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38—676 CC

MARCH 5, 1997

Printed for the use of the Committee on Banking and Financial Services
Serial No. 105—4

JAMES A. LEACH, Iowa, Chairman
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BILL McCOLLUM, Florida, Vice Chairman
TOM CAMPBELL, California
EDWARD R. ROYCE, California
FRANK D. LUCAS, Oklahoma
JACK METCALF, Washington
BOB BARR, Georgia
JON D. FOX, Pennsylvania
SUE W. KELLY, New York
JIM RYUN, Kansas
BOB RILEY, Alabama
RICK HILL, Montana
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BRUCE F. VENTO, Minnesota
BARNEY FRANK, Massachusetts
PAUL E. KANJORSKI, Pennsylvania
JOSEPH P. KENNEDY II, Massachusetts
MELVIN L. WATT, North Carolina
JESSE L. JACKSON Jr., Illinois
JAMES H. MALONEY, Connecticut
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Subcommittee on Housing and Community Opportunity

RICK LAZIO, New York, Chairman
ROBERT W. NEY, Ohio, Vice Chairman

JON D. FOX, Pennsylvania
SUE W. KELLY, New York
RICK HILL, Montana
JACK METCALF, Washington

JOSEPH P. KENNEDY II, Massachusetts
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BARNEY FRANK, Massachusetts
JESSE L. JACKSON Jr., Illinois
JAMES H. MALONEY, Connecticut


Hearing held on:
March 5, 1997

March 5, 1997


  Burt, Martha, Dr., Principal Research Associate, The Urban Institute
  Culhane, Dennis, Dr., Associate Professor of Social Welfare Policy, University of Pennsylvania
  O'Flaherty, Brendan, Dr., Associate Professor of Economics, Columbia University
  Torrey, E. Fuller, Dr., Research Psychiatrist, Neuroscience Center, National Institute of Mental Health
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Prepared statements:
Lazio, Hon. Rick
Jackson, Hon. Jesse L. Jr.

Burt, Martha, Dr.
Culhane, Dennis, Dr. (with charts and maps)
O'Flaherty, Brendan, Dr.
Torrey, E. Fuller, Dr. (with chart and photos)

Additional Material Submitted for the Record
Lazio, Hon. Rick:
Copy of article published in The Economist entitled ''Down and Out: Homelessness is One of America's Most Visible Social Ills''

Kennedy, Hon. Joseph P., Jr.:
Pine Street Inn letter dated February 27, 1997

  Policy statement of National Association of Counties; National League of Cities; Association of Local Housing Finance Agencies; and Council of State Community Development Agencies

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U.S. House of Representatives,
Subcommittee on Housing and Community Opportunity,
Committee on Banking and Financial Services,
Washington, DC.

  The subcommittee met, pursuant to notice, at 9:11 a.m. in room 2222, Rayburn House Office Building, Hon. Rick Lazio [chairman of the subcommittee] presiding.

  Present: Chairman Lazio, Representatives Ney, Kennedy, Jackson, LaFalce, Maloney, and Hill.

  Chairman LAZIO. I want to welcome everyone here to the Subcommittee on Housing and Community Opportunity. This is our first hearing this year involving some solutions to the homeless problem that we have in America.

  Today we are going to be hearing testimony and discussing the issues surrounding homelessness. On any given day in America, many surveys reflect about 600,000 Americans are homeless. For many years, when I was growing up, it seemed to me that homelessness was an aberration, the ''hobo'' or vagrant down the street. Now, both because of the electronic media and because of the overall increase in the homeless problem, it has become something that is synonymous with governmental failure, with the fact that we have been unable to find long-term and permanent solutions to one of the most dramatic domestic problems facing America today, whether you are in a suburban or rural area, or urban area. You can walk through most major cities today and find, tragically, some of our fellow citizens sleeping in parks, out in the cold in the winter, looking for food in garbage cans, and even sometimes experiencing hallucinations.
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  Today, these observations rarely shock the conscience in some of our communities, and we are in the process now of rethinking what our role needs to be.

