[Senate Hearing 107-950]
[From the U.S. Government Printing Office]



                                                        S. Hrg. 107-950


                         REAUTHORIZATION OF THE
                 McKINNEY-VENTO HOMELESS ASSISTANCE ACT

=======================================================================

                                HEARING

                               before the

               SUBCOMMITTEE ON HOUSING AND TRANSPORTATION

                                 of the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                                   ON

 THE HOMELESSNESS PROBLEM IN AMERICA, THE STRENGTHS AND WEAKNESSES OF 
   THE McKINNEY-VENTO HOMELESS ASSISTANCE ACT HOUSING PROGRAMS, AND 
     PROPOSALS THAT SHOULD BE CONSIDERED AS PART OF REAUTHORIZING 
     LEGISLATION TO INCREASE THE EFFECTIVENESS OF FEDERAL FUNDS IN 
                   PREVENTING AND ENDING HOMELESSNESS

                               __________

                             MARCH 6, 2002

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs


88-411              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2003
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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                  PAUL S. SARBANES, Maryland, Chairman

CHRISTOPHER J. DODD, Connecticut     PHIL GRAMM, Texas
TIM JOHNSON, South Dakota            RICHARD C. SHELBY, Alabama
JACK REED, Rhode Island              ROBERT F. BENNETT, Utah
CHARLES E. SCHUMER, New York         WAYNE ALLARD, Colorado
EVAN BAYH, Indiana                   MICHAEL B. ENZI, Wyoming
ZELL MILLER, Georgia                 CHUCK HAGEL, Nebraska
THOMAS R. CARPER, Delaware           RICK SANTORUM, Pennsylvania
DEBBIE STABENOW, Michigan            JIM BUNNING, Kentucky
JON S. CORZINE, New Jersey           MIKE CRAPO, Idaho
DANIEL K. AKAKA, Hawaii              JOHN ENSIGN, Nevada

           Steven B. Harris, Staff Director and Chief Counsel

             Wayne A. Abernathy, Republican Staff Director

                  Martin J. Gruenberg, Senior Counsel

   Joseph R. Kolinski, Chief Clerk and Computer Systems Administrator

                       George E. Whittle, Editor

                                 ______

               Subcommittee on Housing and Transportation

                   JACK REED, Rhode Island, Chairman

                 WAYNE ALLARD, Colorado, Ranking Member

THOMAS R. CARPER, Delaware           RICK SANTORUM, Pennsylvania
DEBBIE STABENOW, Michigan            JOHN ENSIGN, Nevada
JON S. CORZINE, New Jersey           RICHARD C. SHELBY, Alabama
CHRISTOPHER J. DODD, Connecticut     MICHAEL B. ENZI, Wyoming
CHARLES E. SCHUMER, New York         CHUCK HAGEL, Nebraska
DANIEL K. AKAKA, Hawaii

                       Kara Stein, Staff Director

              Tewana Wilkerson, Republican Staff Director

                                  (ii)
?

                            C O N T E N T S

                              ----------                              

                        WEDNESDAY, MARCH 6, 2002

                                                                   Page

Opening statement of Senator Reed................................     1

Opening statements, comments, or prepared statements of:
    Senator Allard...............................................     8
    Senator Dodd.................................................    19

                               WITNESSES

Roy A. Bernardi, Assistant Secretary, Office of Community 
  Planning and
  Development, U.S. Department of Housing and Urban Development..     3
    Response to written questions of Senator Reed................    62
Stanley J. Czerwinski, Director, Physical Infrastructure Issues, 
  U.S. General
  Accounting Office, accompanied by Jason Bromberg, Senior Policy 
    Analyst                                                           9
    Prepared statement...........................................    37
    Response to written questions of Senator Reed................    66
Susan M. Collins, a U.S. Senator from the State of Maine.........    17
    Prepared statement...........................................    53
Nan P. Roman, President, National Alliance to End Homelessness
  Washington, DC.................................................    20
    Prepared statement...........................................    53
    Response to written questions of Senator Reed................    67
Mitchell Netburn, Executive Director, Los Angeles Homeless 
  Services
  Authority, Los Angeles, California.............................    22
    Prepared statement...........................................    58
    Response to written questions to Senator Reed................    70
Mary Ann Gleason, Director, York County Initiative to End 
  Homelessness,
  Alfred, Maine..................................................    24
    Prepared statement...........................................    60

                                 (iii)

 
                           REAUTHORIZATION OF


 
                           THE McKINNEY-VENTO


 
                        HOMELESS ASSISTANCE ACT

                              ----------                              


                        WEDNESDAY, MARCH 6, 2002

                               U.S. Senate,
  Committee on Banking, Housing, and Urban Affairs,
                Subcommittee on Housing and Transportation,
                                                    Washington, DC.

    The Subcommittee met at 2:30 p.m. in room SD-538 of the 
Dirksen Senate Office Building, Senator Jack Reed (Chairman of 
the Subcommittee) presiding.

             OPENING STATEMENT OF SENATOR JACK REED

    Senator Reed. Let me call the hearing to order. My 
colleague, Senator Allard, will be delayed for a few moments 
but he asked us to go ahead. I want to welcome all of our 
witnesses. I would like to make my opening statement in some 
detail because of the importance of this hearing and when 
Senator Allard returns, if he so chooses, he can make his 
opening statement.
    I am pleased to welcome the witnesses this afternoon. This 
is a very important hearing on the reauthorization of the 
McKinney-Vento Housing Programs. In the past year, the Urban 
Institute 
estimates that at least 2.3 million, and perhaps as many as 3.5 
million people, have experienced homelessness. On any given day 
in the United States, at least 800,000 people are homeless, 
including about 200,000 children.
    Homelessness has an especially devastating impact on these 
children. If they are even able to go to school, homeless 
children face significant challenges, such as learning 
disabilities and emotional and behavioral problems.
    Many of those without a home are asking for help. This 
year's U.S. Conference of Mayors report on Hunger and 
Homelessness in America's Cities states that requests for 
emergency shelter by families increased by 22 percent. 
Unfortunately, over half of all these requests for housing 
assistance went unmet.
    In my State, the Rhode Island Shelter System provided more 
nights of shelter this past year than at any point in its 
history.
    Locally and nationally, several trends seem clear. First, 
despite the economic boom of the 1990's, homelessness has 
increased. Second, increasing numbers of families with children 
are being forced into our emergency shelter system. Just 
yesterday, in The Washington Post, there was an article about 
the 25 percent rise in homelessness in Fairfax County, 
Virginia, in the past 4 years. Third, a relatively small number 
of long-term chronically homeless persons continue to utilize a 
disproportionate number of the bed nights in our Nation's 
shelters.
    If you talk to service providers, they can give you a 
laundry list of factors that contribute to homelessness--high 
housing costs, low-paying jobs, domestic violence, substance 
abuse, mental illness, changes and cuts in public assistance 
programs, utility costs, and lack of health care.
    At the national level, the Federal Government has created 
nearly two dozen programs targeted toward people experiencing 
homelessness. Unfortunately, these programs are administered by 
eight different agencies.
    When it was created in 1987, the McKinney-Vento Homeless 
Assistance Act was intended to be an emergency response to the 
crisis of homelessness. It appears that many McKinney-Vento 
programs now serve not just those who are homeless, but those 
who are not being serving by the traditional affordable housing 
programs.
    Instead, mainstream programs are now relying on homeless 
assistance programs, shifting the cost and responsibility for 
providing housing and services to the McKinney-Vento programs. 
As a result, both homelessness and a separate support system, 
have been institutionalized.
    As many of you are aware, I have been working on a bill to 
reauthorize the McKinney-Vento housing titles. First and 
foremost, I believe that limited Federal dollars need to be 
better focused on preventing and ending homelessness, not 
simply maintaining it.
    My proposal would realign the incentives behind HUD 
homelessness assistance programs. More funding would flow to 
communities that can demonstrate a commitment to accomplishing 
the goals of preventing and ending homelessness.
    My bill also would: Simplify and consolidate the HUD 
homelessness assistance programs into one program; provide new 
flexibility in using the McKinney-Vento funds; for the first 
time, promote the building of new housing for families; target 
funds for the development of permanent housing for the 
disabled, provide incentives for the creation of new permanent 
housing stock; promote comprehensive local planning through 
HUD's Continuum of Care process; require greater 
accountability; and increase coordination between Federal 
agencies.
    Reauthorizing the housing titles of the McKinney-Vento 
Homeless Assistance Act is the beginning. However, because the 
needs of homeless individuals and families fall within the 
jurisdiction of many Federal Departments and Congressional 
committees, I believe additional legislation is also going to 
be necessary in order to require Federal agencies such as the 
HHS and the Department of Veterans Affairs to work with HUD in 
a more coordinated manner toward preventing and ending 
homelessness.
    Today, we will hear from two panels of witnesses. The first 
panel will consist of: Roy A. Bernardi, Assistant Secretary, 
Office of Community Planning and Development, U.S. Department 
of Housing and Urban Development; and Stanley J. Czerwinski, 
Director of Physical Infrastructure Issues, U.S. General 
Accounting Office.
    On the second panel we will hear from three homelessness 
advocates about their efforts to prevent and to interrupt, we 
hope, the homelessness in the United States. Ms. Nan P. Roman, 
President, National Alliance to End Homelessness; Mr. Mitchell 
Netburn, Executive Director, Los Angeles Homeless Services 
Authority; and Ms. Mary Ann Gleason, Director, York County 
Initiative to End Homelessness in Alfred, Maine.
    We will be asking all of our witnesses to discuss the 
homelessness problem in the United States, the strength and 
weaknesses of the McKinney-Vento Homeless Assistance Act 
housing programs, and proposals that should be considered as 
part of reauthorizing legislation to increase the effectiveness 
of Federal funds in preventing and ending homelessness.
    As I am joined by my colleagues, I will introduce them and 
offer them an opportunity to speak.
    Now let me formally introduce our first panel.
    Mr. Roy Bernardi is Assistant Secretary of Community 
Planning and Development of the Department of Housing and Urban 
Development. In this role, Mr. Bernardi is responsible for 
overseeing the implementation of HUD's Homeless Assistance 
Programs. Prior to joining the Administration, Mr. Bernardi was 
the 51st Mayor of the city of Syracuse, New York.
    He is joined by Stanley Czerwinski. Mr. Czerwinski is GAO's 
Director for Physical Infrastructure Issues and as such is 
responsible for overseeing evaluations concerning housing and 
related issues. And Mr. Czerwinski is joined at the witness 
table by Mr. Jason Bromberg.
    Mr. Secretary, your statement will be made part of the 
record. If you would like to summarize, you are encouraged to 
do so.
    Mr. Secretary.

       STATEMENT OF ROY A. BERNARDI, ASSISTANT SECRETARY

          OFFICE OF COMMUNITY PLANNING AND DEVELOPMENT

        U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Mr. Bernardi. Thank you, Chairman Reed.
    Thank you for the opportunity to be here this afternoon 
with you. On behalf of Secretary Martinez, I want to extend our 
commitment to work with you to improve this Nation's response 
to the problem of homelessness that you outlined.
    HUD has a long history of addressing homelessness. Since 
the McKinney-Vento Act's beginning in 1987, HUD has 
administered an array of Federal homeless assistance programs. 
The programs provide emergency, transitional, and permanent 
housing for homeless persons. HUD's programs also provide for, 
by law, a variety of supportive services, such as job training 
and mental health treatment. Hundreds of thousands of men, 
women, and children who have no place to call home have been 
assisted by these programs.
    Secretary Martinez intends to continue and even enhance our 

efforts related to homelessness. The Bush Administration has 
set a goal of ending chronic--or long-term--homelessness within 
10 years. This is a bold goal. This is a goal that will require 
many Federal, State, and local partners. But this is a goal 
that together we can and will achieve.
    The Federal Interagency Council on the Homeless was 
recently reactivated and will be critical in ending chronic 
homelessness. The member agencies of the Council elected 
Secretary Martinez as Chairman and Secretary Tommy Thompson of 
the Department of Health and Human Services as Vice Chairman. 
At the meeting, Philip Mangano was appointed as the Executive 
Director of the Council. Mr. Mangano is the former Director of 
the Massachusetts Housing and Shelter Alliance and has 
extensive experience in the field of homeless programs and 
policy. The Council will be, among other activities, assessing 
current Federal homeless efforts, reducing duplication among 
programs, and identifying ways to effectively prevent 
homelessness. We at HUD look forward to working closely with 
the other member agencies of that Council.
    Let me provide some background on HUD's present homeless 
assistance efforts. The Department administers four McKinney-
Vento homeless assistance programs. Three of these are 
competitive: The Supportive Housing Program, Shelter Plus Care, 
and the Section 8 Single Room Occupancy, or the SRO Program. 
The fourth program allocates funds by formula, the Emergency 
Shelter Grants Program. Together, they provide over 70 percent 
of all Federal McKinney funds administered by six Federal 
agencies. In 2002, Congress appropriated and HUD will be 
awarding over $1.1 billion in homeless assistance for these 
four programs.
    To streamline the administration of these programs, in 1995 
HUD implemented the Continuum of Care approach. Prior to that 
time, individual projects were submitted to Washington for 
review, and HUD picked which ones it thought were the most 
important for each community. The Continuum calls on 
communities--not individual projects--to identify their needs 
related to homelessness--both housing and services. State and 
local government, nonprofit agencies including faith groups, as 
well as foundations, businesses, and homeless and formerly 
homeless persons come together in this effort. The community 
collectively identifies the inventory of resources they 
currently have to address their various homeless needs. Any 
unaddressed needs, or gaps, in the system are what communities 
can request HUD to fund. Applicants can request funds for any 
or all of the three competitive HUD programs. Communities 
prioritize the projects they want funded and if eligible, and 
the funds are available, HUD awards local projects based on the 
community's prioritized list. The continuum approach has helped 
coordinate housing and services for a population that is needy 
and often difficult to effectively serve.
    Let me briefly summarize the outcomes of this past 
competition to give you a sense of the magnitude and impact of 
these HUD programs. Over 450 continuums applied for funding in 
2001. With many individual continuums representing several 
cities and in some cases entire States, a significant portion 
of America has a continuum. In fact, a full 90 percent of all 
Americans now live within existing continuums. These continuums 
submitted to HUD 3,275 projects for funding of which HUD was 
able to fund 78 percent. With the $950 million that was awarded 
in 2001, HUD will be supporting the operations of 70,000 beds. 
When combining the housing and the services the funds support, 
approximately 229,000 persons will be supported on any given 
day.
    The current approach is helping many people, but given the 
need on the streets--as you outlined, Mr. Chairman--of our 
cities throughout this Nation, we must do much more. National 
studies indicate that in any point in time there are over 
600,000 persons who have no home. Many are homeless for only a 
short time and with short-term housing and services they can 
transition toward self-sufficiency. That number is 
approximately 80 percent. However, a much smaller number are 
homeless for extended periods of time and they suffer from 
disabilities. As Dr. Dennis Culhane from the University of 
Pennsylvania has pointed out in recent research, this 
relatively small portion of disabled single homeless persons 
consumes a large share of our public services. To the extent we 
can provide permanent housing and support for this population--
this is a key point--the savings in resources can be used to 
serve many more of the homeless persons who need only short-
term assistance.
    Currently HUD is actively pursuing four major policy 
initiatives to meet the goal of ending the problem of chronic 
homelessness established by Secretary Martinez. The first 
initiative is a joint task force made up of HUD, HHS, and the 
Department of Veterans 
Affairs. The second initiative is Policy Academies for States 
and local leaders. The third initiative is improving the annual 
competition to help drive this effort. And the fourth is HUD 
proposes to consolidate its homeless assistance programs.
    Our Joint Task Force: HUD and HHS have been meeting since 
February 2001 and VA has recently come on board. The group's 
purpose is to seek ways to increase the use of mainstream 
Federal supportive service funds so that we at HUD are not 
devoting a majority of our funds to services. Right now we 
provide approximately 50 percent of our services for housing 
and about 50 percent for services. Instead, HUD can once again 
focus on its core mission--the provision of housing. The wide 
range of HHS service programs has been represented at the 
Federal task force. Sharing information about each other's 
programs has been an important and fruitful first step. As part 
of this process, HUD solicited input on how it could improve 
its national grants application. Recommendations regarding 
supportive services were provided by HHS and incorporated by 
HUD into this year's application process.
    Policy Academies: Another concrete outcome of our 
collaboration with HHS is the planning and implementation of a 
series of Policy Academies. Each Governor was invited to submit 
an application for consideration to send a team of their top 
mainstream health and human service officials with policy and 
budgetary authority to a Policy Academy conference. The top 16 
States were selected to attend either of two scheduled 
Academies. We have plans for additional sessions. The sessions 
give the State Teams the opportunity to meet and plan statewide 
strategies on improving coordination and communication between 
the various agencies within the State. The goal is to assist 
State and local policymakers in developing an action plan to 
improve access to the mainstream health and human services that 
are coordinated with housing for homeless persons.
    Changes to the Continuum Application: We have carefully 
considered the comments of the States, cities, and nonprofit 
providers as well as our Federal partners in preparing this 
year's application. The application will focus less on process 
and more on outcomes, clearly highlighting the importance of 
housing and mainstream services. As the Notice of Funding 
Availability for these funds has not yet been issued, I am 
prevented at this time from providing the various details on 
the improvements that we have made.
    In addition to targeting homeless assistance to those most 
in need, we concurrently want to prevent homelessness. Homeless 
prevention is sensible and cost-effective. By lowering the rate 
of entry of people into the homeless population, service 
providers can more effectively aid those who are currently 
homeless. In addition to saving the cost of shelter and related 
social services, and you mentioned, Mr. Chairman, prevention 
efforts can also reduce the human and social costs of 
homelessness. Homeless prevention programs also help people to 
maintain steady employment and self-sufficiency, thereby 
generating real benefits for themselves, our communities, our 
schools, and our places of work.
    The linchpin of HUD's McKinney-Vento homeless prevention 
effort is the Emergency Shelter Grants Program. As you all 
know, this is a formula program. Up to 30 percent of an ESG 
grantee's funds can be used for homeless prevention. Other HUD 
programs can and do provide community development and housing 
assistance to State and local governments to assist low-income 
and other persons in avoiding homelessness. These will include 
the Community Development Block Grant Program, the HOME 
Program, the Housing Opportunities for Persons with AIDS, our 
HOPWA Program, Section 8 Housing Choice Vouchers, and the 
Supportive Housing for Persons with Disabilities.
    There are many successful examples of our prevention 
efforts. I want to share with you one such effort. The 
Community Sharing Funds of the St. Paul Foundation in Minnesota 
is considered a ``last resort'' emergency fund. Working through 
a network of 70 
social service agencies in a three-county area, this recipient 
of ESG homeless prevention monies serves clients who are in 
danger of being evicted from their homes and are not eligible 
for help elsewhere. A thorough screening process and 
documentation of the eviction proceedings help staff to assess 
the potential for solving the housing problem through short-
term cash assistance. In some cases, clients are required to 
attend financial management classes prior to receiving monetary 
assistance. Where a ``reasonable'' chance of success in solving 
the problem exists, financial awards--averaging $400--are made 
to the referring agency, which in turn that referring agency 
presents a check to the landlord to pay the rent, thus 
preventing that family from becoming homeless.
    Let us talk a bit about our HMIS, our efforts related to 
Homeless Management Information System. You can see the 
disparity in the numbers. I mentioned that on any given day 
there were 600,000 people that are homeless on our streets, and 
I believe, Senator, you said as high as 800,000 people. The 
Department has adopted a comprehensive approach to addressing 
Congressional direction to collecting homeless information in 
all jurisdictions and nationally. To facilitate that effort, 
Congress developed, with the input from the HUD staff, a new 
eligibility activity in HUD's Supportive Housing Program. This 
initiative is resulting in many homeless projects receiving 
grant assistance to implement and operate the HMIS systems. To 
further support this effort, in September 2001, we initiated a 
$4.1 million 2 year technical assistance contract to assist the 
Continuum of Care communities. We are currently in the process 
of reviewing proposals for setting standards for local and 
national homeless data collection and implementing an annual 
homeless assessment report to Congress. It is through this HMIS 
effort that we will be able to better measure the performance 
of our progress in ending chronic homelessness and effectively 
assist homeless persons generally in moving toward self-
sufficiency.
    The Department will be submitting a proposal to consolidate 
its three competitive homeless programs. Communities, not 
Federal mandates, can end homelessness. Using the groundwork 
laid through the Continuum process, we want to empower the 
States and cities to more effectively solve their problem 
within their jurisdictions. We have been and will continue to 
be meeting with public interest groups about our proposal. We 
are soliciting their feedback and recommendations as we develop 
this legislation.
    The Department wants to take the best elements of the 
current competitive system and improve upon them. We recognize 
that the community-wide planning aspect of the continuum 
process is a very positive feature. The coordination that is 
going on in communities between city agencies, non-profit 
organizations, and other groups such as foundations and 
businesses is something that we want to retain in our proposal. 
We recognize the vital role that nonprofit organizations 
provide in communities. They actively participate in assessing 
needs and prioritizing which projects should be funded. They 
also are usually the frontline providers of assistance to 
homeless persons, and we will be examining how nonprofits can 
continue to play this important role.
    There are some features of the current process that need to 
be changed. For instance, three of the current programs that 
constitute the Continuum of Care each have different eligible 
applicants, different eligible activities, different match 
requirements, and different grant terms. It is often difficult 
for local organizations to negotiate through the complexity of 
the current array of programs. We need to be more flexible to 
communicate with them and have additional success.
    In addition to providing more flexibility to communities, a 
streamlined approach to awarding funds will significantly 
reduce the amount of time it takes to assist homeless persons. 
Through a national competition system where up to 4,000 
projects must be rated and reviewed before awards are made, HUD 
requires nearly 18 months from the time the funds are 
appropriated to when a homeless person is actually assisted. 
Under a more streamlined approach, the typical community, which 
has fewer than 15 projects, might review and award its projects 
in a matter of weeks, not months. This approach might use a 
formula for award that combines the measures of needs, strong 
performance standards, and incentives so as not to be confused 
with an entitlement. Performance standards such as those 
related to accessing mainstream resources for clients and 
placing long-term homeless persons in permanent supportive 
housing are being considered.
    In closing, HUD is committed to making a difference in the 
lives of those who are unfortunate not have a home. We look 
forward to working with you to make that a reality.
    A proposal is a proposal is a proposal. A function of our 
agency is to talk to everyone involved--the providers, the 
people who have been through the process, local and State 
governments, your staff, yourselves--and try to develop a 
system where we can better utilize the funds that we have 
available to us, and at the same time try to reverse that 
number on homelessness.
    Thank you.
    Senator Reed. Thank you very much, Mr. Secretary. It was 
important to give you the time to lay out in detail the 
position of the Administration, and thank you for your 
thoughtful statement.
    We have been joined by the Ranking Member, Senator Allard. 
Senator, do you want to make a statement now?

