing, including TBA, and welfare reform.
Experience with tenant-based assistance was one reason the MHDC was willing to use from the very first HOME funds for TBA. But the primary reason concerned the large number of available rental units. In the early 1990s, much of Missouri had a relatively high rental vacancy rate and affordable rents. Rather than use all HOME funds to build additional housing, MHDC reasoned it could cost-effectively take advantage of the state's housing conditions by offering a TBA program. MHDC set aside 20 percent of its HOME funds for TBA, and has continued to manage the program in a very similar manner from its first year through to the current year.
The MHDC allocated funds to market areas (counties) based on a formula that considered the total number of households, the total number of households with demonstrated housing need, the number of people on waiting lists for public housing and private assisted housing, and the number of families on Section 8 certificate and voucher waiting lists. The state has continued to rely on this initial allocation by funding subrecipients based on their effectiveness in using TBA. Subrecipients may receive the same amount of funds as the previous year if they well used these funds, while others may be funded at a ratio, e.g., 80 percent or 85 percent, of their previous year funding depending on how well they were able to use TBA assistance. Thus, if a subrecipient does not use its full allotment, the MHDC proportionately cuts its next year funding and provides additional funds to subrecipients who use their entire allotment. Through the years, about 20 percent of the state's HOME funds have been used for TBA.
The MHDC subcontracts most of its TBA funds to subrecipients, nearly all of whom are multi-county community action agencies, who tend to the be administrators of the state-financed RAP. Only local public housing authorities or community action agencies are eligible to be TBA subrecipients.
Only one local housing authority, a municipality-based public housing authority, administers the program, although a couple of the subrecipients are regional planning councils who also act as local housing authorities. The MHDC directly administers the HOME TBA program in the Mid-America Planning District (counties and suburbs of Kansas City, where it also administers the Section 8 certificate program) and in the East-West Gateway Regional Planning District (the counties and suburbs around St. Louis, where it also administers the Section 8 certificate program). The other 11 sub-grantees are multi-county community action agencies. The parts of the state not covered by the program include the greater bootheel region--the southeastern and perhaps poorest region in the state--and the central portion of the state (the central portion of the state will be covered beginning in the 1999 program year, however), and several scattered counties in the northwestern part of the state. All development funds in the HOME program are administered directly by the MHDC.
For the program year 1998, the MHDC allotted $2.5 million to TBA, about 18.5 percent of the state's $13.533 million dollar HOME allocation. The $2.5 million is expected to assist 835 households. This is the same dollar amount that Missouri allocated in 1997 for TBA, but the TBA percentage in 1997 was about 21 percent of the state's HOME allocation. Including its new sub-grantee for the 1998 program year and its own administration of the Kansas City and St. Louis areas, MHDC has 14 (15 as of the end of 1998) HOME TBA subrecipient agreements averaging about $179,500 and ranging from a low of $40,800 to a high of $433,200.
These statewide local preferences include households who are (1) special at-risk persons, (2) very low-income, (3) working very low-income, (4) single employed very low-income, (5) low-income families continuing education that results in employment (the state's welfare reform "futures" program), (6) families in need to being reunited, (7) overcrowded or under-housed, and (8) families in abusive situations. The remaining 50 percent must be used per the federal preference, i.e., households that (1) occupy substandard housing, include families that are homeless or living in a shelter for homeless families; (2) are paying more than 50 percent of family income for rent; or (3) are involuntarily placed at the time they are seeking assistance.
The statewide local preferences option contains additional guidance. A preference may be established for individuals with special needs and, if so, the subrecipients may offer supportive services, with the MDHC indicating that such services should be made available to all who could benefit from them. Further, a subrecipient may provide a preference for a specific category of individuals with disabilities if the specific category is identified in the participating jurisdiction's housing strategy or consolidated plan as having unmet need and the preference is needed to narrow the gap in benefits and services rendered to such persons. However, preferences cannot be administered in a way that limit opportunities in a protected class. If a subrecipient does decide to operate the TBA program in a way that is targeted exclusively to individuals or to a specific category of individuals with disabilities, at least 50 percent of the individuals must qualify in the near future for one of the three federal preferences.