  On the first day of this Congress I introduced H.R. 217, The Homeless Housing Programs Consolidation and Flexibility Act. The purpose of this bill is the following three major principles:

  First, to maximize the taxpayers' investment in homeless programs that ensure superior performance and value for housing and services;

  Second, to facilitate permanent solutions to homelessness, where we stop historical patterns of simply treating symptoms. Instead, we propose a holistic approach using various resources; and

  Third, to provide incentives to local communities to meet the challenges of homelessness that they face each and every day.

  These past 15 years represent an incremental approach by this Congress to spend well over $5 billion on various homeless problems, yet the public questions whether the value of that taxpayer investment has made a significant dent in ending homelessness. At some point, in response to those concerns, it is the Congress' responsibility to reassess and rethink our approach to the homeless problem and perhaps ask some very fundamental questions, such as, who is homeless and how did they get there? What type of housing best serves the homeless? And how do we get homeless people access to housing? What services, if any, are necessary to assist those homeless people staying in housing? Why do we have chronically homeless individuals, given the variety of service providers and assistance available? And, most importantly, how can the Federal Government provide better coordination, partnerships, and greater flexibility to homeless advocates, whether to States, localities, or non-profit organizations?
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  Under today's approaches, we spend about $823 million annually in the McKinney HUD housing dollars, and use approximately 50 to 70 percent of those funds for services rather than permanent housing solutions. Although I recognize and understand the need for supportive services, I believe that the taxpayers would get more value for their investment if we provided incentives for linkages with other agencies and resources to enable us to do both the supportive services and the so-called ''bricks and mortar.''

  Homelessness is not just a housing problem for some individuals. It is a symptom of other pathological problems, yet I have to say that I am perplexed that our Federal approach is to hand off this problem totally to HUD, which has been ill-prepared to meet a mission it was never designed to hold. Who wouldn't agree that HUD will need to collaborate with the other agencies who have eligible block grants, but perhaps have failed to meet the challenge of homelessness?

  House Resolution 217 will not only consolidate the various homeless programs, but also require coordination among the different agencies. The bill is intended to provide a non-adversarial approach for agencies such as HHS and Labor, to provide service funds for these homeless programs and deserving homeless service providers.

  The legislation also requires a match, where the grant recipients bring hard cash or the value of goods and services equal to 50 percent of the Federal grant.

  I believe that it is imperative that other Government sectors also face their responsibility in this issue. In the vast majority of cases, matches will not be a problem. In some areas, however, localities have perceived homelessness as a Federal problem, without any coordination or local assistance, and therefore they lack the investment and outcome that we need.
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  Hopefully, this match requirement will provide incentives for localities and States to provide creative and flexible solutions.

  Finally, another major thrust of this legislation would emphasize permanent housing solutions. Out of this block grant will be a modest competitive block grant for acquisition, construction, and significant rehabilitation.

  Before I turn to some of the other Members here, I would ask that all of the opening statements that Members have prepared be included in the record. Members will have 3 days to submit such statements. I also want to ask unanimous consent to place in the record a February 8th, 1997 article published in The Economist entitled: ''Down and Out: Homelessness is One of America's Most Visible Social Ills; Can Economics Offer Ways to Cure It?'' The article outlines the distinctions between two schools of thought, one promoted by Dr. Christopher Jencks, a social scientist at Harvard University, who argues that homelessness is caused by drug and substance abuse and mental illness, which have little to do with housing economics; and the second, promoted by Dr. Brendan O'Flaherty of Columbia University, one of our witnesses today, who cites changes in the housing market as the largest factor in the rise of homelessness. This article was a major impetus for having this hearing to discuss the explanations and possible solutions to homelessness. Dr. Jencks was invited to participate today, but unfortunately he had a scheduling conflict.

  [The referenced article can be found on page 38 in the appendix.]

  Today we have four expert witnesses: Dr. E. Fuller Torrey; Dr. Brendan O'Flaherty; Dr. Dennis Culhane, and Dr. Martha Burt. All four have different perspectives and observations on homelessness.
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  I am hopeful that we can use this as a dialogue to engage in a worthwhile discussion on the issues that cut to the foundation of the debate.