               STATEMENT OF SENATOR WAYNE ALLARD

    Senator Allard. I do have a statement, Mr. Chairman.
    I would like to thank you for holding this hearing of the 
Subcommittee on Housing and Transportation. This Subcommittee 
has discussed reauthorization on previous occasions. I look 
forward to the opportunity to continue that dialogue.
    In 1987, Congress passed the Stewart B. McKinney Homeless 
Assistance Act, now known as the McKinney-Vento Homeless 
Assistance Act. This Act was the first comprehensive law 
addressing the diverse needs of the homeless, including 
programs at the Department of Health and Human Services, the 
Department of Education, the Department of Labor, the 
Department of Agriculture, and the Department of Housing and 
Urban Development.
    Until enactment of this law, the problems confronted by the 
homeless were mainly addressed at the State and local level. 
The McKinney Act represented a consensus that has developed 
that a major Federal commitment was required to end 
homelessness.
    Currently, the Federal Government devotes significant 
resources to the homeless. According to the General Accounting 
Office, 50 Federal programs administered by 8 Federal agencies 
provide various services to our Nation's homeless population.
    The President's fiscal year 2003 Budget proposes dedicating 
$2.2 billion in homeless assistance, with half of that amount, 
$1.1 billion, to be distributed through HUD's homeless 
programs.
    Despite the enormous Federal resources that are directed 
toward homelessness, the problem persists. We need to bring 
more 
accountability to homeless assistance, increasing funding for 
successful programs and initiatives, and replacing the 
ineffective.
    I want to make one thing clear. I do not pretend to have 
the answer to how we deal with homelessness. But one thing is 
clear: We have to get better. I believe that this hearing is an 
important opportunity to continue the discussion of how we can 
best address homelessness.
    I am very pleased to see that the Administration makes 
ending chronic homelessness in the next 10 years a top 
priority. Particularly, I support the Administration's proposal 
to consolidate HUD's three competitive programs into one 
streamlined program. This will reduce administrative 
duplication at HUD and will make it easier for grantees to 
apply for money. Although HUD has not specified a distribution 
mechanism for a consolidated program, I would like to express 
my support for a formula-based block grant approach.
    It seems to me that a block grant gives local communities 
the flexibility to deal with unique situations in their 
jurisdiction. The answers to homelessness are different in 
Loveland, Colorado, my hometown, for example, than for New York 
City.
    I also believe that a block grant gives communities a 
predictable funding stream so that they can plan ahead in order 
to integrate homeless assistance with other Government funds 
and begin to build a strong Continuum of Care network in their 
communities.
    I would like to conclude by welcoming our witnesses to the 
Subcommittee. You have all done a great deal of work with 
homeless programs and will no doubt have a great deal of 
insight to share. I appreciate you being here, and thank you 
for your testimony.
    Thank you, Mr. Chairman.
    Senator Reed. Thank you, Senator Allard.
    Mr. Czerwinski, your statement has been made a part of the 
record. You are encouraged to take about 5 minutes.

               STATEMENT OF STANLEY J. CZERWINSKI

            DIRECTOR, PHYSICAL INFRASTRUCTURE ISSUES

                 U.S. GENERAL ACCOUNTING OFFICE

                         ACCOMPANIED BY

             JASON BROMBERG, SENIOR POLICY ANALYST

    Mr. Czerwinski. I will stay within the clock, Mr. Chairman.
    Senator Reed. Thank you, very much. You are a veteran 
witness.
    Mr. Czerwinski. And as a veteran witness before the Subcom-
mittee, it is always a pleasure to appear before you, Mr. 
Chairman, and Senator Allard.
    Before I begin, I would like to thank you for allowing 
Jason Bromberg to join us at the table. Jason has led the 
majority of our key reviews of homelessness and as a result he 
has a wealth of on-the-ground experiences which I hope we can 
draw on to illustrate some of the themes I want to bring up.
    As we know, homelessness is both a complex and significant 
problem. It has been estimated that 10 percent of the people 
currently in poverty have been homeless at one time or another. 
As it has already been mentioned in this hearing, that on any 
given night 600,000 to 800,000 people may be homeless. The 
homeless population is not homogenous. About 80 percent are 
temporarily homeless. Their immediate need is shelter. And, 
over the long haul, probably the biggest thing we can do for 
them is to find them affordable housing. About 20 percent, 
however, are chronic homeless. They do not lack just shelter, 
but they suffer from other problems such as substance abuse and 
mental disabilities.
    These people usually have long-term needs for housing and 
many other services, and we have talked a little bit about the 
challenges they pose today. Families, more often, are going to 
be found as temporarily homeless; whereas the chronic homeless 
are more 
likely to be single adult males.
    The Federal approach to assisting the homeless reflects the 
complexities of the problem. As you, Mr. Chairman and Senator 
Allard, mentioned, there are about 50 programs administered by 
eight Federal agencies addressing the needs of the homeless. 
Thirty-four of these are mainstream programs for poor people in 
general, of which the homeless obviously qualify. Sixteen 
programs, though, are targeted specifically to the homeless at 
a cost of approximately $2 billion a year. HUD has a majority 
of the funding for these for four programs. These programs 
offer an array of service including shelter, substance abuse, 
food assistance, and job training. Services are sometimes 
offered in isolation; other times, in different combinations. 
Eligibility also varies. Some are targeted to families. Others 
to veterans. Some are for children. Some are for chronic 
homeless. Others are for transitional. The delivery system also 

involves many agencies and levels of government--Federal, 
State, and local governments, and nonprofit organizations. The 
result is a challenge to both agencies and providers in 
administering and 
coordinating the programs, and integrating the services. 
Especially in the case of mainstream programs, what we often 
see is a fragmented instead of an integrated safety net.
    If we think of the homeless people and their multiple 
needs, we are asking them to navigate a system that they just 
are not equipped to handle.
    Accordingly, I would like to talk about two areas where I 
think we can make a difference. The delivery of benefits can be 
improved by looking at several things.
    First, we should make better use of the mainstream 
programs, as you mentioned in your opening statement, Mr. 
Chairman. The homeless are eligible, as I said, for 34 
mainstream programs. These programs include such as Food 
Stamps, SSI, and Medicaid. The funding for these programs is 
over $200 billion a year. In other words, more than 100 times 
the amount that is targeted to the homeless. And yet, most 
mainstream programs do not track the number of homeless they 
serve, nor do they have goals for serving the homeless. And in 
fact, they even have disincentives for serving homeless 
because, as we have talked about, the needs of the homeless are 
complex. That means it takes more time and effort to serve a 
homeless person than a poor person in general. Accordingly, we 
believe that the service to homeless could be improved by 
providing mainstream programs with incentives to serve the 
homeless, and then holding them accountable for doing that.
    I would also like to talk a moment about the targeted 
programs where we know there are a number of coordination and 
administration challenges. These include dealing with different 
types of organizations. For example, training centers could go 
in and get a grant under the Supportive Housing Program; 
whereas the Emergency Shelter Grants would only go to State and 
local governments.
    Second, another area of difference in the targeted programs 
are the recipients. For example, Shelter Plus Care focuses on 
disabled people. Single-Room Occupancy, as it sounds, is for 
single adults. Other differences include the services provided, 
and the time period that funds are provided, the requirement 
for matching funds.
    I want to commend HUD because it led the way in trying to 
work through these challenges. And this is primarily through 
the Continuum of Care. I will only spend a moment on it, 
because Mr. Bernardi already talked about this, but our view of 
the Continuum of Care is that it does a very good job of asking 
communities to coordinate, plan, and prioritize its services to 
the homeless. It also provides a single annual competition and 
a uniform rating criteria.
    In our view, HUD with a Continuum of Care has taken things 
about as far as they can go without legislation. Therefore, I 
would like to close with a brief discussion of some areas where 
we think legislation could help beyond the Continuum of Care.
    First, we believe legislation should aim at streamlining 
the grant making process. I believe we have talked a little bit 
about that today already. In doing so, we think that a big part 
would be to make communities more likely to integrate the 
mainstream programs into the overall fabric of homeless 
assistance. Again, this is much along the lines that you 
mentioned, Mr. Chairman.
    Second, and this is of course what GAO would talk about, we 
want greater reliance on performance measures for both agencies 
and providers. This would include agencies and providers with a 
requirement to develop outcome measures, and then hold them to 
those measures.
    From what I have heard today, I would say the Subcommittee 
is on the right track. I would like to commend you for leading 
the way on this important issue.
    With that, I would like to enter my statement in the 
record, and if you have any questions I would be glad to 
respond.
    Senator Reed. Thank you very much, Mr. Czerwinski.
    Mr. Secretary, let me first turn to you and commend you, 
the President, and the Secretary for picking a very aggressive 
goal, to end homelessness in 10 years. Yet, comments from 
agencies like the National Alliance to End Homelessness suggest 
the budget that you are working with will not achieve that 
objective.
    Specifically, there is a built-in need to maintain people 
in housing which could consume significant resources, leaving 
just not enough to go the extra mile, if you will, and do the 
things you have to do and to ensure that in 10 years starting 
today that homelessness would be something in the past. Can you 
comment on the goals, given the funding levels you are 
requesting in your budget?
    Mr. Bernardi. The importance would be to try to make sure 
that all the people that need services, that they have the 
mainstream programs available to them. We just heard that in 
many instances that $200 billion number was mentioned, we 
should be able to be giving people choices out there, and give 
them the opportunity to have housing, and to have the 
supportive services that are necessary so that emergency 
housing is first, then transitional, then permanent.
    What we need to do is place people in permanent housing, 
going through the system. We at HUD cannot do that alone. We 
only have, as Senator Allard has indicated, $1.1 billion for 
this year's budget. The fact of the matter remains that we 
spend 50 percent, as I mentioned, of our dollars on services. 
And to provide those kinds of services--that number has been 
rising over the years--we need to do more to make sure that we 
prevent homelessness and provide permanent housing for those 
that need it.
    Senator Reed. No, I do not think anyone can disagree with 
your comments. But the reality seems to be that it takes a lot 
of money to keep these services going. You cannot stop the 
services because people depend upon them. Yet, you have to 
find--and I would argue, you would have to construct additional 
housing so that you can put these people in housing. And that 
all costs money.
    We come back to the budget that you are presenting, which 
is a challenge just to keep in place, given that budget, rather 
than getting ahead, and particularly if in 10 years we want to 
look back and say we have ended homelessness.
    Mr. Bernardi. That is very true. But we have to live within 
the confines of our budget.
    Senator Reed. Well, I am sending you over to the Department 
of Defense.
    [Laughter.]
    Mr. Bernardi. The Millenium Commission is looking at the 
issue of affordable housing, and we will wait to see their 
report.
    Senator Reed. Mr. Czerwinski, again, thank you for your 
testimony. One of the things you emphasized was the need to 
have 
accountability, and that the present programs are competitive. 
And, I think, we all sense that we need to consolidate these 
programs.
    But there is a difference between having a consolidated 
grant program and a block grant. One of the aspects I think is 
it eliminates sometimes the accountability, the ability to look 
annually at the quality of effort in the particular community. 
A formula block grant is just what it purports to be. You can 
expect confidently every year you will get so much money. And 
the accountability I think does not follow necessarily. Can you 
comment upon that, Mr. Czerwinski?
    Mr. Czerwinski. There are pros and cons to the block grant 
versus competitive approach.
    On the competitive side, one thing that we think is 
important is to give the funds to those that are doing the most 
with them. That would be outcomes. By ``outcomes,'' I mean the 
providers would show what has happened over the long-term with 
people who have entered the system.
    Now on the block grant side, there are ease of 
administration and predictability of funding, and, of course, 
that is one of the things that we hear from providers, that 
they want that. So the job is to try to have the best of both 
worlds.
    Senator Reed. I would agree. I think one of the areas that 
again there seems to be consensus in is the Continuum of Care 
approach that has been very successful because, not only has it 
in a way helped coordination but it has also helped getting a 
dialogue going at the local level.
    And again, perhaps one concern about a block grant approach 
is this dialogue might evaporate when, in fact, you have a 
formula and you will get the money whether or not you are 
talking to each other or not. So again, I see your point, which 
is about balance, and I think it is an important point.
    I am wondering, going back to you, Mr. Secretary, we talked 
about this budget number. Do you have estimates what it would 
take if there were no budget constraints? This is a much more 
appropriate way to ask the question, to in fact end 
homelessness in 10 years?
    Mr. Bernardi. I do not have those, Senator. But if we have 
them at the Agency, I will make sure that I get those to you.
    Senator Reed. Is anyone working along those lines? And I 
understand that we all have to live within limits but it helps 
to know what we are sacrificing, or how much we are falling 
short of a reasonable plan to end homelessness in 10 years.
    I think it is incumbent upon the Department if they are 
announcing a goal, they should also be able to be 
straightforward about how much it will cost, and then challenge 
us, the American people, to measure up.
    Mr. Bernardi. Well, Senator, as we talk about changing the 
competitive nature of the homelessness program right now, we 
feel very strongly that if we were to allow the communities to 
have the consortiums at a local level participate in the 
process, that we could realize a significant savings.
    The fact of the matter is that the competitive program has, 
as I mentioned, over 3,000 applications that have to be looked 
at, and graded. You appropriate the dollars, and 18 months 
later the dollars finally flow to the community. To me that is 
an incredibly long time and it is really not the best way to 
utilize the resources that we have.
    So utilizing the resources we have to put a system in place 
with the Continuums, where those agencies and those active 
groups at the local level would still have the decisionmaking 
power. They would make the determination as to where the money 
was being spent and we could get that money to them a lot 
quicker.
    Senator Reed. No one can argue about better efficiency, 
better coordination----
    Mr. Bernardi. Well, that is one way of doing it.
    Senator Reed. --and a fast review.
    I think if you do an analysis you will discover that we are 
talking about a lot of money in terms of ending homelessness, 
truly ending it in 10 years. Any thoughts, Mr. Czerwinski, or 
your colleague, about the number?
    Mr. Czerwinski. My first reaction, Mr. Chairman, when I saw 
that, I said, ``My goodness, they are sticking their necks 
out.'' Then I said, ``Well, it is not 3 years or 7 years, so I 
was not quite sure whose neck they were sticking out.''
    [Laughter.]
    But in all seriousness, the answer is two-fold. In the 
short run, you need to provide the services and the housing, 
and the only way that is going to happen is by leveraging the 
mainstream. That is where the devil is in the details.
    I would look to see just how we are going to deliver those 
mainstream services. In the long run what we are dealing with 
are some economic factors that may be beyond all of our 
control, or certainly are beyond HUD's. One is, for example, 
looking at the policies for deinstitutionalizing people. The 
other is the one that you mentioned, which is within HUD but it 
is a gargantuan task, and that is looking at the unmet housing 
needs, which we know are very large.
    Senator Reed. Thank you very much.
    Senator Allard.
    Senator Allard. Mr. Secretary, the figure was thrown out 
that 20 percent of the homeless use 80 percent of the dollars 
available for--is it homeless programs, or just for the HUD 
program itself ? It was not clear to me.
    Mr. Bernardi. The HUD programs.
    Senator Allard. Just in the HUD program. You also stated 
that most of these homeless ones that are most difficult to 
deal with is the single male. So is this 20 percent that we are 
talking about single males? Are they a highly mobile 
population?
    Mr. Bernardi. They are highly mobile.
    Senator Allard. They are moving around.
    Mr. Bernardi. They are predominantly male with substance 
abuse, mental illness issues.
    Senator Allard. But they could be transitional from job to 
job. Do we have any idea what percent is transitional from job 
to job?
    Mr. Bernardi. A very low employment rate.
    Senator Allard. Yes. I would assume much lower than what it 
was say 20 or 30 years ago when you had more of a rural 
population and they would be moving from ranch to ranch, farm 
to farm, for jobs and that kind of thing.
    Mr. Bernardi. It is very difficult to count this kind of a 
population. That is why the HMIS program is going to go a long 
way to making the determination of the exact number because I 
do not think any of us really know exactly what that number is 
out there.
    Senator Allard. Yes.
    Mr. Bernardi. And how can you service it if you do not have 
all the parameters. Once that management information system, 
once the Continuums with the money that is being provided to 
them, have the opportunity to assess the situation, then we 
will know better how to serve it.
    Senator Allard. I bring that up because saying that you are 
going to eliminate all of homelessness is kind of like saying 
you are going to have nobody unemployed, because there is a 
transitional group there that is going to be moving from job to 
job that would fall into unemployed for a period of time. I was 
just inquiring of whether you would have a certain percentage 
there that would apply probably to single males.
    Mr. Bernardi. I think we at HUD understand full well that 
to realize that goal we are going to need the mainstream 
services from the other agencies take place.
    As I mentioned earlier, and I will repeat it for the third 
time, we are in the housing business, and yet we provide 50 
percent of those dollars for services.
    Senator Allard. Yes. Well, let us follow up on that at 
little bit.
    Would you talk a bit about the type of administrative 
burden we are placing on States and communities right now when 
we have four main McKinney Housing Programs? My understanding 
is that each one of these have a different set of requirements 
in filling out applications and whatnot.
    Maybe, I will ask Mr. Czerwinski, because I think he talked 
about that in his discussion, to talk a little bit about this 
burden on States and communities meeting the requirements of 
these four programs.
    Mr. Czerwinski. Sure. The upside of targeted programs is 
that they meet specific goals. The downside is that the people 
who are providing those specific sources of assistance have to 
meet specific requirements to get the funds to do that.
    We have done quite a number of reviews going out and 
talking to people at the State, local, and nonprofit level, and 
they have laid out several issues that concern them.
    One was the application process. They told us they would be 
very much helped if HUD would help them with some of the 
information that they could use to fill out the applications. 
The other is the predictability of funding.
    Senator Allard. But the application requirements are the 
ones that I am particularly interested in. My understanding is 
you have four different McKinney Programs with different 
application 
requirements, and I would like to kind of get on the record a 
little bit of how these are a problem for local and State 
governments that apply for them.
    Mr. Bernardi. The Emergency Shelter Grants, the eligibility 
there is the State and local governments, and your other 
organizations do not have access to that funding. That is on a 
formula basis. The other three programs are competitive. That 
competition is open to--well, it depends on which one of the 
three you are speaking of--not all of them are open. Some are 
open to State and local government, and some are not. But the 
competition ends up in Washington where we take those 3,000-
plus applications and go through those.
    We are going to streamline that. If we can streamline that, 
we not only can save an awful lot of time, but also we can save 
money and we can drive it back to the communities.
    Senator Allard. Let me talk a little about the Continuum of 
Care. I think it has a pretty complex application process, and 
many jurisdictions or nonprofits apparently are forced to hire 
professional grant writers in order to be competitive for the 
homelessness 
assistance dollars. Do you consider this a wise use of 
resources?
    Mr. Bernardi. The local Continuums, obviously, have the 
expertise. I think as we have all indicated, they provide the 
services. Being a former Mayor, I can tell you that we would 
never be able to run a community without the good services of 
the not-for-profits, faith-based groups, and other 
organizations. In most instances, they can handle the grant-
writing I believe without hiring outside people to do so. But 
in some instances, it depends on the level of technical 
expertise. It depends on the ability that they have. But within 
their own jurisdictions, I am sure your smaller jurisdictions 
probably need that kind of assistance to go through the 
process. That is another good reason why we should simplify it.
    Senator Allard. Thank you.
    I see my time has expired, Mr. Chairman.
    Senator Reed. Thank you, Senator Allard.
    Mr. Secretary, one final question, if I may. You have 
identified a key dilemma that we all face. That is, HUD is a 
housing agency that is providing lots of social services.
    That raises the obvious question of how do we encourage 
other agencies in their budgets, who might not because of 
organizational responsibility, be sensitive to homelessness and 
increase the services to this population, like HHS, Department 
of Labor, and all the different Departments, Commerce programs, 
et cetera?
    Mr. Bernardi. Well, the Interagency Council, as I mentioned 
in my opening statement, Mr. Mangano, I believe on March 15 
will be sworn in, and that is being revived after being dormant 
for I 
believe 5 or 7 years. And that is going to take the 16 agencies 
that are involved here and bring them together and hopefully 
will be able to work something out where we can do some cross-
cutting here and where HHS provides a service organization. We 
are a housing organization.
    If there are ways in which we can do things that can 
improve the delivery of services, and who is to pay for those 
services, then perhaps we could do more with permanent housing 
for our homeless population.
    Senator Reed. Thank you.
    Senator, any other questions?
    Senator Allard. Just one thing I wanted to follow up on. 
You mentioned that there are a lot of homeless programs that 
are provided by other agencies or that you provide programs in 
HUD that are not related to housing for the homeless. So what 
can be done to get other agencies to shoulder more of the 
responsibility of 
assisting homeless people to free these dollars up for housing 
needs?
    Mr. Bernardi. Yes. Exactly.
    Senator Allard. Is there more that we can do? What can be 
done to do that?
    Mr. Bernardi. I think the Interagency Council on The 
Homeless, but obviously your good works and conversations with 
the other agencies can contribute to that process, indicating 
that you feel strongly, as we do, that the more money that we 
have for housing and I think there are records that indicate 
that; that if you can provide permanent housing to individuals, 
they are less likely to be out in the street; then, the job 
training, and the employment that follows leads to self-
sufficiency for them and their families. That is really what we 
are working on here.
    It is episodic in many instances. I mean the majority of 
the people that are out there that are homeless, maybe they 
lost a job, or it is domestic violence, or someone just is out 
of the mainstream for awhile, but 80 percent of those people 
eventually go through emergency transitional, and then they are 
into permanent housing.
    For example, I have some numbers here. In 2001, over 35,000 
persons became employed while in HUD's homeless projects. So it 
does work. And we need to do more with it, and we are committed 
to doing more.
    The fact remains that the long-term homeless individuals 
that are out there, they are the most difficult to serve. And 
collectively we need to find a way to put them through the 
system into permanent housing and hopefully some day into self-
sufficiency.
    Mr. Czerwinski. Senator Allard, if I may offer a little bit 
more hard-nosed answer, coordination is nice but it is really 
hard to measure. And in our line of business, we want something 
that we can measure.
    I go back to a hearing that we did for you probably about a 
year or two ago on GPRA. What I would suggest is, if the 
Administration sets an overall goal of ending homelessness, we 
know HUD cannot do that by itself, it becomes incumbent upon 
the Administration to then say how the other agencies are going 
to help.
    And going along with GPRA principles, what we would suggest 
is performance management, which would ask the agencies to 
track the number of homeless they are serving; ask them to find 
out what happens to them; and hold them accountable through 
oversight hearings.
    It becomes part of that concerted fabric that we would get 
at that issue. There is no way that HUD can do it by itself. It 
has to be through a concerted effort. And the only way that we 
would say is with measures that people can be held accountable 
for to oversee it such as yourselves.
    Senator Allard. Thank you.
    Senator Reed. Thank you, Senator Allard.
    Thank you, Mr. Czerwinski, for your testimony.
    Secretary Bernardi, thank you. It is hard to predict lots 
of things, but I predict you are rooting for Syracuse in the 
Big East.
    [Laughter.]
    Mr. Czerwinski. They better beat Villanova or they will not 
be going to the NCAA finals.
    Senator Reed. Well, I think I know where your sentiments 
are in that regard.
    Just one other final point. I concur, Mr. Secretary, with 
the 
importance of the Interagency Council. The legislation I am 
proposing would authorize a million dollars for the Council to 
actually move it into the Executive Office so it could truly 
have oversight over these individual agencies.
    Thank you, gentlemen, very much.
    Mr. Bernardi. Thank you.
    Mr. Czerwinski. Thank you.
    Senator Reed. I would like to call the next panel forward, 
please.
    Before recognizing all the members of the witness panel, I 
would like to recognize our colleague, Senator Susan Collins 
from Maine. Senator Collins and I collaborated on a host of 
different issues. She has been a leader in the Senate in lead 
paint exposure among children. She has done remarkable work in 
many areas, and it is a pleasure to have you here.
    Susan, you are going to introduce Mary Ann Gleason.

