NAMI - The National Alliance on Mental Illness

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STATEMENT OF SUZANNE VOGEL-SCIBILIA OF BEAVER COUNTY PENNSYLVANIA PRESIDENT
NATIONAL ALLIANCE ON MENTAL ILLNESS

TO THE TRANSPORTATION-TREASURY -HUD SUBCOMMITTEE
COMMITTEE ON APPROPRIATIONS
U.S. HOUSE OF REPRESENTATIVES

REGARDING FY 2007 FUNDING FOR THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD)

APRIL 14, 2006

Chairman Knollenberg and members of the Subcommittee, of the Subcommittee, I am Suzanne Vogel-Scibilia, President of the National Alliance for the Mentally Ill (NAMI).  I am pleased today to offer NAMI's views on the Subcommittee's upcoming FY 2007 bill.  NAMI is the nation’s largest grassroots advocacy organization, 220,000 members representing persons with serious brain disorders and their families.  Through our 1,200 chapters and affiliates in all 50 states, we support education, outreach, advocacy and research on behalf of persons with serious brain disorders such as schizophrenia, manic depressive illness, major depression, severe anxiety disorders and major mental illnesses affecting children.

NAMI is primarily regarded as a national advocacy organization representing children and adults living with serious mental illnesses and their families.  Housing is a critical priority for NAMI given the enormous struggle that people living with severe mental illness face in accessing and keeping a decent, safe and affordable place to live.  Many adults living with illnesses such as schizophrenia and bipolar disorder also need flexible supports and services linked to their housing in order to maintain stable hosing over the long-term.  People with severe mental illness and co-occurring substance abuse disorders are also heavily represented in the chronic homeless population – as much as 80% of the chronic population in many cities.

Why is housing such a difficult challenge for people with serious mental illness?

1. Poverty – The most recent “Priced Out” study published by the Technical Assistance Collaborative (TAC) and the Consortium for Citizens With Disabilities (CCD) Housing Task Force covers data from 2004 and reveals a number of important findings documenting how people with severe disabilities living on Supplemental Security Income (SSI) are completely priced out of the rental market.  Among these key findings are: 
   • As a national average, a person receiving SSI needed to pay 109.6% of their entire monthly income in order to rent a modest one-bedroom unit (from 2002 to 2004, the housing affordability gap for people with disabilities continued to grow alarmingly while federal housing officials repeatedly proposed re-directing essential rent subsidy funds to higher-income households),
   • During the six years since Priced Out in 1998 was published the amount of monthly SSI income needed to rent a modest one-bedroom unit has risen an astonishing 59% – from 69% of SSI in 1998, to 109.6% of SSI in 2004.
   • People with disabilities receiving SSI are also priced out of smaller studio/efficiency rental units (in 2004, the national average cost of these units rose to 96.1% of monthly SSI, an increase of 8 percent from 2002).
   • People with disabilities who rely on SSI payments continue to be among the lowest-income – (in 2004, the national average income of a person with a disability receiving SSI fell to a new low of 18.4% of median income – down from 18.8% in 2002).
2. Difficulty in accessing rent subsidies – As you know, in many communities across the country, waiting lists for Section 8 rental assistance are very long, and often closed.  While the shortage of Section 8 vouchers impacts all low-income households, it is especially difficult for people with disabilities.  For persons with more severe disabilities who have recently, or are waiting to, transition to the community from an institutional setting, they are more likely to be at the bottom, or even unable to get on to a housing agency waiting list.  As the Priced Out data above makes clear, without access to ongoing rent subsidies, stable housing for people living on SSI is simply not possible. 

Need for housing related supports – Many people with severe disabilities, including serious mental illness or cognitive impairments, need flexible supportive services in order to live independently, comply with a lease and keep their housing over the long term.  Unfortunately, cuts in mental health and mental retardation services and efforts to reform Medicaid at the state level, have made it difficult for supportive housing providers to finance this critical link.  NAMI is pleased to support legislation (HR 1471) sponsored by your colleague Rep. Deborah Pryce of Ohio to authorize funding for services in permanent supportive housing. 

