The Senate has passed the CARES Act, the third and largest supplemental spending bill responding to the COVID-19 epidemic and resulting economic dislocation. Every indication is that the House of Representatives will pass the bill and the President will sign it.
There are many provisions that will be important for communities seeking to keep homeless people safe and prevent increases in the number of people who are homeless.
The bill includes $4 billion for homeless assistance, to be distributed through the Emergency Solutions Grants program (ESG). ESG is a formula grant to states and local governments. It funds a broad range of activities for people who are homeless or who are at risk of homelessness, which in this bill includes anyone with income below 50 percent of area median income. HUD recently released a publication on how to use ESG to fund activities to protect homeless people from the new coronavirus. The bill eliminates requirements for matching funds, local planning, and procurement standards. It eliminates the cap on shelter funding. It eliminates habitability and environmental review standards for temporary emergency shelters. It allows up to ten percent of the funding to be used for administration.
The bill also includes the proviso that “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.” The HUD Secretary will have authority to waive almost any requirement of the regular ESG program, if the flexibility provided by the bill is not sufficient.
Funding will be released in two waves. The first will use the regular ESG formula, under a 30-day time frame, and will include up to $2 billion of the $4 billion. The remainder will be distributed based on a new formula developed by HUD, taking into account states’ and communities’ needs related to coronavirus response.
Community Development Block Grants
The bill 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 bill 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.
Coronavirus Relief Fund
One of the larger items in the bill 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.
Other HUD Programs
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.
Section 2201 of the bill 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.
In addition to these provisions, the bill includes other relief for individuals, local and state governments, and nonprofit service providers: health care systems will receive a great deal of new support, which will help people who are or were homeless, and unemployment Insurance will be expanded.
Working with FEMA
An integral component of coronavirus response will be coordinated local efforts in conjunction with FEMA. Funds allocated through FEMA will be separate than what is allocated in this most recent bill.
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.