Several other key program requirements include the following. All leases must be for 12 months (renewable for another 12 months) and must be in writing and on a standard rental form approved by either the Missouri Board of Realtors or the Missouri Apartment Rental Association. Rents cannot exceed the Fair Market Rent unless specifically approved by the MHDC. A minimum payment, an amount equal to the greater of 15 percent of the payment standard of the FMR including utilities or 30 percent of adjusted gross income, is required. The TBA is portable only in the geographic area of the sub-grantee.
The MHDC commits to providing housing assistance to those tenants initially assisted under HOME contracts until such time as the tenant family is eligible for Section 8 rental assistance certificate or they no longer need housing assistance.
The MHDC provides administrative fees of 8.2 percent plus a one-time fee of $100 for each new tenant. MHDC provides a statewide match, so there is no need for sub-grantees to come up with match funds or track match.
The relatively traditional nature of the TBA program does not mean there are no issues. Some subrecipients would prefer not operating the TBA program per the federal preferences and some subrecipients would like to use TBA as part of a self-sufficiency initiative. Although Congress waived in each of the last three federal fiscal years the federal preferences and although the state's rules permit the use of local preferences within a statewide policy framework, most subre-cipients appear to have taken for granted that the TBA program was to be managed very similarly to the Section 8 certificate program, and made no effort to try something else.
One local public housing authority, which receives a very small allocation of TBA (about $41,000), uses the TBA program entirely to provide assistance to disabled households in one-bedroom apartments. This subrecipient has a very small self-sufficiency program within its Section 8 certificate program (about 40 of 175 contracts). But even with its Section 8 certificate program the housing authority has asked HUD to be exempt from federal self-sufficiency requirements because surveys of people on its waiting lists indicate little interest in being involved in a self-sufficiency program. Part of this disinterest in self-sufficiency may rest in the subrecipient being located in the capital area where there are many institutions, agencies, and resources devoted to various self-sufficiency measures in large part due to welfare reform. Other subrecipients seemed to relish the opportunity to use TBA in a self-sufficiency initiative but believed this was not permitted under the state's (pre-1999) guidance.
One subrecipient indicated that its HOME TBA program was much more popular than its Section 8 certificate program. No TBA-assisted household chooses to cross over to the Section 8 certificate program when they are able to and the subrecipient generally sends notices of Section 8 certificate availability to five households on its waiting list before one accepts the certificate. The reason for this is that the subrecipient ran its TBA program as a voucher program where households can rent units that are above the Fair Market Rent. In this subrecipient's service area there is little decent housing at or below the FMR level due to recent economic growth, income increases, and the building of apartments to meet the higher end of the income range (relatively speaking, the area is still a rural area--but this is an example of the critical housing circumstances faced by some "hot spot" rural areas).
Some concern was recently raised when in the summer of 1998 MHDC sent letters to several subrecipients notifying them they had tenants who were paying too much rent. MHDC, using its HOME guidelines, assumed all subrecipients were using HOME TBA as certificate program when in fact several had been using the TBA as a voucher program since the beginning of HOME TBA. Based on a belief that there had been in the past a mis-communication to subrecipients regarding the need to operate TBA as a certificate program and based on the concerns raised by several subrecipients, who pointed out that using TBA as a voucher helped many of their recipients find rental units because it increased the supply of eligible units, MHDC decided in early 1999 to allow the use of the voucher model. (In any event, Congress enacted legislation in 1998 that merged the certificate and voucher programs.)
Although the state permits subrecipients to use rents that are up to 10 percent above the FMRs, the state admits that many subrecipients take advantage of the 10 percent option without obtaining prior approval from the state. Clearly, there are indications that the FMRs present some problems to many rural areas of Missouri.
Some subrecipients indicate that the administrative costs do not cover the actual costs of administering the program and also indicate that too much paperwork is involved in administering the program, especially the monthly billing process. Some subrecipients would prefer a flat fee for administration and not have the fee vary with the amount of funds being spent. However, the subrecipients see the TBA program as a very flexible and valuable housing resource in their areas.