These difficult trends at the federal, state and local level make HUD’s existing programs that serve people with disabilities critically important.  NAMI would urge the Subcommittee to make funding allocations for FY 2007 with the needs of the most vulnerable in mind.  As member of the CCD Housing Task Force, NAMI feels strongly that all people with disabilities – including serious mental illness – need access to the full array of HUD’s affordable housing programs:  Section 8, HOME, CDBG, public housing, HOPWA, McKinney-Vento, etc.  NAMI, and our CCD colleagues, feel strongly that no single HUD program can by itself address the growing crisis in access to affordable, accessible housing faced by non-elderly people with disabilities across the nation.

Section 811 Project-Based

As with the proposed budget for FY 2006, the President's budget seeks a deep cut for the Section 811 program, the only program at the Department of Housing Urban Development (HUD) that still produces housing for people with severe disabilities.  The President's budget would cut Section 811 in half, dropping funding down to $119 million from its current FY 2006 level of $237 million.  Nearly all of this proposed reduction would come from the portion of the 811 program that produces new units of permanent supportive housing, the capital advance/project-based side of the program, i.e. capital grants and project-based rental assistance directed to non-profit disability groups that develop supportive housing (specifically, housing targeted to individuals with severe disabilities who need services directly linked to their housing).  This "production" side of the program that funds new housing and is funded in the current fiscal year at $155.7 million and would be reduced in the President's budget to just under $16 million, a cut of close to $140 million.    

Instead, the President's FY 2007 budget proposes to direct most of the $119 million in the Section 811 program to the renewal of existing rent subsidies (both tenant-based and project-based), with a small amount left to fund new capital advance/project-based grants and new tenant-based subsidies.  The $119 million would be allocated as follows:

• $77.745 million would be directed to tenant-based renewals – to renew the existing 811 tenant-based vouchers now in use,

• $12.375 million for project-based renewals (also known as PRACs) – renewing rent subsidies that are tied to 811 properties,
• $14.85 million for new 811 tenant-based rental assistance, and
• $15.84 million for new capital advance/project-based grants to non-profit disability groups.

This is the second consecutive year that the President's budget proposed deep cuts to the capital advance/project-based side of the 811 program.  This Subcommittee firmly and forcefully rejected this proposal in 2005 and fully restored the proposed cut to 811 for FY 2006.  Mr. Chairman, NAMI thanks you for taking this important step.  This FY 2007 proposal once again marks a continued effort to back away from a 30-year commitment from HUD to support the production of new housing targeted to non-elderly people with severe disabilities (including severe mental illnesses).  Reliance solely on tenant-based assistance (portable rent subsidies that rely on voucher recipients being able to find rental housing on their own) also represents a major change in the targeting of 811 away from people with more severe impairments who need housing related supports.  

In considering the Administration’s request for FY 2007, NAMI would remind the Subcommittee that:

Deep cuts to Section 811 have been repeatedly rejected in Congress by wide bipartisan margins

This is 2^nd year in a row that the Administration is attempting a deep cut to the HUD Section 811 program.  For FY 2006, the proposal was to completely eliminate funding for new capital advance/project-based units.  Congress rejected this idea in 2005 – both the House and Senate Appropriations Committees restored funding.  This year, the proposal is to impose another severe reduction to the capital advance/project-based side of the program – nearly a 90% reduction, from $155.7 million, down to $15.84 million.

Deep reductions to 811 is at odds with the President’s New Freedom Initiative for people with disabilities

The President’s New Freedom Initiative spans numerous federal agencies including HHS, Education, Labor and HUD.  It is designed to promote integration of people with disabilities into the mainstream of community life through access to health care, education, employment and housing.  It is based on the principle of life in the community as an alternative to institutional settings such as nursing homes and psychiatric hospitals.  How are states and communities supposed to continue progress toward eliminating costly institutional care—that everyone agrees is outdated – if 811 is eliminated as a tool for developing permanent supportive housing?  Deep reductions to the 811 program run completely against the important national goals contained in the New Freedom Initiative.

