HUD NSP Training - Using NSP for Supportive Housing Development, 6/7/12

Transcription

1 HUD NSP Training - Using NSP for Supportive Housing Development, 6/7/12 Kent Buhl: So today's webinar is "Using NSP for Supportive Housing Development." This webinar will review opportunities for utilizing NSP funding for the creation of permanent supportive housing. The presenters will provide the context for NSP as a viable tool to address both community revitalization and homeless response efforts. We will briefly review some of the key elements of supportive housing and hear from NSP grantees that have leveraged the program for these purposes. Today's webinar is intended for NSP grantees, subrecipients, developers, as well as continuum of care and other homelessness stakeholders. We have a lot of people with us today on the panelist side, and I'll get to them in a moment. Again, so what we'll be looking at are review of the basic neighborhood stabilization program and permanent supportive housing, those basics, understanding federal homelessness response, discussing various incentives for creating permanent supportive housing with NSP, and again, a couple of case studies, one from Oregon, one from Southern California, and Q&A for all of your questions. So with us today we've got Marc Tousignant from Enterprise Community Partners, Ann Oliva from HUD's SNAPS office, Kimberly Black-King from the Corporation for Supportive Housing, Roberto Franco from the Oregon Housing and Community Services. Doug Swoger and Mark Trotts [ph] will be -- are from Los Angeles. And then of course our regular NSP HUD folks. Hunter Kurtz, John Laswick, and David Noguera are joining us today. So welcome to all of you. And without further ado, let me turn the ball over to Marc Tousignant. Hi, Marc. Marc Tousignant: Hi, Kent. And thanks, everyone; really delighted to be here. I'm Marc Tousignant with Enterprise Community Partners in the Southern California office. And I'm going to walk through, for the next 15 or 20 minutes here, a little bit about kind of the overview of NSP. But I'm going to start first with the agenda. It's kind of a crowded agenda. I'm going to have to unfortunately move somewhat quickly through the material but just wanted to kind of give you a sense of how the day is going to flow. So we had to make some tough decisions today about how we were going to sort of structure the agenda. What we're going to do is sort of start with an overview of NSP. Then kind of go into a little bit about setback and talk a little about the federal response to homelessness. Then go to some basics about permanent supportive housing. And then probably what's most exciting is at the end we're going to hear from two communities, two grantees, State of Oregon and the City of Los Angeles, that have decided to invest NSP resources into advancing creation of permanent supportive housing. And there are some other examples that we can point you to at the end of the presentation.

2 Definitely want to acknowledge that we know there's a range of audiences out there today. We're bridging two kind of key topics, NSP and supportive housing, realizing that some of you are likely experts on homelessness or perhaps involved in the continuum of care, while others may be more active with NSP, may even be grantees and maybe not as deep on supportive housing or homelessness. So we hope you find the material informative and not overly redundant based on your experience bubble. So how we got to this webinar was really just really, I think, the understanding that there's communities struggling with both issues, that is high rates of homelessness and foreclosures. This is sort of a nexus that, at least in our opinion, we felt like we had some room to address some more distinctly. And so what we're trying to do today is package some information that we thought was salient for you all as to how the program can really be used to sort of -- as a tool in addressing homelessness and specifically the creation of permanent supportive housing. So we're going to spotlight some of those incentives, some of the considerations that the program offers, and like I said earlier, really just try to spotlight some good examples around the country where people are doing this. And when we say permanent supportive housing -- and this is going to come up later with Kimberly's presentation -- we're really talking about permanent affordable housing for homeless persons with special needs or disabilities. And we'll talk about why this model is particularly well suited for serving those that are most vulnerable in the homeless population. At the same time, we understand there's a lot of resources out there individually on supportive housing and or NSP. And we're not trying to recreate the wheel, but we will try to direct you to some more information on those prospective areas. So just for the NSP program, for instance, there's so much information on the NSP Resource Exchange. That's at HUDNSPhelp.info. We have some resource links at the end of the presentation to direct you to some of those resources. So please encourage you to look at those. And then a final note on the background, we understand the timeliness of this topic may be of interest to you. In other words, great information, great topic, but why now? And I just want to recognize that we understand the program's well under way with implementation. But for those of you that are in the grantee sort of audience, the NSP grantee audience, understanding that you may have some funding available that's not programmed or you're receiving program income. This could be a valuable strategy to consider. And also just beyond NSP I think we want to make the point that we understand there's going to be distress properties in communities for some time. And certainly if you have the dual impact of homelessness in your community, this is going to be an ongoing need for you. So there's a lot, I think, that can be learned just that transcends the individual NSP program. But we are going to try to focus as much as we can on that program. So we want to just contextualize permanent supportive housing within the broader sort of efforts communities are engaging in terms of stabilizing communities. There's a lot of options available to communities in terms of advancing home ownership, pursuing rental housing, redeveloping 2

