A business plan to end long-term homelessness

Minnesota's plan uses a business approach to tackle a complex social problem.

A 2003 Wilder Foundation report found more than 3,000 Minnesotans, including 500 children, had been homeless for more than a year. The state plan aims to provide housing for that group of people by the year 2010 through a combination of new housing units and rental assistance, and provide services for them.

A diverse advisory council of about 60 people meets regularly to track the plan's progress. At the council's last meeting, the group toured Redeemers Arms, a St. Paul high-rise whose residents include several dozen people who used to be chronically homeless.

Housing manager Geraldine Donnelly shows off the building's computer room, TV room and the so-called store, where residents can get free bedding, dishes and other things for their apartments.

"Because we have so many long-term homeless people, every other person, when they move in, is just wearing a backpack and that's it," Donnelly tells the tour.

Donnelly then takes the group to one of the apartments, a one-room efficiency where Lester Howell lives. Howell's small apartment includes a bed, a couch and a TV. It's not fancy, but Howell says he likes living here, where he can come home and be in peace.

Redeemers Arms has three staffers on site who help Howell and other residents find the services they need. A survey of the residents who were chronically homeless before moving here found most struggle with chemical dependency and mental illness, and most have a criminal history.

Redeemers Arms is the kind of supportive housing state officials envision in the plan to end long-term homelessness.

After the tour, the advisory council heads to a basement conference room for a status update. Housing Finance Commissioner Tim Marx points to a report card on the plan, which lists the incremental goals for each year. For 2005, the goal was to fund 600 housing units.

"The good news is, we're ahead of schedule," Marx said. "We're at 669 as of December 31 and that is tremendous news."

The report card also tracks how much the state is spending on new construction, rehabbing existing housing and rental assistance. Here, the news isn't quite as good.

"The money is going out the door in terms of commitments a little bit more quickly than we had anticipated," said Marx.

Marx said the costs of construction and rehab are higher in many cases than the business plan budgeted for. On the other hand, rental assistance is lower in many cases than the state's estimates. Marx notes that the state can point to 232 families who used to be homeless and now have a place to call home as a result of the business plan.

But state officials don't sugarcoat the challenges ahead if Minnesota's plan is to become a reality.

The plan has a $540 million price tag. The state would come up with two-thirds of that, by tapping state agency budgets and borrowing money to build units. But there's a gap in the plan for the remaining third.

Advisory council member Tom Fulton, president of the Family Housing Fund, told the group that the plan counts on other sources such as private funding and the federal government.

"There's a $180 million allocation that's been assigned to a general category that includes new federal money," said Fulton.

The room erupts in laughter. Fulton's comments are morbidly hilarious to council members, since the prospect of new federal money appears unlikely. President Bush's latest budget proposal would mean fewer housing vouchers that low-income people can use for rental assistance for more than half of Minnesota's housing agencies, according to an analysis by the Center on Budget and Policy Priorities.

The center's director of housing policy, Barbara Sard, said Minnesota would get slightly more vouchers overall next year under the president's budget. But the agencies that would get fewer vouchers include the three largest housing authorities in the Twin Cities.

"And the cuts appear to be concentrated in the agencies where there is more likely to be more homelessness," Sard said. "Those agencies will have fewer vouchers to provide directly to the new housing developments that the governor is planning as part of the plan to end long-term homelessness."

As far as the state's portion of the plan, Gov. Pawlenty is asking the Legislature to include $25 million for new housing in this year's bonding bill. He sought $20 million in the last bonding bill, but the Legislature trimmed his request to $12 million, which is being spent on two projects in St. Paul and Rochester.

Housing advocates say to keep the plan on track, the Legislature should authorize $33 million this year, along with $10 million for transitional housing. That's short-term housing for people trying to get back on their feet.

The executive director of the Minnesota Coalition for the Homeless, Michael Dahl, said the state shouldn't focus its efforts only on the chronically homeless, when many people simply need a place to stay for a short time. Dahl helped create the state plan, and said it does a good job of trying to help a narrow segment of the homeless population. But he doesn't want to shortchange people who could end up long-term homeless.

"What about the new people that are becoming long-term homeless or folks who are just falling into homelessness and are in dire need of some support so they don't get to that point?" Dahl asked. "And I want to make sure that this plan has the components to make sure people don't become long-term homeless."

Dahl said that means that state also needs to fund transitional housing and prevention programs. Some DFLers point out that under Gov. Pawlenty's leadership, the state has cut some health care and chemical dependency programs that help people on the verge of homelessness.

For his part, Pawlenty has made the goal of ending long-term homelessness a priority in his administration, and housing advocates say he's raised the profile of the issue. At a news conference earlier this year to announce a $5 million private donation, Pawlenty talked about the impetus for the plan. He said after he appointed Tim Marx housing finance commissioner, he asked Marx for a major goal for his agency.

"He came back and said, 'I got one for you,' Pawlenty said. 'Ending chronic homelessness within 10 years in Minnesota, and be the first state to do it.' And I said, that sounds great, but that sounds also kind of lofty. Let's make sure it's benchmarked, that we have a performance metrix and measurements around it, and let's make it tangible."

Pawlenty said the plan's business approach has made it a model for other states. Minneapolis and Hennepin County recently adopted a similar plan, and President Bush's point person on homelessness, Philip Mangano, was here for the announcement, when he praised Minnesota's efforts.

But those accolades may not mean much to the homeless people who haven't seen tangible benefits yet from the plan. While the state has approved rental assistance for 340 families, most of the new housing units are still under construction so no one is living in them yet. Doug Fountain is a member of the 'X committee', a group of people who are either homeless or used to be homeless. He said homeless people wonder where all this new housing is.

"So far now, I don't see it," Fountain said. "They say they're building them, but I don't see it - the homeless people really don't know where they're at, put in on that line."

Fountain has come to the state Capitol for the past two years to push for funding for the governor's plan. He was homeless when he came here last year, but says he's turned his life around and is now living with his girlfriend in St. Paul.

Fountain says if Minnesota's plan is to succeed, there has to be a way for homeless people to find out where these new units are, and how they can qualify to live in them. State officials say outreach workers who already have connections with people on the streets will link homeless people with housing in Minnesota's plan.

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