Behavioral Health Rental Subsidies Report — Washington State Department of Commerce

Summary

A report to the Legislature from the Washington State Department of Commerce, Community Services and Housing Division, Housing Assistance Unit, dated February 4, 2022 and submitted pursuant to Chapter 334, Laws of 2021 (ESSB 5092). It reports on the $9,864,000 appropriated for each of fiscal years 2022 and 2023 for long-term rental subsidies for individuals with mental health or substance use disorders, which Commerce combined with the Community Behavioral Health Rental Assistance (CBRA) program. The report states that staffing shortages, subcontracting delays and low vacancy rates slowed spending and that no client-level data were available for the new funding. Table 1 lists CBRA clients served in state fiscal year 2021 by region, totaling 430 clients, 360 with long-term subsidies. It recommends depositing the funds in a dedicated account and increasing funds in state fiscal year 2024.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

Submitted pursuant to Chapter 334, Laws of 2021 (ESSB 5092)




                                                 February 4, 2022
       COMMUNITY SERVICES AND HOUSING DIVISION
       HOUSING ASSISTANCE UNIT                   Report to the Legislature

                                                 Director Lisa Brown
V3.0
Acknowledgments

Washington State Department of Commerce
Diane Klontz, assistant director, Community
Services and Housing Division

Tedd Kelleher, senior managing director, Housing
Assistance Unit




Washington State Department of Commerce
Jefferson Spring
jeff.spring@commerce.wa.gov
360.725.2991

Office of Supportive Housing

1011 Plum St. SE
P.O. Box 42525
Olympia, WA 98504-2525

www.commerce.wa.gov

For people with disabilities, this report is available on
request in other formats. To submit a request, please
call 360-725-4000 (TTY 360-586-0772)




 Behavioral Health Rental Subsidies Report
Table of Contents
Executive summary .............................................................................................................................................................. 2

Expenditures .......................................................................................................................................................................... 3

Individuals served ................................................................................................................................................................. 5

Recommendations ............................................................................................................................................................... 6




  Behavioral Health Rental Subsidies Report                                                                                                                             1
Executive summary
Overview
This report is submitted to satisfy the reporting requirements in section 129, subsection 85 of the 2021-23
biennial operating budget. Subsection 85 appropriates $9,864,000 (GF-S) for each year of the biennium to
provide long-term rental subsidies for individuals with mental health or substance use disorders (ESSB 5092 Sec.
129 (85)). Funds may be used for persons enrolled in the Foundational Community Supports (FCS) program or
individuals transitioning from behavioral health facilities or local jails.

    (85) $9,864,000 of the general fund—state appropriation for fiscal year 2022 and $9,864,000 of the general fund—state
    appropriation for fiscal year 2023 are provided solely for long-term rental subsidies for individuals with mental health or
    substance use disorders. This funding may be used for individuals enrolled in the foundational community support
    program while waiting for a longer term resource for rental support or for individuals transitioning from behavioral
    health treatment facilities or local jails. Individuals who would otherwise be eligible for the foundational community
    support program but are not eligible because of their citizenship status may also be served. By December 1, 2021, and
    December 1, 2022, the department must submit a report identifying the expenditures and number of individuals
    receiving long-term rental supports through the agency budget broken out by region, treatment need, and the
    demographics of those served during the prior fiscal year.

Highlights
     Expenditures: Funding is being combined with the existing Community Behavioral Health Rental
     Assistance (CBRA) program. Contracts are in place to provide services across the state. However, a variety
     of challenges have slowed the process of subcontracting, spending funds and providing services.

     Individuals served: Due to the challenges in contracting, spending funds and providing services, no data
     are available to release as this report is published.


Recommendations
     Make funding expenditure flexible through account deposit. Funds should be deposited for dedicated use
     in either Fund 10B – Home Security Account, or 12C – Affordable Housing for All Account. This change
     would allow unused funds contracted for this purpose to remain available for later use. It would also allow
     greater confidence for grantees who carry the burden of responsibility in serving clients with long-term
     care needs.