3 properties, even demolishing properties. So where we feel like this is a good fit is where you really try to reestablish a healthy rental market and understanding that permanent affordable housing sort of fits in within that rental housing strategy. There's certainly some considerations to share around why this is important. So why pursue permanent supportive housing with NSP? Well, one, we just mentioned that it's certainly key component of a broader revitalization strategy. We know communities are facing both homelessness and foreclosures at alarming rates to consider this as sort of a viable component within that. And certainly where there's a lower demand for home ownership, this is a good fit. There's also within the NSP program some clear programmatic and statutory requirements that create some opportunities for permanent supportive housing. Beyond the program there's broader policy advantages that can be realized as you look to leverage NSP for permanent supportive housing. And we'll get into those a little bit. And then finally, since this program is largely patterned after CDBG, which is really a key leveraging tool for communities, there's really a lot of opportunities for partnerships and leveraging to realize broader programmatic and policy objectives around homelessness and or community revitalization initiatives. So then a little bit about NSP, and we'll get into a little bit about what it does. So dating back to 2008 there's been three rounds of NSP funding, totaling about $7 billion. And you'll also hear this referred to as NSP 1, NSP 2, and NSP 3. And while there are probably more similarities than differences between the three rounds in terms of what you can do with those funds, there are some distinctions. We won't really have time to get into a lot of those distinctions, but for the purposes of today, we'll try to talk about things that are relatively universal to all three rounds. For the most part these funds were available via formula to states and localities, with the distinction that NSP 2 was a competitive program where even beyond units of government, nonprofits could also apply. And I think we get this question all the time is for those that are maybe more involved with homeless programs and maybe not connected to NSP. We get that question around how do we access the program and how do we make that connection. So I just want to point you to the NSP Resource Exchange, again, because it has a grantee search feature where you can really look at which communities received allocations. And you can identify program -- specific program contacts within that search feature. So then a little bit about the specifics of NSP, and we'll just going to have time just to hit some of the key ones. And I think this is something that, again, if you're familiar with the program, this will be pretty basic. But for those that aren't, it should be just a helpful reminder of some of the key considerations. First one is the target area, which is essentially saying that NSP grantees may only use funds in designated geographic areas that are most severely affected by foreclosures. And this is something that's defined at the application stage, and it's very important. In terms of eligible uses and eligible participants, there are specific restrictions on that. We'll get into those in an upcoming slide. In terms of the properties that are eligible, there's really three categories. There's foreclosed, abandoned, or vacant. We're going to have a separate slide on that 3

4 as well. The LH25 requirement is really, really important. We're going to discuss that separately as well. Stands for the low-income housing requirement. Essentially means that 25 percent of the program funds for NSP must be used to assist individuals or households at or below 50 percent AMI, area median income, as defined by HUD. This is what we consider to be kind of one of the more important carrots offered by the program to do some deeper targeting for homeless households. The purchase discount is important because if grant -- when grantees require foreclosed properties, it must be done at a minimum discount of one percent of the appraised value. Regarding tenant protections, just wanted to make a note that Congress and HUD have been very clear that they want to protect bonafide renters in foreclosed properties. So there are specific guidelines around how grantees are to treat properties in which there are tenants in place and bonafide tenants, including protection specifically for tenants who are receiving Section 8 assistance. And then finally, regarding timeliness, because these were emergency funds to really address a pressing foreclosure crisis around the county, there are very tight timelines on when funds need to be expended. NSP 1, for instance, requires that the funds be expended within four years. NSP 2 and NSP 3 had deadlines around 50 percent of those funds needed to be spent within two years and all of the funds within three years. So you can understand there's a very tight timeline, and it's part of the why I think HUD's been very active in trying to issue guidance around how the program is -- as it's rolled out guidance on the program and meeting those requirements. There are five eligible uses for NSP. They're sort of used somewhat alphabetically. So just to review those real quickly, use A allows for the establishment of financing mechanisms for the purchase and redevelopment of foreclosed homes and residential properties. Use B allows for the purchase and rehab of homes and residential properties that have been abandoned or foreclosed upon in order to sell, rent, or redevelop such homes or properties. Use C allows for the establishment and operation of land banks for homes and residential properties that have been foreclosed upon. Use D allows for demolishment of blighted structures. And finally, use E is the -- allows for the redevelopment of demolished or vacant properties as housing. Just to note under use E, for instance, NSP 1 funds are allowed for non-residential purposes. So, for instance, if you wanted to convert a duplex into a community center, that would be allowable under NSP 1. NSP 2 and NSP 3, however, you can only do redevelopment to create housing. And when we say housing, we're talking about permanent housing. So by way of some more examples, under use B, residential property that meets HUD's definition of foreclosure or abandonment could be acquired and rehabbed for use as permanent supportive housing. Under use E, you could take a vacant or demolished property and redevelop that into permanent supportive housing. What we need to note, though, is that NSP funds cannot be used for social services -- supportive services, rather, or ongoing operations costs. So really the best use for permanent supportive housing -- this is what we found around the country -- is as a capital source primarily for acquisition and rehab. 4

