Topic:
HOUSING FINANCE; HOUSING (GENERAL); HOUSING DEPARTMENT; SOCIAL SERVICES;
Location:
HOUSING - FINANCE;
Scope:
Program Description; Connecticut laws/regulations;

OLR Research Report


January 23, 2002

 

2002-R-0007

RENTAL ASSISTANCE PROGRAM (RAP)

By: Robin Cohen, Principal Analyst

Neil Ayers, Human Services Budget Analyst

You asked for information about the RAP program. Specifically, you want (1) a general history of the program, (2) funding levels since its inception, (3) statewide and Fairfield county-specific average subsidy amounts for one- and two-bedroom apartments, (4) the number of clients served, and (5) the size of the program's waiting list.

This report deals only with the regular RAP program, not the rental assistance program for people living in elderly housing that the Department of Economic and Community Development administers.

Much of the early historical information comes from a 1988 Department of Housing (DOH) report to the General Assembly.

SUMMARY

The RAP program has provided rental assistance to the state's low- income residents since it began as a pilot in 1985. Funding for the program has risen steadily over the years, from $250,000 in FY 1995-96 to just over $15 million in FY 01-02. (The Office of Fiscal Analysis was able to furnish only expenditure information for the intervening years. If you wish, we can try to get appropriation amounts from the Department of Social Services (DSS)). In FY 1990-91, program expenditures doubled when the legislature adopted a major homelessness prevention initiative. But since 1995, spending has declined and eligibility has been tightened.

DSS currently provides 1,543 subsidies. (This is fewer than half of the nearly 3,500 subsidies families received in FY 1990-91.) In addition, the department maintains a waiting list containing 7,000 names. (DSS, which has run the program since 1993, recently re-opened the waiting list after a long period but it is now closed.)

The current average statewide RAP subsidy is $480. DSS is attempting to get the averages by both dwelling size and by county from its program contractor. We will forward this information to you once we receive it.

PROGRAM HISTORY

Pilot and DOH Administration

The legislature created the RAP program as a two-year pilot in 1985. PA 85-452 directed the Department of Housing (DOH) commissioner to establish the program for low-income families (incomes less than 50% of the area's median) living in privately-owned rental units that participants selected. The act appropriated $250,000 for subsidies in three municipalities (small, medium, and large) to preserve housing, revitalize neighborhoods, and produce rental housing.

DOH selected New Haven, Meriden, and Cheshire as the pilot towns, based on responses to a request for proposals. New Haven used its money to benefit 40 homeless households. Meriden served 22 families who were being relocated due to downtown development, and Cheshire spent its funds on 10 families and five elderly individuals.

In 1986, the legislature extended the program for one year and allowed the DOH commissioner to test it in more than three towns, provided that at least three towns met the original act's size criteria (PA 86-384). That year's budget act (PA 86-388) appropriated another $250,000 to the program.

PA 87-517 made the program permanent, increased the participants' income limit from 50% to 60% of median income, extended eligibility to include elderly people living in state-assisted elderly rental housing, and mandated that the program's regulations specify the criteria for determining the subsidy amount. (The increased income limit made eligible for participation families ineligible for both state assistance and federal Section 8 assistance because of excess income.)

The 1987 budget act appropriated $6.5 million for FYs 1987-88 and 1988-89, enabling an additional 15 communities to participate. Of the 18 participating communities, 14 selected their local housing authorities to administer RAP. Hartford and Bridgeport chose their housing departments and Cheshire and Norwich used their social service agencies.

In smaller communities where local program administration was not feasible, the legislature provided approximately $600,000 to DOH to provide direct subsidies to landlords for a total of 100 units.

A companion act, PA 87-455, called for an emergency rental assistance program for families eligible for cash welfare benefits (Aid to Families with Dependent Children at that time) who were living in hotels and motels. The legislature authorized $1.5 million of the $6.5 million appropriation to be used for these emergency subsidies. During the summer and fall of 1987, the City of New Haven and the state joined forces to help homeless residents who were living in temporary hotels find private housing. The DOH report indicates that 216 families and individuals were successfully moved. A relatively new “home finders” program, run by the Department of Human Resources (DHR), aided in this endeavor.