                 STATEMENT OF SUSAN M. COLLINS

             A U.S. SENATOR FROM THE STATE OF MAINE

    Senator Collins. Thank you very much, Mr. Chairman.
    I want to thank you and Senator Allard for your leadership 
in the area of housing policy, and to let you know, Mr. 
Chairman, how much I have enjoyed working with you on so many 
issues that are important to the citizens of our States and the 
Nation.
    It is such a great pleasure to be here today to introduce 
one of the Nation's foremost experts on the problem of 
homelessness. We are very fortunate to have an expert witness 
here today who not only has direct experience with Federal 
policy affecting homelessness, but also has done a tremendous 
job at the local level with programs in Maine.
    That individual is Mary Ann Gleason, who sits to my right. 
I was trying to remember today when I first met Mary Ann. She 
came to my office several times in Washington, and is largely 
responsible for my getting personally involved on issues 
affecting the homeless individuals and their families.
    I worked very closely with her and the York County Homeless 
Shelter in southern Maine, and I was very honored to receive an 
award from them one year for my work. She has been a wonderful 
advocate.
    Ms. Gleason worked here in Washington for a number of years 
as the Executive Director of the National Coalition for the 
Homeless, where she worked with Members of Congress, the 
Administration, and Federal agencies to advocate for a more 
effective public policy to expand and better employ Federal 
resources to help those who find themselves homeless, and also 
to address the root causes of homelessness. That is one of the 
parts of Mary Ann's approach that, I think, will be 
particularly helpful to this Committee.
    To the delight of those of us in Maine, Ms. Gleason decided 
to return to the frontlines in 2001 and became the Director of 
the York County Initiative to End Homelessness. In that 
capacity, she has worked diligently to promote both policy and 
attitudinal changes throughout our State. Her commitment and 
dedication to combating homelessness in Maine has had an 
immense impact in improving services, and I am pleased that one 
of my staff members serves on the Coalition and on the Study 
Group.
    Aside from her duties with York County, Ms. Gleason has 
also made time to act as the Chair of the Monitoring and 
Evaluation Subcommittee on the Maine Homeless Assistance 
Planning and 
Advisory Committee, and she has been a Member of the Maine 
Affordable Housing Bond Issue Steering Committee. As you will 
see from her testimony today, Ms. Gleason continues to take an 
active role in Federal policy, and I think her testimony will 
be particularly helpful to the Committee because she has been 
on the frontlines. She has been not only an advocate, but also 
someone who has been directly involved in providing services. 
So, she knows this issue inside and out. I am thankful to have 
her as an advisor, and I want to take this opportunity to 
express my appreciation for her work. I look forward to working 
with the Committee.
    Thank you, very much.
    Senator Reed. Thank you, Senator Collins. Thank you for 
coming here today and introducing Ms. Gleason.
    Let me introduce our other two witnesses and then recognize 
Senator Dodd for some opening comments. Ms. Gleason is joined 
by Ms. Nan Roman. Ms. Roman is President of the National 
Alliance to End Homelessness, a leading voice on the issue of 
homelessness. The Alliance is a public education advocacy and 
capacity building organization with over 2,000 nonprofit and 
public sector member agencies and corporate partners around the 
Nation.
    Thank you for joining us, Ms. Roman.
    Next to Ms. Roman is Mr. Mitchell Netburn. Mr. Netburn is 
the Executive Director of the Los Angeles Homeless Services 
Authority, LAHSA, a joint powers authority of the city and the 
county of Los Angeles. Before coming to LAHSA, Mr. Netburn 
served as First Deputy Commissioner for the New York City 
Department of Homeless Services. From 1993 to 1996, Mr. Netburn 
was the Assistant Commissioner for Ryan White Care Services at 
the New York 
Department of Health. Thank you, Mr. Netburn.
    Senator Dodd, would you like to make an opening statement?

            STATEMENT OF SENATOR CHRISTOPHER J. DODD

    Senator Dodd. Yes, Mr. Chairman. Thanks so much. I 
apologize for arriving a few minutes late. We had several 
meetings with the Technology Committee on some issues. There 
are always so many things going on at once.
    But first of all, welcome to the witnesses. Thank you, Mr. 
Chairman, for holding this hearing. It is a very important 
issue, and one that unfortunately is not going away. I mean we 
all wish it would.
    I wish we could be standing here and that I could call Lucy 
McKinney, Stu McKinney's wife, who is a wonderful friend of 
mine. Their son, John, who is a State Senator in Connecticut 
today--I saw just the other day in the State Capital in 
Hartford--and how proud they are of what their father 
accomplished as a Member of the House Delegation. Stu and I 
served together for a number of years when he represented the 
4th Congressional District, the District held by Chris Shays 
today in Connecticut.
    What a wonderful hearing this would be if we say that the 
McKinney-Vento Program was no longer needed.
    But I am very grateful to you and the witnesses for sharing 
their thoughts with us on this. I would note--as I am sure you 
have 
already, Mr. Chairman, but maybe it deserves being repeated--
that there are still anywhere from 800,000 to 1 million people 
who are homeless.
    What is really troubling to me is that a quarter of those 
are kids. Whatever one feels about adults, I mean, it is never 
justified when you start looking at the conditions that adults 
live with, but how anyone could feel that almost a quarter of a 
million Americans who are infants living in anything but a safe 
environment is acceptable is beyond me. And the numbers 
continue to grow.
    We saw with the mayors recently, three-quarters of them I 
think indicated that this is a problem for them. It is not 
pocketed in New York and some other large urban areas. It is 
across the country and it deserves our attention.
    It is wonderful to have Susan Collins, as well, and to add 
voice to Ms. Gleason's testimony. She knows a lot about these 
issues and brings wonderful background and experience we need 
to have.
    It is a complex issue, obviously, Mr. Chairman, to deal 
with. I am particularly interested, and I know Senator Allard 
is, on the block grant issue. I know it was kicked around a 
little bit here, but I am nervous about what happens in a block 
grant in dealing with this issue, and I want to raise those 
issues when the proper time comes for some questions.
    So thank you, and thank all of you for being here. 
Appreciate it very much.
    Senator Reed. Thank you, Senator Dodd.
    Ms. Roman.

                   STATEMENT OF NAN P. ROMAN

                  PRESIDENT, NATIONAL ALLIANCE

              TO END HOMELESSNESS, WASHINGTON, DC

    Ms. Roman. Thank you so much, Mr. Chairman, Senators 
Allard, and Dodd, for inviting the National Alliance to End 
Homelessness to testify before you today.
    We are certainly grateful for the Subcommittee's past 
efforts to address this issue. The National Alliance to End 
Homelessness is convinced that not only could our Nation do a 
better job of helping homeless people, but also that ending 
homelessness is well within our grasp.
    How could homelessness be ended? There is no question that 
homelessness would be ended if there were an adequate supply of 
affordable housing in the country. But the more realistic 
question that confronts us is, ``Can we do something about 
homelessness if there is not an adequate supply of affordable 
housing?''
    We think that the answer is yes, and I think it is amazing 
to hear the degree of consensus that has been expressed here 
today about what we could do to make progress.
    Millions of people, as has been mentioned, become homeless 
in our Nation each year, and there are some 40,000 nonprofit 
and public sector programs that spend billions of dollars to 
help them. As has been said, the system is primarily funded at 
the national level through HUD and this system is functioning 
fairly well, we think, to manage the problem. It ends 
homelessness for thousands of people every day.
    However, the homeless assistance system cannot prevent 
homelessness, and it cannot open the back door out of 
homelessness. It would be a mistake to think that we could hold 
the homelessness assistance system itself responsible for 
ending homelessness. In fact, I think that no matter how 
perfect we make homeless assistance programs, there is no way 
that it alone is going to be able to end homelessness.
    There are programs that have the resources and 
responsibility for doing that. Mainstream programs like 
welfare, foster care, Veterans assistance, and so forth, can 
prevent and end homelessness.
    But rather than being a safety net, as you said they are 
shifting responsibility and cost for the most vulnerable people 
into the homeless assistance system. So what can be done to 
change this dynamic?
    The National Alliance to End Homelessness has developed a 
pragmatic plan that could end homelessness, we think, in 10 
years. Basically it suggests that communities reorient around 
ending not managing homelessness. They need to close the front 
door into the homeless system, reversing the trend by which the 
mainstream programs allow most vulnerable people to become 
homeless, and they need to open the back door out of 
homelessness.
    To do the latter, we have to examine people's experience of 
homelessness. As has been discussed in the Committee Members' 
statements and by previous witnesses, about 80 percent of 
people enter and exit the homeless system relatively quickly. 
These people are having a housing crisis. They have virtually 
the same characteristics as other poor but nonhomeless people. 
They really need plain vanilla affordable housing.
    In a sense, the homeless system is managing the churn in 
the bottom of the housing market for that 80 percent.
    Twenty percent of people have a very different experience. 
Chronically homeless people spend months and even years in the 
homeless system. A groundbreaking study that was done by the 
University of Pennsylvania shows that the cost of letting 
people live on the street is very high. In New York City a 
chronically mentally ill, homeless person living on the streets 
costs public systems of care about $40,000 a year. It costs 
about the same amount of money to put that person in supported 
housing with services. So, we are going to pay on one end or 
the other. It would certainly make sense to do the permanent 
housing.
    For the 80 percent that is having a housing crisis, we 
would suggest taking a housing-first approach focused more 
tightly on rapid housing placement and connection to mainstream 
services. We should avoid letting people stay homeless for long 
periods of time. For the 20 percent, we should commit ourselves 
to permanent supportive housing and, over 10 years, even at 
current spending levels, we should be able to provide 200,000 
units of that housing. In our view, any reorganization of 
homeless assistance should be measured against whether it makes 
progress in ending homelessness.
    The draft bill, Senator Reed, that you have prepared does, 
we think, help us make progress. In terms of planning, it 
creates planning boards that are charged with a wide range of 
responsibilities. The goals of these boards are admirable, and 
since they build on existing local capacity and do not try to 
create a whole new system, I think they move us forward. We 
have some concern that the issue of local data should be 
addressed more specifically in the bill.
    In terms of closing the front door, the draft bill has 
numerous references to homelessness prevention, and this is a 
welcome shift in emphasis. However, reauthorization of homeless 
assistance programs at HUD cannot be expected to compel action 
in a full range of mainstream systems of care, and we think 
that companion legislation focused on HHS and other agencies 
might more effectively address these prevention and discharge 
planning issues.
    In terms of opening the back door, the draft bill clearly 
improves the outcome focus of the homeless assistance programs. 
The Alliance is particularly supportive of the set-aside of 
funds for permanent supportive housing for people with 
disabilities, and the 
renewal of permanent housing through Section 8.
    This proposal does, in fact, put meat on the bones of the 
Administration's proposal to end chronic homelessness, and we 
are very strongly supportive of it.
    In summary, the Federal Government can do three things to 
help end homelessness. First, it can adjust the existing 
homeless programs to improve their outcome orientation, and I 
believe that the draft bill you have presented does accomplish 
this. Second, it can make the mainstream systems of care and 
custodial systems more responsive to people's housing 
situation. Again, I think that the draft, while it cannot 
entirely do that, sets the stage for progress in this area. And 
third, it can address the underlying affordable housing 
shortage, income, and service issues, and although this is 
beyond the purview of the draft legislation, we look forward to 
working with the Members of the Subcommittee to address these 
issues, as well.
    Thank you for your commitment and contributions on this 
issue.
    Senator Reed. Thank you very much for your testimony.
    Mr. Netburn, welcome.