The Connecticut Department of Housing was the state's administering agency until the governor and legislature merged in 1996 the Department of Economic Development with DOH, resulting in the Department of Economic and Community Development. The new agency, as it had in the past, administers HOME, the Community Development Block Grant Program, and lead-based paint and other housing initiatives. However, it now also takes on core economic development activities, such as attracting and retaining businesses and jobs. DECD makes grants and loans of HOME funds to state subrecipients--local governments--to carryout HOME programs throughout the state, reserves some portion to run its own state program, and grants the balance to localities wishing to become participating jurisdictions on their own.
The state used 38 percent ($3.4 million) of its FY 1992 HOME allocation of $8.9 million for a TBA program administered by 19 housing authorities (of 105 housing authorities statewide) scattered throughout the state. Through a competitive application process, the 19 authorities entered into contracts in 1994 to serve clients from their respective Section 8 certificate waiting lists. Approximately 300 families and individuals were served in the two-year contract period, 1994-1996. DOH did not add state-generated requirements to the authorities' contracts. Overall, the housing authorities modeled HOME TBA on their Section 8 certificate experiences, running their TBA programs as simple housing affordability assistance.
In FY 1993, DOH intended to use 25 percent ($1.5 million) of its total allocation of $6,044,000 for TBA, but actually spent only 15 percent. The focus that year was on a small, lead-based paint abatement relocation program in the city of Stamford and a self-sufficiency program contracted through the Connecticut Department of Social Services. DOH intended to use 25 percent of its FY 94 HOME allocation for additional funding for these programs, but actually used none. The DSS's self-sufficiency program, the focus of this case study, is described later.
Although DOH focused a lot of energy and resources into large rehabilitation and new construction projects--largely due to the habit and familiarly with administering programs with these (pre-HOME) activities and its proclivity to these activities by training and work culture--it also administered, at the time, the federal Section 8 certificate program and a state-funded rental assistance program called RAP. RAP provides rental subsidies to families with incomes at or below 60 percent of area median income, or to people who are at least 62 years of age and who reside in state-assisted housing and pay more than 30 percent of their adjusted monthly income for rent and utilities. RAP mostly serves the hardcore homeless and the working poor who experience recurring bouts of homelessness and is available on a first-come, first-served waiting list basis.
DOH's experiences with rental subsidy programs encouraged its use of HOME for TBA and also helped influenced how it structured its program. The Section 8 program and RAP were later transferred from DOH to DSS based on the state's desire to link rental assistance with supportive services and as a result of DSS gaining administrative experience under its contract with DOH to administer HOME TBA.
DOH also believed, especially in the early '90s when HOME was new, that TBA was a relatively easy way to move out quickly a large portion of HOME funds--both as a way to commit HOME dollars and to help quickly poorly housed and homeless people. DOH leadership, despite the newness of HOME, was willing to use HOME funds for TBA. In FY 1992, when DOH first used HOME for TBA, HUD had issued no guidance on TBA outside of the basic requirements articulated in the December 1991 interim regulations.
In 1992, the state formally adopted a policy as reflected in its CHAS that the use of formula program funds, to the extent possible, should be given to proposals that incorporated the completion of life skills, substance abuse, mental health, job training and other needed services linked with housing. DOH's contract with the Connecticut Department of Social Services to administer TBA was its first, large-scale foray into service-enriched housing.
DSS Contract
In 1995, DSS entered into a contract with DOH to administer 125 TBA certificates for the Bridge Rental Subsidy Program using FY 1993 and FY 1994 HOME funds. A total of $1.5 million ($750,000 of each year's allocation) was to be transferred during the original 29-month contract period, which was later extended another eight months. Of the original amount, DSS spent 65 percent of the FY 1993 amount ($488,000) but none of the FY 1994. Bridge served a total of 43 households (a mix of families and individuals), who received TBA for two years.
