What are the Facts?

The 1996 welfare reform law that created Temporary Assistance to Needy Families (TANF) will be reauthorized this year. Although research has shown that adequate housing is essential for low-income families to improve their economic well-being, the administration in Washington, DC, has failed to acknowledge this connection in its budget plans for HUD and the Department of Health and Human Services. HHS administers the TANF program.

However, a number of national housing organizations, including the National Low Income Housing Coalition, have developed proposals for TANF reauthorization that would recognize the importance of stable, affordable housing for welfare reform. In addition, legislation has been introduced in Congress to include housing assistance in reauthorization legislation. And North Carolina has its own TANF housing programs, though their future may be limited.

Why Housing Should Be Considered As Part of Welfare Reform

While TANF reauthorization legislation is not expected to contribute substantial new resources to housing programs, there are a number of ways to modify the TANF statute to make it easier to address the housing needs of families with children.

Housing affordability is a real problem for families currently receiving TANF benefits as well as for families who have recently moved from welfare to work. Most families that leave welfare for work do not have housing assistance and do not earn enough to afford decent-quality housing. High housing costs can leave families with insufficient remaining income for basic necessities or to pay for childcare, clothing for work, transportation, and other expenses that often must be met for families to move from welfare to work.

• Research demonstrates that low-income families with access to affordable housing are more likely to successfully transition to improved economic well-being and family stability.
• State and metropolitan studies show that people leaving welfare who receive housing assistance have significantly higher employment rates and earnings.
• High housing costs restrict families' ability to live where low-skill jobs are more plentiful, force more families to live in over-crowded conditions and necessitate more frequent moves.
• Studies further demonstrate that housing assistance that allows families to move to better neighborhoods can have positive effects on youth development, including lower teen regnancy, lower involvement in the criminal justice systems, increased high school graduation rates and the increased likelihood of entering college.

Recommended Housing-Related Changes in the Federal TANF Statute, developed by the National Low Income Housing Coalition, the National Coalition for the Homeless, the Center for Budget and Policy Priorities, the National Alliance to End Homelessness, the McAuley Institute and others.

1. Define "housing subsidy" as a work support, similar to childcare or transportation, instead of "assistance", so it is not restricted by time limits or other TANF requirements. Many state and counties planning to commit TANF funds to provide ongoing housing assistance have been unable to implement the types of programs they wanted to provide to working families due to the constraints posed by current HHS rules that consider any TANF-funded housing subsidy provided for more than four months as "assistance," even if families are working and not receiving TANF cash benefits.

2. Add housing to the list of elements that states must address in their state TANF plans. Increasingly, states are becoming aware of the barriers posed by lack of affordable housing to families remaining employed. Through new TANF state plans or other requirements, states should be encouraged to design policies that help families attain sufficient income and benefits to afford adequate housing.

3. Encourage cooperation among welfare agencies and agencies that administer federal housing subsidies. As a parallel to the current requirement in the US Housing Act that public housing agencies (PHAs) seek to enter into cooperation agreements with welfare agencies, Congress should require states to cooperate, directly or through counties, with PHAs to promote the economic self-sufficiency of public housing residents and voucher program participants that currently or recently received TANF benefits.

4. Federal law should allow states to determine what constitutes "minor rehabilitation" costs payable with TANF funds. It is now permissible to use TANF funds for "minor rehabilitation" but there is no HHS guidance on what types or cost of repairs is allowable, making it difficult for states to determine the extent to which using TANF funds in this area is permissible.

5. Provide additional funds to HHS to begin a collaborative initiative with HUD to explore new models of housing with services for families with multiple barriers to work.

6. Allow states with high housing costs to exempt additional families from the federal time limits to prevent homelessness and help families retain jobs.

7. Adjust TANF funding levels for inflation and allow states that historically paid very low welfare benefits to receive additional funds.

