As Massachusetts embarks on solutions to reducing homelessness, it is critical to ensure that its primary rental assistance program remains intact this year and is expanded as soon as state revenues improve. The House of Representatives FY2010 budget level-funds the Massachusetts Rental Voucher Program (MRVP) at approximately $33 million and the Senate should follow suit.
Federal stimulus funds are not available to support this program if funding is reduced. The American Recovery and Reinvestment Act (ARRA) and current Administration and Congressional budget proposals do not include new Section 8 vouchers. The $18 million in Emergency Shelter Grant program funds to be utilized between this fall and 2012 appropriated in the ARRA are restricted to short-term rental assistance and can only be provided to families that are currently homeless or at imminent risk of homelessness.
MRVP assists 5,200 low income households with rental assistance. The average income of households served by this program is less than $11,000. Almost all (79 percent) households are extremely low income and many have incomes below 15 percent of area median. About 2,300 of these households include children under 18.
Rental assistance programs, such as MRVP, help low income households pay their rent by providing a subsidy that covers the difference between what they can “afford” (using a formula set by the program – often 30 percent of income) and their actual rent (up to a rent limit established by the program). If the unit rent is above that limit, they pay all of the additional cost themselves.
Cost Effective
Family homelessness has more than doubled in the past four years, with a 30 percent increase in the past year alone. In March 2005, there were 1,209 families in the emergency shelter system. In March 2009, there were 2,546 (with over 4,400 children) at a cost of over $7.5 million/month ($3,000 per family). In FY2009, The Department of Transitional Assistance (DTA) will spend over $113 million on the emergency shelter system for families and more than $36 million more on shelters and services for homeless individuals.
The average monthly cost of assisting current tenants receiving MRVP is approximately $560 per month. If the state decided to issue new vouchers, it would actually save money by helping families and individuals to leave the shelter. If one assumed an average new mobile voucher cost of $1,000/month (rent subsidy, start up and administrative costs), MRVP could provide a homeless family with 18 months of voucher assistance for the same amount the state currently spends to shelter them for six months. Providing three years of voucher assistance would cost at least $7,000 less than the state spends to shelter its long-term families.
The benefits of rental assistance in family stability have been well-documented and range from better health and nutrition outcomes for children to greater employment opportunities for adults. However, MRVP also makes economic sense for the Commonwealth’s taxpayers.
Aaron Gornstein is exectuive director of Citizens’ Housing and Planning Association, based in Boston.