Since DSS then had limited experience administering rental subsidies, it sub-contracted the work to the Community Renewal Team (CRT), one of the largest and oldest community action agencies in the country (a 1999 operating budget of $52 million, of which $17 million goes towards housing programs; CRT also administers Section 8 and RAP for DSS). The provision of housing-- in addition to the variety of social service and education programs CRT, like other community action agencies, administers--became an integral part of CRT's mission in the early '90s when CRT identified housing as a stabilizing force for families and communities. Under the terms of its sub-contract with DSS, CRT inspected the units to be assisted with TBA, verified income levels, and entered into housing assistance payment contracts with the landlords. CRT's initial administrative fee was $5.00 per unit per month, which was later raised to $25 per unit per month at CRT's request.
Program Design
DSS conceived of its HOME TBA program as a two-year bridge between 19 state-funded transitional living facilities and permanent housing. The transitional living facilities, scattered throughout the state, though somewhat clustered in the population centers of Hartford, Bridgeport, Danbury and Norwich, serve families and individuals made homeless as the result of domestic violence, substance abuse, mental illness, and the working poor experiencing "episodic" homelessness. DSS required residents of the transitional living facilities to come from emergency shelters as opposed to directly from the streets and to live in their transitional facilities for at least six months prior to being eligible for HOME TBA. Of the original 125 subsidies, each facility was to receive four subsidies, with the balance negotiated between DSS and each facility based on need.
Transitional living facility staff were responsible for identifying the clients eligible to receive HOME subsidies based on income and their participation in a self-sufficiency contract. Individuals and families with gross household income below 25 percent of the area median income level, followed by those with income below 50 percent, received priority. Candidates also had to have sufficient funds to pay a portion of their security deposit (30 percent of monthly adjusted income), with DSS paying the balance through its state administered security deposit program. At least 50 percent of the families to be assisted had to qualify, or would qualify in the near future without TBA, for one of the federal preference in effect at the time under the Housing Act of 1937. If not already on a waiting list, the Bridge participants were required immediately to file an application for Section 8 and RAP. While in the program, participants paid no more than 30 percent of their monthly adjusted income less an utility allowance or 10 percent of gross monthly income, whichever was greater.
Participant Agreement
The head of each eligible household was required to enter into a formal written contract with its transitional living facility. The contract, which is very similar to but not modeled after the contracts used by housing authorities for HUD's Family Self-Sufficiency Program, outlined the facilities' responsibilities to provide the referrals and supportive services agreed to under the individual contracts and, if applicable, the family care (or case) plans. The case plans were developed after assessing needs or barriers to independent living, such as the lack of childcare, employment training, or substance abuse treatment.
To qualify for TBA, the household must have demonstrated initial progress in their case plans and on-going progress after one-year in their TBA supported units, or lose their subsidy. In addition, the household was required to live in the jurisdiction of its transitional living facility for the first year presumably to facilitate the delivery of supportive services including case management. Case workers from the transitional living facilities or from local support systems were designated to provide case management and would link Bridge households with supportive services provided by others.
One of the contributing factors to the program's low usage rate was the lack of outreach from coordinating staff at each of the 19 transitional living facilities. The TLF counselors worked in the TLF and with TLF residents. When Bridge participants moved out, they were replaced with other residents. The TLF coordinators did not have a reduction in their own work and were not used to providing services to or managing cases in a scattered-site setting. Absent a Bridge coordinator, it was difficult in many instances to link the Bridge residents with the services outlined in their case plans. (Interestingly, the Governor's Homeless Task Force that was created in 1984 recommended, and the state later funded, service coordinators in all state run emergency shelters starting in 1987.) Additionally, some core services were not available in the first place, which may have been especially problematic in a scattered-site model, but it is unclear whether having the services and a coordinator would help in recruitment for the program and/or be key to the clients success once in the program.
DSS designed Bridge, in part, to target the very poor--people with incomes below 50 percent of area median income with priority given to those below 25 percent. But two years of housing assistance may not have been long enough to serve the hardcore homeless (those below 25 percent of AMI) who often need longer-term housing arrangements and more services. Two years of assistance, however, may have been appropriate for some persons who were homeless, for example, as a result of domestic violence. Many of the 43 persons who completed the two-year Bridge program probably came from the less hard-to-serve TLF residents.
