• Bush Administration's Proposed Budget
• TAC Section 811 Status Report
• CCD Section 811 Statement
•SAVE SECTION 811 - Write to your Senator and Congressman

Bush Administration's Proposed Budget

On February 7, 2006, President Bush sent the Fiscal Year (FY) 2007 budget request to Congress. The Administration proposes to cut HUD funding by 1.8% overall.

A general funding timeline has been created by the National Low Income Housing Coalition.

TAC Section 811 Status Report (click here for a PDF of this report)

The Bush administration’s proposed FY 2007 HUD budget would – for the second year in a row – essentially end the production component of the Section 811 Supportive Housing for Persons with Disabilities program (Section 811). This budget submission would cut funding for the program by 50 percent – from $238 million to $118 million. The $118 million would provide funding to renew all of the expiring contracts for 811-funded tenant based vouchers (Mainstream voucher program), renew all expiring Project Rental Assistance Contracts for Section 811 projects, and provide only $15 million in capital funding for 150 new units nationwide. An additional $15 million could be used for new Mainstream vouchers.

Last year, the administration made a similar proposal which fortunately was rejected by Congress. In the 2006 HUD budget, Congress ensured that Section 811 would again be level funded at $238 million – an amount that produces approximately 1,000 new units per year. Advocates worked extraordinarily hard last year to convince Congress to preserve this Section 811 funding – an effort that must be repeated this year to save the program.

The Section 811 program is widely recognized in states and localities as a cost effective supportive housing alternative to expensive institutional settings. Many states have relied on the Section 811 program to reduce the number of people with severe disabilities forced to remain in public mental health facilities, Medicaid funded nursing home beds, or public facilities for people with mental retardation and other developmental disabilities. A recent cost study by the Pennsylvania Center for Outcome Analysis found that people who moved into Section 811 supportive housing units required 61 percent less public financing to live – about $26,000 per year instead of $67,000 spent on a control group of similar individuals that did not move into supportive housing in the community;

Ironically, the FY 2007 Section 811 budget cuts are being proposed at a time when new Section 811 “mixed finance” rules published by HUD in September of 2005 will promote more integrated and financially feasible Section 811 projects. These rules facilitate combining Section 811 capital advances with federal Low Income Housing Tax Credits. Tax credits produce affordable housing units for households with incomes at 50-60 percent of median income in buildings that also may have market rate rental housing.

Section 811 advocates have waited years for these new rules, which could help to create highly integrated and more cost effective models of community based housing for people with disabilities. When combined with Tax Credits, Section 811 capital costs could be reduced by 50 percent or more, producing double the number of units with the same amount of capital. If HUD’s cuts to Section 811 production are enacted, this new completely new integrated Section 811 model will never be fully realized.

Consortium for Citizens with Disabilities Housing Task Force Statement on Section 811 Click here for a PDF of this report.

HUD FY 2007 BUDGET PROPOSAL CONTINUES ASSAULT ON SECTION 811 PROGRAM

SECTION 811 SUPPORTIVE HOUSING FOR PERSONS WITH DISABILITIES SLASHED BY BUSH ADMINISTRATION FOR THE SECOND CONSECUTIVE YEAR

The Administration’s FY 2007 budget proposes slashing funding for one of the most essential and cost effective housing development programs ever administered by HUD – the Section 811 Supportive Housing for Persons with Disabilities program. In a virtual repeat of its callous FY 2006 budget proposal, HUD’s FY 2007 budget attempts to cut the Section 811 budget by 50 percent. For the second year in a row, HUD is attempting to essentially eliminate the development of new units of permanent supportive housing for people with the most severe disabilities.

This year’s Section 811 budget proposal cuts new supportive housing production funding by 90 percent, providing funding for a mere 150 units of new supportive housing development nationwide. The $118.8 million 811 funding request would provide HUD with funding to renew expiring 5 year contracts for existing tenant based vouchers and project based subsidies, and possibly fund a few hundred new tenant based vouchers.

