Please see below CHAPA’s letter of recommendation regarding the FY13 budget to the Conference Committee:
Our region’s members on the committee include:
Chairman Stephen Brewer, 617-722-1540, Stephen.Brewer@masenate.gov
Senator Michael Knapik, 617-722-1415, Michael.Knapik@masenate.gov
Representative Stephen Kulik, 617-722-2380, Stephen.Kulik@mahouse.gov
Dear Distinguished FY2013 Budget Conference Committee Members:
We want to thank both branches for prioritizing affordable housing and homelessness prevention in their FY’13 budget proposals. Below are funding and outside section recommendations to help bridge the key differences between the two budgets. Thank you for considering these suggestions.
Massachusetts Rental Voucher Program (7004-9024)
Accept the House appropriation of $46 million and the Senate language
MRVP provides over 5,100 low-income families, elders and persons with disabilities with stable housing. The average income of a participant is only $11,000 per year. At a time of unprecedented need, the House funding will enable an additional 900 households to have safe, affordable housing next year, approximately 375 more households than would be served under the Senate funding.
We support the Senate language to enable the funding to reach households that have incomes and circumstances that place them at risk of homelessness and to enhance supportive housing. However, the Senate language accomplishes each chamber’s goal of reducing homelessness without sending a message to struggling families that they must spend time in shelter/motels in order to receive housing assistance, or limiting the benefit of the increase to an arbitrary group of recipients. Furthermore, the Senate language sets eligibility at 50% area median income, which allows for regional variations and makes the program more consistent with other housing programs in its method to determine eligibility. Lastly, the Senate does not include a cut in the administrative fee from $32.50 to $30 that would result in poorer program administration.
Public Housing Operating Support (7004-9005)
Accept the House appropriation of $64.5 million and the House language
Housing authority rental income has decreased in line with the recession because state public housing rents are capped at 32% of income. As a result, housing authorities have been forced to take units off-line because they don’t have adequate funding. The House funding and language will help increase maintenance resources and return vacant public housing back to productive use.
Tenancy Preservation Program (7004-3045)
Accept the Senate appropriation of $500,000
TPP prevents homelessness among people with disabilities by working with landlords and tenants, and providing clinical consultation services to the Housing Court. Over one-third of TPP participants have had a prior history of homelessness. The program is extremely cost effective, stabilizing 82% of households served with an average cost of $2,377 per case. Without the Senate funding, TPP staffing and services will shrink because of loss of federal funding sources.
Short Term Housing Transition Program (7004-0108)
Accept the Senate appropriation of $90.8 million and the Senate language
The redesigned HomeBase program included in both the House and Senate budgets will help divert families facing homelessness, re-house families in shelter, and provide rental assistance funding for over 6,200 households that are receiving HomeBase rental assistance in FY2012. Given the low level of incomes of eligible families and the high cost of housing in Massachusetts, we think $6,000 in assistance proposed in the Senate budget is a more realistic maximum amount of assistance to effectively divert families from EA. If the $2,000 in additional resources over the House proposal results in a modest percentage of families choosing HomeBase instead of shelter, the overall savings will be significant because $2,000 equates to approximately three weeks of shelter. In both the House and Senate budget, eligible families continue to have the choice to access HomeBase or enter shelter. With that in mind, HomeBase design should be structured to maximize the percentage of families that use HomeBase. If it costs $6,000 per each family that chooses HomeBase instead of shelter, it saves the Commonwealth $15,000 per family than if the family entered shelter, stayed the average length of stay, and left without additional assistance from the Commonwealth.
Furthermore, we support the Senate language that allows certain families to access HomeBase assistance in the following year after initially being helped if necessary. In this regard, the Senate language also provides the greatest likelihood that a family will choose to take a risk and use HomeBase resources to avoid homelessness rather than enter shelter at a much higher cost to the Commonwealth because they may be able to receive additional assistance if unsuccessful. However, we do not support the component of the Senate language that bars recipients of HomeBase assistance from shelter for 12 months after they stop receiving HomeBase. Beyond restricting access, this will also make eligibility determinations very difficult to determine.
Lastly, we support the Senate funding. It appears that initial Administration estimates about projected costs to renew rental assistance for recipients enrolled in HomeBase in FY’12 were too low. It is critical to provide sufficient funding to enable HomeBase funds for diversion, rehousing and stabilization activities in additional to fully funding rental assistance for HomeBase recipients that are relying on the program to be stable.
Residential Assistance for Families in Transition (7004-9316)
Accept the Senate language
Thank you for providing a significant boost in RAFT homelessness prevention resources. While both budgets are close in overall vision for RAFT, the Senate language allows a family to receive $4,000 in RAFT resources, and be able to receive another $2,000 within the same 12 month period if necessary to prevent homelessness. We think $6,000 is a more realistic maximum amount of assistance, and the Senate language still assigns responsibility to the regional administering agency to determine the actual assistance amount, which may be below the maximum amount.
