COVID-19, Third Stimulus Package: Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136

Impact

The CARES Act (P.L. 116-136) includes many provisions that will be important for communities seeking to keep homeless people healthy and prevent increases in homelessness during the COVID-19 pandemic.   

EMERGENCY SOLUTIONS GRANTS: The new law includes $4 billion for homeless assistance, to be distributed through the Emergency Solutions Grants (ESG) program.  ESG is a formula grant to states and local governments, and the program funds a broad range of activities for people who are homeless or who are at risk of homelessness, which in the new law includes anyone with income below 50 percent of area median income.  The new law eliminates requirements for matching funds, local planning, and procurement standards, as well as the cap on shelter funding and habitability and environmental review standards for temporary emergency shelters.  The new law also allows up to ten percent of the funding to be used for administration. 

The HUD Secretary is given authority to waive almost any requirement of the regular ESG program, if the flexibility provided by the new law is insufficient.

Finally, the new law includes this prohibition: “none of the funds provided under this heading in this Act may be used to require people experiencing homelessness to receive treatment or perform any other prerequisite activities as a condition for receiving shelter, housing, or other services.”  

Funding is supposed to be released in two waves. The first wave will use the regular ESG formula, under a 30-day time frame, and will include up to $2 billion of the $4 billion. The second wave will be distributed based on a new formula developed by HUD, taking into account the needs of states and communities to deal with COVID-19.

On May 20, 2020, Congressman David Price (D-NC), Chairman of the Transportation, Housing, and Urban Development Appropriations Subcommittee, and Ranking Member Mario Diaz-Balart (R-FL) sent a letter to the Secretary of Housing and Urban Development, Ben Carson, urging the department to immediately take steps to ensure CARES Act funding is promptly disbursed to states and local communities.  CARES Act funding approved on a bipartisan basis that has yet to reach local grantees include: $5 billion for the Community Development Block Grant (CDBG) program, $4 billion for the Emergency Solutions Grant (ESG) program, and $65 million for the Housing Opportunities for Persons with AIDS (HOPWA) program.

“Congress, on a bipartisan basis, appropriated billions in the CARES Act for critical housing and community development programs that are meant to assist states, towns, and local housing providers address the threats posed by the COVID-19 pandemic.  While HUD has been quick to announce funding allocations, the department has thus far failed to take additional steps, such as issuing necessary guidance and administrative requirements, that communities need before they can confidently utilize these federal funds,” said Chairman David Price. “Flexible funding, like the Community Development Block Grant program, and targeted programs like Emergency Solutions Grants and the HOPWA program provide a lifeline to communities helping the most vulnerable among us remain in stable housing to prevent community transmission of the virus. Our letter urges Secretary Carson to immediately take action to deliver these urgently needed resources.”

COMMUNITY DEVELOPMENT BLOCK GRANTS: The new law also provides $5 billion for Community Development Block Grants (CDBG) to state and local governments for a broad range of activities that can include those needed to keep homeless people safe and prevent additional homelessness. Funding will be released in multiple waves, with $2 billion to be allocated to existing CDBG grantees within 30 days. Local and state governments will determine how to use the money. Unlike normal CDBG, this funding will have no cap on the amount used for public services; in fact, the new law eliminates the public services cap from the most recent two rounds of regular CDBG funding, allowing the money to be spent on rental assistance, operating costs of shelters, and other necessities. 

STATE AND LOCAL GOVERNMENTS: One of the larger items in the new law is the Coronavirus Relief Fund, which will provide $150 billion to state and local governments for any expenses incurred due to this public health emergency. This funding is allocated to states, territories, and tribal governments under a formula based on population. Any locality with a population of 500,000 or more is allowed to carve out a proportionate amount of its state’s funding.  

The Alliance is hopeful that entities that receive this money will include work on homelessness and on preventing housing instability. Because of the large amount of money available through this funding source, many localities have a serious chance to prevent evictions and other housing losses at an appropriately large scale, in order to keep pressure off the homelessness system. 

A number of other HUD programs received smaller amounts of money, aimed primarily for the important purpose of keeping programs and housing opportunities sufficiently staffed and available to people.  

FEDERAL EMERGENCY MANAGEMENT AGENCY: An integral component of coronavirus response will be local efforts coordinated with the Federal Emergency Management Agency (FEMA).  Funds allocated through FEMA will be separate than what is allocated pursuant to the new law.  The Alliance will have more guidance on how to work with FEMA, as well as information on all other available funding sources, as implementation begins. 

CHECKS: Section 2201 of the new law provides that any U.S. resident with a work-eligible Social Security number who is not someone else’s dependent and had adjusted gross income under $75,000 ($150,000 for a married couple) will receive a one-time payment of $1,200 ($2,400 for a married couple), plus $500 for each dependent child. For people with a bank account, and for whom the IRS or Social Security has the bank information, the money will be direct deposited. Others will receive checks, although that process will take longer, and could disadvantage people without bank accounts or without bank accounts on file at the IRS. There is work to be done to ensure that eligible homeless people receive these benefits. 

There has been a lot of concern about making sure all folks experiencing homelessness who are eligible for relief checks actually get them, including on the part of Senator Tina Smith (D-MN) and many of her colleagues.

Smith Letter to Mnuchin_Relief Payments for People Experiencing Homelessness

And here is a House sign-on letter on the same topic that was organized by Representative Lisa Blunt Rochester (D-DE).

Rochester Veasey 200413_Ltr_IRS and Stimulus Checks for Homeless Population FINAL

Summary

The CARES Act (P.L. 116-136), the third stimulus package, which was signed into law by the President on March 27, 2020, included $4 billion in new Emergency Solutions Grants funding to help homelessness services providers deal with the consequences of COVID-19.  However, it is believed that this amount covers only a fraction of the ultimate cost of helping people experiencing homelessness cope with the pandemic. 

Analysis suggests that the total estimated cost to meet the nation’s emergency and observational/quarantine shelter bed need is approximately $11.5 billion for the current year, and project that homeless individuals infected by COVID-19 would be twice as likely to be hospitalized, two to four times as likely to require critical care, and two to three times as likely to die than the general population.  https://endhomelessness.org/resource/estimated-emergency-and-observational-quarantine-bed-need-for-the-us-homeless-population-related-to-covid-19-exposure-by-county-projected-hospitalizations-intensive-care-units-and-mortality/

Clearly, much more federal assistance will be necessary to protect folks experiencing homelessness from contracting the virus.  The best way to safeguard the health of those experiencing homelessness is to get them housed, particularly with respect to those living in encampments; make it easy for shelters to implement prevention practices; and secure spaces, particularly in motels and hotels, which can be used for self-quarantine.  As the analysis mentioned above would indicate, Continuums of Care need additional resources to provide health care to those people experiencing homelessness who contract the virus, and whose health may already be compromised. 

 

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