  We intend to hold a second hearing, with the participation of the Administration, homeless service and housing providers, and State and local government officials, to discuss specifics of the legislation.

  Again, I want to welcome everyone, and also announce that our Ranking Member, Mr. Kennedy, should be here very soon. I know he has some scheduling conflicts. Mr. Kennedy is very involved in this issue and we have been working closely together on a number of these problems.

  Let me turn to Mr. LaFalce.

  [The prepared statement of Hon. Rick Lazio can be found on page 34 in the appendix.]

  Mr. LAFALCE. Thank you very much, Mr. Chairman. I look forward to listening to the witnesses. We all agree that homelessness is a very serious problem. I would like to hear further documentation of that from the witnesses.

  I think most of us also agree, too, that H.R. 217, in the majority, is a good combination of the existing programs. There are some difficulties that some of us might have within it, however, with respect to certain caps for temporary shelter and for supportive services. But I would prefer to hear the witnesses' perspective on all those issues.

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  Thank you.

  Chairman LAZIO. Thank you, Mr. LaFalce.

  The gentleman from Montana, Mr. Hill.

  Mr. HILL. Mr. Chairman, just to expedite the hearing, I will pass.

  Chairman LAZIO. Thank you very much.

  The gentleman from Illinois, Mr. Jackson.

  Mr. JACKSON. Mr. Chairman, I would like to associate myself with my colleague's remarks, and in the interest of expediting the hearing, I would like to enter my remarks in the record.

  Chairman LAZIO. Thank you very much.

  [The prepared statement of Hon. Jesse L. Jackson can be found on page 40 in the appendix.]

  Chairman LAZIO. I would like to introduce the first panel. The first presentation will be made by Dr. E. Fuller Torrey.

  Dr. Torrey is a research psychiatrist at the Neuroscience Center of the National Institute of Mental Health. He is also the author of 12 books, including the best-selling ''Surviving Schizophrenia,'' which has been described as the ''bible of the mentally ill and their families.'' He recently published ''Out of the Shadows: Confronting America's Mental Illness Crisis,'' which in chapter 2, entitled ''Nowhere to Go: Homelessness and Mental Illness,'' discusses the relationship of the homeless mentally ill to de-institutionalization, as well as a quantitative analysis and profile of homeless people.
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  Dr. Torrey contends that the single largest cause of homelessness is substance abuse, both alcohol and drugs, especially cocaine and heroin. The second largest cause is severe psychiatric illness, specifically schizophrenia and manic-depressive illness. He estimates that approximately 150,000 out of 402,000 homeless individuals have severe psychiatric illness. He argues that if any homeless programs are to be successful, then you must take into account the problems of drugs and substance abuse and severe mental illnesses.

  It is with a great deal of pleasure that I welcome you to the panel.


  Dr. TORREY. Thank you very much, Mr. Chairman. My name is E. Fuller Torrey. I am a clinical and research psychiatrist specializing in schizophrenia, manic-depressive illness, and other severe psychiatric disorders. I am also the Director of the Stanley Foundation, which supports research on these disorders. For over 14 years I have run a free clinic every other week for homeless individuals who are mentally ill, and I have visited public shelters for homeless individuals in 20 States. I have published 16 books and over 200 professional papers. My testimony today is based on a chapter out of my most recent book, ''Out of the Shadows: Confronting America's Mental Illness Crisis.''

  I think my position today is representing the viewpoint, basically, that homelessness is, at a minimum, a housing issue. The homelessness issue placed on the HUD committee as primary responsibility strikes me as very similar to taking homeless mentally ill and putting them in jails, and having the public librarians and the people running the subways taking primary responsibility. It's both inappropriate and a very clear indication of the failure of the public services, especially at the State and county levels.
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  Studies have shown conclusively that the largest group of the homeless are the substance abusers, alcohol and cocaine especially, some heroin, and that they constitute about 50 percent of the homeless in the surveys that have been done.