                 STATEMENT OF MITCHELL NETBURN

            EXECUTIVE DIRECTOR, LOS ANGELES HOMELESS

          SERVICES AUTHORITY, LOS ANGELES, CALIFORNIA

    Mr. Netburn. Good afternoon, Mr. Chairman, Senator Dodd, 
and Senator Collins.
    My name is Mitchell Netburn and I am the Executive Director 
of the Los Angeles Homeless Services Authority known as LAHSA. 
We are honored you have invited us to testify in support of the 

reauthorization of the McKinney-Vento Homeless Assistance Act.
    LAHSA is a joint powers authority of the city and county of 
Los Angeles. It was founded in 1993 and is governed by a 10 
member commission appointed by the Los Angeles County 
Supervisors and the Mayor.
    LAHSA has been the lead coordinator for the Nation's second 
largest Continuum of Care system. Prior to the establishment of 
LAHSA, there had been little local coordination of funding for 
homeless housing and services. The Continuum of Care 
requirements enabled LAHSA to vigorously pursue a regional 
approach to addressing homelessness. This is critical, 
especially given the geography covered by our Continuum--4,000 
square miles--and the 
extreme differences across our county. Moreover, the county 
encompasses 88 jurisdictions, including 34 entitlement cities.
    We are proud of our collaborative efforts to prevent and 
address homelessness and support reauthorization of the 
McKinney-Vento Homeless Assistance Act to codify the Continuum 
of Care.
    Regarding Los Angeles County, the most commonly used 
estimate indicates that there are 84,000 men, women, and 
children homeless on any given night. A more recent county 
survey found that 375,000 adults experienced homelessness in 
the previous 5 years. While many of these persons doubled up in 
someone else's home, up to half resorted to staying on the 
streets or in shelters.
    Since 1995, the Los Angeles Continuum of Care has received 
over $325 million through the McKinney-Vento Act. In the last 
year alone, these funds provided services to over 63,000 
homeless men, women, and children. This funding has enabled 
localities to leverage millions of dollars in private funding 
and investment, while also contributing to the quality of life 
and the aesthetic 
improvement of many neighborhoods.
    Notwithstanding this significant level of Federal support 
for homeless persons, we face some very real challenges to 
ending homelessness. Los Angeles County is reporting that 
despite a 3.5 percent drop in unemployment since 1990, poverty 
has increased by 46 percent. These conditions have fueled 
greater demand for homeless services even before the local 
economy began to experience general economic hardship since 
last fall.
    Within the city of Los Angeles, there is a 3.5 percent 
rental housing vacancy rate. Not only does this mean a tighter 
housing market for low-income renters, but also those who are 
fortunate enough to receive a Section 8 voucher are finding 
fewer and fewer landlords willing to rent to them. The city's 
Housing Authority reports that only 41 percent of households 
issued vouchers are able to use them, compared to over 90 
percent just a few years ago. On a brighter note, the Los 
Angeles City Council last week adopted the Mayor's plan for 
establishing an annual $100 million trust fund. And this 
November, voters in the State of California will likely have 
the 
opportunity to approve up to $2 billion in bond financing for 
affordable housing.
    In reauthorizing the McKinney-Vento Homeless Assistance 
Act, you have the opportunity to harness this momentum and 
provide necessary Federal leadership.
    In looking forward toward reauthorization, our experience 
tells us that the collaborative, community-based process 
generated by the Continuum of Care system does work. Our 
system, as a whole, is more responsive to the needs of homeless 
individuals and families, more vigorous and more integrated 
because of the incentives created by the Continuum of Care to 
engage in a broadly inclusive planning process, and to identify 
the resources in mainstream systems that need to serve our 
homeless clients.
    We respectfully offer the following recommendations. Keep 
the program flexible. Every community has different 
circumstances that call for different approaches to addressing 
homelessness. The strength of the existing system is that it 
allows localities to determine the best use of funding to meet 
the local needs of homeless individuals and families. By 
allowing localities to decide who is best suited to lead the 
planning effort and apply for funding, we avoid the 
difficulties that often occur when disinterested entities are 
the appointed recipients of funding.
    Ensure Federal coordination of homeless programs by 
locating the Interagency Council on Homelessness in the White 
House 
Domestic Policy Office. While nearly all of LAHSA's funding for 
homeless programs originates in HUD, many of the homeless 
housing and service agencies that we fund are also funded by 
other Federal Departments, including the Departments of 
Veterans' Affairs, Health and Human Services, Labor, and 
Education. Coordination of funding and programs could be 
furthered by having a centralized presence in the White House 
to oversee a national plan to prevent and end homelessness.
    Lift the cash match requirements for permanent housing. 
Developers in our system have reported that the 25 percent cash 
match requirement hampers their efforts to use this program. 
Although new sources of local funding are on the horizon, 
securing and documenting the cash match for this process is not 
always feasible. This in turn inhibits development of the 
permanent affordable housing we so desperately need to end 
homelessness.
    Move the renewal of Shelter Plus Care and Supportive 
Housing Program Permanent Housing Contracts to the Housing 
Certificate Fund. By the time these programs are ready to 
renew, they have demonstrated their effectiveness and the 
tenants in the programs are no longer homeless. Therefore, we 
urge you to consider these renewing programs as mainstream, 
thereby allowing renewals to be funded from a mainstream 
source.
    Provide for Homeless Management Information Systems 
funding. Several years ago, Congress wisely directed HUD to 
embark on 
implementing such a system. However, this entails considerable 
cost. We look to you to ensure that the HMIS requirement will 
not be an unfunded mandate.
    And last, retain the competitive process for homeless 
services funding. While administering an annual competition 
does consume significant local resources, the system is better 
for it, particularly if it is performance-based. The current 
process is a catalyst that empowers us to work closely with a 
broad range of stakeholders, including homeless and formerly 
homeless persons, agencies from our 31 entitlement cities, our 
housing authorities, and our county administered housing, 
health, and welfare systems. Therefore, LAHSA has historically 
opposed the block granting of Federal homeless assistance 
funds.
    Thank you for this opportunity to share the experiences of 
Los Angeles County and our suggestions for improving the 
existing legislation. The Los Angeles Homeless Services 
Authority strongly supports your efforts to reauthorize the 
McKinney-Vento Homeless Assistance Act so we will have the 
critical resources and Federal leadership necessary to prevent 
and end homelessness.
    Thank you.
    Senator Reed. Thank you very much, Mr. Netburn.
    I would like to recognize Ms. Gleason for her statement, 
and thank her for her help to my staff on the drafting of this 
legislation that we are talking about this afternoon.
    Thank you.
    Ms. Gleason.

                 STATEMENT OF MARY ANN GLEASON

                DIRECTOR, YORK COUNTY INITIATIVE

               TO END HOMELESSNESS, ALFRED, MAINE

    Ms. Gleason. Good afternoon, and thank you, Senator Reed, 
for your kind invitation to appear before the Subcommittee, and 
you, Senator Collins, for your gracious introduction, and most 
especially for your wonderful leadership on homeless issues, 
particularly on ensuring the passage and expansion of the 
Grants To Benefit Homeless Individuals.
    It is a critical step in further involving Health and Human 
Services in providing services and moving HUD therefore out of 
that provision. It has been critical, and we really appreciate 
it very much. I began working with HUD's Homeless Assistance 
Programs in 1987. It pains me that 15 years later this national 
issue of grave concern continues and grows.
    In Maine, the number of admissions into our shelters grew 
by 51 percent over the last 4 years. Thirty-two percent of 
those who become homeless in our State are families; 11 percent 
are youth; 13 percent are veterans; 37 percent are employed. 
Nearly 45 percent are challenged by disabilities. Twelve 
percent have attended at least a year of college and, in 
Portland, 29 percent have either graduated from or at least 
attended college. The average monthly income, however, of 
shelter residents in Maine is $240. It is also important to 
know that 68 percent of those who entered the shelters were 
homeless in some other form prior to doing so, and prior, 
therefore, to being counted. They were doubled or tripled up 
with friends or relatives, living in motels, cars, tents, 
speaking loudly to us of how many more live so close to the 
edge that simply doing shelter or street counts cannot tell us 
the scope of the problem.
    Since passage of the McKinney bill in Rhode Island, Maine, 
Connecticut, Colorado, and every other State, we have had 
recipients of HUD homeless assistance funds that have supported 
the development of many highly effective programs that not only 
allowed us to redress homelessness for the individuals who 
suffer it, but also serve as models for addressing the holistic 
needs of very vulnerable families and individuals throughout 
our Nation. In Denver, McKinney funds helped renovate a portion 
of 92 rental housing units, half of which were no longer 
liveable and contributed to the increasing blight and crime in 
the neighborhood. Having significantly 
upgraded the community's self-regard, these units now provide 
permanent housing shared by persons who are challenged by 
mental illness who had lived on the streets for years of their 
lives, high-tech employees, factory workers, other families, 
and individuals of mixed incomes in an integrated model we can 
all feel good about. In another, new construction of a complex 
of permanent affordable housing units for diverse populations 
includes a child care center used by the broader neighborhood 
of homeowners, as well as children homeless in the recent past. 
In Maine, we are developing housing on an organic farm for 
late-stage alcoholics who have 
become homeless to bring meaning and hope back to their lives, 
and to provide vegetables and herbs for the bakery and catering 
service where shelter residents can develop skills in culinary 
arts from a terrific chef. In Columbus, the housing first model 
moves families out of shelters within 2 weeks and into 
permanent housing with transitional services, so they can 
quickly be reintegrated into the larger society. Developed now 
in a large number States, highly efficacious supportive housing 
programs also provide employment opportunities for persons with 
disabilities that help them feel good again and whole. For 
families who suffer domestic violence and consequent 
homelessness, we are designing a cohousing model to create the 
sense of community that September 11 taught us is America at 
her best. Nationally, HUD's McKinney programs have had a 
positive impact in every State in the Union. The diversity of 
local responses has resulted in significant cross-fertilization 
of good ideas and best practices.
    Having read a draft of your bill, Senator Reed, I am 
delighted to say it builds on much that is highly effective in 
HUD McKinney programs and improves elements needing such. I 
will mention a few. One, it consolidates the separate McKinney 
programs and eliminates the constraints they imposed to 
maximize flexibility, creativity, and local decisionmaking. 
Two, it provides funding for the first time for permanent 
housing for nondisabled homeless families. Three, it removes 
the caps on funding for transitional and permanent housing to 
move more realistically to reflect the cost of housing 
construction and renovation at the diversity of localities in 
our States. Four, it provides some financial incentives to help 
build the funding capacity of nonprofits so they can create 
housing stock for those poorest among us that other Federal 
housing programs keep moving away from. Five, it requires 
limited and appropriate Federal oversight to ensure that the 
Federal Government does not abnegate its rightful role to 
effectively address the needs of our most vulnerable citizens. 
Sixth, it brings to the table both targeted homeless and 
mainstream program recipients, public and private, to 
collaborate their planning, implementation, and evaluation 
activities in order to utilize available resources in a manner 
that can maximize outcome effectiveness, reduce duplication, 
and reverse policies and procedures that unintentionally either 
stimulate or prolong homelessness. Seventh, it places the 
responsibility for interagency collaboration at the Federal 
level in the hands of the Domestic Policy Council, as you 
mentioned, within the Office of the President, which we 
desperately need to help ensure that each Federal agency 
assumes their responsibility for preventing and ending 
homelessness using the resources under their administration. 
Eighth, it reduces HUD funding for services 3 years after 
enactment of the bill in order to ensure and give Congress and 
the 
Administration an opportunity to increase those resources from 
the appropriate Departments: HHS, DOL, DOT, VA, to mention a 
few.
    Talking about ending homelessness is actually a dialogue 
about deeper, broader issues that narrow into the topic of 
homelessness, which is too easily dismissed, is neither 
accurate nor informed. It is a dialogue about the lack of 
opportunity for housing stability, an essential condition for 
family health and well being, retaining steady employment and 
employees, children succeeding in school, neighborhoods 
retaining their quality and safety, disabled and 
elderly persons living as full and dignified a life as 
possible.
    Ending homelessness is about finally reckoning with the 
unfinished business of deinstitutionalization, ensuring that 
community-based housing--treatment and support services are 
available and affordable. It is a dialogue about welfare reform 
whose enlightened purpose would be economic viability for the 
participating families, not falling backward by moving them off 
the roles but into either hidden or blatant homelessness. 
Ending homelessness is a dialogue about recipients of Federal 
block grants that fund behavioral health care, not being held 
accountable for the poorest and most vulnerable of their target 
populations. It is a dialogue about wages and cash assistance 
benefits that still remain remarkably disproportionate to the 
cost of housing and other basic needs. We can respond in one of 
two ways. We can either increase income levels so housing is 
affordable at whatever costs the market requires, or we can 
significantly increase the public investment in producing and 
sustaining affordable housing. Doing neither is a prescription 
for protracted homelessness. Housing policy in America is 
primarily investment policy, an approach that is simply 
inadequate to meeting the housing needs of the disabled person 
whose annual SSI income is $6,000 a year, or a full-time worker 
earning even $7 an hour. Ending homelessness is actually about 
producing housing and not simply continuing to talk about 
producing housing. It is about only 36,000 new housing vouchers 
being proposed nationwide for 2003, when in one city alone, 
there are 150,000 eligible households on the waiting list. And 
finally, homelessness is about a shredded and shameful safety 
net, including the lack of health care, in a Nation blessed 
with both the resources and the ingenuity to be fairer than 
that. I look at the weight of poverty, and the burden of 
disregard that homelessness represents and wonder how, having 
so much, we have come so far from what is just and right.
    In conclusion, we suggest these broader issues that form 
the structural underpinnings of homelessness must be addressed 
through omnibus legislation, as you have suggested, similar to 
but broader than the original McKinney legislation. We would be 

