SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 2203 words

COMMITTEE: HOUSE WAYS AND MEANS

SUBCOMMITTEE: HUMAN RESOURCE

HEADLINE: WELFARE OVERHAUL PROPOSALS

TESTIMONY-BY: SHARON MCDONALD,, POLICY ANALYST,

AFFILIATION: NATIONAL ALLIANCE TO END HOMELESS

BODY:
Statement of

Sharon McDonald, Policy Analyst, National Alliance to End Homeless

Testimony Before the Subcommittee on Human Resources of the House

Committee on Ways and Means

Hearing on Welfare Reform Reauthorization Proposals

April 11, 2002

Mr. Chairman and Members of the Subcommittee:

Thank you for inviting me to testify today. My name is Sharon McDonald and I am a policy analyst for the National Alliance to End Homelessness. The Alliance is a nonpartisan, nonprofit organization solely committed to eradicating homelessness in the United States.

We applaud the Administration and those members of Congress who have embraced a goal of ending chronic homelessness. We believe this is an important step forward in solving homelessness in our nation. It is estimated that 900,000 to 1.3 million children in the United States experience homelessness each year.[i] TANF reauthorization can play a critical role in solving this problem. I am delighted to be here today to share with you our proposals on how TANF reauthorization can ensure progress is made to end homelessness.

First, to make a difference in ending homelessness in our nation we must stop the flow of people into homelessness.

To "close the front door" into homelessness, the Alliance advocates that programs that serve vulnerable people, including extremely poor families, take active steps to ensure their clients do not become homeless. This strategy requires changing the incentive structure of these programs. Under current policy, programs at the state and local level are in effect rewarded for allowing people to fall out of their systems and into the homeless assistance system. This is especially the case for those who are most difficult to serve.

For TANF reauthorization, this means ensuring states are serving families that are the hardest to serve, including those with disabilities-and that vulnerable families are not allowed to fall through the cracks of sanctions, time limits and case closures.

Second, by focusing on rehousing families as rapidly as possible, we can substantially reduce the amount of time children spend in homelessness.

To "open the back door" out of homelessness, the Alliance supports an outcome-focused emphasis on services that move people back into housing as rapidly as possible. Most people who become homeless remain so for only a brief period of time, and they typically do not become homeless again. They are very poor people who are experiencing a housing crisis. The Alliance recommends the use of a "Housing First" strategy to address the homelessness of those individuals and families. This is a cost- effective approach that helps families exit homelessness as rapidly as possible by providing housing search assistance and follow-up case management to ensure families stabilize in their homes and are linked with needed community-based services and supports.

Some states have mobilized TANF resources to prevent and end the homelessness of families, we are encouraged by this and believe the Subcommittee can do more to encourage further innovation and planning.

Recommendation 1: Encourage the Use of TANF Resources to Address Family Homelessness

Nationally, it is estimated that 38% of the 2.3 million to 3.5 million people who are homeless over the course of a year are children.[ii] While there have been increases in the numbers of homeless people who are working full-time, it is reasonable to conclude that the vast majority of homeless families with children remain eligible for TANF cash assistance and services.

Research indicates that in contrast to children who are housed, homeless children are more likely to be in poor health and experience developmental delays. Not surprisingly, homeless children are more likely to experience mental health problems such as anxiety and depression and to exhibit behavioral problems than other children.[iii] Children who are homeless have lower academic achievement, exacerbated by frequent moves and psychological distress.

Homelessness puts enormous strains on families. Some emergency shelters require the break-up of families-accommodating older male youth in a separate facility, requiring married couples to separate. Parents seeking stability for their children may house them temporarily with relatives. However, rather than achieving stability, many children will end up being merely shifted from home to home.

Sustaining families in homelessness is a costly endeavor that absorbs an increasing amount of federal and state dollars- typically well beyond what would be incurred by preventing homelessness or providing financial assistance to help rehouse a family. Homelessness can be devastating to children, disruptive to all family members and is simply more expensive than stabilizing families in housing.

Currently, state TANF resources can be utilized to prevent and end homelessness. To facilitate greater innovation and ensure progress in meeting this important goal, the Alliance believes homelessness should be a specific focus within the TANF block grant program. States should receive incentives and guidance from the U.S. Department of Health and Human Services to address family homelessness. Our specific recommendations to the Subcommittee are as follows:

To properly identify families that require safety-net services, states should identify TANF-eligible families that are homeless.

In order to minimize homelessness, state TANF plans should indicate how the state will coordinate with homeless assistance providers (including housing providers).

In order to end homelessness for eligible families with children, state TANF plans should indicate how services other than cash benefits (including housing re-location services, short-term rent assistance, emergency assistance, and case management) will be used to end and prevent homelessness.

To reduce homelessness and promote housing stability, HHS should award high performance bonuses to states that improve housing outcomes, as measured by:

reduced proportion of TANF eligible families entering the homeless system,

reduced length of time families spend in homelessness, or

reduced number of families with worst case housing needs.

