RD365 - Report on Investment Models and Best Practices for the Development of Affordable and Accessible Community-Based Housing for Persons with Intellectual and Related Developmental Disabilities (Item 315. Z.) - November 15, 2009


Executive Summary:
Item 315. Z. of the 2008 Appropriation Act directed the Department, in conjunction with the Virginia Housing Development Authority, the Department of Housing and Community Development, the Virginia Association of Community Services Boards, The Arc of Virginia and the Virginia Network of Private Providers to conduct a study and ‘report on investment models and best-practices for the development of affordable and accessible community-based housing for persons with intellectual and related developmental disabilities.'

This study demonstrates how Virginia can promote individualized, person-centered housing for people with intellectual and related developmental disabilities in more comprehensive and creative ways. The Commonwealth is at a crossroads with respect to housing for persons with intellectual and developmental disabilities. It now has an opportunity to reverse its historical institutional bias, demonstrate its commitment to the establishment of a strong policy of community inclusion and to dedicate resources to this effort. The study group recognizes current economic challenges, but believes that these challenges can lead to creative decision-making.

Below is information that provides a brief historical perspective for the report’s recommendations. This is followed by a discussion of the direction of long-term care services and supports, current resources and programs in Virginia, current service and investment models, current barriers to systems change in housing, and housing trends. The Executive Summary also provides an introduction to exciting best practices discussed in detail in the body of the report that warrant consideration for potential implementation/replication in Virginia. Finally, the study group puts forth seven recommendations for consideration by the General Assembly that will move Virginia forward in a positive and proactive direction.

Historical Perspective

Since its founding, the Commonwealth of Virginia has assumed responsibility for providing care and support to people with disabilities. Beginning in colonial times with the creation of the nation’s first public hospital for people with ‘mental disorders,’ and for the first two hundred years after, care and support were provided almost exclusively in state funded institutions. Not until the 1960s and 1970s did Virginia, and in fact the nation, begin to recognize the life burden that institutional placement put on people capable of living productive and fulfilling lives as active, participating members of their local community. In addition, it became recognized that the cost to the Commonwealth of relying on institutional settings is extremely high, and community-based alternatives can better serve the needs and desires of people with disabilities at lower long-term cost. Since that time, Virginia and other states have begun to shift state funds for disability services to community-based providers, and have worked with the federal government to enable Medicaid assistance to be used in non-institutional settings through ongoing expansion of Medicaid Home and Community- Based Waivers.

Progress can now be seen in the growing availability of community-based disability services. However, the pace of that progress has not been matched by comparable progress in providing for the other types of assistance needed by people with disabilities to live independently in the community. This is especially true with regard to assistance in obtaining affordable, accessible housing. This is due to significant budgetary barriers at both the federal and state levels inhibit funding streams that provide assistance for room and board to be used for community-based housing. For example, Medicaid will cover all costs of facility-based care including room and board, but Medicaid Waiver funds can not be used to support the monthly operating costs of community-based housing.

State and local housing agencies have placed longstanding priority on serving the needs of extremely low-income households, including people with disabilities. Those agencies and non-profit organizations have historically depended on federal rent and operating subsidies through the Section 8, Public Housing, and Section 202/811 programs to do so. The expansion of those programs peaked in the early 1980s and has experienced little subsequent growth, especially when adjusted for inflation and increased population. The movement of people with disabilities from institutions to the community has largely occurred during this era of limited growth in federal housing assistance. Consequently, the absence of a shift of institution-based shelter funding to community housing providers has resulted in people with disabilities having to compete with other extremely low-income, vulnerable populations for relatively static federal housing subsidies.

State and local housing agencies have worked to accommodate the significant growth in demand for rental assistance among people with disabilities, and considerable progress has been made. For example, in the federal Section 8 Housing Choice Voucher program, well over a third (38 percent) of current participants in Virginia has disabilities. In the areas of the state where the voucher program is administered by the Virginia Housing Development Authority (VHDA), over half (51 percent) of participants have disabilities. These shares cannot increase much higher due to the substantial unmet needs of other extremely low-income, vulnerable populations. Consequently, further expansion of housing services to Virginians with disabilities is highly dependent on the ongoing ability and willingness of Congress to increase the level of federal rent and operating subsidy assistance, and/or an ongoing ability and willingness of the Commonwealth to develop mechanisms through which funding streams that currently provide for room and board in state-operated settings can be shifted to provide community living supplements to people with disabilities who seek to live in community settings.