  The second largest group are the homeless mentally ill. These are the individuals who I have had the most experience with. And I might stress very strongly that these individuals are not homeless by choice; they are homeless because they have a brain disorder, because they have a brain disease. And on the handout that I have here there is a picture of identical twins with schizophrenia, showing the enlarged ventricles in the twin who has schizophrenia compared to the twin who does not have schizophrenia. This is the kind of research that I am involved in on a daily basis.

  It is important to emphasize that the homeless mentally ill have a brain disease just exactly as people do who have Parkinson's or Multiple Sclerosis or Alzheimer's disease. This is not an issue of stress; this is not an issue of being poor. This is an issue that something has changed the chemistry in their brain, and their brains are no longer working normally. Depending on what you accept as your total homelessness in the United States, if you take a figure of 400,000, then the number of homeless mentally ill on any given day is about 150,000; if you take the 600,000, as you mentioned earlier, then the number of homeless mentally ill on any given day is about 200,000. That's greater than the total population of Hartford or Providence or Fort Lauderdale or Reno, and it is more than twice as many individuals, seriously mentally ill individuals, as are in any hospitals for the mentally ill on any given date.

  In short, many of the shelters and the jails have become the largest mental institutions in their counties or in their States. And in fact, the Los Angeles County Jail is the largest mental institution in the United States, de facto.
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  The quality of life for the homeless mentally ill is grim on the best of days. A recent study found that 28 percent of them get some food from garbage cans; 9 percent use garbage cans as their primary food source. A third of the homeless mentally ill women have been raped. If I told you today that 28 percent of people with Alzheimer's disease were getting food from garbage cans, and a third of the women had been raped, you would be outraged, and I think that that's an appropriate response to what I am telling you today.

  These individuals you have all seen; as you mentioned, Mr. Chairman, you certainly saw them in your younger years on Long Island. In fact, Long Beach on Long Island was one of the earliest places where the homeless mentally ill were described in the early and mid-1970's, being de-institutionalized from the State hospitals on Long Island. You can see them even a few blocks from here. A woman lived for about 2 years up on the corner of Independence and 3rd; I notice she is not there anymore. I don't know where she is, but the chances are quite high that she is now deceased.

  If this subcommittee hopes to influence the problem of homelessness in the United States, it must take into account the problems of substance abuse and severe psychiatric illness, even though that is not your primary responsibility. Cocaine addicts, you can put homeless people who are mentally ill and who are substance abusers in housing, and you're not going to get very far ahead. Cocaine addicts will sell the apartment's copper water pipes to buy more cocaine. Individuals with paranoid schizophrenia, and I've had this experience, being placed in housing here in Washington, and they are convinced that the authorities have installed invisible television monitors, and they move directly back to the streets because of their mental illness.

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  In short, the easy part of the homeless problem is to provide housing, but that solution by itself will do little to alleviate the homeless problem.

  What are the solutions? I am going to discuss three very briefly. One is the block grants; two is involuntary treatment; third is evaluation and accountability.

  The proposed legislation that you have before you today I think is an important step in the right direction in block-granting the Federal funds back to the States. I think the McKinney funds have accomplished a lot, but this is a State and a local issue. This is not a Federal issue. The Federal Government does many things well, but providing human services is not among them. The record of Federal involvement in programs for the seriously mentally ill and substance abusers is a rather dismal one, and I will give you as Exhibit A the failed Community Mental Health Centers Program, which I know very well, and which out of the 670 Federally-funded centers, maybe 20 did what they were supposed to do. They are, in fact, one of the reasons why we have the problem with the homeless mentally ill today.

  Second, although it is not the responsibility of your subcommittee, whatever you do to recommend solutions to homelessness must deal with the issue of involuntary treatment. It is very clear that about half of people with severe mental illnesses who are homeless have no insight into their illness. When I run my clinic, I spend about half of my time saying to the homeless mentally ill individuals, ''You need to be on medications,'' and about 90 percent of the time they say back, ''There's nothing wrong with me. It's not voices. I know the CIA has implanted those electrodes in my brain, and if you think these medicines are so great, you take them.'' It is very, very difficult now to treat involuntarily severely mentally ill people who are homeless, because the laws have been changed at the State level by the ACLU, by the Bazelon Center, by well meaning lawyers who don't understand the problem, and that is a major problem in terms of how to solve this today.
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  Until the problem of involuntary treatment is addressed at the State level, there will be no appreciable decrease in homelessness, and it seems perfectly appropriate to me to give priority in housing to alcoholics who are taking Antabuse under supervision; to drug addicts who are in drug rehab programs, getting random urine checks; and the severely psychiatrically homeless individuals who are taking their medications as prescribed.