5 HUD is -- and really, in essence, there's restrictions on who's eligible. And this is typical of a lot of federal programs, all federal programs. So in the case of NSP it's limited to individuals and families whose income does not exceed 120 percent of area median income. And just for those that are familiar with CDBG, this is a little higher. So, in essence, there's been sort of a new strata of income eligibility created. And what we're calling that is low, moderate, and middle income households. So LMMH is a common acronym you'll hear in the program. So that doesn't mean that you can't create mixed income developments where some of the units may be targeted to folks that are not NSP eligible. But HUD has specific guides on how that gets treated under NSP. And we can't get into that right now, but that is an important distinction. In terms of the properties that are eligible, like I said earlier -- and this was even sort of reviewed a little bit in just the eligible uses -- there are three definitions or three categories, foreclosed, abandoned, and vacant. I'm not going to go through defining each of these, but I just wanted to point to a policy alert that HUD issued back in 2010, April 2010, specifically on the guide -- issuing guidance on these definitions. And I'd encourage you to look at that for specific language around these definitions. These definitions are important because they affect the eligibility of certain uses and activities in the program. In some cases properties may qualify under both, and in that case -- for instance, if it qualifies as abandoned or foreclosed, HUD's asking you to sort of use the most restrictive category. These categories are also important because these properties must be located in the grantees target area to be eligible for assistance. The LH25 requirement, as I mentioned earlier, is an important, important consideration in the creation of permanent supportive housing through NSP. And Congress put this into the legislation as a requirement that we now call LH25. It's essentially a requirement that 25 percent of your NSP grant amount -- this is the original allocation plus available program income -- must be used to create housing for individuals or households earning no more than 50 percent of AMI. This housing must be permanent housing to qualify. So individual leases, no limit on time, and specifically there were some changes made recently back in 2010 to allow for vacant properties to qualify as meeting this requirement. This is a funds test primarily, but it's also going to be tied to occupancy. This is without question one of the greatest incentives that the program offers to really do some deeper targeting. It's not that Congress or HUD is saying, look. You have to do permanent supportive housing with your LH25 requirement. But what we're saying is that it's a good opportunity to sort of advance some other community goals around homelessness. This income targeting also fits nicely with other federal capital financing programs, such as the low income housing tax credit and the federal home program. There's been a significant amount of guidance HUD's issued on this specific requirement, including a webinar that was offered on May 20th of last month. So I'd encourage you to go to the NSP Resource Exchange, if you're interested in more information about this requirement. We just list two examples, Knoxville, Tennessee and Phoenix, Arizona, as two communities that have decided specifically to do permanent supportive housing with their LH25 requirement. 5

6 Moving on to policy incentives because certainly there are a lot of policy considerations and try to tackle homelessness with NSP. To be very frank, this is a very rare opportunity with NSP for one-time federal funding to supplement and address unmet housing needs that you have in your communities, specifically housing for homeless and special needs populations. So in addition to fulfilling the core civic goal around revitalizing neighborhoods, there are a few key policy priorities that can be addressed in using NSP for permanent supportive housing. As we've mentioned, for starters, it will inevitably assist in meeting your LH25 requirement. Beyond that, this is a wonderful chance to align your local NSP implementation with local and national planning efforts, including strategies to end homelessness and specifically chronically homeless -- chronic homelessness. Just want to point out an example. The annual continuum of care note, for those of you that are familiar with that, asks applicants to identify how they're coordinating with their local NSP program and other federal resources. So there's actually some sort of financial incentive around demonstrating that coordination. And more broadly than that, as you know, a lot of communities around the country are adopting or implementing 10-year plans to end homelessness. Nearly every plan calls for better resource coordination and increased bed capacity for PSH. Where we found good examples of that is being used as PSH. It was because the grantee saw this as an advancement of fulfilling goals in their plan. The State of Oregon, for instance -- and you'll hear from them later -- is an example of that. Third, it's just good public policy. It's going to help reduce pressures on other systems of care that are likely serving chronically homeless folks, including ERs, mercy rooms, jails, other mercy facilities. And finally, there's a range. If you're fortunate, at least, to have a range of viable nonprofit housing operators in your community that have experience working with homeless populations and can be good stewards of this kind of housing and may even have experience with scattered site housing as a particular model. So it's important to capitalize on that kind of an asset. This slide just indicates a few of the resources that we've seen that communities are leveraging with NSP. I won't get into each, but I just want you to kind of get a flavor for some of those programs that exist. These should most -- for the most part, be recognizable. The LIHTC acronym, again, stands for low income housing tax credit. MHSA is actually a California specific program. It stands for the Mental Health Services Act. It's a program in which -- allows for capital costs for housing that serves persons with mental illness. We understand that's not available throughout the country, but just to note that. When we were talking with some of the California grantees, that was a common leveraging source. What we don't have on here are specific services subsidies. Just for the sake of time, I think that was a little long to list. But we do have examples of those at the end that we'll share. And certainly, I think, as you hear from some of our guests community examples, they'll get into a little bit about how that specific need was addressed. And definitely don't want to overlook that issue. 6

