Thursday, February 6, 2014

All Politics is Local...and Federal: How Backward Federal Policy Hurts Families and our Communities

The Boston Globe recently highlighted how the Town of Danvers is facing costs totaling $250,000 a year to transport homeless children from hotels to their schools. This cost, which was once borne solely by the Commonwealth, but is now split 70/30 between the State and localities, imposes significant burdens on the Bay State’s 351 cities and towns.

The root of the problem, however, is not the cost of transporting the children from hotels to schools—rather, it is the fact that the children (and their families) are in hotels in the first place. This state of affairs is particularly galling given that hotels cost the Commonwealth far more per family than would permanent housing vouchers.

Similarly, in New York City (which, like Massachusetts, is a “right to shelter” jurisdiction), over 50,000 New Yorkers (including 20,000 children) live in shelters, many of which are privately-run facilities where costs for a family run nearly $3000/month.

“They spend so much money on us. It costs three thousand dollars a month to put one family in a shelter! Why don’t they just give us part of that money so we can afford our own place to live?”

Or another New Yorker—a mother—exasperated by the same seemingly illogical policy:

“Every month, I get a paper from Welfare saying how much they just paid for me and my two kids to stay in our one room in this shelter, and I can tell you the exact amount: Three thousand four hundred and forty-four dollars! Every month! Give me nine hundred dollars of that every month and I’ll find me and my kids an apartment, I promise you.”

So why do cities and states spend money on inefficient emergency shelter-- in hotels and elsewhere-- rather than providing subsidies for permanent housing? In part, it is because while federal Temporary Assistance for Need Families (TANF) funds can be used to fund 60 percent of the cost of family shelter, TANF funds cannot be used for subsidies (such as Section 8 vouchers) that move homeless families into stable, permanent housing.

In February 2013, the Department of Health and Human Services (HHS) issued a letter to administrators of TANF entitled, “Use of TANF Funds to Serve Homeless Families and Families at Risk of Experiencing Homelessness,” (, in which the agency reiterated that TANF funds can only be used for up to four months for the purposes of rental assistance.

This is horrendous policy—not only for local governments like Danvers with the costs associated with busing students to far-off locales; not only for the families themselves who have little certainty in temporary, emergency shelter; but also for the taxpayers, who pay far more for emergency shelter than it would cost to provide vouchers for permanent housing.

Given that this is an issue from the Bay State to the Big Apple, from red states to blue states, state and city leaders should work together to lobby their Congressional delegations to change federal rules governing grants for homeless services. Just as the Federal Government has worked with states to establish cost-saving incentives for Medicaid reform, so the Feds should push states to revamp their homeless policies by making TANF funds more flexible and sharing the savings from moving families to permanent, supportive housing.

That's the path toward a sustainable, smart, sensible policy that does well by our nation's children.

UPDATE: The Sunday after this post was published, 60 Minutes had a feature on how Nashville is using vouchers to move chronically homeless individuals into permanent housing. Check it out here.

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