Long-Term Care Services and Supports

Historically, decisions about where people with disabilities live have been based on diagnosis and a medical model. The clearly expressed desire of people with disabilities to be a part of mainstream society is recognized as a civil rights issue. According to the Americans with Disabilities Act (ADA), the nation’s goals regarding individuals with disabilities are to assure: 1) equality of opportunity; 2) full participation; 3) independent living; and 4) economic self-sufficiency. In order to succeed in reaching the goals of the ADA, the needs of people with disabilities should be included in all community development and planning processes including affordable housing.

The Community Living Mandate of the ADA is the U. S. Supreme Court’s 1999 Olmstead (*1) decision supports a meaningful life for people with disabilities that allows greater independence and control by people choosing to live in their own homes or community residences rather than in institutions. The court ruled states must afford people with disabilities this opportunity. As a result of this decision and the growing influence of people with disabilities seeking more independence and choice about their publicly funded supports, states have been attempting to shift public resources away from institutional care toward home and community supports and toward consumer or self-directed long-term care services.

The New Freedom Initiative, a direct result of the Olmstead decision, was announced in 2001. This initiative is a nationwide effort to remove barriers to community living for people of all ages with disabilities and long-term illnesses and it supports states' efforts to meet the goals of the Olmstead decision. The New Freedom Initiative was the impetus for a number of federal grants that have been made available to states to support rebalancing efforts including:

• Real Choice Systems Change Grants;
• Money Follows the Person Demonstration;
• The Federal Transit Authority’s United We Ride Grant;
• Community-Based Alternatives for Children in Psychiatric Residential Treatment Facilities (PRTFs) Demonstration Grant Program;
• Medicaid Infrastructure Grants; and
• Demonstration to Maintain Independence and Employment Grant Program.

The policy focus is now firmly on community supports, inclusion, self-determination, person centered planning, and consumer direction. These concepts are fully integrated in federal policy and are the predominant preference of people with disabilities. This new era can serve as a catalyst for facilitating Virginia’s modernization in policy and practice to build community capacity that supports the housing and service needs of it citizens with disabilities

Current Resources and Programs in Virginia

Virginia and other states are pursuing a variety of cost-effective investment models for expanding community housing choice for people with disabilities. A key element in successful efforts is the targeting of state funds to fill critical funding gaps in order to make feasible the investment of private capital for the development of affordable housing. The size and type of the funding gap varies according to the type of housing option being developed. Therefore, different types of funding are needed to support different types of housing choice.

Current Service and Investment Models

The following is a summary of current community housing choices for people with intellectual and related developmental disabilities and investment models used to support them:

• Group Homes: Currently, 62 percent of the recipients of MR/ID Waiver services reside in group homes licensed by the Department of Behavioral Health and Developmental Services (DBHDS). There are state and federal programs available to finance the development of new group homes. In particular, the federal Section 811 program provides both capital grants and ongoing operating subsidies to support group home development. The challenge is that small homes (four or fewer residents) that conform to Virginia’s and other states’ model of community integration lack sufficient economies of scale to support ongoing feasibility at established provider rates. Consequently, there continues to be a predominance of larger homes. Resolution of this problem requires higher provider rates and/or supplemental funding assistance.

• Sponsored Residential Homes: Called ‘host homes’ in others states, this is a model of residential services in which a licensed provider contracts with families living in their own private residence to include up to two individuals with disabilities into their family home. In this setting, the family provides all of the supports that are prescribed in the individual service plan and are subject to all of the regulations applied to the group home model as well.

• Supervised Apartments (or “supportive in-home”): Supervised apartments enable people with ID/DD to reside in mainstream housing. While Medicaid Waiver funds needed supports/services, there is not a mechanism to provide assistance with shelter costs. Therefore, housing providers are reliant on their ability to access scarce federal rent or operating subsidies in order to create new affordable supervised apartments.

