Strategies to fund housing for people with criminal justice history
Due in part to the complex network of funding sources offered at the federal, state, and local levels, funding is a persistent challenge for many cross-sector housing efforts.
The criminal justice sphere is no exception to this, as funding streams from different federal agencies often come with disparate eligibility and application requirements, making it difficult for local organizations to manage multiple grant processes. This brief describes strategies to fund cross-sector efforts and examples of how cities and states have deployed them across the country.
Adapt existing housing programs to the needs of returning citizens
Housing Choice Vouchers (HCVs). Funding for the voucher program falls extremely short of demand (only a fourth of the households eligible for rental assistance receive it), but many low-income households can receive rental subsidies for private-market housing through HCVs. While the U.S. Department of Housing and Urban Development (HUD) funds vouchers, the program is administered locally by local housing agencies. Some agencies have additional flexibility on the access and use of these vouchers through participation in employment-based demonstration programming, an initiative that allows public housing authorities (PHAs) to design and test innovative strategies that help residents find employment and increase their housing choices. In addition, all local housing agencies have some discretion in how they prioritize households for vouchers.
Examples
- Elm City Communities, the public housing authority in New Haven, Connecticut, prioritizes roughly ten percent of the housing vouchers they administer for those returning from jails and prisons.
- The Michigan State Housing Development Authority collaborates with the Michigan Department of Corrections to target a portion of available vouchers to support people on parole.
Public housing. Through the public housing program, HUD funds government-owned and operated rental housing for low-income families. Rents are calculated based on household income. Similar to housing choice vouchers, local housing agencies can establish their own selection preferences for tenants.
Examples
- The Department of Housing and Community Reintegration in Hudson County, New Jersey, is the local administrator for housing choice vouchers and public housing. The department also oversees a reentry program that helps those exiting jails connect with healthcare providers, job training, and other social supports. The county pursued this unique combination of department responsibilities in order to align disjointed funding streams from federal programs.
- The Burlington Housing Authority in Vermont works directly with correctional facilities to identify returning citizens and family members who currently live in public housing. The authority prioritizes reuniting returning citizens with their family members when possible; otherwise, it works with local landlords or their transitional housing program.
Low-Income Housing Tax Credit (LIHTC). Developers can apply for tax incentives to offset the cost of developing and rehabilitating income-restricted affordable housing. The federal government allocates a set amount of credits to each state annually. State housing finance agencies then distribute tax credits among different projects according to requirements and priorities they define in their Qualified Action Plan (QAP). Some states have used QAPs to support the accessibility of affordable housing to those with criminal justice backgrounds.
Examples
- Indiana’s QAP limits the lookback periods that can be used in tenant screenings for a criminal justice background (two years for misdemeanors and five years for felonies).
- Georgia’s QAP stipulates that LIHTC-supported projects cannot reject an applicant for housing based on arrests. Additionally, an applicant’s conviction history can only form the basis for rejection if it suggests that the individual may pose a risk to the safety of other tenants.
Other federal housing-focused funding sources include Community Development Block Grants (CDBG) and the Continuum of Care (CoC) Program. HUD awards CDBG dollars annually to states, cities, and counties to provide flexible funds for urban development and increased economic opportunity for people with low and moderate incomes. HUD distributes CoC dollars to support coordinated approaches to prevent and end homelessness. CoCs can fund permanent supportive housing through long-term subsidies for housing and services, a resource typically reserved for those who have a disability and have experienced homelessness for an extended period (“chronically homeless”). CoCs can also provide time-limited rental support to help those experiencing homelessness achieve housing stability through rapid rehousing programs.
Develop innovative programming to unlock funding from non-housing federal agencies
Section 115 Medicaid waiver programs. Federal Medicaid dollars typically cannot cover housing expenses. However, states can apply for Section 1115 Medicaid waivers to support demonstration projects that suspend specific Medicaid guidelines. This allows states to create programs that use Medicaid dollars to fund housing costs for those seeking health care. In 2023, The U.S. Department of Health and Human Services announced new guidance to help states increase the accessibility of Medicaid programs and funds to those soon to be released from jails and prisons. Some states are using this flexibility to address housing needs as a social determinant of health.
