Subcommittee on Housing and Transportation

Oversight Hearing on Consolidation of HUD's Homeless Assistance Programs

9:30 a.m., Tuesday, May 23, 2000 - Dirksen 538

Prepared Testimony of Mr. John Parvensky
Executive Director
Colorado Coalition for the Homeless

On behalf of the Colorado Coalition for the Homeless, I appreciate the opportunity to address the Subcommittee on Housing and Transportation on the important issue of McKinney Homeless Programs.

The Colorado Coalition for the Homeless is a non-profit organization whose mission is to work towards the creation of lasting solutions for homeless families and individuals throughout Colorado. CCH is a unique organization in that in addition to working with organizations throughout the state to address homeless at the local level, CCH had developed and operates model programs to address homelessness. CCH provides a range of housing, emergency assistance, health care, mental health counseling, and supportive services to more than 7,000 homeless families and individuals throughout Colorado each year. We also provide technical assistance to more than 15 communities throughout Colorado on developing effectiveness homeless assistance programs.

CCH received its first McKinney grant in 1988 to establish a transitional housing program for homeless women with chronic mental illness. Since then, we have been awarded xx McKinney grants, including renewals. We have also been integrally involved in the development of continuum of care systems in Metro Denver and in 10 communities in Colorado.

I have served as the President of CCH for the past 15 years, and have been involved in each of these activities. I also serve on the Board of Directors of the National Coalition for the Homeless and the National Health Care for the Homeless Council, where I also chair their Policy Committee. Through this involvement, I have had the opportunity to observe and discuss the impact of the continuum of care process and McKinney programs in communities across the country.

Based on my experience, I strongly believe that the current Continuum of Care process administered by HUD is the best mechanism for distributing federal homeless assistance funds to local communities and states. There is a broad consensus across the nation to let the current Continuum of Care process continue to move us in the right direction. While the process is not perfect, the continuum process is working effectively to bring consumers, providers, advocates, local governments, and mainstream service agencies together in an unprecedented way, breaking down barriers to better outcomes related to turf issues, politicization of the process, lack of accountability, communication or collaboration.

We appreciate the attention you are bringing to the HUD McKinney programs which play a critical role in local efforts to end homelessness for thousands and thousands of homeless persons. However, we are concerned about the proposed initiative to consolidate current McKinney programs into a block grant for state and local governments.

We oppose the move to block grants for seven reasons. First, block grants will create another level of bureaucracy between these funds and the homeless families and individuals who need help. This will inevitably divert needed funding to administrative uses rather than getting it to local agencies that serve homeless persons daily.

Second, we believe the current system working. It has taken communities years to develop effective local planning and continuum of care systems. Changing the process will take time Ė time families and children on the street do not have Ė to implement new vehicles for distributing funds and developing programs. As the old adage goes, "if it ainít broke, donít fix it."

Third, we fear that a block grant will politicize homeless funding, as local governments take control of funds and fund their pet initiatives. We believe funding decisions should be based on who can best produce housing and deliver services to end homelessness, rather than who has the best access to city hall. Indeed, not all communities prioritize homeless programs. NIMBY issues, and a desire to minimize or deny that homelessness is a problem.

Fourth, block grants donít always work the way they are intended. While the goals of block grants are worthy, experience shows that the best laid plans often go awry. For example, Congress established the PATH program in 1990 as a block grant to the states to provide outreach and treatment for homeless persons with serious mental illness. In Colorado, during the first three years of the program, very few homeless persons were served, as funds were diverted for other programs prioritized by the state. We all have seen how CDBG funds in some communities are used for projects which do not serve the needs of the lowest income citizens. It is very difficult to oversee block grants and ensure that they are used for their intended purpose.

The current Continuum of Care system provides the best of both worlds. It meets the goals of a block grant, in that local communities set the priorities and select projects for funding. Yet it also provides incentives to increase collaboration and involve all parts of the community in the planning and service delivery system.

Fifth, a block grant will make it harder to develop the long term permanent housing which most homeless persons need. When faced with many more agencies and projects requesting funding, the tendency for local government is to divide up the limited pie into smaller pieces. It makes it more difficult to secure the long-term commitments needed to finance and build permanent housing. For example, CCH developed a 100 unit Single Room Occupancy housing project in 1996 with a 10 year, $4 million Section 8 subsidy. It is extremely unlikely that the city of Denver would have made a commitment of ten yearís funding of this magnitude necessary to secure the financing and tax credits to complete this project.

Sixth, block grants will break-up effective multi-jurisdiction continuums of care. In Colorado, we have been able to establish a 6 county collaborative in Metro Denver, a collaboration between Larimer and Weld Counties, and a 5 county collaborative in Southwest Colorado. A block grant using CDBG allocation formula will provide funding to 12 different jurisdictions participating in the Metro Denver Homeless Initiative. Rather than a coordinated 6 county continuum of care system, we would likely have a disjointed, and competitive process with 12 different continuums.

Homelessness knows no political boundary. It is critical to develop programs that cross political subdivisions and serve people where they are, rather than on where they used to live.

Finally, Many jurisdictions will receive less money than they received in prior years. In Metro Denver, for example, in 1999 we received $6.6 MILLION. Under the proposed system, Denver will receive $5.9 million in 1st year and only $4.9 in 5th year.

We believe that the Congress could make a tremendous impact on homelessness by increasing the funding for HUD McKinney programs to $1.6 billion per year. This will help give communities the resources they need to develop long term solutions to end homelessness.

In addition, it is imperative that the issue of renewal funding for expiring McKinney grants be addressed. In many communities, renewals of expiring shelter plus care and permanent housing grants exceed the amount of funding available. In Metro Denver, we project that we will have more than $12 million in renewals, more than twice the amount we have received in each of the past two years. We have lost two shelter plus care projects in two supportive housing projects in the past two years. Moreover, the need to continue targeting limited McKinney funds to renew permanent housing projects means that we cannot develop the new projects needed to move newly homeless families and individuals from the streets into appropriate permanent housing.

We urge you to support the Presidentís request to have expiring Shelter Plus Care and SHP Permanent Housing grants be paid for out of the Housing Certificate Fund.

Thank you very much.

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