For more than 40 years, the Section 811 program (and its precursor the Section 202(h) program for persons with disabilities) has been dedicated to the development of new community based supportive housing for some of the most vulnerable people in our society. The Section 811 program is the only HUD program that produces affordable and accessible permanent housing with supports for extremely low income people with severe disabilities.

The program has also been the cornerstone of efforts to promote and expand community integration for people with disabilities whose housing and supportive services needs cannot be addressed through the private rental housing market. In perhaps the ultimate irony, HUD is proposing to reduce new 811 production funding by 90 percent at the very same time that new HUD 811 “mixed finance” rules now provide an opportunity to using 811 funding in “mixed income” rental housing developments – making it an even more effective tool for community integration. Another sad irony is that HUD is making this proposal when thousands of individuals with disabilities on the Gulf Coast have lost their housing.

Fortunately, last year, Congress refused to accept HUD’s FY 2006 proposal to end all new Section 811 supportive housing production and provided $236.6 million so that housing production levels could be maintained. The disability community must again vigorously advocate with members of Congress to ensure that funding for new supportive housing development is sustained through the Section 811 program.

The Section 811 Program

The Section 811 program provides affordable and accessible housing for people 18 years of age or older with severe disabilities, including physical disabilities, developmental disabilities, and chronic mental illness. Most Section 811 program participants live in supportive housing units developed and managed by non-profit organizations. Historically, HUD has used 75 percent of Section 811 funding to provide one-time capital funding and an essential monthly subsidy to help finance the development of fully accessible rental housing, including independent living projects, condominium units, and small group homes, many of which offer voluntary supportive services for people with severe disabilities. The non-profit Section 811 sponsors must agree to provide the housing to people with severe disabilities for a minimum of 40 years – an extremely cost-effective long term approach.

For the past 8 years, Congress has dedicated 25 percent of Section 811 funding to tenant based vouchers which HUD has administered as the Section 8 Mainstream Housing Opportunities for Persons with Disabilities Program. Unfortunately, the Mainstream program has been grossly mismanaged by HUD since its inception in 1997

HUD’s Section 811 Budget Request

Instead of maintaining the Section 811 program’s long standing commitment to production of new supportive housing units, the Administration’s FY 2007 budget request again proposes to slash the Section 811 program by 50 percent and virtually end the production component of the program. The Administration has recommended cutting Section 811 funding to a mere $118.8 million – an amount which will only support renewal of existing tenant based and project based subsidy commitments and 150 new units developed by non-profit organizations. This is a cut of almost $120 million from the FY 2006 budget – which provided essential funding to produce over 1,000 new units of supportive housing for people who currently live in institutions, nursing homes, homeless shelters, or who remain at home with aging parents because there is no housing available for them. HUD’s Section 811 FY 2007 budget request also is completely inconsistent with the community living goals and principles in President Bush’s New Freedom Initiative for People with Disabilities.

Ironically, the FY 2007 Section 811 budget cuts are being proposed at a time when new Section 811 “mixed finance” rules published by HUD in September of 2005 will promote more integrated and financially feasible Section 811 projects. These rules facilitate combining Section 811 capital advances with federal Low Income Housing Tax Credits. Tax credits produce affordable housing units for households with incomes at 50-60 percent of median income in buildings that also may have market rate rental housing. Section 811 advocates have waited years for these new rules, which could help to create highly integrated models of community based housing for people with disabilities. If HUD’s cuts to Section 811 production are enacted, this completely new integrated Section 811 model will never be fully realized.

The Section 811 Program – A Cost Effective and Essential Program

The Section 811 program is widely recognized in states and localities as a cost effective supportive housing alternative to expensive institutional settings. Many states have relied on the Section 811 program to reduce the number of people with severe disabilities forced to remain in public mental health facilities, Medicaid funded nursing home beds, or public facilities for people with mental retardation and other developmental disabilities. Recent cost studies document the program’s cost effectiveness:

• A newly published Pennsylvania study by the Center for Outcome Analysis found that people who moved into Section 811 supportive housing units required 61 percent less public financing to live – about $26,000 per year instead of $67,000 spent on a control group of similar individuals that did not move into supportive housing in the community;

• Beds in state psychiatric institutions cost $147,000 per year ($403 per day) in 2002 according to data published by the National Association of State Mental Health Program Directors. Supportive housing units linked with community supports such as those developed with Section 811 funding help to reduce hospital costs by providing people with severe mental illness with permanent homes in the community.