delighted to help you pursue such legislation replicating the 
highly collaborative process that resulted in the Community 
Partnership to End Homelessness Act of 2002.
    Thank you for listening, and for your thoughtful leadership 
and proposal.
    Senator Reed. Thank you very much.
    That was compelling testimony of all the witnesses. Thank 
you so much.
    I would like to turn to Senator Collins and recognize her 
for her comments, and thank her because I believe you are going 
to be a cosponsor?
    Senator Collins. Yes.
    Senator Reed. She is a very wise and brilliant Senator. She 
is a cosponsor already.
    [Laughter.]
    Senator Reed. Senator Collins.
    Senator Collins. Thank you, Mr. Chairman, and thank you for 
your graciousness in accommodating my schedule this afternoon.
    Ms. Gleason, when I heard your description of the homeless 
individuals and population in Maine, it was a very useful 
reminder to us that the lack of affordable housing, 
particularly in areas of our State like Portland, can cause 
people who never dreamed that they would be in a situation of 
not being able to afford an apartment to become homeless; that 
it is a shock for many to find themselves in that situation.
    You also gave us a useful reminder of how many of the 
clients served in Maine have families; that it is not just the 
single individual, but it may be a mother with children, or a 
father with children. I think that is a really important 
reminder to us, as well.
    Senator Reed and I have collaborated together to try to 
designate more funding to go for substance abuse programs to 
assist in providing services to individuals who find themselves 
as homeless and are battling a drug or alcohol addiction. And 
indeed, from what I have learned from working with you and 
others in Maine, often many of your clients also have problems 
with substance abuse.
    I would like to ask each of you, starting with Ms. Gleason, 
how we can better integrate services such as substance abuse 
counseling with providing shelter, as well. And, similarly, how 
can we ensure that job training and other skills that can help 
an individual put homelessness behind himself or herself, how 
can we do a better job of integrating those kinds of programs 
into the programs that meet the housing needs of individuals?
    Ms. Gleason.
    Ms. Gleason. Thank you for your question. It is an 
important one. I actually think the reason that pursuing 
omnibus legislation is so important is because we currently do 
not have the resources either within HUD or the appropriate 
oversight. I mean the truth is that HUD, as wonderful as they 
are, does not have the level of skill to provide oversight to 
mental health and substance abuse programs that is in HHS. So 
it is really critical.
    One of the things we keep missing is that if we try to 
provide substance abuse services to people while they are still 
homeless, it is very compromised.
    Residentially based treatment programs are so critical. In 
our State there is a dramatic number, I believe 75 percent, of 
people who need substance abuse treatment that do not have 
access to it because the resources are so small. But 
unfortunately we keep spending them in hospital detoxification 
programs. So, we spend the money. This is the funny thing in 
America. We spend the money just in the wrong place at the 
wrong time, and it costs too much because of that. If we were 
able to create residentially based treatment programs, I think 
it would be much wiser for us than the current way we are 
trying to do it.
    Senator Collins. Thank you. Mr. Netburn.
    Mr. Netburn. I would certainly agree with that comment. Los 
Angeles has been a strong leader in supporting the Housing 
First Model on the theory that you need to stabilize people in 
housing and then wrap around the support services, and only in 
that way will you actually adequately address the underlying 
causes of homelessness. So, I think that is critical to focus 
on the whole concept of supportive permanent housing.
    I think there are--as I just talked about--a lot of 
services, a lot of HUD's dollars going for services, and we 
need to look for other agencies to increase their support.
    One of the concerns we all have, regarding to the 
additional focus on housing, is whether the other agencies will 
actually increase their budgets as they ``mainstream'' the 
homeless population. That will be critical to ensure that high 
level of services that are needed for that population are 
provided.
    Also, I think putting the Interagency Council on 
Homelessness within the White House will help integrate 
services and ensure that all the appropriate services from 
substance abuse, mental 
illness, job training, et cetera, are provided to homeless 
individuals and families.
    Senator Collins. Thank you.
    Ms. Roman.
    Ms. Roman. I would concur with my colleagues. I think on a 
National level, half of the people who ask for substance abuse 
treatment cannot get it. So that has to be reckoned with.
    Also, I would concur with the other two panelists that 
services are more effective once people are in permanent 
housing than when they are in either shelter or transitional 
housing.
    I would add that most shelter programs and transitional 
programs have sobriety requirements, so they are essentially 
asking people to get sober before they can come in the door. 
That is something we need to look at, too. We need entry level 
programs with a low threshold. Once people are engaged we can 
provide them with what they need in order to achieve sobriety.
    Senator Collins. Thank you.
    Mr. Chairman, let me thank you again for your leadership. 
We are very fortunate here in the Senate to have Senator Reed 
as the leader on these issues. He is an individual of great 
compassion and knowledge, and I am confident that under his 
leadership we are really going to make a difference. So thank 
you for being here, and thank you for letting me participate.
    Senator Reed. Thank you, Senator Collins.
    Senator Dodd is going to return, and I will leave, at least 
for the moment, the questions about block grants to him. He 
expressed an interest in asking those questions.
    First, again let me thank you all for this informed 
testimony. Let me underscore ``informed.'' The experience at 
this witness table is very impressive, people who have been 
running programs in challenging cities like New York City and 
Los Angeles. In Maine where it is a different environment, and 
Nan's leadership nationally on homelessness is extremely 
commendable. Thank you all.
    Let me go to a couple of specific points. One is that I 
think, Mr. Netburn, you commented on this but I would like 
everyone to 
respond. The legislation we are proposing would have a 30 
percent setaside for permanent support in housing. Also, it 
would move the renewal grants for the Shelter Plus Care and 
permanent housing components of SHP to the Housing Certificate 
Fund. Can you comment upon the importance of this and the 
criticality of this? Maybe we will go right down the line. Nan, 
do you have a comment?
    Ms. Roman. Certainly. These provisions are critically 
important if we are to make progress. Theoretically, we could 
also do Permanent Supportive Housing through the mainstream 
programs. But this is not happening.
    I think the SRO, Shelter Plus Care, and SHP Programs were 
inserted into the McKinney Act fairly early in its history. 
There is a lot of capacity that has been developed through 
these programs to deliver premanent supportive housing.
    So our feeling is, if we have a proportional amount of 
money being spent on permanent supportive housing for the 
chronically homeless population, over time we could get enough 
units to end chronic homelessness, even with the resources we 
currently have. And we think 30 percent is the correct 
percentage, if the housing subsidies are renewed elsewhere.
    I think Mitchell said, very accurately, that it is peculiar 
that we require people who have the most serious housing needs 
to have their housing subsidies renewed through a competition, 
whereas everyone else has their housing assistance renewed more 
or less automatically.
    Authorizing these permanent supportive housing activities 
you have described would allow us over time to create enough 
supportive housing to address the issue of chronic 
homelessness. We think that the cost of that after 10 years--
you asked about cost during the earlier panel----
    Senator Reed. Yes.
    Ms. Roman. --would be slightly in excess of a billion 
dollars, if I recall properly, just for the housing. Then we 
will also have to obtain the service financing because there is 
no money at HUD to do service financing. So, we have to get HHS 
to the table.
    But it is important to note that many of these costs will 
be offset, as the New York City study shows us, by savings to 
public systems on the emergency side.
    Senator Reed. Before we move on, Nan, just a comment about 
the question I posed to the Secretary about the 10 year budget 
forecast. This budget that has been submitted, if it does not 
change, is that sufficient to get us where we want to be?
    Ms. Roman. No. You could take the renewals for permanent 
housing out of the existing program, but you would have to do 
it at the expense of serving the other 80 percent of people who 
are not chronically homeless or disabled.
    The idea is to get the chronically homeless people into 
permanent supported housing and free up resources so you can do 
better by the other people, the 80 percent, not cut the 80 
percent off from services entirely. The fiscal year 2003 HUD 
budget has not 
addressed this. And I would also say, although I think that the 
Secretary was right in pointing out the need to shift some of 
HUD's service spending into HHS, HHS's budget did not reflect 
this 
increased need for services from that Department, either. So 
the need was not addressed in the budget.
    Senator Reed. Mitchell, do you have a comment? Because you 
raised this issue.
    Mr. Netburn. Just as you stated, in my testimony I said I 
think it is critical to shift that funding into the mainstream 
systems. Two additional points I would make is that, first, by 
doing that it also encourages more developers to actually 
develop this type of housing, because there is a more 
guaranteed funding stream and they can use that to secure loans 
and the like. So that is critical.
    Second, which is what Nan just touched upon, is that there 
is a lot of needed focus on that 20 percent, but there is that 
other large percentage of people who are temporarily homeless. 
Increasingly in Los Angeles, and it is certainly a national 
trend, there are increasing numbers of families, and 
particularly single women and women with children, and so 
mainstreaming services would free up the funds to address these 
new needs.
    The reality is, we have seen it in Los Angeles, and I saw 
it in New York, and I am sure it exists in other jurisdictions, 
that as the programs come up for renewals those burdens become 
very high and there is very little money available for new 
programs. So this would allow new programs to target the new 
needs.
    Senator Reed. As I understand your comments, there is a 
certain irony here because people have been placed in shelter 
and they are successfully living there, and yet you have to go 
and renew them as if they were part of the homeless program, 
when in fact they have a home.
    Mr. Netburn. That is true. It is an irony. And, you know, 
HUD, and rightfully so, has particularly in the last couple of 
years 
focused a lot on having agencies document homelessness, so that 
these funds should be targeting homeless people. Well, once 
they are in permanent housing, they are not homeless. So it is 
an irony.
    Senator Reed. And as you are more successful, the margin 
for reaching additional homeless people diminishes because you 
have the trail of the legacy of your success in the past. Is 
that accurate?
    Mr. Netburn. Exactly. HUD itself has raised the 
possibility, not this year but in the coming year, that there 
might not be enough money nationally to renew all the renewals. 
For the first time ever they may not be able to fund all the 
renewals. We are certainly seeing that locally, and from HUD 
there is also a national trend.
    Senator Reed. Mary Ann, do you have a comment?
    Ms. Gleason. Yes. What the policy does is it actually 
allows the Federal Government to do the same thing they are 
asking the State and local governments to do, and the 
nonprofits, which is to utilize mainstream resources to serve 
the needs of homeless people.
    The mainstream resources at the Federal level is the 
Housing Certificate Fund. So basically all we are doing, we are 
asking the Federal Government to do the same thing we have 
asked every other level of government to do. It is totally 
appropriate, especially because we know most of the recipients 
of these services are absolutely eligible for Section 8 
vouchers.
    They needed some weaning back into stability that the 
homeless programs were able to do. Now, we simply need to move 
them into the mainstream resources. That is the housing 
mainstream 
resource that we have.
    Senator Reed. One final question before I recognize Senator 
Dodd. We have reserved the topic of block grants for you, 
Senator. You won the toss-up previously.
    [Laughter.]
    One of the major points of conceptual agreement is we have 
to get into prevention rather than simply responding. Just 
quick thoughts on how we move the focus from responding to 
prevention. Nan, your thoughts, and then down the panel.
    Ms. Roman. Well, the draft bill has some good emphasis on 
that in terms of emergency prevention--that is, rent 
assistance, and mortgage assistance--but the more significant 
thing is the fact that these other mainstream programs are 
discharging so many people into the homeless system. How do you 
stop that?
    Obviously, you cannot do that with this bill. We think that 
TANF is a good example. Even though everyone believes TANF has 
been a success, there are people who are being sanctioned or 
removed from TANF who are ending up in the homeless system. If 
the welfare system was more attentive to people's housing 
status and had more responsibility for stable housing, for 
example, that would be a way to prevent homelessness.
    Similarly in HHS, the mental health and substance abuse 
block grants and other service programs could look more 
carefully at housing. They used to, before there was a homeless 
system, be 
responsible for housing for people with mental illness and 
other disabilities. Now there is a homeless system and they 
have shifted responsibility for housing to the homeless system.
    So, we need to push back up against those systems. Everyone 
has mentioned that we need to do omnibus legislation, and such 
legislation is where we should focus our prevention efforts.
    Senator Reed. Thank you. Mr. Netburn.
    Mr. Netburn. I would just add, preventing eviction is 
critical. Somehow it is often looked at as somewhat dubious and 
there are concerns for fraud and the like, but with some 
oversight we can have programs that work.
    Not only do you prevent the homelessness, but sometimes 
when somebody becomes temporarily homeless, if they have just 
been evicted from their apartment, it sets a whole cycle in 
place. And sometimes it is very hard to get that person very 
quickly back into housing. So it is so much more cost effective 
and more humane to keep them in the housing where they are 
especially for the stability of children with schools and the 
like.
    In addition, some of the underlying causes of homelessness 
occur before somebody became homeless. So the idea is to make 
sure that there is treatment upon demand, things like that, 
rather than getting to the stage where somebody has lost their 
home due to substance abuse, mental illness, some other issue, 
and then relying on the whole homeless system to take care of 
them.
    And last, I cannot stress enough Nan's point about closing 
the front door. What has really happened in this country is 
that the homeless systems have really become the last resort 
for people who really should be served by many other systems, 
including everything from hospitals to correctional facilities, 
to mental health 
institutions, and the like. People have all been dumped, to use 
that word, into the homeless system. And it is not necessarily 
the appropriate place for many of those individuals, and we 
should really focus the resources on those who are homeless.
    Senator Reed. Thank you.
    Mary Ann.
    Ms. Gleason. One of the things that your bill does that I 
think is very important is that it moves prevention activities 
into the collaborative planning process, which it has not been 
previously. I think that is going to go a long way to actually 
encouraging local communities to build prevention efforts into 
their programs.
    I am so delighted that you are Chair of this Subcommittee, 
Senator Reed, because it is so important that we formulate 
housing policy in America that really does ensure that the 
lowest income population has what they need. We have done it 
with Medicaid. We need to do it with housing.
    Senator Reed. Thank you very much.
    Senator Dodd.
    Senator Dodd. Thank you, very much.
    I apologize for stepping out. The Former President of 
Trinity College in Hartford is now President of the University 
of Hawaii and happened to be visiting. So he came over and I 
stepped out to talk with him. I apologize for walking out in 
the middle of the hearing.
    Again, to Jack Reed, I was struck, in fact, I was saying to 
President Dovelle out here, how important this hearing.
    Here we are talking about a million people in our country, 
as many as a quarter of that population are children, living in 
these conditions. Your presence here, knowledgeable people, 
working at this. You know, the lights and cameras show up here 
for somebody to plead the Fifth Amendment in the Enron case, 
but we cannot get people to show up to pay attention, other 
than the wonderful people who are in the room here, to care 
about it. They are never here and never can come. This is a 
constituency that can never be here. We normally have a hearing 
about some subject matter, and those who would be affected by 
it pack the room, line the halls, show up on the Mall, do all 
sorts of things. The homeless cannot. They are never going to 
come down here and lobby. We do not know where to go to meet 
them. They do not have a lunch for us. They do not have a 
dinner for us. They do not give out awards to get us to come. 
So it takes someone with the intestinal fortitude and the heart 
of a Jack Reed to carry the ball. And I am going to do 
everything I can to help him----
    Senator Reed. Thank you.
    Senator Dodd. --as a senior Member of this Subcommittee to 
see that we get the job done.
    Are you teasing me about the block grants?
    Senator Reed. I am not.
    Senator Dodd. Okay. I was out of the room and I thought you 
were pulling my leg.
    Senator Reed. I'd never do that, Senator. It is your 
question.
    Senator Dodd. Because this is such a big issue here, how 
this gets handled right. I am so impressed with the notion of 
the Continuum of Care concept and how well that has worked.
    I want to ask each of you, and particularly because I know 
in Los Angeles county, as opposed to the city, they have 
opposed the block grant approach. There is a lot of 
attractiveness to block grants.
    You do not want to take the view, because there are 
circumstances when a block grant makes sense. It is certainly a 
lot more efficient, and you can get dollars in some ways in a 
whole area that could be worthwhile.
    But my concern here, would be because this really does lace 
together so many different entities to serve the multiple needs 
of a very complicated constituency, and that you start, if you 
block grant my fear would be--and there is a big question mark 
here, okay--that when you do that, you run the risk of breaking 
out.
    Now maybe there is some way to do this a bit differently 
where, maybe you could block grant the Federal level somehow. 
But then when it gets down to the State or the local level, you 
would make it work differently.
    Anyway, I know in Los Angeles they have opposed this. So, I 
will lead with you, since I know where you are going to stand--
--
    [Laughter.]
    Mr. Netburn. Yes.
    Senator Dodd. --then go to your two colleagues on either 
side.
    Mr. Netburn. We do oppose it. You know, it was mentioned by 
the Administration that over 90 percent of the country is now 
covered by a Continuum of Care. There has been universal 
agreement that it is a system that works and works very well. 
So we certainly want to maintain that. Frankly, having the 
competitive process really enables us to bring all different 
parties to the table.
    Senator Dodd. The best ones win. They do. It is really 
effective.
    Mr. Netburn. It does. Also it is effective in getting the 
cities to participate which is not always easy. Everybody has 
competing time interests. Some cities do not want to admit they 
have a homeless problem. But knowing that the funding is 
somewhat dependent upon their being at the table, bringing 
resources to the table, being a part of the planning process 
really operates as a carrot-type 
incentive. It really brings them. And then we get a better plan 
because of that, and particularly in a county the size of Los 
Angeles. We have 88 different entities to deal with. It is the 
largest urban county in the country.
    We cringe in fear of the idea of, depending how the block 
grant might go, funds going to each one of the entitlement 
cities, having to enter into separate agreements with over 30 
of them; the possibility that you would have duplication of 
services; the loss of planning that has taken place due to the 
Continuum of Care process.
    And, frankly, we think a competitive process does bring 
communities together to put their best proposals forth, and we 
support it.
    One of the things the Administration was talking about was 
the process taking a long time. I think there is something in 
between. The 18 months can be cut down. And I also would be 
concerned about the 18 months, if this was a brand new program 
we were talking about and we are all sitting here saying, well, 
we are not going to get money for 18 months.
    The reality is, we are all on our annual cycles, and so it 
is not as though this is preventing us from providing services 
today. We know when that money is coming forward. And so 
definitely we do oppose the block grant of the funds.
    I believe this begins Senator Dodd's statements. It would 
be very helpful--and I want to hear the two other witnesses--if 
you might lay that out a little bit to us for the Subcommittee.
    I would ask consent, Mr. Chairman, that specifically the 
problems that you would have--now Los Angeles is a huge urban 
area, and obviously small areas may have a different reaction--
but I think what you just said could be very valuable for 
Members of the Subcommittee as we look at this, why this is not 
some ideological reaction. It is a question of how it works. If 
you are going to have the program--and I presume most people 
are going to support the program--then you want it to work 
well. And you want it to serve the people it is designed to 
help. If you are going to somehow break up the system that 
delivers the service the best, then Members here should know 
what the implications are because the block grant has turned 
into this partisan liberal/conservative battleground, and we 
really need to get away from that.
    We have to decide in certain cases block grants work very 
well. In some cases they do not. We should be able to make that 
distinction when it occurs, and by giving us more detailed 
information about why this would not work here, not for some 
ideological 
reason but very practical reasons, I think could be 
tremendously helpful to the Subcommittee.
    Mr. Netburn. Sure. We would welcome that opportunity.
    Senator Reed. Ms. Gleason, your thoughts.
    Ms. Gleason. Well, two of those practical things. One is 
that it would interrupt the multijurisdictional and regional 
planning that has been going on in many communities, certainly 
in the way the block grant had been proposed in the past. And 
we do not have any idea of any other formula. So that is the 
only thing we can assume. But that would definitely interrupt 
those multijurisdictional efforts, and those are so critical to 
being able to effectively reduce and end homelessness.
    Two is, personally, I just think it is a distraction from 
the progress we have been really making well, and we do not 
need this distraction at this point. Because the truth is, 
people have a pro rata share now. This is a modified block 
grant, as far as I am concerned. That is what this proposal is.
    So it is the best of both worlds, in my mind, because it is 
a modified pro rata share. There is predictability there. The 
argument about predictability really I do not think is very 
valid because of the pro rata formulas that we use right now.
    Also, I would say there are many communities that would 
suffer financially from this. In Maine, we would suffer the 
loss of well over $2 million that we really cannot afford to 
do. So there is definitely financial impact from it, as well.
    Another thing I want to mention that worries me terribly is 
the institutionalization of homelessness. You know, you give 
people block grants. You say, you know what? We are not going 
to solve this. We are going to perpetuate it, and potentially 
prolong it by giving block grants to communities. And that I 
worry about, and I worry about the local politics, because NMBE 
is alive and well across the United States. If we do not have 
somebody like the Federal Government paying attention to what 
is happening, if we give all the power and money to the 
localities in the States, I worry about the expansion of NMBE 
and the use of that money in ways that unintentionally maybe or 
intentionally perpetuate NMBE.
    Senator Dodd. It also helps a lot of good people at the 
local level, as well. I mean it is how the International 
Monetary Fund works, where they set up the rules to countries. 
They tell them how they are going to manage things. Then they 
blame locally the IMF for doing it. They understand why it has 
to be done locally, but they blame. So, we become a good foil 
in a sense----
    Ms. Gleason. Yes.
    Senator Dodd. --where people who would like to see us do 
these things and say that the Federal Government made us do it.
    Ms. Gleason. Right.
    Senator Dodd. Yes, Ms. Roman.
    Ms. Roman. Well, I agree with the argument about 
institutionalization, although I will say that HUD has 
indictated its intention to link funding to outcomes, and it is 
possible that there is a way to front load a performance basis 
onto a block grant. Essentially that is what the Continuum of 
Care is. From our point of view we really do not have a 
particular interest for or against block grants, but we have an 
interest in ending homelessness.
    Block granting is really an administrative issue. As 
Mitchell said, the money goes out to communities now. Once a 
year they get their allocation. They spend it. And no matter 
how we alter the 
administration, communities are still going to get their money 
once a year. It is not going to matter to a homeless person how 
the money goes out administratively.
    I have not heard any serious complaints about the way the 
money goes out now. It might be possible to look at 
administrative improvements such as a 2 year application so 
communities would not have to go through so much process just 
for renewals. So, we would not have to do the whole Continuum 
every year; maybe we could do a 2 year cycle. There would be 
more predictability.
    But I really prefer the approach that Senator Reed has 
taken in his bill, which is just to tidy up the existing 
system; simplify the programs; consolidate the programs; but 
move forward.
    If we block grant, we are going to spend a year arguing 
about whether or not to block grant. Then another 2 years 
having communities get up to speed on how to use this new 
system. We will be 3 years behind. It will have no impact on 
outcomes for homeless people, or on ending homelessness. Zero. 
We will just be 3 years farther along without having made any 
progress. I would much rather spend the next 3 years trying to 
get an omnibus bill that looks at HHS resources, VA, Education, 
and gets us somewhere.
    I just do not see block granting as really impacting 
outcomes or ending homelessness. I see it as an administrative 
matter that may improve administration of the program at HUD. 
It will make it easier for HUD to administer, to block grant. 
That is about all I could say for it.
    Senator Dodd. It sounds like what I hear from all three of 
you is what Senator Reed has put together makes sense?
    Ms. Roman. To me it does, yes.
    Mr. Netburn. Absolutely.
    Senator Dodd. And I guess that suggests block granting at 
the Federal level by consolidation of programs and then 
allowing the Continuum of Care concept to work at the local 
level. That is the hybrid you are suggesting.
    Ms. Gleason. I was just going to say, certainly in my 
conversations with HUD I believe that Senator Reed and his bill 
is very close to the goals they want to reach, as well. I 
honestly do. So some conversations between this Committee, 
Senator Reed, Secretary Martinez, and other people at HUD would 
really just push us along. Because I honestly believe there are 
a lot of mutual goals.
    Senator Dodd. I should mention, he was not here, but I 
think very highly of Secretary Martinez.
    Ms. Gleason. Right.
    Senator Dodd. He was a local official in the Orlando area. 
He has a wonderful reputation as a developer in the private 
sector. Then when he served on local planning boards and so 
forth, he really had a wonderful record.
    He is very forthcoming. He has actually been up to 
Connecticut once, but we have tried to get him up to our area, 
Jack, to come by, and we have other issues to address, housing 
authority questions and so forth, but I think that is a good 
suggestion, Ms. Gleason. And I am a strong supporter of what 
Jack is trying to do, and I thank all three of you.
    Thank you, Mr. Chairman.
    Senator Reed. Thank you very much, Senator Dodd, for your 
questions. Let me conclude the hearing by thanking the 
witnesses, all the witnesses, the Assistant Secretary and the 
representatives of GAO, and our panel.
    This is an issue that, as Ms. Gleason just said, seems to 
have some emerging consensus and we are going to work to 
translate that consensus into something palpable that will help 
end homelessness, we hope within 10 years.
    If there are any additional comments that you would like to 
forward to us, do so quickly. If there are questions or 
requests, as Senator Dodd made a request for additional 
information, I would ask that you respond back to the Committee 
within 2 weeks.
    Thank you very much. This hearing is adjourned.
    [Whereupon, at 4:26 p.m., the hearing was adjourned.]
    [Prepared statements and response to written questions 
supplied for the record follow:]

































             PREPARED STATEMENT OF SENATOR SUSAN M. COLLINS
                 A U.S. Senator from the State of Maine
                             March 6, 2002
    Mr. Chairman, thank you for allowing me to be here today to take 
part in this constructive dialogue on the future of Federal housing and 
homeless policies. Let me first express my appreciation for your 
leadership and the work of Senator Allard to serve the homeless 
population throughout the country.
    I am pleased that the committee is working to reauthorize the 
McKinney-Vento Homeless Assistance Act. The programs authorized by the 
Act have served the 
citizens of Maine well, providing resources for shelters, new 
construction, rehabilitation, prevention, and numerous support 
services. Mr. Chairman, it has been a pleasure to work with you on 
possibilities for a reauthorization proposal. I am hopeful that we can 
reauthorize the program by the end of this Congress in a manner that 
incorporates innovative approaches to improving the delivery of 
services throughout the country. I appreciate your initiative and look 
forward to continued collaboration.
    We are fortunate to have a witness here today who has direct 
experience with the Federal homelessness programs at the local level 
and has done a tremendous job with the programs in Maine. It is my 
pleasure to introduce one of the Nation's foremost advocates on behalf 
of homeless individuals, Mary Ann Gleason. Ms. Gleason worked here in 
Washington for a number of years as the Executive Director of the 
National Coalition for the Homeless, where she worked with Members of 
Congress, the Administration, and Federal agencies to advocate for a 
public policy that expanded and better utilized Federal resources to 
prevent and address homelessness.
    To the delight of those of us in Maine, Ms. Gleason decided to 
return to the front line in 2001 and became the Director of the York 
County Initiative to End Homelessness. In that capacity, she has worked 
to promote both policy and attitudinal change throughout the State. Her 
commitment and dedication to combating homelessness in Maine have had 
an immense impact on the success of our system, and her work is to be 
commended.
    Aside from her duties with York County, Ms. Gleason has also found 
time to act as the Chair of the Monitoring and Evaluation Subcommittee 
on the Maine Homeless Assistance Planning and Advisory Committee, and 
she has been a member of the Maine Affordable Housing Bond Issue 
Steering Committee. As we can see by her presence here today and her 
numerous appearances before Congressional committees, Ms. Gleason 
continues to take an active role in Federal policy, and we are the 
richer for her efforts. Ms. Gleason, thank you for being here today and 
for all of the work you do in Maine. I look forward to hearing your 
testimony.
                               ----------
                   PREPARED STATEMENT OF NAN P. ROMAN

    President, National Alliance to End Homelessness, Washington, DC
                             March 6, 2002

    Mr. Chairman, Senator Allard, and Members of the Subcommittee, on 
behalf of our Board of Directors and partners, I am honored that you 
have invited the 
National Alliance to End Homelessness to testify before you today on 
reauthorization of the McKinney-Vento Homeless Assistance Act housing 
programs and on how these programs can be better used to make progress 
in the struggle to end homelessness in the Nation. The National 
Alliance to End Homelessness is convinced that not only could our 
Nation do a better job of helping homeless people, but also that ending 
homelessness is well within our reach. We very much appreciate the 
Subcommittee's history of accomplishment toward this goal. We are 
particularly grateful for Chairman Reed's recent work to draft a bill, 
provisionally entitled the ``Community Homeless Assistance Act of 
2002,'' that will take a critically important step in improving 
homeless assistance by simplifying and codifying the largest Federal 
homeless program--the HUD Homeless Assistance Grant Program.
    The National Alliance to End Homelessness is a nonpartisan, 
nonprofit organization that was founded in 1983 by a group of leaders 
deeply disturbed by the emergence of a new social phenomenon--thousands 
of Americans living on the streets. It is important to remember that 
prior to the 1980's, there was not widespread homelessness in the 
Nation. While there were certainly problems such as mental illness, 
drug abuse, and deep and pervasive poverty, people experiencing these 
problems were able to find a place to live. But then the seeds of 
deinstitutionalization, loss of affordable housing stock, destruction 
of a million units of single-room occupancy housing, new kinds of 
illegal drugs and an increase in poor, single parent households began 
to take root. In the 1980's, they grew into homelessness. The absence 
of widespread homelessness before the 1980's is a reminder that 
homelessness is not inevitable. It has not always existed, and it does 
not have to exist now.
    From its founding in 1983, the focus of the National Alliance to 
End Homelessness (the Alliance) has shifted as the problem of 
homelessness and our knowledge about it have changed. Once focused on 
food and shelter, today the Alliance and its nonprofit, public sector, 
and corporate partners in every State in the Nation are 
focused on permanent solutions to homelessness.
    I am grateful to you for holding this hearing today. It is time to 
look at the effectiveness of our homeless assistance programs and to 
make the necessary adjustments to ensure that they have the best 
possible outcomes. In doing this we must avoid the institutionalization 
of a system, which can manage but cannot eliminate homelessness. We 
must, instead, try to make progress toward an improved system that is 
results- and outcome-oriented. The decisions that you will make about 
reauthorization of the McKinney-Vento Act will affect which of these 
two paths we, as a Nation, will travel.

