Federal Homelessness Program Runs Out Of Money As Need Rises

WASHINGTON -- Homelessness has significantly risen in the U.S. as a result of surging foreclosures and joblessness caused by the recession, but a new federal program designed to nudge people back from the brink of life without shelter is on the brink itself.

A new report, released by the National Law Center on Homelessness and Poverty on Jan. 26, found that a homelessness prevention and re-housing program funded by the 2009 stimulus bill needs more money to meet rising need. Instead, the program will likely be left out of the new federal budget.

In response to the 20 percent increase in foreclosures that occurred from 2008 to 2009, the Department of Housing and Urban Development used $1.5 billion in American Recovery and Reinvestment Act funds to create the Homelessness Prevention and Rapid Re-Housing Program (HPRP), which helps keep people in their apartments by subsidizing their rent.

The program is quickly running out of money, however, and having a number of administrative difficulties trying to keep up with demand. In Detroit, for instance, about 50,000 people filled out applications for only 3,500 grants on the first day the money was available, and a number of major U.S. cities have already used up more than 80 percent of their allotted funds, which were supposed to last until 2012.

When the NLCHP report surveyed local service providers and legal assistance organizations to determine the overall effectiveness of the program, about 61 percent said that "program bureaucracy" resulted in over half of people applying for HPRP not receiving assistance. About half of the respondents said there was no clear appeals process to give people a second chance when their initial application was denied, and in many communities, eligible families were not even aware of the program because of a lack of outreach efforts.

Sheila Crowley, president and CEO of the National Low Income Housing Coalition, told HuffPost she is not surprised the program is having difficulties meeting demand because it was only supposed to be an emergency band-aid for victims of the recession.

"The program was basically created fairly quickly, and the idea was to put some cash into the hands of the service providers in communities who are there when people knock on the door and say, 'I'm about to be evicted,'" she said. "It's a program that was seen as a one-shot deal in response to what, in 2009, people hoped was a short-term crisis. Here we are two years later, and unemployment is still high, and foreclosures continue, so it's sort of the story of what happens when you do programs like that."

According to a December report by the U.S. Conference of Mayors, 52 percent of U.S. cities surveyed reported an increase in people experiencing homelessness in 2010, and emergency shelters in 64 percent of those cities said they've had to turn away families with children due to a lack of available beds.

The NLCHP is recommending that HUD allocate $1 billion per year in additional funding to the re-housing program to respond to the ongoing needs of communities that are quickly running out of HPRP money. But Maria Foscarinis, executive director of the Law Center, said Congress has asked all government agencies to deliver a reduced budget this year that will likely not keep the HPRP program afloat.

If the program goes by the wayside, it will join the ranks of a number of effective stimulus programs that Congress has deemed unworthy of deficit spending, including a $2.5 billion work subsidy program that one Washington think tank estimated had created nearly 250,000 jobs.

"The bottom line is this is an important program that really does prevent people from being homeless and get people back into housing, but the need greatly outstrips the resources that were allocated," she told HuffPost. "We're seeing tremendous increases in homelessness as a result of the foreclosure crisis and economic downturn, and we're afraid that programs that help prevent homelessness will be cut at a time when their funding needs to be increased."

Click HERE to download a PDF of NCLHP's report .