• Assisted Living: Due to current Department of Social Services (DSS) licensure requirements and Medicaid Waiver regulations, very few people with intellectual and developmental disabilities are being served in assisted living settings. Assisted living faces the same challenges as group homes in providing small quality residential settings, and will likewise require higher provider rates and/or supplemental funding assistance to become a viable community housing alternative for this population.

• Adult Foster Care: Adult foster care provides a similar housing choice as sponsored residential homes, and while it is an approved setting for MR/ID Waiver services provision, it has proven more difficult to access due to restrictions in some local DSS jurisdictions on serving the MR/ID Waiver recipients in these homes.

Best Practices

A number of states have expanded access by extremely low-income people with disabilities to mainstream rental housing by implementing state-funded programs to provide financial assistance. This has been done in one of two main ways.

First, a number of states have appropriated funding for rent or operating assistance tied to specific newly created rental housing units—often a set-aside of units in rental housing receiving development subsidies through the federal Low-Income Housing Tax Credit (LIHTC) program. This has enabled state LIHTC administrative agencies to mandate set-asides of units in their LIHTC programs. Absent such state-funded assistance, many states, including Virginia, have provided incentives to developers in the competitive tax credit allocation process to encourage set-aside units for people with disabilities, but have not made such set-asides mandatory.

Second, some states have created state rental voucher assistance programs for people with disabilities. Often assistance is targeted to Medicaid Waiver recipients to enable them to access affordable community housing without the multi-year wait time frequently necessary to participate in over-subscribed local Section 8 Housing Choice Voucher programs. State voucher assistance has expedited the use of Medicaid Waivers and facilitated the success of state Money Follows the Person initiatives. Absent such state-funded assistance, it has been nearly impossible for Virginia to coordinate locally-managed federal Housing Choice Voucher waiting lists with state Medicaid Waiver waiting lists, thus making it extremely difficult to transition people from state institutions to community housing in a timely manner.

Challenges to a Better System

First, a large share of people with severe disabilities, including people with intellectual and related developmental disabilities, have extremely low incomes and lack the financial resources to exercise effective demand in the housing marketplace. In institutional settings, state expenditures (including Auxiliary Grants) and/or Medicaid subsidies cover the cost of shelter, room and board. However, Medicaid pays for services but not room and board in community settings. Despite over three decades of federal policy promoting movement of people from institutions to community housing, there has not been a willingness to appropriate sufficient subsidy funds to enable that policy to be effectively carried out. Absent access to rent subsidy assistance, it is not possible for extremely low-income households to attain available community housing, including rental housing with below-market rents enabled through federal and state housing development assistance.

Second, the absence of adequate purchasing power by people with disabilities has stymied the ability and willingness of private developers to provide desired community housing choices. This has led to very limited community capacity to develop needed housing options serving unique disability needs. Many providers are relatively very small and fledgling organizations that require state capacity building support to effectively develop and operate supportive housing on a sustained basis. A critical mass of targeted subsidy investment on a sustained basis is needed in order to build needed development capacity at the local level to create the types of housing options that people with intellectual and developmental disabilities desire and need.

Community housing options vary widely across Virginia depending on local access to needed subsidies and the existence of able housing providers. The vast majority of federal housing rent and operating subsidies are under the sole control and management of larger urban jurisdictions and local housing authorities. Some localities have successfully committed resources to effective community disability housing partnerships and have supported the growth of capable local nonprofit housing developers/operators. The largest urban areas benefit from a critical mass of need and demand that facilitates the expansion of varied housing choices. Smaller communities face greater challenges in addressing the widely varied disability needs in their communities. Strategic state subsidy investment priorities can help to fill current gaps in housing options, both geographically and in types of housing choice.

Trends

As previously stated, Virginia has been funding the total care needs of individuals with intellectual disabilities choosing to live in its state-operated facilities for decades. Those needs include the cost of services as well as the total cost of the housing.