• Section 811 supportive housing units provide an extremely cost-effective alternative to expensive public institutions serving people with mental retardation and other developmental disabilities. Recent data published by the American Association on Mental Retardation documents that it costs 50-75 percent less to provide services in community based housing provided by Section 811 than in more institutional type settings funded by Medicaid. ($67,348-$134,619 vs. $35,215 for community based services through a Medicaid waiver.

The continued production of new Section 811-funded supportive housing is essential to address certain supportive housing needs that simply cannot be met in the private housing market using vouchers. Unfortunately, many owners of rental housing continue to discriminate against people with disabilities, particularly people with the most severe disabilities. Many people with severe disabilities have functional limitations which make it extremely difficult to use a voucher successfully. People with severe disabilities or multiple disabilities often need fully accessible housing with special features not found in the private market. In addition, as demonstrated in Priced Out in 2004, individuals with disabilities who rely on federal Supplemental Security Income benefits are unable to afford even a modest one-bedroom apartment (at the HUD Fair Market Rent) in any corner of the nation without a deep subsidy. The Administration’s Section 811 proposal only exacerbates this affordability crisis.

Supportive housing production is also needed to address the serious and growing problem of aging parents who are still providing housing and supportive services for their adult children (many who are now in their 30’s and 40’s). Data suggests that as many as 700,000 adults with serious disabilities still live at home with parents age 60 and over. Many need community based supportive housing because their parents can no longer care for them. These parents – who have saved the government billions of dollars – deserve to know that their adult child will have a decent, safe affordable and accessible place to live along with the community supports they want and need. The Section 811 supportive housing production program was specifically intended by Congress to address these urgent and compelling housing needs

U.S. Supreme Court’s Olmstead Decision, the New Freedom Initiative and Accessible Housing

The Section 811 Supportive Housing Program is also critical to address the significant need for supportive housing in states participating in the Administration’s New Freedom Initiative for People with Disabilities. Prompted by the U.S. Supreme Court’s Olmstead decision and the Administration’s Real Choice Systems Change Grant program, many states have identified a critical need to expand the development of supportive housing for people currently living in restrictive settings which may violate the Americans with Disabilities Act pursuant to the Olmstead decision. It is both tragic and ironic that the production of Section 811 supportive housing units is being proposed for elimination at a time when states have explicitly identified a need to expand this type of housing opportunity.

Recommendation

The CCD Housing Task Force urges Congress to restore the cuts proposed by the Bush Administration in the Section 811 Supportive Housing for Persons with Disabilities program in HUD’s FY 2007 budget proposal. We also urge the Congress to require that any funds not needed to renew existing Section 811 contracts be dedicated exclusively to the production component of the program so that new desperately needed supportive housing units can be created in 2007 and beyond.

For many years, the CCD Housing Task Force has urged HUD and the Office of Management and Budget to adopt our recommendations to improve the Section 811 production program by eliminating outdated bureaucratic requirements that prevent the leveraging of additional capital funding which could make the production of Section 811 units even more cost effective. Now that the Section 811 “mixed finance” rules are in place, tax credit financing can more easily be leveraged. The Section 811 production program must continue to receive sufficient funding so that these tax credit financing opportunities can be realized.

We have also sought improvements in the Section 811 tenant based Mainstream voucher program. It is urgent that HUD more closely monitor the use of these precious funds. We have gone on record that we cannot support any expansion of the tenant based Mainstream component of the program at this time. until: (1) HUD has documented that all Mainstream vouchers currently funded are being used by people with disabilities who can benefit from supportive housing; and (2) HUD has issued appropriate policy guidance to ensure that all future Section 811 funding is used solely for this purpose.

March 2006