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18th April
2011
written by naehblog

After a long and contentious process, Congress has finally passed a budget for fiscal year 2011. HUD’s homeless assistance grants, will receive a $40 million increase, which is a much smaller increase than we were hoping for, but not as bad as some of the worst-case scenarios that were possible. What does that mean for HEARTH Act implementation?

The short answer is that it means new funding for prevention and rapid re-housing programs, but little to implement changes to the Continuum of Care program.

While the overall increase was $40 million, Congress chose to increase funding for the Emergency Solutions Grant (ESG) by $65 million. The HEARTH Act changes the ESG program to include both the traditional shelter activities, which ESG has always funded, and also the prevention and rapid re-housing activities of HPRP. The $65 million increase will go almost entirely to prevention and rapid re-housing. For most jurisdictions receiving ESG, this will mean an increase of about 35 percent. While it will certainly not replace all of the funding provided by HPRP, it will help sustain some of these programs.

For the Continuum of Care program, things are more complicated. The HEARTH Act combines the Supportive Housing Program, Shelter Plus Care, and Moderate Rehabilitation/Single Room Occupancy programs into a single Continuum of Care program that still funds all of the eligible activities of the previous programs. The amount provided by Congress is enough to fund all renewals, but little will be left for new projects or to implement many of the HEARTH Act’s other changes, and HUD will have to make some hard decisions.

For the first time in many years, the focus will not be on new CoC projects. Instead it will be on setting up ESG to be a regular source of funding for prevention and rapid re-housing, and on deciding whether and how to reallocate CoC resources to higher priority activities.

For more information about the federal budget and it’s impact on homeless assistance programs, please see other blogposts or check out our website.

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13 Comments

  1. Do you know how the increased allocations to ESG will work?
    Does HUD plan to increase the funding threashold for municipalities in proportion to the total increased ESG allocations or leave them at their current threshold levels.

    Currently the allocation formula for the City of White Plains, in Westchester Co., New York falls under the Funding Threshold and therefore has NOT been eligible to receive funds through ESG. [Since HPRP used the ESG formulas the City was similarly cut out of HPRP Funding.]

    White Plains is not part of Westchester County’s list of eligible consortium communities so can not access ESG funds allocated to the County. There for creating an ESG/HHRP Funding Black Hole in White Plains NY.

    Trying to understand if any changes will occur with this increased ESG funding and/or whether advocacy with Federal Politicians is warranted. [Specifically Congresswomen Nita Lowey, who represents this area.]

  2. 18/04/2011

    Do you think that this change in focus, from new CoC projects to setting up ESG as a regular source of funding for HPRP, will continue in the foreseeable future? I’m wondering if bonus SHP projects are now a thing of the past. Also, do you think this will increase or decrease HUD’s direction in regards to having CoC’s establish themselves as unified funding agencies?

    Thanks for the update! It’s very helpful.

  3. [...] Norm Suchar, Director of the Center for Capacity Building at the National Alliance to End Homelessness (NAEH) provided his view of the impact on the NAEH blog. [...]

  4. 18/04/2011

    Would you please clarify the math. If the overall increase is $40 million and ESG gets a $65 million increase, then it would seem that something would have to have been cut by $25 million. Yet you say that the amount allocated to the CoC program is enough to fund all renewals.

  5. Norm Suchar
    19/04/2011

    Regarding ESG allocations: The allocations are set by law and based on a formula. The minimum threshold is also set by law as a percentage of total funding and will rise proportionately to any increases in funding. As a result, it is unlikely that there will be many new ESG grantees.

  6. Norm Suchar
    19/04/2011

    Kyle, I think we will see bonus projects in the future, but I don’t know how soon. All the concern about the budget deficit isn’t directed at homelessness programs specifically, but we clearly feel the impact. A lot of communities have been making progress on ending homelessness by creating new projects, but now progress will have to be made by making better use of renewal funding.