Also, many clients of the transitional living facilities generally appeared more interested in permanent, long-term housing subsidies. But whether this belief played a role in the transitional living facilities' inability to recruit program participants is unclear.
A two-year subsidy may also not have been appealing to some landlords who could rent available units on the market or rent to Section 8 holders--both options offering, in most cases, a longer tenure. Additionally, some landlords may not have wanted to rent to Bridge participants out of fear of having to evict them (formal eviction proceedings are usually time consuming and costly to landlords), presuming that formerly homeless persons would be unable to pay their rents.
Bridge also suffered somewhat from a lack of marketing overall--to clients, to landlords and to service providers. An especially important part of this may have been the absence of housing outreach on behalf of Bridge participants, who on their own had to find housing in the private market place. Whether additional opportunities and mechanisms to sell the merits of the program would have increased interest is unclear, however. For example, DSS expanded RAP in 1997 to include a one-year subsidy for persons exiting welfare, the Temporary Assistance to Needy Families (TANF) Program, but similarly to the Bridge Program, DSS is experiencing some difficulty in recruiting participants--some suggest additional marketing of the program may be warranted.
Finally, HOME TBA required the establishment and maintenance of new record keeping systems, which may have been overly burdensome to local administrators because of the additional work it created. Also, few were comfortable with the HOME statutory requirement that caps administrative cost at no more than 10 percent of each year's formula allocation and most participants thought that additional flexibility was needed. Every new federal program comes with requirements, however, and HOME was no different. In fact, this realistic attitude may have contributed to DOH's willingness to plunge headfirst in using HOME for TBA in the first place.
First, Oregon shows that using TBA for self-sufficiency can be done and, apparently, done effectively and for a long time period. Oregon has used HOME for TBA tied to self-sufficiency since the beginning of the HOME program.
Second, the use of TBA for self-sufficiency will not automatically happen, as Missouri provides testament. Although Missouri provided its subrecipients through its regulations the ability to adopt non-federal preferences and, further, to adopt self-sufficiency objectives, its subrecipients used it as a traditional (simple housing affordability assistance) TBA program. Given the long history of Section 8 certificates being used as simple housing affordability assistance, the inertia to use HOME TBA the same way was very strong, even among subrecipients that may have had lengthy experience in self-sufficiency-related programs, such as community action agencies. Subrecipients with little such history, such as local public housing authorities, may have faced even stronger inertia constraints. Even the state used its HOME TBA (in the St. Louis and Kansas City suburbs) as a traditional TBA program.
Third, using a self-sufficiency objective requires fortitude and forethought. An advantage of using TBA as a simple housing affordability assistance program is that administration and policy issues tend to be simple and routine. Relatively speaking, Oregon has had an easy time using HOME TBA funds for self-sufficiency. Nonetheless, many issues arose over time to which Oregon and its subrecipients had to respond, which took time and resources. These ranged, illustratively, from trying to merge HOME TBA with a similar state-funded program; to trying to create a housing-services administrative collaboration at the local level; to potential conflict, or at least complexities, between fair housing requirements and the desire for local preference priorities; to whether the state even could legally require a self-sufficiency objective. In some instances, the resolution of these issues reduced, perhaps even impeded, using HOME TBA funds for self-sufficiency. Yet, the state and its subrecipients so strongly believed in the value of self-sufficiency that they continued to pursue the objective.
This issue connects to the question of the administrative costs of TBA, which subrecipients in all three states believed were insufficient to cover actual costs. Unless connected to other programs that can help cover real shortfalls in administrative costs--interestingly, in Oregon and Missouri the predominant subrecipients are community action agencies and not local public housing authorities, and even in Connecticut the key intermediary administrative manager was a statewide (although one the centered its activities mainly in the Hartford area) community action agency--or unless states adjust their administrative cost policy, subrecipients may be unable to undertake effectively a TBA program that has a complex objective, such as self-sufficiency.