Section 811 serves among the most vulnerable citizens – non-elderly people with severe disabilities – who need access to supportive housing as an alternative to costly institutionalization.  Deep cuts to development of new supportive housing will leave this population with no alternative.  Congress and HUD should not abandon its mission to serve people with severe disabilities.    NAMI urges this Subcommittee to reject this proposed cut to Section 811.

Section 811 Tenant-Based

As you know, since FY 1997, this Subcommittee has allowed to HUD to allocate up to 25% of the 811 appropriation to tenant-based rental assistance, rather than development of new capital advance and project-based units.  Unfortunately, this tenant-based “mainstream” program, HUD has been marred by mismanagement and neglect since the inception. 

1. HUD has consistently failed to issue programmatic guidance for how housing agencies are to allocate vouchers and ensure that they go to non-elderly individuals with more severe disabilities, as opposed to the “disabled family” that happens to be high up on the agency’s Section 8 waiting list – this despite numerous directives from this Subcommittee in report language in recent years.
2. HUD has been unable to provide the Subcommittee with accurate assessments of future rent subsidy renewal and contract amendment costs – these renewal costs continue to grow and severely limit the capacity of Section 811 to develop new supportive housing units.
3. HUD was slow to issue guidance to housing agencies that have “mainstream” vouchers regarding their obligation to continue to target these tenant-based rent subsidies to people with disabilities upon turnover – this guidance was not issued until February 2005, despite numerous directives from this Subcommittee.
4. For years, HUD has resisted efforts to allow non-profit disability organizations (including faith-based groups) to compete for 811 tenant-based – this despite the traditional role of non-profits in the overall 811 program and their expertise in serving he targeted population.

For these reasons, NAMI strongly recommends that the Subcommittee NOT appropriate additional funds for new Section 811 tenant-based assistance for FY 2007 until HUD addresses these long-standing management and oversight problems.

Section 8 Rental Vouchers

NAMI supports the $112 million increase recommended for the Section 8 voucher program for FY 2007 (boosting funding to $15.920 billion).  Section 8 is a critical resource for people with disabilities.  As noted in the above discussion of the most recent Priced Out report, non-elderly people living on SSI are at an average of only at 18.4% of median income.  Accessing and keeping a rent subsidy overtime is essential.  Without it, community-based housing is all but impossible.

NAMI is hopeful that the request for Section 8 renewals that has been made to this Subcommittee by HUD will be sufficient to renew the estimated two million tenant-based vouchers that are currently in use – without changing the basic structure and protections in the program.  Of most importance to NAMI are ensuring that income targeting and limits on tenant contributions remain in place.  . 

Homeless Programs Funding

NAMI strongly supports the President’s request for a $209 million increase for programs under the McKinney-Vento Homeless Assistance Act – boosting funding to $1.536 billion for FY 2007.   NAMI also urges support for the $285 million request for renewal of rent subsidies for permanent supportive housing developed under the Shelter Plus Care program and retention of the 30% permanent housing set aside and 25% local services match that are the cornerstone of federal policy toward investment in permanent supportive housing. 

NAMI would also urge this Subcommittee to support the $200 million request sought for the President's Samaritan Initiative to end chronic homelessness – including new grants for permanent housing paired with case management targeted to individuals and families experiencing long-term chronic homelessness.  NAMI supports the efforts of the Interagency Council on the Homeless to more effectively coordinate federal efforts to focus on this extremely vulnerable population. 

Numerous studies have demonstrated how expensive it is for local communities to keep individuals with mental illness and co-occurring substance abuse disorders chronically homeless.  Uncompensated care for emergency medical services, inpatient hospitalization (both medical and psychiatric) and criminal justice are tremendous burden closely associated with the failure to break the cycle of shelters, the streets, jails, clinics, etc.  Permanent supportive housing has proven highly effective in breaking this costly and tragic cycle.  The Samaritan Initiative and the work of the Interagency Council are critical to efforts to help states and localities move forward in ending chronic homelessness.  HUD cannot do this alone.  The Interagency Council is essential to bringing HHS, the VA and other agencies to the table.

 

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