7 I think by nature -- and I'm sure Kimberly will explain this -- creating and maintaining permanent supportive housing is by nature a collaborative endeavor. You simply can't address all the housing and supportive service needs alone and nor should you. So in deciding to use NSP funds for permanent supportive housing, there's really a number of opportunities for public and private partnerships. We've listed some of those partners above. Again, not an exclusive list, but it does give you a flavor for the partners that provide for different types of support that you'll need. So capital financing, operations funding, social service funding, and agencies that can help you connect directly with housing providers, social service providers, and homeless clients themselves. And the one point I really want to make is that we really encourage continuums of care out there, if you're not doing so already, to really coordinate with your NSP lead agency so that you can try to work together, explore how you can mutually benefit one another to maximize housing options for the most vulnerable in your communities. On a final note, I just want to address a little bit of this issue of the types of housing that are appropriate for permanent supportive housing because, as you know, in communities there's a lot -- there's lots of different options. There's different types of properties. And so what we put here on this slide is just an example of some of the questions you should consider in deciding what is the best fit for the housing stock that you have in your community. Is there a high or a low demand for home ownership? Are there nonprofits that are already experienced doing scattered site housing? How are you going to address potential community opposition or resistance to permanent supportive housing in that neighborhood? And how are properties going to be located in some proximity to services and other amenities that they're going to need to be able to remain housed? Those are all important questions to consider. For the sake of this discussion, there's really three categories that we want to just include for permanent supportive housing types. The first one -- and I think this is typically what people think about when they think about foreclosures -- is single-family homes. So again, we understand that this stock is a good fit for families. It gives a sense of privacy, a sense of choice and pride. It's also a good disposition strategy where there's limited demand for home ownership. And it can be used as a shared housing model for veterans, transition age youth, and adults with developmental disabilities. Second category are small properties or small multi-family properties, really two to four units. Typically, those are less attractive to home buyers and more often than not used as rental income properties. Again, does provide opportunities for sharing of housing or for renting to small families as well. And then finally, multi-family housing is really what, I think, folks feel more familiar with when they think of permanent supportive housing. It certainly is an opportunity for NSP grantees to spend funds in a little bit more quicker and efficient way. But it's also an opportunity to do mixed income projects where you have a portion of the units that are dedicated to supportive housing or special needs tenants. And it also leverages very well 7

8 with some of these other sources we've mentioned such as home, low income tax credits, Section 8, shelter plus care, and so on and so forth. And finally, just a note about a guide that Enterprise released earlier in the year on the topic of NSP and supportive housing. This was not something that was funded through the NSP TA program but was funded through HUD Section 4 capacity building program. It's a useful topic. It sort of digs a little deeper on some of the issues we're going to talk about today, raising awareness on the topic, talking about how NSP can tackle homelessness. And it also includes a lot of examples from around the country where communities are using NSP for permanent supportive housing. It's one of those things I would really encourage you to look at. We're also including it as a link at the end of the presentation. And it does get into the little -- some of the other issues we won't really have time to discuss today, such as design issues, as well as property management considerations. So that's it for me. Kent Buhl: Thank you, Marc. Let's see. We've got -- I'm not sure if you know the answer to this question off-hand. But Tyler asks what the names of the low income projects in Tennessee and Arizona are. Marc Tousignant: I do have those, if you want to give me a sec to pull those up. I believe the Knoxville project was called Minvilla Manor. And that's a big multi-family project. For Phoenix -- let's see. Give me a second here -- the Royal Suites Apartments. This was 80 units of PSH for formerly homeless men and women with at least eight units available for individuals with physical disabilities. It's using continuum of care funding as well as Section 8. Back to Knoxville, there was two projects. One was going to be redeveloping a vacant condemned hotel. This was Minvilla Manor. And then a Flanakin project, which was redeveloping a vacant school site plagued by vandalism and water damage into 48 affordable apartments for chronically homeless individuals. This is something that grew out of their local 10-year plan. Kent Buhl: Very good. Thanks for that question, Tyler. And it looks like we can move on to Ann Oliva. And let me give her the presenter ball and make sure she can be heard. And there we go. Hi, Ann. Ann Oliva: Hi. Good afternoon, everybody. Again, my name is Ann Oliva. I am the director of the Office of Special Needs Assistance Programs here at HUD. And today I'm actually pinch hitting for Kristy Greenwalt from the U.S. Interagency Council on Homelessness. And I'm going to talk to you a little bit, provide you some context about USICH and the federal strategic plan. So I'll start here. The U.S. Interagency Council on Homelessness or USICH is an independent agency within the federal branch that consists of 19 federal cabinet secretaries and agency heads. And this group is 8

