Mayor’s Proposed FY24 Budget Cuts Essential Funding for Programs to End Homelessness

Testimony of Kate Coventry, Deputy Director of Legislative Strategy, at the DC Council Committee on Housing's Budget Oversight Hearing on the Department of Human Services

Chairman White and members of the Committee, thank you for the opportunity to testify today. My name is Kate Coventry, and I am the Deputy Director of Legislative Strategy at the DC Fiscal Policy Institute (DCFPI). DCFPI is a non-profit organization that shapes racially-just tax, budget, and policy decisions by centering Black and brown communities in our research and analysis, community partnerships, and advocacy efforts to advance an antiracist, equitable future.  

DCFPI envisions a future where homelessness is rare, brief, and non-recurring, as outlined in Homeward 2.0, DC’s strategic plan to end homelessness.[1] DC has made great strides towards this vision, but underfunding and implementation delays in successful, research-based strategies are undermining progress. The Mayor’s proposed fiscal year (FY) 2024 budget freezes and cuts funding for programs essential to ending and preventing homelessness.  

Black residents bear the brunt of current underfunding and implementation delays, and they will experience the harm of the Mayor’s proposed budget unless the DC Council addresses these shortcomings. Eighty-nine percent of unaccompanied adults counted in the District 2022 Point in Time Count were Black.[2] This is the result of the enduring legacies of structural and individualized racism—such as racist zoning and residential segregation, redlining, restrictive covenants, and practices barring federal employment—that for years prohibited Black families from equitably accessing the housing and employment markets. 

As a Steering Committee member, DCFPI supports The Way Home campaign’s full budget platform. This testimony focuses on a portion of that platform and makes the following recommendations to the DC Council:   

  • Restore adequate levels of funding for Project Reconnect; 
  • Restore funding to Emergency Rental Assistance Program (ERAP); 
  • Preserve funds for the DC Flex expansion; and,  
  • Reinvest unspent dollars for Permanent Supportive Housing (PSH) and Medicaid savings back into the homelessness system.  

The Council Should Restore Funding for Project Reconnect And Meet the Need 

Project Reconnect, the prevention program for individuals experiencing homelessness, plays a key role in making homelessness rare and brief. Yet, the Mayor’s proposed FY 2024 budget cuts funding in half for this vital program, which helps individuals who are newly homeless or exiting from institutions like jail or foster care find alternatives to shelter, such as reuniting with friends and families. Shelter can be traumatic and unsafe, and investments in programs that help individuals avoid shelter can benefit them in the long run.[3] Homeward DC 2.0 calls for more robust prevention services for individuals, and given the proven success of Project Reconnect, the District should ensure the program is fully funded, meaning all who qualify can receive services. The Council should ask the Department of Human Services (DHS) how much funding is required to serve everyone in need. If they fail to provide this number, the Council should add at least $1.2 million to the FY 2024 budget to bring the budget to the same level as in FY 2023. 

The Council Should Add Funding to ERAP 

ERAP helps residents facing eviction pay for overdue rent and related legal costs—yet the Mayor proposes slashing this program by about 80 percent next year. The program also covers security deposits and the cost of the first month of rent for residents moving into new homes. And many PSH residents use ERAP for security deposits when they need to move apartments. Preventing evictions is a key to avoiding significant socioeconomic setbacks for adults and children and offering security deposits helps households exit homelessness. Many DC residents experience housing instability: nearly 40,000 households earn less than 30 percent of family median income, just $29,900 for an individual, and pay more than half of their income in rent.[4],[5] These households are severely rent burdened and are one missed paycheck or illness away from losing their housing.

The Mayor’s proposed FY 2024 budget includes only $8.2 million for ERAP, down from $43 million in FY 2023. The District recently closed the ERAP portal for FY 2023 because DHS anticipates running out of funding in May. DHS has received 7,720 applications for ERAP since last fall, but this likely undercounts the number of households who need help. In fact, analysis of Census Pulse data shows that from last October through mid-March, a monthly average of 16,300 DC renter households reported they weren’t caught up on rent.[6] Council should provide at least an additional $50 million to ERAP in the supplemental budget—as housing advocates have called for—and anticipate high need for the program in FY 2024 due to a forthcoming rent increase, high inflation, and because every year the program runs out of money mid-year.[7] The administration claimed their approach returns the program to pre-pandemic levels of spending. But the FY 2024 budget falls short even of the FY 2020 budget once inflation is taken into account. The FY 2020 budget was $7.6 million but was worth $8.5 million in FY 2024 dollars.   

DCFPI asks the Council to add as much funding as possible to the ERAP budget in FY 2024. 

The Council Should Preserve Funds for DC Flex Expansion  

DC Flex is a five-year shallow subsidy program that provides a fixed amount of cash assistance annually to working households who are struggling to afford rent. The goal of the program is to provide support that households can draw down flexibly as they need it. For example, residents with uneven income over the year, like those who do day labor, can use more assistance during colder months when work is more difficult to get. If the household does not use all the cash assistance that they receive, they can use it in the following year. When the District launched DC Flex, the program was limited to families with children. In FY 2022, DHS set aside $1 million to expand the program to individuals, but the agency has yet to launch this expansion. DCFPI requests this body to require DHS to provide a timeline for implementation and to ensure that the FY 2022 funds are carried over into the DC Flex budget for FY 2023 and FY 2024. 

The Council Should Ensure Underspending is Reinvested 

Because of the delay in implementing vouchers funded in the FY 2022 and 2023 budgets, DHS should have significant savings from underspending. There also should be ongoing local savings associated with the shift to Medicaid to fund PSH services, as DCFPI details in a report that will be published next week and shared with this body. The actual amount of savings is unclear. It is also unclear how DHS or the administration is using this unspent funding. DCFPI asks the Council to gather this information and ensure that funding that was supposed to help our neighbors experiencing homelessness is retained for this purpose.  

Thank you for the opportunity to testify, and I am happy to answer any questions. 

[1]Homelessness will be rare when services are in place to prevent as many people as possible from experiencing homelessness. Homelessness will be brief when individuals are helped as quickly as possible. And homelessness will be non-recurring when individuals have the supports they need to maintain their housing.

[2] Metropolitan Washington Council of Governments, Homelessness in Metropolitan Washington: Results and Analysis from the Annual Point in Time (PIT) Count of Persons Experiencing Homelessness, May 2022. 

[3] “Diversion,” National Alliance to End Homelessness, August 10, 2010. 

[4] DC Deputy Mayor for Planning and Economic Development (DMPED) and DC Department of Housing and Community Development (DHCD), “Inclusionary Zoning Program 2022-2023 Maximum Income, Rent, and Purchase Price Schedule,” Effective July 1, 2022. 

[5] DC Interagency Council on Homelessness, “Homeward DC 2.0,” Accessed December 8, 2022. 

[6] Center on Budget and Policy Priorities analysis of Census Pulse data for DC, October through mid-March. 

[7] “ERAP Request for Supplemental Emergency Funds,” Sign-On Letter from DC Advocacy Organizations to Mayor Bowser and the DC Council, Dated March 19, 2023.