     Increase funds in state fiscal year 2024. A significant funding increase would build capacity to provide
     project-based vouchers to address insufficient rental revenue experienced by most affordable housing
     operators, particularly those operating permanent supportive housing.




 Behavioral Health Rental Subsidies Report                                                                         2
Expenditures
As a result of staffing shortages, staff capacity constraints and historically low vacancy rates, spending for state
fiscal year 2022 is lagging. The challenges noted here have negative impacts on spending. To spend their grant
funds by year’s end, housing providers focus more on short-term subsidies. Focusing on short-term subsidies
allows providers to spend down contracts but directs Community Behavioral Health Rental Assistance (CBRA)
dollars away from the primary purpose as long-term subsidies. Commerce continues to provide technical
assistance to grantees and subgrantees to facilitate subcontracting and spending.


Background on funding alignment with
Community Behavioral Health Rental Assistance
The Behavioral Health Rental Subsidies funding is strongly aligned with the CBRA program created in section
129, subsection 16 from the 2019-21 biennial operating budget, which provides $1,980,000 per year for rental
assistance for a similar population. Priority for the existing CBRA funding must be given to people on state
psychiatric hospitals' discharge lists or in local inpatient behavioral health facilities.

With guidance from our assistant attorney general, the Department of Commerce (Commerce) paired the new
fund source with the existing pilot CBRA program, allowing expansion to all 10 behavioral health regions this
summer. The statewide implementation of CBRA marks a milestone in expanding permanent rental assistance
to those with behavioral health conditions. This is the first time long-term, state-funded rental assistance for
those with behavioral health conditions has been available state wide.

CBRA is a supportive housing program. Participants must be eligible for at least one of several different state-
provided long-term supports programs, including Foundational Community Supports (FCS). Utilization of these
supportive services by clients must be strictly voluntary. Though supportive housing is most frequently thought
of as project-based housing, there remains a significant deficit of such housing, the recent capital investments in
such housing notwithstanding. As a result, the success of CBRA is dependent on private-market rental housing.

While CBRA allows for indefinite assistance with rent, it is commonly used as a bridge subsidy until another long-
term subsidy is arranged, commonly a Housing Choice Voucher (also known as Section 8 voucher). This use as
a bridge function extends the option for long-term rental assistance to more eligible clients.


Historic service levels with CBRA
With guidance from the Health Care Authority (HCA), Commerce has contracted with the 10 Behavioral Health
Administrative Service Organizations (BH-ASO) as the lead grantees in each of the 10 behavioral health regions.
Lead grantees are responsible for subgranting to eligible non-profit service providers to administer direct rental
assistance to eligible clients, monitoring subgrants, and providing technical assistance as needed or referring
subgrantees to Commerce for assistance.

2019-21 biennium
In the previous biennium, available funding was sufficient only to contract with eight of the 10 regions. The
funded regions were chosen to match the existing regions used by Housing and Recovery through Peer Services



 Behavioral Health Rental Subsidies Report                                                                3
(HARPS), an initiative funded by HCA's federal mental health block grant. HARPS funding doesn't provide long-
term rental assistance, making the combination with CBRA a sensible enhancement.

HARPS teams are comprised of 3 FTEs (one mental health provider and two certified peer counselors). Since
most behavioral health regions include multiple counties, the presence of a single team didn't allow realistic
outreach to all counties in their respective regions. As a result, long-term rental assistance coverage was
incomplete in most regions.

2021-23 biennium
The Legislature's appropriation of additional funding in the current biennium provided the opportunity to fund all
10 behavioral health regions and ensure that housing providers were contracted in each county within a region.
This funding expansion means people with behavioral health conditions in every county will have access to
targeted long-term rental assistance for the first time.


Challenges
Subcontracting
The COVID-19 pandemic has presented considerable challenges and amplified existing concerns. Many
prospective non-profit subgrantees report being overwhelmed by COVID-19 relief funds and are at or over
capacity in terms of client service. This lack of capacity compared to funds available has caused subgranting
delays in some regions.