9 currently chaired by the Department of Health and Human Services, Secretary Sebelius, and our current vice-chair is VA Secretary Shinseki. And I'm going a little bit out of order, but the mission of the council is to coordinate the federal response to homelessness and create partnerships at every level of government and with the private sector to reduce and end homelessness across the country. And I think it's important today for you all to sort of understand why we're doing this joint webinar. And we really want to talk about how the NSP program used locally can help us reach our goals to prevent an end to homelessness. And I want to talk a little bit about how it fits into the administration's goals on homelessness. So let's talk a little bit about the plan itself. So the council was charged by Congress with coordinating the federal response to homelessness. And in June 2010 the Obama administration announced the first ever comprehensive federal plan to end homelessness. And the plan is based on 52 strategies under five broad themes and focused on four goals. And the goals are up on the screen in front of you. The first is to finish the job of ending chronic homelessness by 2015, to prevent and end homelessness among veterans by So those are both five-year goals. To prevent and end homelessness among families, youth, and children by So that's a 10-year goal. And to really set a path to ending all types of homelessness within the timeframe of the plan. So again, I'm not going to talk about all 52 strategies. There's plenty of resources up on a couple of different websites that I'll mention throughout my presentation about those 52 strategies. But I want to sort of talk about those five broad themes, and the broad themes are up on your screen. Again, it's increasing leadership and collaboration, increasing access to stable and affordable housing, increasing economic security, improving health and stability, and really taking a critical look at the homeless crisis response system and retooling that system. So Opening Doors, the federal strategic plan really serves as a road map for joint action by the 19 council member agencies along with our state and local partners across both the public and private sectors. And all of you know, who are watching here today, that there's really no one size fits all plan. Every community has a unique set of strengths and challenges, different types of constraints locally. So while Opening Doors really lays out a set of strategies that guide our collective efforts, the council has called upon communities across the country to develop your local plans that align with the federal goals but that really acknowledge and work with the unique circumstances and opportunities in each community. And really the strategies in the plan are built on the conclusion that mainstream housing, health, and human service programs must be fully engaged and coordinated to prevent and end homelessness. I think you heard from Marc a little earlier that we really are looking at -- the McKinney money for homelessness and the HUD money for VASH program, those are all important resources, but they're not the only resources to be used towards the plan and towards preventing and ending homelessness. And in fact, we can't. We know we can't end homelessness with just those resources. So that's why everybody on this call is such an important player in our national effort to end homelessness because there is such huge strength in collaboration. 9

10 If you're on the call and you're not familiar with who is in charge of your local plan, either your 10-year plan or your continuum of care plan, I would encourage you to start with your local continuum of care. And you can contact your -- get contact information for your local continuum of care on the Homelessness Resource Exchange, which is sort of the sister site to the NSP Resource Exchange. It's located at And if you go on the header toolbar under COC grantee information, that's where you can find local contact information. So while the plan overall is about the work of all of the federal agencies, of course HUD's primary emphasis with regard to the plan and its implementation is really about the creation of housing opportunities. And the plan contains two specific objectives with regards to housing. One is the creation of more affordable housing opportunities for people who are homeless or at most risk of homelessness and the creation of more permanent supportive housing. Obviously, affordable housing is an appropriate intervention for many people who are homeless or at risk of homelessness who have lower barriers to housing. But today what we're talking about really is permanent supportive housing, which combines a rental subsidy with intensive wrap-around services. It's a proven solution for individuals with higher barriers that need intensive services to maintain to obtain and maintain their housing. And these are often individuals and families that have been homeless for long periods of time. They have severe physical or mental health issues, and they're often frequent users, as Marc mentioned, of other costly public systems like emergency rooms, emergency shelters, hospitals, and jails. A growing body of evidence confirms that communities can experience significant cost savings by housing these highly vulnerable individuals. The plan itself is based on -- or the goals and timeframes are really based on an analysis of both the need and the interventions. That is what is the need across the country, and what are the best types of ways to serve people who have specific barriers? And how many of each type of those kinds of housing that you have up on the screen in front of you do we need nationally? I think this is especially relevant in this difficult fiscal environment because our ability to target interventions according to need is going to be critical to our success. And the analysis that we've done both by HUD and the USICH really drives both policy decisions and resource discussions. I also want to note that because homelessness is not distributed evenly across the country, each community should be doing a similar analysis as part of their local planning process. HUD is planning to publish a tool to help folks have these critical discussions locally. So hopefully we'll be able to follow up with some instructions around that tool in the next couple of months. I'm going to leave you with some additional context for this discussion, especially for those of you who are newer to this conversation. And as I mentioned earlier, first, while our targeted resources such as continuum of care programs and HUD VASH are certainly an important part of the solution, we are not likely to see big increases in federal funding to these program budgets in the coming years. So as such, our success meeting the goals of the federal plan will increasingly depend on our ability to tap into mainstream housing and service resources to assist the most vulnerable members of our communities. And with permanent supportive housing in particular, both the council and HUD are really encouraging our communities to think about how 10