Where We Stand on Homelessness
    A recent Federal report, based upon the most extensive survey to 
date of homeless assistance providers and their clients (conducted by 
the U.S. Bureau of the Census) describes the situation. As of 1996 
there were 40,000 programs to assist homeless people in the Nation. 
This infrastructure of assistance has largely been formed in the past 
15 years, stimulated and sustained in good part by Federal funding. 
With an infrastructure of this size and complexity, one might expect 
the size of the homelessness population to have been reduced over this 
period of time. In fact, this is not the case. Despite the growing 
infrastructure of assistance, between 1987 and 1996 the size of the 
homeless population increased, from 2.5 to 3.5 million people per year.
    Is homelessness growing because the homeless system is ineffective? 
The answer is no. In fact, the homeless assistance system helps 
hundreds of thousands of people to escape homelessness every year. 
Indeed, it is becoming more effective. Through the Continuum of Care 
process much progress has been made, and the vast majority of people 
who become homeless exit the system relatively quickly and do not 
return. For most individuals, the existing system does end 
homelessness.
    Yet, the homeless assistance system cannot end homelessness 
overall, nor can it reduce the number of homeless people. This is 
because it can neither prevent people from becoming homeless, nor 
change the overall availability of housing, income, and services that 
will truly end homelessness. In the final analysis, the homeless 
assistance system cannot close the front door into homelessness, and it 
cannot open the back door out of homelessness.
    Mainstream social programs, on the other hand, do have the ability 
to prevent and end homelessness. These are programs like welfare, 
health care, mental health care, public housing, substance abuse 
treatment, foster care, veterans assistance, and so on. However, these 
programs are oversubscribed and underfunded. Increasingly, rather than 
being a true safety net that prevents people from becoming homeless, 
these mainstream systems shift the cost and responsibility for helping 
the most vulnerable people to the homeless assistance system. 
Perversely, the better the homeless system gets, the worse the 
mainstream system gets.
    So there is a very dysfunctional situation that is quickly becoming 
institutionalized. There is a homelessness assistance system that 
manages the problem but cannot solve it. There is a mainstream system 
with far more resources that, instead of solving the problem, has more 
incentive to shift cost and responsibility to the homeless system. If 
this dynamic is not changed, homelessness will never go away. If this 
approach to the problem is not altered, the American people will be 
paying to support the current system forever.
    How can this system be changed? Given that the draft bill addresses 
only the HUD homelessness program, will it nevertheless help us make 
progress toward ending homelessness?

Ending Homelessness
    To end homelessness, people will have to be prevented from becoming 
homeless--the front door to homelessness will have to be closed. In 
addition, those who are homeless will have to find somewhere to go when 
they exit the system--the back door out of homelessness will have to be 
opened. These are not unrealistic goals. They can be accomplished 
within the current parameters of the mainstream and homeless systems. 
To do so will require four steps. The National Alliance to End 
Homelessness believes that by following this course, homelessness can 
be ended in 10 years.

Planning to End Homelessness
    First, jurisdictions and the Federal Government can plan to end, 
not simply to manage, homelessness. A preliminary requirement is much 
better data collection at the local level. Data can identify who is 
homeless, why they are homeless, how they use the homeless and 
mainstream systems, and what is effective in ending their homelessness. 
Based on solid data, jurisdictions can begin a planning process that 
brings homelessness experts, and mainstream programs and resources, to 
the table with a goal of ending homelessness.

Closing the Front Door into Homelessness
    Second, to prevent homelessness the mainstream programs must be 
adjusted so that incentives favor helping the most vulnerable people 
rather than shifting this responsibility to the homeless system. 
Federally funded mental health, substance abuse, foster care and 
veterans programs, as well as corrections are among those mainstream 
programs whose clients often become homeless. Furthermore, these 
systems provide inadequate assistance to people while they are 
homeless. Ultimately, their performance must be improved if we are to 
make progress.

Opening the Back Door out of Homelessness
    In terms of opening the back door, recent analysis of homelessness 
has revealed that while most people (perhaps 80 percent) who become 
homeless exit the system relatively quickly, the remaining 20 percent 
has a much more troubled experience. Approximately 20 percent of the 
homeless population (200,000 people) spends months, and even years, 
homeless. This group is also chronically disabled. It might seem that 
housing chronically homeless and chronically disabled people in shelter 
is a cost effective way of providing assistance. It is not. A recent 
exhaustive and groundbreaking study by the University of Pennsylvania 
shows that a chronically homeless, mentally ill person living on the 
streets of New York City exacts an annual public cost of approximately 
$40,000. [This is because members of this group are high users of 
hospital emergency and intensive care facilities, jails and prisons, 
and mental health beds while homeless.] For nearly the same expenditure 
on the part of public systems of care (around $41,000 per year) that 
person can be provided with permanent supportive housing and services.
    So how can the back door be opened more widely?
    The 80 percent of the homeless population who exit the system 
quickly (both families and single adults) initially entered the system 
because they experienced a housing crisis that resulted in their 
homelessness. Despite the near universal shortage of affordable housing 
for poor people, they will find a way to house themselves. Since the 
homeless system is unable to address the real cause of their problem--
the overall national shortage of affordable housing--its best course of 
action is to facilitate their accommodation to this shortage and help 
them make it more quickly. Accordingly, the Alliance recommends a 
"housing first" approach for most homeless people--getting them quickly 
back into housing and linking them with appropriate mainstream 
services--thus reducing their stay in shelter or transitional housing 
to an absolute minimum. Although people who become homeless certainly 
need services, such services are most effective when delivered in 
permanent housing, rather than while people are in unsettled, temporary 
housing. (There are exceptions. For example, families fleeing a 
domestic violence situation usually need a period of time in a 
sheltered and secure environment. Families in which adult(s) are just 
finishing treatment for substance abuse also need intermediate levels 
of supportive housing.) Affordable housing is ultimately the solution 
to homelessness for this group, and we encourage any and all efforts to 
increase the supply of such housing. In the meantime, everything 
possible should be done to minimize the duration of homelessness for 
families and individuals.
    For chronically homeless people, there is also an answer--permanent 
supportive housing, usually preceded by outreach and sometimes by 
intermediate treatment or housing. Such housing is over 80 percent 
effective in achieving stability and is very cost effective. 
Approximately 200,000 units of such housing would essentially eliminate 
chronic homelessness, empty the system of those who live in it through 
no choice of their own, and change the dynamic of homelessness. This 
supply of permanent supportive housing could be achieved by retaining 
the set-aside of 30 percent of the homeless funds for permanent 
supportive housing. Further, it requires that the renewal funding for 
these units (Shelter Plus Care and Supportive Housing--permanent 
housing program, or any permanent housing) be shifted to Section 8.

Building the Infrastructure
    Finally, while it is certainly true that the homeless assistance 
system can shorten people's experience of homelessness, and that 
mainstream programs can be better targeted so that clients and wards 
are not vulnerable to housing crisis, ultimately this must be done in 
the context of addressing the larger systemic causes of homelessness. 
There is not enough affordable housing; earnings from employment and 
benefits have not kept pace with the cost of housing for poor people; 
and services that are needed for support and stability are not 
available to extremely low-income people. Whatever is done must be done 
in the context of addressing these underlying needs.

The Federal Role
    In the view of the Alliance, any initiative to change Federal 
homeless assistance programs should be measured against the goal of 
helping the Nation to end homelessness. Does it facilitate better 
planning to end homelessness? Does it help prevent people from becoming 
homeless? Does it help create permanent housing? Does it encourage 
greater responsibility of mainstream programs?
    The bill Senator Reed has drafted does not presume to be able to 
end homelessness. This is in its favor since it is unrealistic to 
expect homeless programs to end homelessness on their own. The bill 
does, however, tidy up the administration of the current system and 
maximize the use of Federal resources to achieve positive outcomes. In 
addition, it takes steps to compel action in mainstream programs that 
will lead us down the road to ending homelessness. Following is an 
evaluation of this proposal relative to its impact on ending 
homelessness.

Local Planning
    The draft bill creates a Community Homeless Assistance Planning 
Board (the Board) that is made up of those who deliver and receive 
homeless assistance, as well as the other significant sectors of the 
community. This Board is charged with devising an outcome-oriented plan 
to spend Federal resources, with developing long-term plans for 
reducing and preventing homelessness in the jurisdiction, with 
examining causes of homelessness, and with assessing and reporting on 
the success of projects funded by the Act and also of the communities' 
efforts to prevent and end homelessness. The goals of these planning 
Boards are admirable, and as they mirror the current system of planning 
and applying for Homeless Assistance Grants, they build upon existing 
capacity. They press further, however, by requiring a more rigorous 
outcome orientation and by requiring the community to look beyond the 
homeless system for both the causes and solutions to homelessness.
    Two improvements might be suggested in this area. First, without 
comprehensive administrative data systems that can examine how clients 
and tenants use the homeless system over time, from where they come, 
and to where they go, communities are unlikely to be able to achieve 
the level of planning or reporting anticipated in the draft bill. The 
achievements of cities like Columbus and Philadelphia demonstrate the 
impact such data systems can have upon results. This could be more 
explicitly addressed in the bill.
    A second area to examine concerns the constitution and 
responsibilities of the Boards. The Boards are required to do a 
tremendous amount of reporting, much of it on the performance of public 
and private systems and institutions. They are asked to address 
discharge planning and prevention policy and practice in systems of 
care that are beyond their control. While this reporting would be 
useful, in and of itself it is not likely to change these systems. It 
will be costly, and unless there is representation from relevant public 
and private agencies on the Board, the information may be difficult to 
obtain. Frankly, the issues of discharge planning and the utilization 
of mainstream services might be more effectively addressed in companion 
legislation directed to the U.S. Departments of Health and Human 
Services, Justice, Veterans Affairs, etc. Alternatively, the bill might 
include incentives to encourage key agencies to participate in local 
homeless planning. At a minimum, the bill could list key public sector 
agencies that must participate in local Boards if local applications 
are to be successfully funded.

Closing the Front Door
    The draft bill includes numerous references to homelessness 
prevention and requires Boards to describe improvements in discharge 
from public institutions and other prevention efforts. These are 
welcome shifts in emphasis. Again, a reauthorization of homeless 
assistance programs at HUD cannot be expected to compel action in a 
full range of public systems of care. This will have to be more 
substantively addressed in future companion legislation.
Opening the Back Door
    The bill draft clearly improves the outcome focus of the homeless 
assistance programs. It places the emphasis much more squarely on 
placement of people in permanent housing. The Alliance is particularly 
supportive of the set-aside of 30 percent of the funding for permanent 
housing for people with disabilities. In fact, you are encouraged to go 
even further and target these resources to people who experience 
chronic homelessness (and are also disabled) in order to make progress 
in helping this most difficult to serve population.
    The Alliance is also extremely supportive of the provision in the 
draft that provides funds for the renewal of permanent housing 
subsidies from the Section 8 
account. This will allow, over time (an estimated 10 years), 200,000 
chronically homeless people to be provided with permanent supportive 
housing--a key step toward ending homelessness.
    The Administration commits, in its fiscal year 2003 budget request, 
to end chronic homelessness in 10 years. The Alliance fully supports 
this goal, as part of its own goal of ending all homelessness in 10 
years. Authorizing the 30 percent set-aside for permanent supportive 
housing and shifting the renewal of this housing to the Section 8 
account would have a significant positive impact on the Nation's 
ability to end chronic homelessness in 10 years.
    Finally, the Alliance applauds the bill's focus on housing 
placement. Homelessness funding will never be adequate to end poverty 
for the millions of people who enter the homeless system every year. 
What can be expected is for the homeless system to end people's 
homelessness. People should be moved into housing as quickly as 
possible, and the draft bill has provisions to encourage this preferred 
approach.

Building the Infrastructure
    Since this bill focuses only on the homeless programs, it does not 
have a major impact on the systemic changes needed, including improving 
the supply of affordable housing, providing adequate incomes, or 
adequately addressing service needs. It is important to note, however, 
that to the degree that new permanent supportive housing or housing for 
families is developed, the affordable housing supply can be increased.

Summary
    Millions of people become homeless in our Nation each year and 
thousands of nonprofit and public sector agencies spend billions of 
dollars to help them. This system functions fairly well to manage the 
problem. However, because it cannot stop people from becoming homeless, 
and does not create the housing that can end their homelessness, this 
homeless assistance system cannot reasonably be expected to end 
homelessness overall.
    And homelessness can be ended. To make progress toward this goal, 
the Federal Government can do two things. First, it can adjust the 
existing homeless programs to improve their outcome orientation. It can 
distribute money more rapidly; focus resources more tightly on the goal 
of ending homelessness for individuals and families by moving them more 
quickly into permanent housing; create an adequate supply of permanent 
supportive housing for chronically homeless people; and be more 
attentive to emergency prevention measures such as rent assistance that 
can divert people from the homeless system altogether.
    The second step, however, is beyond the purview of the homeless 
system. It 
involves making mainstream systems of care and custodial systems more 
responsive to the housing needs of those they serve, and preventing 
them from shifting these people and the cost of serving them into the 
homeless assistance system. It involves the creation of more affordable 
housing, the provision of adequate incomes, and the provision of 
services adequate to meet needs.
    The draft bill Senator Reed and his wonderful staff have developed 
does a good job of addressing the first task. It builds upon a 
successful system of delivering 
resources. Communities are highly invested in this system, which is 
well embedded in communities. It makes sense to focus on improving the 
existing administrative infrastructure rather than replacing that 
infrastructure. Creating a whole new 
infrastructure is unlikely to have any significant impact on ending 
homelessness. The draft bill tightens up the existing system by 
codifying its procedures, including the allocation formula and the 
planning body. It focuses the program much more tightly on outcomes and 
outcome-based planning. It authorizes critical provisions necessary to 
end homelessness, including targeting a proportional amount of the 
resources to permanent supportive housing, and normalizing the renewal 
of housing for homeless people. Overall, it improves the administration 
of current programs, and shifts their focus to improve outcomes. The 
National Alliance to End Homelessness believes that this is a positive 
step.
    As to the second part of the Federal responsibility, the draft bill 
sets the stage for positive change. Mainstream systems of care and 
custodial systems such as prisons must be engaged to close the front 
door into homelessness and open the door out of homelessness. The 
Alliance looks forward to working with the Members of the Committee on 
this critical task in the future.
                               ----------
                 PREPARED STATEMENT OF MITCHELL NETBURN
      Executive Director, Los Angeles Homeless Services Authority
                        Los Angeles, California

                             March 6, 2002

    Mr. Chairman and Members of the Subcommittee, I am honored that you 
have invited the Los Angeles Homeless Services Authority to testify in 
support of the 
reauthorization of the McKinney-Vento Homeless Assistance Act.
    The Los Angeles Homeless Services Authority, known as LAHSA, is a 
joint 
powers authority of the City and County of Los Angeles. Founded in 
1993, LAHSA is governed by a 10 member commission. Each of the 5 Los 
Angeles County Supervisors appoints one commissioner and the Mayor of 
the city of Los Angeles appoints the other 5 commissioners.
    LAHSA has been the lead coordinator for the second largest 
Continuum of Care system in the country since the inception of HUD's 
Continuum of Care funding 
process. Prior to the establishment of LAHSA, there had been no local 
coordination of funding for homeless housing and services. The 
Continuum of Care requirements enabled LAHSA to vigorously pursue a 
regional approach to addressing homelessness. This is critical to 
successfully address homelessness, especially given the geography 
covered by our Continuum--four thousand square miles--and the extreme 
differences in infrastructure and needs across our county. Moreover, 
Los Angeles County encompasses 88 jurisdictions, including 34 
entitlement cities.\1\ McKinney-Vento funding has made it possible for 
LAHSA to provide critically needed leadership in integrating services 
across jurisdictional boundaries and between homeless and mainstream 
service delivery systems.
---------------------------------------------------------------------------
    \1\ Three of those cities, Glendale, Pasadena, and Long Beach, 
submit their own Continuum of Care application, but have been 
coordinating their Homeless Management Information System planning with 
LAHSA.
---------------------------------------------------------------------------
    We are proud of the collaborative efforts stimulated by the 
Continuum of Care and support reauthorization of the McKinney-Vento 
Homeless Assistance Act to codify the Continuum of Care and a 
competitive process for obtaining funding for homeless programs.
Nature and Extent of Homelessness in Los Angeles County
    The most commonly used estimate indicates that there are 84,000 
men, women, and children homeless on any given night in Los Angeles 
County.\2\ A more recent County survey found that 375,000 adults 
experienced homelessness in the previous 5 years. While many of these 
persons doubled up in someone else's home, up to half resorted to 
staying on the streets or in shelters.\3\
---------------------------------------------------------------------------
    \2\ The Number of Homeless People in Los Angeles City and County: 
July 1993 to June 1994. Shelter Partnership, Inc., Los Angeles. 
November 1995.
    \3\ Cousineau, Michael R. and Brian Shimabakura, ``The Five Year 
Prevalence of Homelessness in Los Angeles County: Findings from the 
L.A. County Health Survey,'' Institute for the Study of Homelessness 
and Poverty Colloquia presentation, Los Angeles, January 20, 1999.
---------------------------------------------------------------------------
    Since 1995, the Los Angeles Continuum of Care has received over 
$325 million through the McKinney-Vento Act. In the last year alone, 
McKinney-Vento funded programs that served more than 63,000 homeless 
men, women, and children. These programs include outreach services, 
supportive services, emergency shelter, and transitional and permanent 
housing. Among them are model programs in the area of specialized 
employment services for homeless persons, the relocation of families 
living in shelters to permanent housing, and permanent supportive 
housing lauded for addressing chronic homelessness and its contribution 
to neighborhood improvement. McKinney-Vento funding has enabled 
localities to leverage millions of dollars in private funding and 
investment while also contributing to the aesthetic improvement of many 
low-income neighborhoods.
    Notwithstanding this significant level of Federal support for 
homeless persons, we face very real challenges to ending homelessness. 
Over the last 10 years, Los 
Angeles County has experienced increasing poverty and diminishing 
housing resources for our lowest-income residents. Los Angeles County 
is reporting, despite a 3\1/2\ percent drop in unemployment since 1990, 
poverty in the County has increased by 46 percent. These conditions 
have fueled greater demand for homeless services even before the local 
economy began to experience general economic hardship since last fall.
    Specifically within the City of Los Angeles, there is a 3.5 percent 
rental housing vacancy rate,\4\ among the lowest rate in the last 4 
years. Not only does this mean a tighter housing market for low-income 
renters, but also those who are fortunate enough to receive a Section 8 
voucher are finding fewer and fewer landlords willing to rent to them. 
The City's Housing Authority reports that only 41 percent of households 
issued vouchers are able to use them.\5\ On a brighter note, the Los 
Angeles City Council last week adopted the Mayor's plan for 
establishing a $100 million Housing Trust Fund. And this November, 
voters in the State of California will have the opportunity to approve 
over $2 billion in bond financing for affordable housing.
---------------------------------------------------------------------------
    \4\ Citywide vacancy rate from January 1998 through January 2002 
for multifamily, individually metered housing units. Los Angeles 
Housing Department /Policy and Planning Unit. 
http://www.lacity.org/lahd/vacchart.PDF.
    \5\ ``Housing Less Affordable as Rent-Wage Gap Widens,'' Los 
Angeles Times, October 3, 2001.
---------------------------------------------------------------------------
    We are looking forward to unprecedented funding opportunities at 
the local, State, and Federal level to finally end homelessness. In 
reauthorizing the McKinney-Vento Homeless Assistance Act, you have the 
opportunity to harness this momentum and provide the Federal leadership 
necessary to end homelessness.
Recommendations for Reauthorization of the McKinney-Vento Homeless
Assistance Act
    In looking toward reauthorization, our experience tells us that the 
collaborative, community-based process generated by the Continuum of 
Care works. Our system as a whole is better, more vigorous, and more 
integrated because of the incentives created by the Continuum of Care 
to engage in a broadly inclusive planning process and to identify the 
resources in mainstream systems that need to serve our homeless 
clients.
    We have, however, outgrown the current McKinney-Vento Act and offer 
these 
recommendations:

 Keep the program flexible. Every community has different 
    circumstances that call for different approaches to addressing 
    homelessness. The strength of the existing McKinney-Vento system is 
    that it allows localities to determine how they can best use the 
    funding to meet the needs of homeless individuals and families. In 
    some communities, local governmental agencies are strong advocates 
    for service 
    delivery and understand how to work with their nonprofit partners 
    to serve the homeless. In other areas, the nonprofit community is 
    better positioned to lead that decisionmaking process. By allowing 
    localities to decide who is best suited to lead the planning effort 
    and apply for funding, we avoid the difficulties that often occur 
    when disinterested entities are the appointed recipients for 
    funding.
 Ensure Federal coordination of homeless programs by locating 
    the Interagency Council on Homelessness in the White House Domestic 
    Policy Office. While nearly all of LAHSA's funding for homeless 
    programs originates in the U.S. Department of Housing and Urban 
    Development (HUD), many of the homeless housing and service 
    agencies that we fund are also funded by other Federal Departments, 

    including the Departments of Veterans' Affairs, Health and Human 
    Services, Labor and Education. Coordination of funding and programs 
    could be furthered by having a centralized presence in the White 
    House to oversee a national plan to end homelessness.
 Lift the cash match requirement for permanent housing. 
    Developers in our system have reported that the 25 percent cash 
    match requirement under the SHP 
    permanent housing program has hampered efforts to use this program 
    in the Los Angeles area. Although new sources of local funding are 
    on the horizon, securing and documenting the cash match for this 
    process is not always feasible. This in turn inhibits development 
    of the permanent affordable housing we so desperately need to end 
    homelessness.
 Move the renewal of Shelter Plus Care and Supportive Housing 
    Program Permanent Housing Contracts to the Housing Certificate 
    Fund. By the time these 
    programs are ready to renew, they have demonstrated their 
    effectiveness and the tenants in the programs are no longer 
    homeless. Therefore, we urge you to consider these renewing 
    programs as ``mainstream,'' thereby allowing renewals to be funded 
    from a mainstream source.
 Provide for Homeless Management Information Systems funding. 
    Several years ago, Congress wisely directed HUD to embark on 
    implementing computerized data collection. LAHSA has begun working 
    on a countywide homeless management information system that would 
    be used not only by McKinney-Vento-funded programs, but by agencies 
    serving the homeless that do not receive Federal funding. We have 
    embraced this opportunity to establish a system that will help 
    homeless persons access services, providers to track the work that 
    they do, and allow localities to assess the effectiveness of their 
    programs. However, this entails considerable costs that we cannot 
    sustain with local funding. We look to you to 
    ensure that the HMIS requirement will not be an unfunded mandate.
 Retain the competitive process for homeless services funding. 
    While administering an annual competition does consume significant 
    local resources, the system is 
    better for it. The current process is a catalyst that empowers us 
    to work closely with agencies from the 31 entitlement cities within 
    our Continuum of Care, as well as with the County-administered 
    housing, health, and welfare systems. Therefore, LAHSA has 
    historically opposed the block granting of Federal homeless 
    assistance funds.