The fortitude and foresight lesson raises several related topics for discussion. Each of the three case study states became involved in using HOME funds for TBA at least in part because they had earlier experience with TBA programs (Section 8 and/or state-funded). But there is a difference between using TBA for housing affordability and using it for self-sufficiency. Connecticut, for example, was unable to make the transition from a traditional use of TBA to a self-sufficiency use. While the nature of this report precludes detailed analyses, the Connecticut experience suggests several factors to consider when thinking about a TBA program tied to self-sufficiency.
Unlike Oregon and Missouri, Connecticut had a complex funds/policy flow: from the Connecticut Department of Housing to the Connecticut Department of Social Services to the Community Renewal Team (a community action agency) to 19 state-funded transitional living facilities. These many "hand-offs" invite ambiguity and dissipation in communication, whether in policy clarity or problem feedback and response.
One of the noticeable aspects of TBA administration in Oregon was the extent of communication (written reports, telephone conversations, workshops, one-on-one and on-site technical assistance--generic as well as specific communication, and the use of both lean and rich media as appropriate) that occurred between the state and its subrecipients. Not withstanding this, however, ambiguity (Who is responsible for determining this? What does this actually mean in specific application?) and, less often, mis-communication sometimes occurred. In Missouri, the (thought to be) reaffirmation of the requirement to use HOME TBA funds as certificates and not vouchers briefly caused problems because the one-way written directive did not foster discussion and clarification until after the fact.
Thus, one implication that can be drawn is the importance of non-routine, rich communication when non-simple policy objectives are sought. Having direct lines of communication and minimal hand-offs can significantly help achieve effective communication. If a state's design requires multiple hand-offs, then it must realize the extraordinary burdens this places on communications and must intensify its efforts to ensure effective communications.
Another implication concerns the value of having both housing and services experience if not expertise. The subrecipients in Oregon, by and large, had experience in administering two state-funded housing programs that had a self-sufficiency orientation to them. So, the community action agencies, generally services-based organizations with a self-sufficiency orientation, had some housing experience. And even where this housing experience may not have been substantial, the early requirement in Oregon for a collaboration between a community action agency and a public housing authority (the early partnership approach), helped engender communication and experiences in both housing and services. Although in most instances the partnership arrangement proved too cumbersome to continue, it did provide community action agencies with some housing learning within the context of TBA.
In Connecticut, however, the transitional housing facilities staff had little experience in out-reaching to and working with private landlords and scattered-site housing within the context of TBA. These administrators could have well used substantial hands-on technical assistance as well as clear communication in their start-up period. One of the advantages Oregon had was that the department that administered HOME also administered a variety of community action-related programs: the Oregon Department of Housing and Community Services and the community action agencies have much communication on issues beyond HOME.
Both Oregon and Connecticut illustrate the need to prepare individual contracts, which include individual assessments and goals for TBA self-sufficiency clients. Self-sufficiency cannot be mass processed. However, as Oregon shows, given the individual assessments the degree of self-sufficiency a TBA subrecipient commits to depends on resources and priorities and values. Some Oregon subrecipients defined self-sufficiency as relatively simple steps in the short term, such as regularly taking and refilling prescription drugs and learning how to use public transit within a six-month TBA time frame. Other subrecipients saw self-sufficiency more comprehensively and intensely, such a series of increasingly important steps over a two-year time period, with a two-year TBA contract. If the resources needed to help households move toward self-sufficiency are those that must be found by or are those readily available to the subrecipient and if the subrecipient is selecting TBA self-sufficiency clients, then it makes sense for subrecipients to determine the degree of self-sufficiency to be attained.
The importance of the assessment, learning, adjustment cycle is another implication. Oregon tried very early in its administration of the HOME program to force or at least induce the creation of local level collaborations and to merge seamlessly the HOME TBA and state-funded TBA programs. Oregon soon concluded that neither were working well and dropped its integration and collaboration requirements (some partnerships still manage the program, but nearly all the subrecipients are either community action agencies or, to a much lesser extent, local public housing authorities; and there continues in some instances a reinforcing use of the two TBA programs).