11 to manage access to units that are set aside for homeless individuals and families through a coordinated or centralized process that prioritizes the most vulnerable individuals and families for placement into units. So hopefully all of that provided you with some context, the context that you need to understand the federal effort. And I think with that I'm going to turn it back to Kent so he can move the ball to the next person. Kent Buhl: Thank you very much, Ann, and could you just repeat that web address you gave just a couple slides ago? Ann Olivia: Of course. It's the homelessness resources exchange, and it's located at Kent Buhl: Terrific. Thank you very much. And thanks for that good information. And we will now move to Kimberly Black-King. Hi, Kimberly. Kimberly Black-King: Hello. Thank you. So I'm Kimberly Black-King, and I am the Mid- Atlanta director for the Corporation for Supportive Housing. And I am going to go over a few of the basics for permanent supportive housing. So both Ann and Marc touched on the definition for permanent supportive housing being defined as safe, affordable, permanent rental housing combined with a range of flexible supportive services that are designed for people with special needs. So again, the premise behind the supportive housing model is based on services being provided either on site or within a close proximity to the housing site that will help people transition out of homelessness, remain housed, and live in communities as independently as possible. So there are two core components to permanent supportive housing. One is the housing, and the other core piece is the services. The housing must be permanent. So there's no time restrictions for how long a person or a family can stay in permanent supportive housing. The housing must also be affordable, which in general means that a person is not paying or a family is not paying more than 30 percent of their gross income towards their rent and utility cost. And lastly, the housing must be independent of services. So the housing is not conditioned on the tenant's treatment. People in permanent supportive also -- I should mention that they also have a lease, and the leases are consistent with standard rental leases that defines the tenant protections as well as many responsibilities of the tenant. With respect to the services, the services should be flexible and ongoing, meaning that they are actually designed appropriately to meet the tenant's needs, and they're available for when the tenant should need them. The services are also voluntary and independent of housing. Again, the independence of housing piece. So tenants are generally not required to participate in services as a condition of remaining in housing. And the philosophy behind that voluntary and independent service piece really goes back to housing being a basic right. So therefore, formerly homeless 11

12 people shouldn't be required to meet conditions for housing that wouldn't be imposed on people who don't have histories of homelessness or disabilities. So who's PSH for? HUD defines those eligible for PSH as individual or family that has been homeless and has a qualifying disability. And qualifying disability is noted here on the slide. It's expected to be long continuing or of an indefinite duration -- substantially impedes a person's ability to live independently. The condition could be improved by the provision of more suitable housing conditions, and the disability is a physical, mental, or emotional impairment including impairment caused by alcohol and or drug abuse, post-traumatic stress disorder, and brain injury. Development disability and HIV AIDS are also considered a qualifying disability. So Marc touched on a couple of the different types of permanent supportive housing. But actually, before I go to this slide, going to talk a little bit about some of the demographics of this population that permanent supportive housing is for. So homelessness has often been viewed as a one-dimensional issue. And it's assumed that homeless people, especially the chronically homeless individuals, are social misfits who either don't want to work or can't work and achieve stability in the community. But we know differently, and chronically homelessness, that population is really not one-dimensional at all. A large number of the homeless men and some women are veterans. This number is around 13 percent. A significant number of the PSH population -- we estimate this to be more than half based on different surveys and samples of those in permanent supportive housing -- to be suffering from a mental illness, a severe mental illness and or drug and alcohol addiction. For individuals, those who are not accompanied by other family members, the population tends to be dominated by males. And we also have recent research that we were provided by USICH that shows that in 1990 the cohort for this group had a mean age of 30. In 2000 the mean age was 40. And today the mean age is 50. So increasingly aging population. It also shows that adults who are chronically homeless have a life expectancy of 62 years. For families, the adult or the family head of household is overwhelmingly female with an average age of 31. And over half of the children in these families are under the age of six. Okay. So moving to the types of permanent supportive housing, which Marc touched on a little bit, I should say that similar to affordable housing, permanent supportive housing should always be designed to be consistent with existing housing stock and the surrounding neighborhood, when you're planning your development. And there are three basic types, the single site, which is where all of the apartment units or the buildings in a complex or the single-family homes are exclusively designated for permanent supportive housing. The scattered site model where several units of existing rental housing are leased and therefore scattered throughout the community and the integrated model, which was also touched on earlier, where a defined number of permanent supportive housing units are set aside within a larger development. 12