To help states achieve this goal, the Department of Health and Human Services should provide technical assistance and guidance to the states to improve state and local TANF agency capacity to end homelessness among very vulnerable families.

To ensure success of welfare to work initiatives, states should collect data on housing status and housing needs of TANF recipients and leavers.

Recommendation 2: Improve State Capacity to Serve Families with Special Needs

A recent GAO study found that 44% of TANF beneficiaries report having a disability that impedes their work participation.[iv] Families that include people with disabilities are likely to differ in their capacity to participate in work activities even with the provision of appropriate services and supports.

To adequately meet the needs of a more disadvantaged population that remains on welfare caseloads, states must have flexibility to count activities that serve and support those families as meeting work participation requirements. With the ability to modify program requirements to meet the diverse needs of the remaining caseloads rather than imposing a one-size-fits all approach, the states will have a greater likelihood of retaining and serving well those families that face the greatest impediments to success. By allowing states to receive credit for those who are participating in work activities to the extent of their abilities, they will have an incentive to move those who cannot fully participate into self-sufficiency activities.

The Alliance is concerned that families with special needs are exiting state TANF programs through sanctions. Studies have demonstrated that families that include a person with a disability are disproportionately represented among those who have been sanctioned off of cash assistance and have not moved into employment.[v] Activities to prevent the loss of some of these families include improving local agencies capacity to identify people with disabilities and developing procedures that reduce and remedy erroneous sanctions.

Finally, we must reevaluate the appropriateness of the 20% exemption to the federal five-year time limit. Due to the decline in caseloads, the 20% exemption will cover far fewer families than had ever been anticipated. Allowing states to index the exemption rate to an earlier year will allow those states that have substantially reduced their caseload by moving families from welfare to work to retain and serve those with greater challenges.

To adequately meet the needs of a more disadvantaged population, the Alliance advocates that states be provided increased flexibility to develop a programmatic response coupled with greater accountability for outcomes. Specifically, we recommend the Subcommittee:

Ensure that all families with disabilities are properly identified so that states can utilize their most flexible resources to assist them by providing access to professional assessments.

Allow states to identify and assist those families that have special needs and should be exempted from time limits by indexing the 20% exemption to the 1997 caseload.

Encourage work among families with disabilities by expanding the definition of work for those who have a disability.

Ensure that families with disabilities are not inadvertently dropped from the caseload by establishing procedures that reduce erroneous sanctions and increase outreach and assistance both before and after sanctions are imposed.

Recommendation 3: Respond to the Intersection of Housing & Welfare

The flexibility that was conveyed to the states under the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) stimulated many state-level innovations that resulted in families transitioning off of welfare and into the workforce. One of the emerging areas of innovation in service delivery is in coupling housing and welfare assistance to help families transition to greater economic independence.

To date, there has been considerable attention to the supports families require to successfully transition from welfare to work. Assuring stable housing has often been overlooked, though it is one of the most critical concerns families face. There is evidence that suggests those with access to affordable housing are more likely to be successful in transitioning to economic independence.[vi] For example, one study found that families with a housing subsidy were twice as likely to be employed and had higher earnings than those without a subsidy. Conversely, there is evidence that a housing affordability crisis can threaten ties to work. Leaver studies indicate that families who have exited TANF assistance through the employment of a family head are among those who become homeless.[vii] Attending to housing stability must simply be part of a plan to promote self-sufficiency.

A fundamental cause of homelessness among families is a shortage of housing affordable to families with extremely low incomes. HUD has reported that 3.6 million children live in families with "worst-case housing needs."[viii] Their parents, with incomes below 50% of the local area median income, pay more than 50% of their income for housing or live in seriously substandard housing. Extremely low-income families--those most likely to be eligible for or using TANF funded services--are particularly vulnerable to having worst case housing needs. Sixty-eight percent of those families without access to a housing subsidy pay more than half their income in rent or live in seriously substandard housing.[ix]

To allow states to effectively address the intersection of housing and welfare, the Alliance recommends providing enhanced flexibility to further innovation and maximize the use of available resources. Specifically, we recommend that the Subcommittee:

Allow states to utilize housing assistance more strategically and effectively by removing the requirement that housing subsidies be treated the same as cash assistance.

Ensure states have the maximum resources at their disposal for families with special needs by building collaborations between Public Housing Agencies and state and local welfare agencies.

Assess how to best assist families with special needs by undertaking and evaluating a housing with services demonstration.

Conclusion

I would like to convey my appreciation to the Chairman and the members of the Subcommittee for allowing me to testify today. We believe the reauthorization of TANF provides a critical opportunity to make progress in addressing homelessness among families by promoting innovation in ending and preventing homelessness, enhancing the capacity of states to respond to families with special needs and attending to the housing needs of TANF recipients. The National Alliance to End Homelessness welcomes the opportunity to be of assistance to the Subcommittee as it moves forward in the reauthorization of the TANF block grant program.



LOAD-DATE: May 1, 2002