Examples
- The California Advancing and Innovating Medi-Cal (CalAIM) Program expands and coordinates care provided under Medi-Cal, the state’s implementation of Medicaid. Beginning in July 2023, Medi-Cal can provide up to six months of housing for individuals with high medical or behavioral health needs who are exiting a correctional facility and who would otherwise be homeless.
- New York State’s Medicaid Redesign Team Waiver Amendment increases the accessibility of Medicaid programs to incarcerated individuals 30 days before their release. These programs include discharge planning services and medication management support. The amendment also aims to improve housing services for people experiencing homelessness by establishing a transitional housing program targeted to those who have lived in an institutional setting for 90 days or more.
Bureau of Justice Assistance (BJA) programs. The bureau administers funds to state and local governments through a variety of programs intended to “combat violent and drug-related crime and help improve the criminal justice system.” Multiple jurisdictions have found innovative ways to align BJA programs to address the housing needs of people returning from incarceration.
Examples
- The City of Wichita, Kansas’ Project HOPE uses funds from the BJA’s Innovations in Community-Based Crime Reduction Program to provide housing assistance, case management, and peer support to individuals experiencing homelessness in an effort to reduce violent crime in Wichita’s urban core.
- Georgia’s Criminal Justice Coordinating Council will use funds from the BJA’s Adult Treatment Court Discretionary Grant Program to subsidize shelter and transitional housing for participants in local drug courts, an alternative to incarceration for those with substance use disorders.
Leverage the flexibility of state, local, and private funds
State and local funds. Some localities have been able to tap state or local general funds, bypassing federal restrictions on eligible populations, grant activities, and time-limited social support. However, this spending is also subject to local political concerns, which may bear stigma against those with criminal justice backgrounds.
Examples
- The Wichita – Sedgwick County Housing First Program in Kansas is supported by general funds from the city and county. Program staff note that this arrangement gives the program more flexibility to serve those with criminal backgrounds and sex offense convictions.
- Los Angeles County, California’s Care First, Jails Last initiative uses 10 percent of the jurisdiction’s locally-generated unrestricted revenue to advance alternatives to incarceration and decrease racial inequities. This initiative supports, among other resources, over $45 million in housing, primarily for those with complex health conditions experiencing homelessness.
Philanthropy. Philanthropic dollars can be a valuable source of initial funding for new, innovative programming. Grants are monetary awards that generally do not have to be paid back by the grantee, while program-related investments are philanthropic financing tools that give non-profits access to low-cost loans or equity investments.
Examples
- Impact Justice’s Homecoming Project in California matches homeowners willing to rent spare bedrooms with individuals returning from long-term incarceration. While the California state government now provides some funding for the initiative, philanthropic grants were its first and remain its primary source of funding to support the screening process, time-limited rental assistance, and help with communication and collaboration between participants and hosts.
- The multi-city Just Home Project increases the supply of housing available to those with criminal justice history by using program-related investments from the MacArthur Foundation to acquire and develop property.
Combine public and private funds for full-service programs
Pay for Success. Rather than a distinct funding source, Pay for Success is a framework for combining funds from for-profit, non-profit, and/or public sources. Funders, often philanthropies or other social impact investors, cover the up-front costs of a social program and, in partnership with a government partner, define desired outcomes for the program’s target population. Governments repay the initial investment if the program achieves its target outcomes, and investors may receive more if the program results in additional saved costs for the public sector. Pay for Success funding can take many forms, such as outcomes-based contracts and social impact bonds.
Examples
- The Denver Supportive Housing Social Impact Bond Initiative provided supportive services and housing subsidies for individuals who were homeless and had several interactions with the criminal justice system in Denver, Colorado. The program paired housing supports (funded through HUD programs and Colorado state vouchers) with supportive services paid upfront by philanthropic foundations, non-profit financers, and for-profit financial service companies. The program was effective in increasing housing stability and reducing interactions with the carceral system, leading to private financers receiving a $1 million return on their investment from the City of Denver.
- Los Angeles County’s Just in Reach Pay for Success program utilized performance-based contracts to fund supportive housing services for over 300 individuals with disabilities and histories of homelessness exiting county jails. A foundation and health insurance company provided most of the upfront costs for service delivery. After four years, independent evaluators found that the program effectively supported long-term housing stability and reduced recidivism, contributing to public cost savings and a return on the private financers’ investments.
Cities seeking more information on how to fund housing-criminal justice interventions can direct their questions to Ask the Lab.