In King County, which has the largest percentage of funds, county staff turnover has presented additional
subgranting difficulties. In other regions, staff shortages experienced by subgrantees have hindered subgranting,
resulting in the delay of provision of rental assistance.

Vacancy rates
The pandemic and resulting eviction moratoria have worsened pre-existing low rental vacancy rates. Since the
pandemic began, already-low vacancy rates statewide have become even tighter due to less unit turnover. The
low vacancy rates have had real effects on finding suitable housing of any affordability for clients approved for
service, and directly affect spending.




 Behavioral Health Rental Subsidies Report                                                               4
Individuals served
The Homeless Management Information System (HMIS) is the primary data-collection platform for Community
Behavioral Health Rental Assistance (CBRA). However, HMIS cannot be configured until subgrantees are in
place. Therefore, meaningful data cannot be derived from HMIS until sufficient time elapses from HMIS setup;
this lag in information is characteristic of new program implementation. Thus, there is no client-level data
available for this funding source at this time.

Table 1 shows regional client service levels for state fiscal year 2021 (representing the original CBRA fund
source). For state fiscal year 2021, approximately 83.7% of those served were provided long-term subsidies,
rather than short-term bridge subsidies. The high utilization of long-term subsidies is likely due to the chronic
underfunding of the Housing Choice Voucher (Section 8) program, which is the only widely available long-term
housing subsidy besides CBRA. This deficit of Housing Choice Vouchers makes programs like CBRA necessary.

Table 1: CBRA clients served, state fiscal year 2021

  Region                    Clients served            Served with long-term subsidy

  Great Rivers                               147                               122

  North Sound                                  20                               18

  Greater Columbia                             16                               16

  King                                         17                               13

  Salish                                       46                               31

  Spokane                                    110                               110

  Thurston-Mason                               11                                9

  Pierce*                                      63                               41

  North Central**                               0                                0

  Southwest**                                   0                                0

  Total                                      430                               360

* Partial year data
** Regions not under contract in state fiscal year 2021




  Behavioral Health Rental Subsidies Report                                                             5
Recommendations
In January 2019, the Public Consulting Group reported a deficit of 16,885 housing units for the behavioral health
population.1 Some of that need will be met through capital investments through the Housing Trust Fund and
other public financing mechanisms. However, reliance upon the private rental market remains intact, as
construction of publicly-funded housing units cannot keep up with the demand for such housing.

Despite the challenges noted above, Commerce is confident that BH-ASOs will fully subcontract funds.
Therefore, Commerce makes the following recommendations for future funding consideration:

        Make funding expenditure flexible through account deposit. Funds should be deposited for dedicated use
        in either Fund 10B – Home Security Account, or 12C – Affordable Housing for All Account. This change
        would allow unused funds contracted for this purpose to remain available for later use. It would also allow
        greater confidence for grantees who carry the burden of responsibility in serving clients with long-term
        care needs.

        Increase funds in state fiscal year 2024. A significant funding increase would build capacity to provide
        project-based vouchers to address insufficient rental revenue experienced by most affordable housing
        operators, particularly those operating permanent supportive housing.




1
  The Public Consulting Group report on the prioritization and funding of behavioral health facilities in Washington was commissioned by
the Office of Financial Management. Data is from 2018 — see table 44, Summary of Bed Gaps by Region and Category, page 56.



    Behavioral Health Rental Subsidies Report                                                                                6


File and source

File

2022_cshd-2022-02-04-behavioral-health-rental-assistance-program-report-fin.pdf

Size

405,515 bytes

SHA-256

7b506c9936c1bfa1a2e88c7f72fc300e13b36d6faf47ac1efb2d5f23156c92c8

Our copy

2022_cshd-2022-02-04-behavioral-health-rental-assistance-program-report-fin.pdf

Original

app.leg.wa.gov