We have significant concerns regarding the House language that requires families that receive RAFT to show that they can sustain housing without paying more than half of their income towards rent. This language creates an unnecessary burden to serving the most vulnerable families. Many extremely low income families are able to be sustainable with modest RAFT assistance and still pay more than half of their income towards rent. Under both House and Senate budgets, the program’s new target population is below $22,000 in annual income so the barrier would make it hard for these families to access RAFT because lower income households have to pay a higher percentage of their income towards rent. The Senate budget does not include the onerous sustainability requirements and leaves the need to determine sustainability more flexible. We think this issue would be better addressed administratively.
Mental Health Rental Subsidies (7004-9033)
Accept the House appropriation of $4.5 million
Rental assistance for persons with mental health challenges is a critical component of providing cost-effective stability for this population. The House funding will help provide much-needed community-based housing.
Community Preservation Act Updates
Accept compromise language
Both the House and Senate adopted important updates to the Community Preservation Act. In addition to updates to the law, the House budget adds $25 million annually to the state CPA Trust Fund if a budget surplus exists at the end of each fiscal year: the CPA match would not increase until fall, 2013 under the House proposal but it would increase significantly, up from the present 22% to approximately 45% if the FY’13 budget surplus is sufficient. The Senate adopted language to transfer $5 million to the state CPA trust at the start of this fiscal year, which would result in a state match in October, 2012 of approximately 27%. The Senate proposal would mean that the increase in the state match would happen one year sooner than the House proposal, it would not be conditional on a budget surplus, it would not be nearly as large as the House proposal if a surplus exists, and communities could not rely on future additional revenue for CPA. We support the Senate goal of providing additional dependable funding this year, but we also believe the House language must be included to provide an annual transfer of $25 million from consolidated net surplus in order for the Commonwealth to demonstrate a long-term commitment to this critical program.
Senate Amendment Number 59 Adding a New Outside Section
The Senate included an amendment to compel the Inspector General and Attorney General to hire accountants to conduct additional audits of Comprehensive Permit developments. While we do not object to the spirit of the amendment, the Senate language includes troubling language that threatens the integrity of these audits and does not include funding for the audits. Instead, the language allows a private accounting firm to be paid to conduct audits based on a “pre-determined percentage of all recovered monies”. This bounty language creates a payment structure that could seriously compromise the integrity of the audit. It would also deprive municipalities of funds if they are recovered and conflict with the developer and financing agency’s regulatory agreement related to the profit limitation.
The Senate language creates an inherent conflict of interest and threatens the private auditor’s objectivity by tying payment to a specific result. Payment to the profit-motivated enterprise conducting the forensic audit cannot be tied to a particular finding or outcome in order for an audit to meet standards for fairness, objectivity, and reliability. Instead, the audit should be unbiased and any payments should be for objective forensic auditing regardless of the outcome that objective exercise delivers. Therefore, if the Conference Committee chooses to accept this Senate Outside Section, we suggest deleting the following sentence from the section: “The third party hired to conduct the initial audit may receive a pre-determined percentage of all recovered monies, not to exceed 10 per cent, with the balance being returned to the host community.”
Senate Amendment Number 8 Adding a New Outside Section
Senate Amendment 8 would add a new outside section and change the cooperative housing governing statute to add requirements for cooperative housing boards and members. It is our understanding that these new requirements are aimed at preventing unfair discrimination in housing, which is a goal we fully share. However, housing cooperatives are already prohibited from discriminating under Ch. 151B and we are unaware how this new requirement would increase that protection. The legal and financial ramifications are also unclear and we are concerned how this would impact limited equity cooperatives and cooperative tenants with low incomes. We do not support adding this amendment through this vehicle and would encourage any similar legislation to exempt limited equity cooperatives from these new requirements.
Senate Outside Section Enabling Fuel Assistance Payments
Accept the Senate Outside Section
Last year, challenges in Washington jeopardized on-time receipt and adequate funding of federal LIHEAP fuel assistance and the legislature stepped in to address the situation. The Senate budget includes an outside section adopted via Amendment 278 that would ensure households can receive fuel assistance even if there are federal delays in federal LIHEAP fund commitments in the following year. Given the toxic political climate in Washington and the short Beacon Hill legislative session, we encourage the Conference Committee to adopt the Senate fuel assistance language and eliminate the possibility of households not receiving LIHEAP fuel assistance prior to the cold winter months.
As noted above, both the House and Senate proposals for housing and homelessness prevention include great ideas and we hope these recommendations help produce a budget that includes the best ideas possible. Please don’t hesitate to contact us with any questions. Thank you for your leadership and support.
Brenda Clement Sean Caron
Executive Director Director of Public Policy