    I honestly don’t know if this year’s funding will have any effect on HUD’s plans for unified funding. It was always going to be a longer term project, and I think that’s still the case.

  7. Norm Suchar
    19/04/2011

    Kathryn, sorry about leaving the math on funding so unclear, here’s a better explanation.

    Last year (2010) homeless assistance received $1.865 billion. Of that, $160 million was for ESG, $1.41 billion was for renewals, and about $300 million was for new projects (the numbers don’t entirely add up, because there is a little funding spent on technical assistance and data projects, and there’s also money that wasn’t used in previous years recycled into the competition).

    For 2011, Congress passed a $40 million increase to $1.905 billion with $225 million for ESG (a $65 million increase). That leaves about $1.68 billion for everything else, and nearly all of that will be needed for renewals.

    Another way to look at this is that we have had consistent funding for new projects every year for several years, and the cut to funding going to the CoC side of the equation has nearly eliminated that resource, but it hasn’t yet cut into renewals.

  8. 20/04/2011

    Hopefully, I can make this question clear. Our agency was awarded an HPRP through Dutchess County, which qualified for an HPRP allocation (I beleive because HPRP followed the CDBG funding formula). We also were able to apply for HPRP through NYS & received a small grant though we were low priority since we operated in a County receiving a direct HPRP allocation. Under the current ESGP, our agency would only be able to apply to the State for funding since Dutchess is not large enough to receive its own ESGP allocation. Will all the new ESG funding go through local COC’s or will the State receive some portion of ESG funds to distribute? If the latter, than who would be eligible for State funding?

  9. [...] About Homelessness » Blog Archive » What does the federal budget mean for HEARTH Act Imp… [...]

  10. [...] Norm Suchar, Director of the Center for Capacity Building at the National Alliance to End Homelessness (NAEH) provided his view of the ESG increase NAEH blog. [...]

  11. Dar Forder
    22/04/2011

    It is very easy to fix the Federal budget. Here is the new “Green Budget”:
    Every person and company pays 15% income tax. There are no longer any deductions or itemizations. Money located anywhere in the world is taxed. Individuals can take 5% off of that if they vote in the Federal Election.
    No Federal subsidies are paid to any company that is profitable.
    No Federal agency can hire more than 800 people in Washington DC.
    The Pentagon gets $300B per year.
    Any other company that gets Federal military or social aid gets a bill for it and if they can’t pay it will turn into an interest bearing loan.
    Every resident of the US gets $300/mo. for medical help. It is no longer legal for a medical provider to operate if they do not provide at least three $300/mo. insurance programs. It is illegal for a medical provider to use exclusions. If you make over $300,000.00 per year you do not get this.
    Every agency must post its use-of-funds budget online for comments 6 months before they get to use their money. The Federal OMB office has police authority to prosecute abuse.
    Believe it or not, that would pretty much fix our budget problems!

  12. Dar Forder
    22/04/2011

    It is very easy to fix the Federal budget. Here is the new “Green Budget”:
    Every person and company pays 15% income tax. There are no longer any deductions or itemizations. Money located anywhere in the world is taxed. Individuals can take 5% off of that if they vote in the Federal Election.
    No Federal subsidies are paid to any company that is profitable.
    No Federal agency can hire more than 800 people in Washington DC.
    The Pentagon gets $300B per year.
    Any other country that gets Federal military or social aid gets a bill for it and if they can’t pay it will turn into an interest bearing loan.
    Every resident of the US gets $300/mo. for medical help. It is no longer legal for a medical provider to operate if they do not provide at least three $300/mo. insurance programs. It is illegal for a medical provider to use exclusions. If you make over $300,000.00 per year you do not get this.
    Every agency must post its use-of-funds budget online for comments 6 months before they get to use their money. The Federal OMB office has police authority to prosecute abuse.
    Believe it or not, that would pretty much fix our budget problems!

  13. [...] McKinney Vento programs may have received a small increase in the fiscal year (FY) 2011 budget, but this small increase is simply not enough – especially in [...]