Any endeavor at complex problem solving and collaboration requires the room to be wrong at the beginning. Mistakes will occur; the appropriate response is to learn and adjust and not to walk away from challenging or complex initiatives by quickly declaring them failures. Self-sufficiency managers, at the state and subrecipient or local level, should avail themselves of the growing body of literature that assesses self-sufficiency initiatives.
Inherent in this last implication is another one: the importance of flexibility. Oregon was directive in requiring that HOME TBA be used for self-sufficiency. But within this directive the state administrators were largely flexible in how subrecipients were to accomplish the objective. The state requirement for a self-sufficiency plan was general enough to permit for various specific treatment by subrecipients. Further, and illustratively, some Oregon subrecipients strongly believed in a six-month self-sufficiency time frame while others were more inclined to use a two-year time frame -- state administrators permitted various approaches to the time limits issue and to defining further self-sufficiency. Also, state administrators permitted various approaches to preferences and to distribution of assistance, not requiring, for example, subrecipients to follow a first-come, first-served distribution policy. Perhaps unintentionally, Missouri exhibited flexibility by permitting subrecipients to use TBA as vouchers and to use rents above the FMR without prior approval. Connecticut's approach, however, was much more state-directed than either Oregon's or Missouri's.
The Oregon and Connecticut case studies implicitly raise an important issue regarding how state government positions itself regarding resources for self-sufficiency. With the exception of its homelessness assistance and state-funded rental assistance programs, Oregon made no conscious effort to organize the delivery of supplemental resources to its subrecipients. The community action agencies had to rely heavily on their own skills, experiences, and resources in encouraging TBA households to move to self-sufficiency. Although the CAPs had few deep resources, and often had minimal staff, they had several flexible resources, had experience with and commitment to self-sufficiency, and often were able to create good community networks that permitted them and their clients to take advantage of other resources administered locally by other organizations. This appeared to permit the CAPs to do a satisfactory job of effecting self-sufficiency.
The advent of the TANF program, which changed the focus of welfare assistance from a permanent income maintenance entitlement to a temporary self-sufficiency initiative, may further increase the CAPs self-sufficiency capacity. This change will likely increase cooperation between CAPs and local welfare agencies because both institutions now look to self-sufficiency objectives. While the Oregon Department of Housing and Community Services has had and continues to have conversations at the state level with the TANF administering agency, these conversations have been informal and so far inconclusive. Thus, the resource cooperation that may occur between CAPs and TANF resources will be driven in the near future by wholly local relationships.
Both Oregon and Connecticut initially designed their TBA programs to use local partnerships. Oregon started with local pubic housing authorities being responsible for the housing side of self-sufficiency and community action agencies being responsible for the supportive services side. Connecticut generally used a statewide community action agency for the housing side and transitional living facilities for the supportive services side. While this division seems to make a priori conceptual sense, it broke down in both states. The reasons for the breakdown in Oregon seemed to reside in the disconnect between the simple housing affordability style of the housing authorities and the self-sufficiency style of the community action agencies. The advent within just a few years of two state-funded rental assistance-type programs and the HOME TBA program probably added a level of complexity to the local arrangements that may have made coordination more difficult. In Connecticut, a key probable reason for the difficulties Bridge encountered was the lack of integration of the two sides, housing and supportive services. States may be better off trying to ensure that one subrecipient has both service and housing expertise, or at least should not assume that coordination between housing and services agencies casually and effectively happens.
In Connecticut, the 19 transitional facilities, as well as perhaps the community action agency, implicitly expected the Connecticut Department of Social Services to provide or help orchestrate complementary resources to help them pursue the self-sufficiency objective of TBA. However, this orchestration did not occur, in part because of lack of follow-through at the state level to this small (compared to other department of social services activities) TBA initiative. The facilities had neither the resources nor the networks that the CAPs had in Oregon and were unable to bootstrap themselves in a short period of time to effect self-sufficiency. In this instance, the state fairly specified the TBA clients (homeless people residing in one of 19 transitional living facilities) and the specific objective of the program (provide two-year TBA as a transition from living in a TLF to being housed in the private market). A very specific determination of clients and objectives, which leaves little discretion to the local level, needs to be matched by a state commitment of resources commensurate to the clientele and objective.