13 And this integrated model is a very good and savvy financial strategy because the higher incomes from the non-permanent supportive housing units actually help subsidize the permanent supportive housing units. So again, a really great opportunity exists when matching your 25 percent set-aside for people at or below 50 percent of AMI when participating in NSP. So there are various ways, mechanisms to create permanent supportive housing. And you're probably all familiar with these. So just quickly they include a rehab, which goes really well with NSP -- the NSP program. New construction is obviously another tool. Master leasing where there's a group of apartments that are rented by one master sponsor and then sublet to PSH tenants. Turnkey developments where the developer doing the construction or rehab doesn't have an ongoing investment in the property but instead turns it over to the project sponsor. This actually helps with project capacity building as well. So if there are nonprofits who have generally provided transitional housing or just services and they're interested in permanent supportive housing, pairing with the developer who has that experience can really help the capacity of that agency, if they're interested in moving towards permanent supportive housing. There's also scattered site, which is property in the existing market being rented or purchased by a sponsor and rented to -- directly to permanent supportive tenants. That could also be master leasing and set-asides, as mentioned on the previous slide with integration. This is where there are permanent supportive housing set aside in the larger developments. So essential to permanent supportive housing with -- as with any other housing -- is definitely the financing. And the financing can be thought of as the three-legged stool. We often refer to it as the three-legged stool where there is the three legs, one being capital, which are the costs associated with housing development, the operating costs, which includes the rental assistance, and the supportive service cost. So clearly with supportive housing the uniqueness here is that, if you take any of these legs away, the project doesn't work. So you have to have all three to make your project work. Other than that, the housing development activities for PSH are the same as any other housing development. The only difference is the need for really the financing, very low interest rate loans, and participation in programs like NSP since the rental income from the permanent supportive housing units typically can't cover significant debt service that you would have with mainstream affordable housing. So with permanent supportive housing, there's typically a deficit between the cost of operating a housing development and the rents from PSH tenants. Again, this goes back to the savvy strategy of the integration model because you have other units at market rate or affordable rates that can help subsidize those units. Otherwise, that deficit is typically bridged by rental and or operating subsidies. So other essential features associated with supportive -- permanent supportive housing includes a sort of outreach and engagement, which is very important to linking the target populations to the right housing opportunities. And outreach is particularly important with the chronically homeless 13

14 population because other more traditional processes, like just scheduling an appointment, have proven to be less successful at initial recruitment stage. So when you're trying to get someone recruited into housing and services, to really reach that vulnerable population -- and this is the population that really is best served by permanent supportive housing -- the outreach really has to be done in the communities where the homeless people are, so on the streets, in shelters, dropin centers, etc. And also continued outreach is very important, even once a person is housed, to help encourage residents to participate in housing so that they're able to maintain their stable -- remain stably housed. And of course, as with any housing, permanent supportive housing should be safe and decent housing. It's really important to think about the safety in PSH. As I mentioned earlier, a significant percentage of people living in PSH have had or are struggling with a substance abuse. So developers, property managers, and service providers really need to think through the safety issues of the property. Other essential features around services, the services should be accessible. So services can be located on site, off site, or a combination of both. The decision to provide services to tenants at the housing site or off site really depends on the program scale, the resources of the program, the severity of the residents' needs, and the proximity to other off-site services. So I've mentioned some of these already, but some typical supportive services include counseling, healthcare and mental health services, alcohol and substance abuse treatment. The promotion of independent living skills is very important. Money management and financial planning, employment services, and a host of other services that are really dictated by your tenant population. So who creates permanent supportive housing? You'll see on this slide many, many, many people. Both Ann and Marc talked about the numbers of people involved in permanent supportive housing and how important collaboration is. And I really have to just reiterate that. It's very important. If we go back to the financing slide and you just think solely about the financing with the capital operating and services, you can tell just from that slide that your partnership is going to be very wide. So in addition to the federal partners like HUD, multiple state departments and agencies operate programs that impact permanent supportive housing. The primary ones include Department of Housing and Community Development, Department of Mental Health, and Department of Health and Human Services. And nonprofits typically play a huge role in developing housing projects and providing supportive services. Most of these projects are developed in a partnership with a housing provider or housing developer and a service provider. The Public Housing Authority is also a key partner because they control the operating subsidy or most of the operating subsidies. Some jurisdictions also have local operating subsidy programs. But the Housing Authority -- the Public Housing Authority controls the federal programs. And private developers and private landlords are also key in creating permanent supportive housing. 14