8. Require HHS to provide technical assistance and guidance to states and localities outlining best practices, models, and suggestions for how TANF resources and the TANF state planning process can be used to: (a) address the housing needs of TANF recipients; (b) promote housing stability among current and former TANF recipients; (c) develop partnerships with public housing authorities and other affordable housing providers; and (d) prevent and end homelessness among TANF-eligible families.

The housing organizations involved in the development of these proposals will be visiting Capitol Hill and communicating with the Administration in the coming weeks, seeking inclusion of the proposals in TANF reauthorization legislation.

Much of the above information came from the Center for Budget and Policy Priorities. To learn more, visit www.cbpp.org/3-12-02hous.htm or www.cbpp.org/4-15-02hous.pdf

Current Federal Legislation

In April, Senator Kerry (D-MA) introduced a bill to increase state flexibility in using TANF funds for housing assistance and encourage greater collaboration among housing and social service agencies at all levels of government. The "Welfare Reform and Housing Act" (S. 2116) is a strong statement by a longtime leader on affordable housing issues that Congress should address housing needs in reauthorizing welfare this year and include housing solutions in the revised law.

S. 2116 would make relatively minor changes to TANF, but those modifications would greatly increase the program's ability to provide housing help and complement housing assistance from other sources. First, the bill would provide that TANF-funded housing assistance would not trigger the 60-month lifetime limit on the receipt of TANF cash benefits, effectively treating TANF-funded housing assistance as "work support" like TANF-funded childcare and transportation assistance.

The bill also would encourage greater collaboration between HUD and the Department of Health and Human Services and between local public housing authorities and state welfare agencies. States would be required to consider housing needs in developing and implementing their TANF plans. In addition, the bill would allow states to define "minor rehabilitation" for the purposes of using TANF funds to pay for it. Finally, legal immigrant victims of domestic violence eligible for TANF and other welfare-related benefits would also be eligible for housing benefits.

Kerry's bill could become part of a broader Senate Democrat plan to reauthorize welfare. While the House recently passed a mostly Republican welfare bill that doesnot include housing provisions, the Senate probably will not vote on a bill until later in the summer.

To read the full text of S. 2116, go to http://thomas.loc.gov/ and search for the bill by number.

TANF Housing Programs in NC

In 2000, the NC General Assembly agreed to set aside $3 million of federal TANF funds for housing assistance programs to help families transitioning from welfare to work. Pilot projects were initiated in eight counties: Wake, Durham, Orange, Mecklenburg, Edgecombe, Catawba, Buncombe and Forsyth. Each county was allowed to structure the program in its own way, to best meet the needs of that community. In 2001, the appropriation was cut to $2.7 million, but the programs continued to serve local families and assist them in leaving homelessness or dependence and finding a place to live.

Most of the programs include some form of counseling--classes on successfully negotiating the maze of finding a rental unit, budgeting advice, or homeownership counseling--to help families achieve self-sufficiency. They also may include rental subsidies or assistance with making a deposit on a rental unit, to help those families gain a foothold when they are just entering the working world. These subsidies then decrease with time, as earnings increase.

Most of the programs subcontract out to nonprofit organizations in the community, and many have successfully leveraged local dollars to extend the program further or make up for the funding cut in 2001. Some programs tie in with other state and federal housing and poverty reduction programs to further assist low-income families.

The programs are regarded as very successful. Accessibility to decent and safe housing is intrinsic to family well-being and self-sufficiency, and the fact that each county can tailor its program to meet local needs means it can be highly responsive and community-based in helping those families who are leaving welfare.

However, it is widely believed that these pilot housing programs will end this year as a result of greater needs in North Carolina for direct cash assistance, which is the first funding priority for TANF money. However, the Coalition has lobbied and will continue to push for a continuation of these programs in North Carolina and for the inclusion of housing assistance in federal TANF legislation.

For more information on TANF housing programs in NC, contact Wilbert Morris of the Department of Health and Human Services at (919) 733-7831.