OLR Research Report

March 18, 2005




By: Joseph Holstead, Research Analyst

You asked for potential funding sources for homeless shelters and how they have been funded in the past.


Traditionally, emergency homeless shelters have relied primarily on federal and state funding, according to the Department of Social Services (DSS). However, they also get private contributions, according to the Connecticut Coalition to End Homelessness (CCEH), a statewide network that works to identify and eliminate the root causes of homelessness. Its web site is Connecticut's funding for homeless shelters has remained constant for the past 15 years. This flat funding coupled with a decline in private contributions, and a rise in the demand for homeless shelters, have negatively impacted funding for homeless shelters in the state.

There are currently 53 emergency homeless shelters and 39 transitional housing programs in Connecticut that receive grants from DSS. There are also 15 volunteer locations across Connecticut that provide temporary shelter (also known as “No Freeze” shelters) as overflow for the emergency shelters. These “No Freeze” shelters operate 495 beds with little or no financial support, according to the CCEH. The number of people that shelters, which receive state grants, have had to

turn away has increased from 9,953 in 1999 to 37,180 in 2004, according to a February 2005 CCEH fact sheet (which drew from recent studies by the Urban Institute and the University of Pennsylvania, and from the 2000 Census).

CCEH's fact sheet also states that 33,000 people, of which 13,000 are children, in Connecticut experience homelessness during a 12 month period. We have attached (attachment 1) a copy of the fact sheet for your reference.

Shelters could use increased state funds to leverage private funds and provide additional help for homeless shelters, according to a 2005 report from the state Interagency Council on Supportive Housing and Homelessness. Other potential funding sources include municipal taxes (New Haven currently provides funding to shelters located there) and donations from businesses, private individuals, and foundations, according to CCEH. However, the consensus is that addressing the need for more supportive housing and affordable housing would help to curb the number of homeless people in need of emergency shelter. (Supportive housing is affordable to low-income individuals and provides services, such as counseling and healthcare, that tenants need.)


The Interagency Council on Supportive Housing and Homelessness Report to the Governor, released January 1, 2005, recommended (1) using state and federal funding to leverage private investment and (2) new state spending as ways to provide more funding to reduce homelessness. Additionally, the report recommended continuing to target existing resources, such as state and federal employment and job training funds, and using state funds to leverage federal dollars. The report's more specific recommendations were on supportive housing, but the ideas work for shelters as well. It concludes, however, that a general expansion of supportive housing and affordable housing would reduce the number of homeless people in Connecticut.

The governor's FY 2005-07 biennium budget calls for creating 1,000 supportive housing units in the state, which the report recommended, over the course of the next four years. The governor's FY 2005-07 budget funds only the first 500 units, according to the Connecticut Housing Coalition.

The Interagency Council Report

Commissioners from several state agencies crafted the report during three meetings in 2004. Agencies included the departments of Social Services, Economic and Community Development, and Mental Health and Addiction Services; the Office of Policy and Management; and the Connecticut Housing Finance Authority, a quasi-public agency. Executive Order #34, which the governor issued on April 7, 2004, established the council. According to the report, in 2003, approximately 17,000 people used the state-funded emergency shelters. We have attached (attachment 2) a copy of the report for your reference.


Federal Sources

The U.S. Department of Housing and Urban Development (HUD) operates the Emergency Shelter Grant program, which provides funding to states and municipalities under a formula based on need. The grants are primarily used to cover the costs of operating existing shelters, but could be used to rehabilitate or convert buildings for use as emergency homeless shelters. Additionally, the supportive housing component of HUD's Continuum of Care program provides competitive grants for transitional housing (where residents stay for fewer than 24 months), permanent supportive housing, and supportive services. More information is available at HUD's website: http: //www. hud. gov/offices/cpd/homeless/index. cfm.

According to OLR report 2004-R-0533, in federal fiscal year 2003-04, Connecticut received $1.8 million under the Emergency Shelter Grant program and $19 million under the Continuum of Care program. Additionally, municipalities can use community development block grants (CDBG) for homeless shelters. CDBG funds can also be used for a wide range of housing and infrastructure projects; competition at the local level for CDGB funds is intense. We have attached (attachment 3) a copy of OLR report 2004-R-0533 for your reference.

State Funding Sources

DSS coordinates federal and state grants for emergency shelters services (ESS) and transitional housing programs. On March 16, 2005, DSS reported that its grants are currently funding 53 ESS facilities and 39 transitional housing programs. Connecticut has used both bond funds and appropriations for homeless shelter projects, often in conjunction with federal and private funds. DSS also reviews grant applications submitted to the Office of Policy and Management under the Urban Action grant program. The Urban Action grant program is open to towns designated as (1) economically distressed as defined by CGS 32-9p(b), (2) public investment communities, or (3) urban centers under the state's Plan of Conservation and Development (C&D) (CGS 4-66c). Funds may be used for emergency homeless shelters.

Towns can also compete for Small Town Economic Assistance Program (STEAP) funds. A town can receive STEAP grants of up to $500,000 a year if (1) their population is under 30,000, (2) they are not designated as a distressed municipality or a public investment community, and (3) the State Plan of Conservation and Development does not show them as having an urban center. They can use the grants for the same activities as larger communities can currently use Urban Action grants, including for emergency homeless shelters (CGS 4-66g).

Pending Legislation

The Housing Committee favorably reported several bills on March 10, 2005, to the Planning and Development Committee that address homelessness issues:

1. SB 491, An Act Authorizing Bonds of the State for Development of Additional Supportive Housing Dwelling Units, authorizes up to $2 million for the development of supportive housing units;

2. SB 758, An Act Providing Additional Funding to Municipalities that Provide Housing and Emergency Shelter Services, appropriates $2 million to the Department of Economic and Community Development (DECD) to assist towns with housing initiatives, including emergency homeless shelters;

3. HB 6595, An Act Appropriating Funds for housing for Homeless Persons, appropriates $1 million to DECD for municipalities for homeless shelters and related programs; and

4. HB 6785, An Act Concerning the Use of Abandoned Property Bond Funds for the Housing Trust Fund Program, establishes a fund that would provide up to $10 million a year for affordable housing projects.