    I thank you for this opportunity to share the experiences of Los 
Angeles County and our suggestions for improving the existing 
legislation. I strongly support your efforts to reauthorize the 
McKinney-Vento Homeless Assistance Act so that we will have the 
critical resources and Federal leadership necessary to end 
homelessness.
                               ----------
                 PREPARED STATEMENT OF MARY ANN GLEASON
  Director, York County Initiative to End Homelessness, Alfred, Maine
                             March 6, 2002

    Good afternoon, Senators, and others concerned about homelessness 
in our 
Nation. Thank you, Senator Reed, for your kind invitation to appear 
before the Subcommittee. Thank you, Senator Collins, for your gracious 
introduction.
    The Stewart B. McKinney Homeless Assistance Act was enacted into 
law in July 1987, as the first, and to date only, major Federal 
legislative response to homelessness as a national issue of grave 
concern. According to the Urban Institute, as many as 842,000 persons 
on any given night, and up to 3\1/2\ million a year become homeless in 
the United States.
    In Maine, the number of admissions into our shelters grew by 51 
percent over the last 4 years. Thirty-two percent of those who become 
homeless in our State are 
families; 11 percent are youth; 13 percent are veterans; 37 percent are 
employed; nearly 45 percent are challenged by disabilities. Sixty-one 
percent are high school graduates. Twelve percent have attended at 
least a year of college; in Portland, 29 percent have graduated from, 
or at least attended college. The average monthly income of shelter 
residents in Maine is $240. It is also important to know that 68 
percent of those who entered the shelters were homeless in some other 
form prior to doing so, and prior, therefore, to being counted. They 
were doubled or tripled up with friends or relatives, living in motels, 
cars, tents, speaking loudly to us of how many more live so close to 
the edge that simply doing shelter or street counts cannot tell us the 
scope of the problem.
    Since passage of the McKinney bill, Rhode Island, Maine, 
Conneticut, Colorado, and every other State has been the recipient of 
HUD homeless assistance funds that have supported the development of 
many highly effective programs that not only 
allowed us to redress homelessness for those who suffer it, but also 
serve as models for addressing the holistic needs of vulnerable 
families and individuals. In Denver, McKinney funds helped renovate a 
portion of 92 rental housing units, half of which were no longer 
livable and contributed to the growing blight and crime in the 
neighborhood. Having significantly upgraded the community's self-
regard, these units now provide permanent housing shared by persons 
challenged by mental illness who had lived on the streets for years of 
their lives, high-tech employees, factory workers, other families, and 
individuals of mixed incomes in an integrated model we can all feel 
good about. In another, new construction of a complex of permanent 
affordable housing units for diverse populations that includes a 
childcare center used by the broader neighborhood of homeowners, as 
well as children homeless in the recent past. In Maine, we are 
developing housing on an organic farm for late-stage alcoholics who 
have become homeless to bring meaning and hope back to their lives, and 
to provide vegetables and herbs for the bakery and catering service 
where 
shelter residents can develop skills in culinary arts from a terrific 
chef. In Columbus, the housing first model moves families out of 
shelters within 2 weeks and into permanent housing with transitional 
services, so they can quickly be reintegrated into the larger society. 
Developed now in many States, highly efficacious supportive housing 
programs also provide employment opportunities for persons with 
disabilities that help them feel whole again. For families who have 
suffered domestic violence and consequent homelessness, we are 
designing a cohousing model to create the community that September 11 
taught us is America at her best. Nationally, HUD's McKinney programs 
have had a positive impact in every State in the Union. The diversity 
of the local responses has resulted in significant cross-fertilization 
of good ideas and best practices.
    Having read a draft of your bill, Senator Reed, I am delighted to 
say it builds on much that is highly effective in HUD's McKinney 
programs, and it improves elements needing such. I will mention a few:

          1. It consolidates the separate McKinney programs and 
        eliminates the constraints they imposed to maximize 
        flexibility, creativity, and local decisionmaking.
          2. It provides funding for the first time for permanent 
        housing for nondisabled families.
          3. It removes the caps on funding for transitional and 
        permanent housing to more realistically reflect the cost of 
        housing construction and renovation at the diversity of 
        localities in our States.
          4. It provides financial incentives to help build the funding 
        capacity of nonprofits so they can create housing stock for 
        those poorest among us that other Federal housing programs keep 
        moving away from.
          5. It requires limited and appropriate Federal oversight to 
        insure that the Federal Government does not abnegate its 
        rightful role to effectively address the needs our most 
        vulnerable citizens.
          6. It brings to the table both targeted homeless and 
        mainstream program 
        recipients, public and private, to collaborate their planning, 
        implementation, and evaluation activities in order to utilize 
        available resources in a manner that can maximize outcome 
        effectiveness, reduce duplication, and reverse policies and 
        procedures that unintentionally either stimulate or prolong 
        homelessness.
          7. It places responsibility for interagency collaboration at 
        the Federal level in the hands of the Domestic Policy Council 
        within the Office of the President to help ensure each Federal 
        agency assumes their responsibility for preventing and ending 
        homelessness using the resources under their administration.

    Talking about homelessness is actually a dialogue about deeper and 
broader issues that narrowing to a topic too easily dismissed is 
neither accurate nor 
informed. It is a dialogue about the lack of opportunity for housing 
stability, an essential condition for family health and well-being, 
retaining steady employment and employees, children succeeding in 
school, neighborhoods retaining their quality and safety, disabled and 
elderly persons living as full and dignified a life as possible.
    It is a dialogue about the unfinished business of 
deinstitutionalization--insuring that community-based housing, 
treatment and support services are available and 
affordable. It is a dialogue about welfare reform whose enlightened 
purpose would be economic viability for the participating families, not 
naively moving the rolls into hidden or blatant homelessness. It is a 
dialogue about recipients of Federal block grants that fund behavioral 
health care, not being held accountable for the poorest and most 
vulnerable of their target populations. It is a dialogue about wages 
and cash assistance benefits that remain remarkably disproportionate to 
the cost of housing and other basic needs. We can respond in one of two 
ways--increase income levels so housing is affordable at whatever costs 
the market requires, or we can significantly increase the public 
investment in producing and sustaining affordable housing. Doing 
neither is a prescription for protracted homelessness. Housing policy 
in America is primarily investment policy, an approach that is simply 
inadequate to meeting the housing needs of the disabled person whose 
annual SSI income is $6,000 a year, or a full-time worker earning even 
$7.00 an hour. The larger housing dialogue is about producing housing 
and not simply talking about producing housing. It is about 36,000 new 
housing vouchers being proposed nationwide for 2003, when in one city 
alone, there are 150,000 eligible households on the waiting list. 
Finally, homelessness is about a shredded and shameful safety net, 
including the lack of health care, in a Nation blessed with both the 
resources and the ingenuity to be fairer than that. I look at the 
weight of poverty, and burden of disregard that homelessness represents 
and wonder how, having so much, we have come so far from what is right 
and just.
    In conclusion, we suggest that these broader issues that form the 
structural underpinnings of homelessness must be addressed through 
omnibus legislation, similar but broader than the original McKinney 
legislation. We would be delighted to help you to pursue such 
legislation, replicating the highly collaborative process that resulted 
in the Community Partnership to End Homelessness Act of 2002.
    Thank you for listening. I would be happy to answer any questions.

   RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED FROM ROY A. 
                            BERNARDI

Q.1. How many units of housing have been created with McKinney 
funds? How many of these are permanent housing units?

A.1. HUD records and tracks information regarding housing 
created under the McKinney-Vento Act using Annual Performance 
Report (APR) data submitted by project grantees. APR data 
records beds created and sustained rather than housing units. 
On the basis of the most current analysis of APR data, HUD's 
McKinney-Vento Act programs have created and are currently 
funding 155,000 beds of which 43,000 are permanent housing 
beds.

Q.2. How many communities has HUD provided McKinney funding to 
since its inception. Have both urban and rural communities been 
able to access the funds?

A.2. The vast majority of the grantees under HUD's McKinney-
Vento Act programs are nonprofit organizations, not 
communities. Therefore, the precise number of communities where 
projects have been assisted since 1987 is not known. However, 
in fiscal year 2002, $150 million in formula-based funding 
under the Emergency Shelter Grants (ESG) Program was provided 
to 324 metropolitan cities and urban counties, 50 States, 
Puerto Rico and the territories. In the fiscal year 2001 
Continuum of Care (CoC) homeless competition, over $900 million 
was allocated to nearly 400 Continuum of Care jurisdictions 
covering almost 90 percent of the 
population of the Nation. Rural and urban communities can 
access both the ESG and the CoC competitive funds. We estimate 
that 
approximately 11 percent of the 2001 competitive funds had been 
awarded to projects in rural communities.

Q.3. The Administration has made ending chronic homelessness in 
the next decade a top objective, but HUD's programs will 
continue to be funded at $1.1 billion. When we asked you if 
this funding level was sufficient to meet the Administration's 
goal, you said that this level would not achieve the desired 
result. Please provide us with an analysis of the appropriate 
level of HUD funding needed to achieve this goal if budget 
constraints were not an issue.

A.3. The HUD program that most directly works toward ending 
chronic homelessness is the Shelter Plus Care Program. This 
program provides rental assistance for permanent supportive 
housing for disabled homeless persons. HUD has committed to 
request 
additional funding above the current funding level to ensure 
that all otherwise eligible Shelter Plus Care renewal projects 
can 
be renewed. The renewal demand for fiscal year 2003 is 
estimated to be $118 million and is increasing annually as 
additional S+C projects seek renewal. Although it is difficult 
to project exact renewal needs due to the flexible nature of 
the 5 year grants, based upon already approved 1 year renewals 
and projected renewals of 5 year grants, it is estimated that 
the renewal demand for Shelter Plus Care will be approximately 
$200 million in fiscal year 2004. In order to meet this 
increasing demand and still have enough funds to continue 
funding new and renewal Supportive Housing Program, the budget 
request will need to be adjusted appropriately.
    Additionally, HUD has moved aggressively to encourage our 
applicants to seek needed funding for supportive services from 
the mainstream supportive service programs of HHS, VA, the 
Social Security Administration, the Department of Agriculture, 
and other agencies. As the transition to other sources 
continues, a growing percentage of HUD's funding is being freed 
up for use in developing housing. As a result, large additional 
increases in HUD's homeless appropriations, beyond the S+C 
renewal costs noted above, are not anticipated.

Q.4. What is the Secretary's plan for achieving funding 
commitments and active engagement from other Federal agencies--
for 
example, HHS, DOL, DOE--toward the goal of preventing and 
ending homelessness?

A.4. The Department of Housing and Urban Development is working 
with a variety of other Federal agencies to prevent and end 
chronic homelessness in the United States. In particular, we 
have undertaken several major initiatives with the Department 
of Health and Human Services (HHS) to not only coordinate 
activities but also, most importantly, to open up the enormous 
resources tied to the HHS mainstream supportive service 
programs for use in meeting the critical supportive service 
needs of homeless persons. On a monthly basis, a senior level 
task force composed of 
representatives from HHS, HUD, and the Department of Veterans 
Affairs (VA) meets monthly to discuss funding availability and 
areas for eliminating duplication. The goal of the Task Force 
is to discuss access to programs and how to eliminate obstacles 
that 
prevent homeless persons from obtaining supportive services. To 
this end, we have collaborated on definitions for supportive 
service programs and, for the first time, these joint HUD/HHS 
definitions are included in HUD's 2002 Homeless Assistance 
Funding Application. Similar interdepartmental coordination has 
been achieved in the development of Policy Academies funded by 
HUD and HHS in which State governments are actively engaged in 
identifying and eliminating barriers that currently prevent 
homeless persons from accessing supportive service funding.
    HUD's efforts to coordinate access to Federal funds are now 
being assisted by the Interagency Council for the Homeless. The 
Agency, with the new leadership of the Director, Philip 
Mangano, is responsible for: (1) planning and coordinating the 
Federal Government's actions and programs to assist homeless 
people, and making or recommending policy changes to improve 
such assistance; (2) monitoring and evaluating assistance to 
homeless persons provided by all levels of government and the 
private sector; (3) ensuring that technical assistance is 
provided to help community and other organizations effectively 
assist homeless persons; and (4) disseminating information on 
Federal resources available to assist the homeless population.

Q.5. You say in your testimony that you are intending to make 
changes to the Continuum of Care application process to focus 
less on process and more on outcomes. What types of changes are 
you intending to make?

A.5. The following changes have been made in HUD's fiscal year 
2002 Continuum of Care application process:

 HUD has established a goal for eliminating chronic 
    homelessness within 10 years. In this year's application, 
    HUD is requiring communities to provide their strategy for 
    ending chronic homelessness and to report any progress that 
    has been made over the past year that would contribute to 
    this goal. HUD is still requiring communities to set goals, 
    action steps, and a timetable for achievement of the goals 
    that address their other homelessness needs.
 In HUD's upcoming national competition, under the 
    Supportive Housing Program, applicants may include, as an 
    eligible activity, the development and implementation of 
    homeless management information systems (HMIS). This will 
    allow communities to track their homeless clients and 
    report unduplicated data to HUD regarding client outcomes 
    that is, types of housing clients reside in, supportive 
    services provided, homeless provider information, etc.
 State and local government applicants must certify 
    that they have a discharge plan for the discharge of 
    persons from publicly funded institutions or systems of 
    care if they request funding under the CoC programs, for 
    example, Supportive Housing, 
    Shelter Plus Care, and Section 8 Moderate Rehabilitation 
    for SRO programs. In this year's application, applicants 
    that certified in 2001 are required to describe any 
    discharge policy or protocols they have developed.
 Project applicants are now required to provide 
    information in the application regarding the progress made 
    by homeless clients based on program goals. The program 
    goals are: (1) residential stability, (2) increased client 
    skills or incomes and (3) greater self-determination.
 HUD is placing greater emphasis on housing assistance 
    for homeless individuals and families. In the 2002 CoC 
    competition, HUD will award up to 5 points to Continuums 
    whose total 
    approvable funds go toward housing activities as opposed to 
    supportive services activities. Housing activities consist 
    of rental 
    assistance; and acquisition, rehabilitation, new 
    construction, leasing and operating costs for supportive 
    housing projects.

Q.6. Many credit HUD's Continuum of Care with improving 
coordination of homeless programs and providing a more 
comprehensive approach to homelessness within communities. 
However, the Continuum of Care has traditionally focused more 
on targeted rather than mainstream programs. We know that 
access to mainstream programs (such as, Medicaid, SSI, and Food 
Stamps) by homeless people is a serious concern. What are your 
ideas on how to provide communities with an opportunity to 
better coordinate and integrate their mainstream and homeless 
programs? What key actions or strategies does HUD feel should 
be taken in order to reduce the barriers that homeless people 
face in accessing mainstream Federal programs?

A.6. HUD began encouraging communities to integrate mainstream 
resources in their Continuum of Care planning in last year's 
competition by requesting that the community describe their 
strategy to coordinate homeless assistance with various 
mainstream programs. This year's application places more 
emphasis and scoring points on the continuum-wide strategy to 
identify homeless persons eligible for mainstream programs, 
enroll them in the programs and ensure that they receive 
assistance. In addition to encouraging continuum-wide strategy 
to access mainstream programs, HUD is also rating individual 
projects on their plan to ensure that all homeless clients will 
be assisted in obtaining benefits under mainstream programs. We 
believe that this may encourage continuums to work more closely 
with mainstream providers that have not traditionally been 
involved with the Continuum of Care.
    HUD has also been actively participating in a senior level 
working group that includes representatives from HHS and VA. 
The working group meets monthly to try to overcome barriers 
that homeless people face in accessing mainstream Federal 
programs. In addition to this working group, HHS and HUD have 
sponsored two policy academies for State and local policy 
makers to improve access to mainstream services for homeless 
persons. State teams attending the academies are to prepare a 
State Action Plan that identified specific strategies for 
overcoming barriers to accessing mainstream programs.

Q.7. The most recent Conference of Mayor's study of hunger and 
homelessness states that demand for emergency shelter has 
increased in 2001 and that most applicants for public housing 
and Section 8 vouchers are on a 1 year or more waiting list. 
What does HUD propose to do to increase the supply of 
affordable housing to meet these needs?

A.7. Within the limits of the current budget constraints tied 
to the war against terror and the slowing economy, HUD's fiscal 
year 2003 budget seeks to expand the number of households that 
can 
afford the costs of rental housing, as identified below:

 We are requesting 34,000 additional housing vouchers.
 We are proposing a $74 million increase in HOME 
    funding, even after taking out the $200 million for the 
    American Dream Downpayment Fund.
 We are continuing our strong commitment to Section 202 
    for the elderly and Section 811 for the disabled.
 We are adding $15 million to the Housing Opportunity 
    For Persons With AIDS Program--raising it from $277 million 
    to $292 million.
 We will continue to emphasize permanent housing 
    solutions to addressing the needs of the long-term homeless 
    using McKinney-Vento Continuum of Care funds.

Q.8. In your testimony, you discuss HUD's concept of a Joint 
Task Force to seek ways to increase the use of mainstream 
supportive service funds. How is this group's purpose different 
than the Interagency Council on the Homeless (ICH)?

A.8. As more fully discussed in response to question 4 above, 
HUD has joined with HHS and VA in a joint, senior-level working 
group that is working to coordinate delivery of housing and 
supportive service assistance to homeless persons. While this 
objective is consistent with the goals of the ICH, the purpose 
of the HUD/HHS/VA working group is focused on a very specific 
objective that is now limited to these three agencies. 
Additionally, at the time the working group was initiated in 
February 2001, the ICH had not been reestablished. Upon 
installation of the ICH Director, the working group has been 
coordinating its activities with ICH Director Philip Mangano.

Q.9. In your testimony, you also discuss the use of ``Policy 
Academies'' to assist State and local policymakers in 
developing Action Plans intended to improve access to 
mainstream health and human services that are coordinated with 
housing. Please describe these Policy Academies, their purpose 
and who was involved in planning and attending such Academies?