For more than 25 years now, the national and state trend has been moving steadily away from state operated institutions toward homes that are located in integrated settings in the community. The funds for these services have been provided by the state and federal match for only the services. The cost of the housing has not been provided. Unlike the state operated institutions and the community based Intermediate Care Facilities for Individuals with Mental Retardation (ICFs/MR) the only funding available to pay for room and board of each individual is restricted to a portion of the monthly SSI benefit. This benefit in Virginia is currently $674 per month; it has just been announced that there will be no Cost of Living Adjustment (COLA) in January 2010. Providers who offer these services to individuals by billing Medicaid for the personal services and supports they provide must often supplement the cost of room and board through donations or some other funding stream.

Since the trend toward community-based services and supports (away from state-operated institutions) is seen by almost all observers to be irreversible, the Commonwealth would be better prepared to continue to support this trend by addressing the issues of a ‘living supplement’ for community housing. In this way, the level of support for each individual that has been maintained through the institutional method of support would simply be carried into the community-based support model.

Historically, the Commonwealth has provided assistance for shelter costs, but only in high-cost institutional settings. Now, the Commonwealth should acknowledge that in order for less costly, more desired community alternatives to be viable, institutional funding streams must be made available in order to bridge the gap between SSI and the reasonable costs associated with community living.

Policy Recommendations – Next Steps

The basic precept that “disability is a natural part of the human experience that in no way diminishes a person’s right to participate fully in all aspects of life” is now established in federal law. Housing and service models/opportunities that are creative and rooted in the values and principles set forth in federal law need to be prioritized and instituted as part of a framework for housing and disability policy in Virginia. The following are recommendations designed to further Virginia’s desire to expand community housing options for people with intellectual and related developmental disabilities and to capitalize on “investment models and best-practices for the development of affordable and accessible community-based housing for persons with intellectual and related developmental disabilities.”

It is recommended that Virginia:

1. Develop a state policy and plan to expand critically needed community housing options for people with intellectual and related developmental disabilities. Current efforts to develop community-based housing for individuals with intellectual and related developmental disabilities are fragmented. Housing options must be affordable, accessible and reflect Virginia’s “person-centered” vision for serving people with disabilities.

2. Prioritize, target and align state agency investments of assistance with that strategic plan. State strategic investment priorities will help to organize and align federal, state, local and private investment resources which can significantly increase the development of integrated community housing for individuals with intellectual and related developmental disabilities. The state agencies that should participate in the development of the investment priorities are:

i. Department of Behavioral Health and Developmental Services (DHBDS)
ii. Department of Housing and Community Development (DHCD)
iii. Virginia Housing Development Authority (VHDA)
iv. Department of Medical Assistance Services (DMAS)

The leadership of state agencies is critical in supporting the development of local coalitions aimed at increasing affordable and accessible housing options. Further, Virginia’s disability services agencies must become fluent regarding Virginia’s federal housing resources and the prioritization of those resources.

3. Invest in the development of innovative housing and financing models that can effectively leverage affordable housing finance capital and private investor resources. Three related steps to this recommendation are:

• Build the capacity and willingness of the housing development community to provide desired community housing options;
• Establish program priorities for federal housing resources allocated to Virginia, including any National Housing Trust Fund resources, which are aligned with state investment priorities for addressing the community housing needs of people with intellectual and related developmental disabilities; and

• Direct the Virginia Housing Commission to study General Obligation bond use for housing in Virginia, including any Virginia-specific legal concerns. (see Examples of Other States’ Use, p. 37)

4. Establish a community living supplement program for room and board to support the choice of community housing. A supplement of this kind will help solidify Virginians commitment to individuals who reject institutional living.

5. Convene a meeting of agency heads from DBHDS, VHDA and DHCD to consider the adoption of an updated Memorandum of Understanding (MOU).

6. Establish a permanent state source for education and training to provide a resource for CSBs and others to continually connect housing and the needs of people with intellectual and related developmental disabilities.

7. Direct the Disability Commission, through the state interagency Housing Expansion Task Force and in conjunction with the Housing Commission, to conduct an annual review of Virginia’s implementation of these recommendations in subsequent years.
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(*1) Olmstead v. L.C., 527 U.S. 581 (1999).