State and Local Rental Assistance Supports Key Health and Homelessness Work

A new Cityscape paper authored by CBPP analysts offers insights about how states and localities can create new rental assistance programs, or improve existing ones, to better serve vulnerable people, such as people experiencing homelessness.

While federal rental assistance programs such as Housing Choice Vouchers and Section 8 Project-Based Rental Assistance provide the vast majority of rental aid, 3 in 4 eligible households receive no federal aid because of limited funding, and many people spend years on waitlists. While they won’t fully fill the gap left by federal programs, states and localities fund their own relatively small rental assistance programs because a lack of affordable housing stands in the way of other policy goals, including ending homelessness and helping people with mental health conditions move out of institutional care (nursing facilities, group homes, or state hospital settings).

The programs we studied often targeted rental assistance to vulnerable people for whom state or local governments already provide specialized (and expensive) services, such as homeless shelters or inpatient mental health treatment. These programs also commonly work in combination with federal rental assistance so that people transition to federal assistance once it becomes available. The two most common target populations in the programs we studied are:

• People with mental health conditions, particularly those living in or at risk of living in institutions. All states are legally obligated under the Olmstead decision to serve people in the community rather than institutions when community-based services can meet their needs. But people can’t leave costly institutional care if they don’t have affordable housing available to them. Targeted rental assistance can remove that obstacle to living in the community.
• People experiencing homelessness, often those who also have a chronic health condition or disability. Individual communities and states across the country have committed to ending homelessness. People experiencing homelessness have higher rates of physical health, mental health, and substance use conditions, which can make it harder for people to find and keep housing and can lead to higher use of expensive inpatient hospitalizations and emergency health services. Often, state and local rental assistance programs supplement communities’ most promising innovations to help end homelessness, like supportive housing, that pair rental assistance with health care services. These innovations help people leaving homelessness remain stably housed and improve their use of health care services, which can result in lower health care costs.

While we need to learn more about how these state and local programs impact health outcomes and costs, they can serve an important role in quickly addressing the housing needs of a subset of communities’ most vulnerable members, all while furthering other state and local priorities.