The Overselling of Rapid Re-Housing

The Overselling of Rapid Re-housing
by Sharon Lee
Executive Director
Low Income Housing Institute, Seattle, WA.

Published in Shelterforce November 28, 2017

Rapid re-housing, originally a strategy to prevent homelessness for households experiencing a temporary financial crisis, is now being promoted widely as a broad solution. But in a high-cost area, it’s possible it might do more harm than good.

The Dibaba family of three are refugees from Ethiopia. After staying in a refugee camp, they arrived in Seattle and ended up homeless. Both adult members of the household are disabled. The mother suffers from depressive pseudo dementia. While it has been a struggle, she tries to remain positive. Their 8-year-old son thrives in school and basketball. Living in transitional housing for homeless families at Columbia Court, the family pays 30 percent of their income, $156 per month, for a two-bedroom apartment operated by the Low Income Housing Institute (LIHI).

They receive supportive services including case management, ESL classes, after-school tutoring, mental health, and healthcare. After completing a one-year lease at Columbia Court the family received assistance from the on-site case manager to move into subsidized low-income housing. Every year, thousands of immigrant/refugees, survivors of domestic violence and people of color successfully exit homelessness to stable housing as a result of transitional housing programs like Columbia Court.
In April 2017, however, federal funding for Columbia Court terminated because of HUD’s change of policy that prioritizes “rapid re-housing,” which provides three to nine months of short-term rental assistance in private market housing, over longer-term transitional housing. Six other transitional housing programs that received HUD McKinney-Vento funds to house homeless families, veterans, young adults, and people living with mental illness were also dropped from the local Continuum of Care and cut from HUD funding.

Why is the Seattle Human Services Department on a path to dismantle a robust and effective stock of transitional housing in favor rapid re-housing, a relatively new program that puts vulnerable homeless families into private market housing with only short-term rent assistance?

The Problem

Seattle is in the unenviable position of having the third largest homeless population in the nation, right behind New York City and Los Angeles. The 2017 Point-In-Time Count, taken on a cold wet night in January, documented 8,522 homeless people in the city of Seattle, 45 percent of whom were living unsheltered on the streets. King County experienced a 19 percent increase in homelessness from the previous year. Seattle also has the fastest growing rents and housing costs in the country.  The average rent for a one-bedroom apartment is $2,069; for a two-bedroom, $2,803.

City officials are desperate to reduce the number of homeless people. The mayor and the Human Services Department turned to two national consultants for recommendations on what to do.  Focus Strategies and Barbara Poppe and Associates were hired and in 2016 issued their reports on Seattle’s Homeless Investment Policy.

The Focus Strategies report gives the city false hope that by largely getting rid of transitional housing and reinvesting those funds into rapid re-housing, that all homeless people could be sheltered. The consultants talk about “right-sizing” homeless programs, instead of addressing the need to add additional units of affordable housing or more resources. Here are some excerpts from the Focus Strategies report:

• “Expanded affordable housing is not a precondition for reducing homelessness. The community has to commit to making an impact on the problem with the existing housing inventory…”
• “All unsheltered families and single adults could be sheltered by the end of 2017 and significant system resources could be shifted to rapid re-housing.”
• “This includes bringing rapid re-housing to scale and cutting back investments in lower performing transitional housing, permanent supportive housing, and other permanent housing.”
• “We have identified $11 million that can be shifted from low and medium performing transitional housing to create new rapid re-housing….”

Unfortunately, while rapid re-housing might be considered a best practice for some communities, it is not working for Seattle and other high-cost cities. Our market rents are too far out of reach for low-wage earners, people without employment history, the chronically homeless, and those living with a disability. Rapid re-housing may be the ideal program for a small segment of the homeless population, but it will not help most of them.

Six executive directors of agencies that primarily serve people of color wrote to the Seattle City Council about this problem. “Many of us operate rapid re-housing as well as transitional housing programs,” they wrote, “so we know firsthand who can succeed in which program. Rapid re-housing does not work for the majority of highly vulnerable and chronically homeless populations, especially in a high-cost market like Seattle.  Three to six months of rent support to live in market-rate housing is inadequate for a disabled head of household, a person with mental illness or a family on refugee assistance or TANF.  Many cannot increase their income quickly enough and address language/cultural barriers, mental health, substance abuse and domestic violence.  Local data shows about half the participants in rapid re-housing fail in the program. Others become cost burdened, have to double up or move out of Seattle…”

Transitional Housing Works in Seattle 

Local data collected from programs in Seattle, published in the Focus Strategies Seattle/King County Homeless System Performance Assessment Report, show that in Seattle, transitional housing is a superior model, with a 73 percent success rate in exiting homeless families to permanent housing, whereas rapid rehousing is only 52 percent effective. Despite this, the consultants conclude that since rapid rehousing is cheaper at $11,507 per household, compared with $20,000 for an individual or $32,627 for a family in transitional housing, it should be the preferred option.

In actuality, transitional housing at Columbia Court has cost the city $2,780 per family for one year and $5,560 if their stay is extended to two years. A family at Martin Court, another LIHI project, is costing the city $2,439 for one year and $4,878 for two years.  These numbers are nowhere close to the $32,627 for transitional housing cited by the consultant. Each program and its actual cost to the city should be evaluated individually; it is reckless to make drastic across the board cuts as recommended by the consultants.