15 So I mentioned some of the typical partners as being Department of Housing and Community Development, mental health. And then there are other partners in permanent supportive housing that, when you think of housing, you really don't think of them as your natural partners. So the Department of Corrections, for example. But tons of people in this population cycle through street homelessness, shelter, Department of Corrections, jail, prisons. And so it's really important to partner with Department of Corrections, which really doesn't seem like, again, a natural marriage when you think of housing. But this slide I like particularly because it shows all of the vastness of the partnerships. And to reiterate, there are currently a lot of interagency efforts going on to end homelessness -- chronic homelessness at both the federal level, as discussed during this webinar with USICH, as well as at the state level and at your local level. So these efforts are all designed to better coordinate activities and help leverage the resources for the participating agencies, the providers, developers, and service providers. So a little bit on the development team. The development team looks very similar to that of any other affordable housing development team with the special addition of the supportive housing service provider. And I'll mention that it's important to have that person on board as soon as possible because when you're thinking through your development plan, you want to think about your population. So the service provider can really provide a lot of insight to the type of units you'll need and the layout for the housing development. And in thinking through that team, some of these team members will have long-term interests like your owner, the property manager, service provider, clearly neighbors, residents of the development, and funders. And then others will have short-term interest like engineers, turnkey developers, or development consultants. And this is important to think about as you think through structuring -- how you should structure your relationships. And this last slide shows some of the typical roles of the long-term partners in permanent supportive housing. Some of these roles might actually be within the same organization, but the separation of duties and roles are clearly defined. So the first role being the property sponsor and owner who represents the long-term interest of the building and is really the driving force behind the project. The second role is the developer who provides the services necessary to acquire, construct, and to offer the rehab for the property. And the third role being the property manager who operates and maintains the property. Next, the supportive service provider that designs and implements the supportive services plan. And when you're thinking through your property manager and the service provider, it's very important to remember that there should be a separation between these two functions. So the property managers can focus on housing, and they're the experts for different concerns like collecting rent or building maintenance, while the service providers can focus on their expertise, which is around treatment planning and case management. So in other words, you don't want the same individual going to collect rent to be the person that goes to check on the person and do the 15

16 treatment planning. So this helps avoid confusion with the tenants, among the tenants and other provider staff. And then last on this slide but certainly not last in your consideration is a very important role of engaging the tenants. This is huge. It really helps build some of the ownership of the tenants. And some ways to engage tenants includes having them involved in designing and implementing their own service plans. And they've also -- they also serve really well on housing project committees and -- which really helps inform designing programs or designing developments. So with that I will end and turn it back over to Kent for a few questions before we go into specific samples. Kent Buhl: Great. Thank you, Kimberly, all that information about permanent supportive housing. And we do have a couple of questions. Let's see if -- how this goes. From Kevin, "Can NSP multi-family properties be used as a transition for homeless to permanent housing?" Kimberly Black-King: Should I kick that over to the NSP expert? Kent Buhl: Perhaps we should. Let me get to -- Hunter Kurtz: You can give me now. Kent Buhl: There we go. There's Hunter. Ann Oliva: Yes. We're here. Hunter Kurtz: Hi. Yeah. There are some limits to what you can do with non-permanent housing in NSP. And basically, only in NSP 1 could you do something like that. But it's quite possible that you developed a property with NSP 1 funds. You could use it as a transitional center. But for the most part, NSP funds are supposed to be used for permanent housing of different types. Kent Buhl: Very good. Thank you for that question, Kevin. And let's see. How about Mark asks, "Are there any new incentives for localities to use NSP for permanent supportive housing development?" Ann Oliva: So this is Ann from the SNAPS office. I would say from the homeless services perspective, the biggest incentive for our continuums of care to use these types of funds are not only obviously to meet the goals of their own plan and the national plan, but we incentivize the use of mainstream resources and other types of funding through the point system in our continuum of care application. So in other words, you would likely receive more points if you were using NSP funds and able to show that in your continuum of care application. Hunter Kurtz: And I think for the NSP side, the incentive that I would see, just the sort of financial one that you could potentially tap into less expensive real estate and thereby lower your 16