As the RAP program continued to grow, the legislature appropriated more money, so that by FY 1989-90, the appropriation was up to $9.3 million. During 1990, then-Governor O'Neill recommended transferring the program to the Connecticut Housing Finance Authority. The legislature opted to keep the funding in DOH but have it pass through to DHR. Concurrently, the legislature passed comprehensive legislation to prevent homelessness by creating more affordable housing. One goal of the enabling legislation (PA 90-257) was to eliminate the use of separate state funds to provide emergency shelter to welfare recipients in hotels and motels, which cost the state over $2,300 per month per family.

RAP Transfer to DSS and Program Reductions

In 1993, the legislature merged the departments of human resources and income maintenance to create DSS. As part of this reorganization, RAP moved from DOH to the new DSS, including the emergency rental assistance component for Aid to Families with Dependent Children (AFDC) families living in hotels and motels.

In 1995, Governor Rowland recommended reducing the RAP budget by 25%, with an eye towards phasing the program out over four years. Concurrently, as part of major reforms in the state's family welfare program, the legislature directed DSS to modify the RAP program for participants with earned income (PA 95-351). This same legislation reduced the Temporary Family Assistance (TFA)(replaced AFDC) benefits for people with housing subsidies by 8%.

In response, DSS adopted regulations (1) increasing a family's contribution to their housing from the greater of 10% of monthly gross income or 30% of adjusted gross income less a utility allowance, to 10% and 40%, respectively and (2) reducing the deduction families could take from their income for dependents from $750 to $480 per year. The program's budget was reduced to reflect these changes.

In 1996, the governor again recommended eliminating the program, except for the elderly congregate housing component. The legislature restored the program's funding but lowered its income eligibility threshold from 60% to 50% of median income (PA 96-268). (The legislation changed the family contribution back to 30%, but only for elderly and disabled renters.) The expected savings was earmarked for a study.

The only subsequent legislative action of note was the creation of the Transitionary Rental Assistance Program, a time-limited housing subsidy program for people transitioning off the TFA program (PA 99-279, effective July 1, 1999.)

PROGRAM EXPENDITURES

Table 1 presents a history of RAP expenditures since its inception as a pilot program in 1985. For FYs 1997-98 through 2000-01, program funding was transferred from the General Fund to Social Services Block Grant (SSBG) funds. This was possible because federal law allows states to transfer a portion of their Temporary Assistance for Needy Families (TANF) block grant to SSBG. There is presently some uncertainty about the percentage that states may transfer so RAP funding is again coming from General Fund appropriations.

Table 1. RAP Expenditures—1985--present

Year

Expenditures

FY 1985-86

250,000 (1)

FY 1986-87

119,738

FY 1987-88

2,176,105

FY 1988-89

6,033,175

FY 1989-90

9,238,225

FY 1990-91

17,992,430

FY 1991-92

18,000,000

FY 1992-93

17,499,322

FY 1993-94

17,549,451 (2)

FY 1994-95

17,500,000

FY 1995-96

14,070,144

FY 1996-97

13,667,145

FY 1997-98

13,103,710 (3)

FY 1998-99

11,790,813 (3)

FY 1999-00

11,582,208 (3)

FY 2000-01

11,171,066

FY 2001-02

15,281,989 (1)

1. These were appropriated amounts.

2. This was the year that the program was transferred from DOH to DSS.

3. SSBG funds were used to pay most program costs during these years.

SUBSIDY AMOUNTS

The regulations specify that the subsidy is the difference between the tenant contribution and the contract rent. As mentioned above, the tenant contribution is the greater of 10% of the family's monthly gross income or 40% of its adjusted gross monthly income less a utility allowance (Connecticut Agency Regs., 17b-812-6).

The regulations also limit the types of units that participants can rent by establishing a “maximum allowable rent” (MAR), which the combined contract rent and a utility allowance (if utilities are not included in the rent) may not exceed. DSS establishes both the MAR and utility allowances (see attached). The MAR varies by both apartment size and the area of the state where the housing is located. The utility allowance varies by size and by the type of dwelling (e.g., garden style apartment versus a high rise).

For example, if someone was looking for a rental in Stamford, the contract rent and utility allowance for a two-bedroom apartment could not exceed $1,384 per month, which, as you can see, is the MAR for Stamford. If the person found a rental that was $1,000 per month, his utility costs could not exceed $384 per month. If they did, he would have to find a cheaper rental unit.

RC:ts