Additionally, since close to half of homeless families fail out of rapid re-housing in Seattle, the real cost to the city should include the cost of re-housing those families.  Going through rapid rehousing and returning to homelessness also brings additional short- and long-term costs in terms human suffering and more limited options going forward as families get evicted, have judgments entered on their records with possible garnishments, and have their credit ruined.

They can end up worse off than before entering rapid re-housing.

Housing First

If rapid re-housing were operated along a Housing First model (as recommended by HUD) to meet the needs of all homeless families, it could cost considerably more than $11,507 per household.  For example, a homeless family on TANF (receiving $521 per month in Washington state) can only afford to pay $156 per month in rent. If they are placed in a $2,000 two-bedroom apartment, the program would not only have to pay their first and last month rent, security deposit and moving expenses, but also cover the cost of staffing for housing navigation, employment search, and connection to services.  If the budget is $11,507, this means there is not enough money to cover rent after four or five months. A family is then left to sink or swim.  If the household not able to pay the $2,000 rent on their own in that short time, they will have to break the lease and face eviction.

Even a parent who gets a full-time job at Seattle’s minimum wage of $15 per hour would have to pay 77 percent of their gross pay on that $2,000 two-bedroom apartment. The cost of taxes and utilities would quickly consume 100 percent of their income, leaving nothing for food, clothing, transportation, healthcare, and other living expenses.  This does not count as no longer being at risk of homelessness.
The National Alliance to End Homelessness states: “Rapid re-housing assistance should end. . . when the individual or family is no longer facing the threat of homelessness.”  If Seattle’s rapid re-housing program followed this standard and met the needs of families or individuals who could not earn sufficient income to pay for market-rate housing within a few months, the rental assistance would have to be extended for a year, two years, or even more. This would quickly bring the cost of rapid re-housing to $40,000 to $50,000 per household. The cost of subsidizing the monthly rent on a $2,000/month market-rate apartment is far more than the cost of a $700/month rent-restricted transitional housing apartment sponsored by a nonprofit agency.

Local Housing Markets Matter

Barbara Poppe and Associates point to rapid re-housing programs that work in Houston, New Orleans, Salt Lake City, and other cities. Market rents in those communities are less than half of Seattle’s. Unlike Seattle’s very tight housing market, vacancy rates in those cities are much higher. In Houston (before the flood) one could easily find a two-bedroom unit for $750. The average two-bedroom in New Orleans is $1,137.  The average rent for a two-bedroom unit in Salt Lake City is $1,092. A HUD study on families in rapid re-housing who return to homelessness states the obvious: “Families living in a community with relatively high FMRs return to homelessness, on average, 2.24 months earlier than otherwise similar families who live in communities with lower rent levels.”

The city’s consultants also failed to look at rapid re-housing through a racial justice and equity lens. The overwhelming majority, over 80 percent, of Seattle’s homeless families are people of color, primarily African-American and African immigrant households.  About 50 percent of the adults or heads of households are disabled. Many rely on TANF, refugee assistance, and are marginally employed or unemployed.  Many are survivors of domestic violence.

Rapid re-housing as a primary strategy for ending family homelessness would result in the displacement of more African-Americans and persons of color from Seattle. The Black population is already down to 7 percent in Seattle. Focus Strategies noted that homeless families in rapid re-housing in San Francisco have to move 60 miles or more away from the city to find rental housing. Where would our families in Seattle have to move to in order to find cheap rent? Are they likely to relocate to places of opportunity or too far-flung counties away from their communities, jobs, and services? Little research has been done locally to look at racial disparities in outcomes that affect persons of color in rapid re-housing.

Organizing to Save Transitional Housing

Columbia Court and the other transitional housing programs received a reprieve through 2017 due to advocacy from housing advocates, the community, and the Seattle Human Services Coalition, which is composed of nonprofit housing and human services organizations During the 2017 budget process, the Seattle City Council also raised issues with this policy and funding shift away from transitional housing. Under the leadership of council member Lisa Herbold, the council voted unanimously to “back-fill” the loss of HUD funding by allocating resources from the city’s general fund. Columbia Court and the other transitional housing programs were saved—at least for 2017.

But things are about to change. This fall, the Seattle Human Services Department is competitively bidding out $30 million in funding for homeless programs in 2018 through a request for proposal (RFP). These funds include a mix of federal, state and local resources. The Department proposes to reduce overall funding for transitional housing from $4.6 million in 2016 to $2 million in 2018, a 56 percent reduction. In comparison, funding for rapid re-housing is proposed to expand from $3.8 million to $8 million, a 110 percent increase.

Currently, transitional housing programs house 2,667 individuals, or 43 percent of King County’s sheltered homeless population. This is a significant housing resource that keeps people safely housed and off the streets.

Don’t Be a Blind Follower 

Homeless advocates and policymakers should be wary of consultants who promise pie-in-the-sky solutions, that they can “right size” homeless programs (which often translates into “cuts”), and that they can end homelessness with no additional resources. Instead of focusing on expanding the low-income housing stock, which costs real money, they look at the existing landscape as a zero-sum game, thereby giving elected officials an excuse to not invest more in ending homelessness.
The National Alliance to End Homelessness, HUD, and other supporters have a fervent, almost cult-like devotion to rapid re-housing as a solution for all, without taking into consideration different population groups, the unique needs of each family and individual, and the local housing market. Blindly following what is considered a national “best practice” will not work for all communities.  Local market conditions and housing availability must be seriously considered when choosing how to allocate resources between transitional housing and rapid re-housing.