A.9. The idea for the Policy Academy concept originated after a 

national meeting in September 2000 titled ``Building 
Partnerships for Access to Health Care and Social Services for 
Persons Who Are Homeless. `` In this session, HUD and HHS 
officials asked stakeholders to describe barriers and solutions 
to better uses of multiple funding sources. As an outgrowth of 
this conference, HUD and HHS formed a joint working group that 
later grew to include VA. The mission of this group was to 
develop a project that would focus States on how their current 
policies and program resources could be coordinated and 
integrated at the State level to improve their ability to serve 
the homeless. Our research revealed how little State officials 
knew about each other's programs and areas of 
responsibility and consequently what the Policy Academies could 
accomplish. The purpose of the Policy Academy is to bring 
individuals from the same State together, sometimes for the 
first time, with the task of developing a statewide Action Plan 
to improve 
access of the homeless population in their States, to 
mainstream health and human services.
    All States and Territories were invited to apply for slots 
in the two planned Policy Academies. Thirty-seven States 
applied. The sixteen top scoring applications were selected. 
The initial Academy took place November 26-28, 2001, in Santa 
Fe, New Mexico, focusing on how to increase the access of 
families and children to mainstream resources. The second 
Policy Academy is scheduled for April 9-11, 2002, in Boston, 
Massachusetts, and will focus on the adults who are disabled 
and have experienced chronic homelessness. Each State team is 
assigned a facilitator who continues to work with the team over 
the following year as the Action Plan is developed and 
implemented. There are tentative plans to hold additional 
Policy Academies and a National meeting that will be open to 
all who are interested in hearing more about the State Plan 
process and understanding the direction of the HUD/HHS 
collaboration.

 RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED FROM STANLEY J. 
                           CZERWINSKI

Q.1. Your statement highlighted the need for better integration 
of homeless assistance programs. Why is this so important?

A.1. Numerous studies have demonstrated that the multiple and 
complex needs of homeless people--which may include medical 
care, mental health care, substance abuse treatment, housing, 
income support, and employment services--should not be 
addressed in isolation but rather through programs that are 
integrated and that are coordinated. Yet, as we and others have 
reported in the past, the Federal Government's system for 
providing assistance to low-income people is highly fragmented. 
Each Federal assistance program usually has its own eligibility 
criteria, application, documentation requirements, and time 
frames; moreover, applicants may need to travel to many 
locations and interact with many 
caseworkers to receive assistance, Among other things, this 
fragmentation can make it difficult to develop an integrated 
approach to helping homeless people, who often have multiple 
needs.

Q.2. Mr. Czerwinski, some local communities use outcome 
measures to evaluate their homeless programs. What do you 
believe are the benefits of using outcome measures to evaluate 
homeless programs? What kind of information do you believe 
communities need to collect in order to effectively measure 
outcomes? Is HUD or any other agency collecting such data?

A.2. The benefit of using outcome measures to evaluate homeless 
programs is that the data can be used to hold programs 
accountable for their performance. Our work in 1999 showed that 
homeless assistance services are increasingly being evaluated 
by measuring outcomes (such as number of clients who are no 
longer homeless) rather than outputs (such as number of shelter 
beds provided). Measuring program outcomes generally requires 
the ability to collect data at the client-level (rather than 
the aggregate community level) and over an extended period 
(rather than at a single point in time). Implementing such data 
gathering can require significant planning and development of 
appropriate management information systems. Nevertheless, we 
reported in 1999 that communities were increasingly using 
outcome measures to manage their homeless 
assistance programs. For example, in Minnesota the Family 
Homeless Prevention and Assistance Program provides agencies 
with grants they can use very flexibly, as long as the agency 
sets specific outcome goals, develops a method for tracking 
those outcomes, and reports on those outcomes. Similarly, the 
Ohio Department of 
Development requires its homeless assistance grantees to 
develop performance targets that they are then held accountable 
for achieving. HUD said that it has begun collecting data 
through its Homeless Management Information System.

RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED FROM NAN P. ROMAN

Q.1. You state in your testimony that, ``there is an overall 
national shortage of affordable housing . . . earnings from 
employment and benefits have not kept pace with the cost of 
housing for poor people.'' What do you suggest should be done 
to increase the supply of affordable housing?

A.1. Increasing the supply of affordable housing requires both 
production of more low-cost housing and subsidies to very poor 
people so that they can afford the housing, even if the cost is 
very low.
    HUD says that there is a shortage of 5.3 million units of 
affordable housing. To achieve an adequate supply of affordable 
housing, this gap would have to be filled with increased 
production. To achieve more production, it will be necessary 
either to devote substantial new resources to housing 
production, or to target existing resources much more tightly 
to production of very low-cost housing. A variety of strategies 
can be used to distribute the increased 
resources and produce the housing. Housing can be produced by 
for-profit, nonprofit, or public sector entities. Each has its 
advantages and disadvantages. It can be produced through 
increasing funding to existing programs such as HOME, the Low 
Income Housing Tax Credit, Section 202, and Section 811 (which 
the Alliance has supported), and/or through a new production 
vehicle such as the National Housing Trust Fund (which the 
Alliance has also supported). Increased funding can be obtained 
through new appropriations, and/or through targeting existing 
resources to the 
production of very low-cost housing. The bottom line is money. 
Without more money, either new or redirected, devoted to the 
production of low-cost housing, the gap will not be filled.
    Even if there were substantial new production of very 
inexpensive housing, there would be a sizeable group of people 
who could not afford to live in it. In fact, using the Federal 
standard of 30 percent of income for rent a substantial 
percentage of renters could not afford to pay for the costs of 
operating housing, even if all capital costs were covered. 
There is simply no way to reduce the cost of housing to a level 
that extremely low-income people can afford without subsidy. 
So, additional subsidy will be required. This can be provided 
via Section 8 or other subsidy vehicles. It has been suggested, 
for example, that there be a renters' tax deduction similar to 
the mortgage interest tax deduction. Another suggestion is that 
there be a tax credit for excessive (above 30 percent of 
income) housing cost burden. Again, the issue is money.
    The short answer to the question, then, is that more money 
is needed to increase the supply of affordable housing. The 
vehicle through which this money is delivered is less important 
than the money itself.

Q.2. Why is moving the renewals grants for the Shelter Plus 
Care Program and the permanent housing components of SHP to the 
Housing Certificate Fund so important to ending and preventing 
homelessness?

A.2. Spending 30 percent of the HUD Homeless Assistance Grant 
program funds on incremental permanent supportive housing over 
10 years would result in the availability of 200,000 units of 
permanent supportive housing for disabled homeless people, 
according to Alliance calculations. Based upon available data 
about homelessness, there are an estimated 200,000 chronically 
homeless people in the Nation. This strategy, therefore, holds 
the hope of ending chronic homelessness. By removing the 
chronically homeless population from the homeless system, 
moreover, additional resources would become available to assist 
people who become homeless for shorter periods of time.
    This supply of permanent housing will not be amassed, 
however, if the subsidy contracts are renewed from this same 30 
percent set-aside, (unless additional resources are added every 
year). Three hundred million dollars worth of incremental 
subsidies are needed every year. We recommend that the renewals 
come from the Housing Certificate Fund, as this is the most 
well-accepted method of funding renewals. However, any 
mechanism that funded the 
renewals would suffice. We estimate that after 10 years, when 
the supply of housing was around 200,000 units, the cost of 
maintaining rent subsidy would be something over $1 billion per 
year.

Q.3. Could you describe Dr. Dennis Culhane's University of 
Pennsylvania study results on the cost of supportive housing 
for the chronically homeless? What long-term benefits are 
derived from providing services and housing to these 
individuals?

A.3. Dr. Culhane's 5 year study tracked 4,679 mentally ill 
individuals in New York City for 2 years while they were 
homeless and for 2 years after they were housed in permanent 
supportive housing. The objective of the study was to assess 
how many public 
dollars were spent by and on these individuals both pre- and 
post-housing. This was determined by tracking their use of 
publicly funded service systems--emergency shelters, 
psychiatric centers, hospitals, jails, and prisons. The study 
found that on average, these individuals utilized $40,500 worth 
of publicly funded services annually while homeless. Placement 
in supportive housing resulted in a reduction in costs of 
$16,282 per person per year. The cost of the housing was 
$17,277. So the net cost of placing a mentally ill homeless 
person in supportive housing was $995 per year. Essentially, to 
quote Dr. Culhane, ``The solution can pay for itself.''
    The Corporation for Supportive Housing says that overall, 
supportive housing programs are around 85 percent successful in 
stabilizing people. Individual programs claim success rates as 
high as 95 percent. For people with chronic illnesses, many of 
whom have lived on the streets for years, this is astounding 
success, far above the success rate of mental health and 
substance abuse treatment programs not linked with housing, for 
example. To again quote Dr. Culhane, by providing people with 
housing and services, ``Policymakers could substantially reduce 
homelessness for a large and visible segment of the homeless 
population--often considered 
beyond the reach of the social welfare safety net. . . .''

Q.4. You express support for the Administration's initiative to 
end chronic homelessness. Do you believe the Administration has 
taken adequate steps to implement this commitment, and what 
steps do you think should be taken to make this goal a reality?

A.4. The National Alliance to End Homelessness fully supports 
the Administration's stated goal of ending chronic homelessness 
within 10 years, and believes it to be possible and practical. 
Having said that, the Administration has yet to structure or 
fund programs that could achieve this goal, although some 
progress has been made.
    To end chronic homelessness, the Administration will need 
to 
address three things:

 There are a series of steps, known as ``engagement,'' 
    that may have to be taken in some cases before chronically 
    homeless people can enter housing. People may have to be 
    contacted, often 
    repeatedly, by outreach workers or other skilled 
    professionals to overcome their fears, lack of knowledge or 
    anxiety. They may initially require housing that has low 
    demands of them in terms of stability and sobriety (some 
    supportive housing requires stability and sobriety prior to 
    entering). Although HUD currently funds such activities, it 
    needs to improve communities' understanding of how to 
    utilize these programs to move people into permanent 
    supportive housing.
 HUD needs to ensure the renewal of existing permanent 
    supportive housing rental contracts. It did not request 
    adequate funds for this in its fiscal year 2003 budget 
    request and it has not yet taken steps to make this process 
    reliable.
 Funding must be found for the services attached to 
    supportive housing, moving forward. Units now online have 
    cobbled together services, many of which are funded by HUD. 
    Even if HUD funding of such services is thought to be a 
    good idea, there is not money available in the HUD homeless 
    programs to fund both the services and the housing, going 
    forward. HHS resources must be engaged. The Administration 
    did not propose any significant 
    activity or resources in HHS to address these needs.

    On the other hand, HUD has done several things that move 
the initiative forward:

 It has pushed forward with requirements that 
    jurisdictions 
    develop Homelessness Management Information Systems (HMIS). 
    Without such systems, chronically homeless people are 
    difficult to identify and strategies for ending chronic 
    homelessness are not based on realistic numbers.
 It has appointed an Executive Director for the 
    Interagency Council on the Homeless, which would be a fine 
    vehicle for coordinating efforts among agencies. In 
    particular, it appears that the ICH will focus on 
    prevention--that is on discouraging agencies from 
    discharging people, particularly people with illnesses, 
    into homelessness.
 It is meeting with HHS and pushing that Agency to 
    coordinate better and to provide more funding for services.
 It is using TA resources to encourage the development 
    of supportive housing.

  RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED FROM MITCHELL 
                            NETBURN

Q.1. Why is LAHSA opposed to block granting McKinney-Vento 
housing funding (other than Emergency Shelter Grant funding)?

A.1. Competition has been good for the Continuum of Care in Los 
Angeles--it has motivated communities to work together to 
identify and address needs across political boundaries. LAHSA 
has opposed block granting of the McKinney-Vento Act funding 
for the following reasons:

          a. Many Continuum of Care networks involve multiple 
        jurisdictions and it is to their credit that they have 
        created regional responses to address their problem. 
        There are 31 entitlement cities in the Los Angeles 
        Continuum of Care. Few of those 
        cities coordinate use of their block grant funding. 
        However, the Continuum of Care has provided the impetus 
        to bring those cities together to coordinate their 
        funding, as our agency did in cooperation with the 
        Department of Housing and Urban Development (HUD) last 
        fall. In addition, the requirements of HMIS 
        implementation have not only meant further integration 
        of programs within the Los Angeles Continuum of Care, 
        but also 
        cooperation with the neighboring Continuum of Care 
        systems in the cities of Pasadena, Glendale, and Long 
        Beach, as well as with Orange County.
          b. Contrary to the collaboration fostered by the 
        Continuum of Care competitive process, block granting 
        would fuel fragmentation and lead to the likelihood of 
        ill-prepared jurisdictions returning unused funds. In 
        most instances, cities do not coordinate the use of 
        their block grant funding on a regional basis. Thus, we 
        could expect to see in Los Angeles County 31 separate 
        entities administering small portions of funding for 
        homeless programs. Many of these cities are not 
        equipped to manage a homeless services grant. In fact, 
        one of the reasons the Los Angeles area HUD office 
        agreed to sponsor a meeting with LAHSA last fall was 
        that many of the Consolidated Plan submissions by these 
        cities did not do an adequate job of 
        describing their response to homelessness.
          c. Recent HUD action to impose penalties on 
        jurisdictions that are slow to spend Community 
        Development Block Grant funds illustrates how 
        entitlement funding does not guarantee that a 
        jurisdiction will use its funding in a timely manner.
          d. The existing Continuum of Care planning process, 
        by 
        emphasizing a community-based process for determining 
        priorities, does allow for local control. And, because 
        the projects are specified in relation to a grant 
        request, provides stronger assurances that the funding 
        will be spent in a timely manner.
          e. While no jurisdiction is assured a set allocation, 
        all applicants are provided a reasonable estimate of 
        funding, for example the pro rata need share they can 
        expect to receive if they submit a competitive 
        application.

    Our primary criticism of the pro rata need share lies with 
the formula used for creating it; block granting would heighten 
our concern about funding equity. We have found that within our 
Continuum of Care, there are communities that defy the 
allocation 
formula's premise. Specifically, the City of Santa Monica has a 
considerably larger visible homeless population than one would 
expect, based on the pro rata need share number. Furthermore, 
communities in our less populated areas, such as Lancaster, 
face barriers due to their distance from concentrated service 
areas. Finally, Hollywood has long been a magnet for homeless 
and runaway youth from around the country. These are people 
never included in Census figures. The pro rata need share 
formula does not take into consideration these factors which 
have a great impact on our communities. If a block grant system 
were to be implemented, we would continue to share these 
concerns.

Q.2. Do you believe that increasing the supply of affordable 
housing would help the existing problem? How would new 
production address the needs of the homeless in Los Angeles?

A.2. Increasing the supply of affordable housing is essential 
to ending homelessness--both for persons experiencing short-
term homelessness and those who are chronically homeless.
    Lately, a great deal of attention has been given to 
``chronically'' homeless persons because they tend to use a 
substantially higher proportion of public services than the 
balance of the homeless population. Chronically homeless 
persons tend to have conditions such as mental illness or 
serious addiction problems that, in an addition to poverty, 
keep the prospect of staying in their homes out of reach. 
However, in any given year, there is a much higher number of 
more functional persons who become homeless simply because they 
cannot find a home that they can afford.
    A 1997 telephone survey in Los Angeles County found that 
approximately 375,000 individuals were homeless at some point 
in the previous 5 years. Of those reporting a prior homeless 
experience, 35 percent indicated that they stayed in shelters 
or on the streets, and another 8 percent stated that they 
sometimes stayed in shelters, sometimes on the streets or with 
others. Thus, over half did not enter into the homeless 
delivery system at all, suggesting that for a substantial 
number of people, homelessness is the result of economic 
conditions.
    The shortage of affordable housing continues to be the most 
significant problem we face in ending homelessness. In the last 
3 years, Los Angeles County has implemented a State program 
originally called ``AB34,'' after its State Assembly bill 
number. The AB34 program is designed to end the cycle of 
arrest, incarceration, and release to the streets of mentally 
ill, nonviolent offenders. Under this program, community-based 
mental health providers work with mentally ill inmates who are 
about to be released. The challenge facing these providers has 
been finding adequate housing for this population. The lack of 
affordable, accessible housing has consistently been the 
greatest barrier to success of this program.
    While Section 8 has brought habitable housing within the 
reach of extremely low-income households, the program does not 
begin to meet the need. Moreover, in the current housing 
market, fewer landlords are willing to accept Section 8 
vouchers. Overall, in the city of Los Angeles, successful use 
of new Section 8 vouchers has dropped to 41 percent of those 
issued. Persons with disabilities fortunate enough to receive 
Section 8 have even greater difficulty because so few of the 
units accepting Section 8 are ADA accessible.
    As I mentioned in my testimony, the low-vacancy rates and 
challenges to the use of Section 8 in Los Angeles underscore 
the need for affordable housing. For the nondisabled 
individual, the income source of last resort in Los Angeles 
County, General Relief, pays $221 per month. Working 
individuals and heads of households on the margins have not 
only low wages, but also unstable sources of income that make 
it difficult to sustain rent payments at the lower end of the 
market. This, of course, gives rise to overcrowding and tenancy 
in substandard conditions, if not homelessness.
    Persons with disabilities, in particular those who require 
the use of a wheelchair, also find that new production of 
accessible units affordable for low-income persons is not 
keeping pace with demand.
    In short, the unassisted housing market does not build for 
these populations. New production must therefore include units 
targeted to extremely low-income individuals and families, as 
well as to low-income persons with disabilities, including 
those who require supportive housing. Since the private market 
does not--or is not 
required to--build for these populations, Government 
intervention and leadership is necessary to meet these needs.

Q.3. Why should the Homeless Management Information System 
(HMIS) be an eligible activity apart from administration? 
Couldn't communities recoup their costs for HMIS with their 
administrative fee allocation? Has the 5 percent administrative 
fee been sufficient for your Continuum of Care?

A.3. While a Homeless Management Information System (HMIS) 
should simplify program administration, its true purpose is to 
facilitate program and systemic evaluation. Our recommendation 
is to create, as a separate eligible activity, implementation 
of HMIS.
    In preparing for selection of HMIS, jurisdictions have been 
told that implementation will take far longer and cost far more 
than originally envisioned. Apart from purchasing a system and 
the hardware necessary for implementation, jurisdictions will 
face continuing costs of training and technical assistance to 
ensure proper use of HMIS. Moreover, we have been told that at 
least 60 percent of the beds in our Continuum of Care must be 
included in order for HMIS to provide reliable information 
about service usage. Since we do not fund this threshold number 
of beds in our Continuum, the line-item approach to funding 
HMIS through administrative fees will mean that a significant 
portion of the programs we want to use HMIS must find other 
sources of funding for this activity.
    Permitting HMIS to be a separate fundable activity gives us 
the flexibility to include agencies in our geographic area that 
currently do not receive HUD funding. A significant number of 
such programs are likely to be the faith-based organizations 
that the 
Administration has focused on for increased access to Federal 
funding, but who, for a variety of reasons, do not wish to 
apply for it. We see this activity as being consistent with 
Congressional goals for evaluation and accountability, and with 
the vision of the Administration to promote greater integration 
among all programs serving the homeless.
    For those programs receiving SHP funding, the 5 percent 
administrative fee currently allowed fails to cover the cost of 
administering Continuum of Care programs. The 5 percent 
administrative fee is so low that LAHSA, as the Continuum of 
Care grantee, long ago made the policy decision to pass the 
entire amount on to the project sponsors. The extent to which 
the 5 percent fee is insufficient likely depends on the agency 
and the total grant amount. In fact, many sponsors have stated 
that the 5 percent fee does not cover the administrative costs 
essential for implementing a Continuum of Care program. The 
larger organizations, with multiple funding streams are likely 
able to take advantage of economies of scale and the 5 percent 
fee may suffice. Smaller agencies, with few grants may struggle 
to cover core administrative functions.
    Therefore, the additional cost of implementing a system and 
providing the needed staff training simply cannot be absorbed 
by the administrative fee provided to our sponsoring agencies. 
We agree with the Congressional directive stating the need for 
HMIS, however, failing to provide an accompanying source of 
funds to pay for it constitutes an unfunded mandate.
    In addition to a separate category of funding for HMIS, we 
recommend a 10 percent administrative rate, or a sliding scale 
for program administration, with a higher rate for smaller 
agencies or grants. This is still lower than the overhead rates 
typically permitted by private foundations, and we believe, a 
more realistic compensation for the administrative 
responsibilities necessary to successfully manage a Continuum 
of Care grant.