  The third part of the solution that I am going to address is evaluation and accountability. There should be no block grants without accompanying evaluation and accountability, and this should probably be the primary role of the Federal Government.

  A small proportion of the proposed block grant should be set aside and used to hire private contractors, like Rand or the University of Michigan's Institute for Social Research, to survey homelessness in each State periodically, for example, every 2 years, and then to publish and report back the findings to the Federal Government. Such a survey should not be done by Government agencies, such as the Center for Mental Health Services, because of their proven vulnerability to Congressional influence, White House mandates, and political correctness. The results of the survey could then be used as a ''carrot and stick'' to determine the following year's Federal block grant allotment to each State.

  In addition to relatively modest housing funds, the Federal Government currently spends approximately $38 billion, these are 1994 figures, for support and services for people with severe mental disorders. Thus, the Federal Government has potentially a very large stick and a very large carrot to influence what the States do with the block grant.

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  In summary, the proposed legislation is an important step toward solving the problem of homelessness, which is a continuing tragedy for individuals affected, and a blight on the American social scene. However, this legislation must be integrated with other programs that directly address the problems of substance abuse and severe psychiatric disorders, and that, to me, is the biggest challenge facing this subcommittee, to coordinate what you're doing with the other committees in Congress who have oversight over the individuals who are involved in this problem.

  The Homeless Housing Programs Consolidation and Flexibility Act should be coordinated. Give the money to the States, but measure the outcome, and then hold them publicly and fiscally responsible.

  Thank you. I will be glad to answer any questions, if you have any.

  [The prepared statement of Dr. E. Fuller Torrey can be found on page 43 in the appendix.]

  Chairman LAZIO. Thank you, Doctor.

  I would note also that we have been joined by Congressman Ney.

  The next panelist is Dr. Brendan O'Flaherty. Dr. O'Flaherty is an Associate Professor of Economics at Columbia University. He argues that homelessness is at the root of the housing problem, not substance abuse or mental illness.

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  Dr. O'Flaherty, thank you very much for joining us.


  Dr. O'FLAHERTY. Thank you for inviting me. Thank you very much also for emphasizing the idea that it's time to look at the foundational questions in homelessness.

  Let me begin by quoting approvingly from a recent book on homelessness: ''Better housing is still the first step in dealing with the problem. Regardless of why people are on the streets, giving them a place to live that offers a modicum of privacy and stability is usually the most important thing we can do to improve their lives. If people have housing, the rest of their life may improve. Even if it does not, at least they have a home.''

  That's not a quote from me. That's a quote from Dr. Christopher Jencks.

  I begin with that quote partly because it's right and because it's important, and also partly because it reminds me of the confusion, the imprecision, and the muddle that continue to bedevil the discussions of homelessness. The Economist article and several other articles have been billing ''Jencks v. Me'' as a major fight, and when it comes to history, that's true; Jencks and I disagree about history. But when it comes to policy, I consider myself closer to Jencks than to practically anyone else who writes in the field, probably to most of the other people who are here today.

  This confusion between history and policy is just one of the many things that bother me about the discussions of homelessness, especially some of which I've even heard today. There is for instance, the confusion between levels and changes, between individual trajectories and social trends that underlies the idea that mental illness or substance abuse is responsible for the rise in homelessness over the last 20 years. It's a question of history. True, many homeless people are mentally ill, and many are substance abusers. That is not why homelessness rose. In fact, there have always been people who are substance abusers and there have always been people who are mentally ill. In 1975 or 1978 there were probably more of them than there are today.
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  Homelessness rose not because the number of non-institutionalized mentally ill people rose; not because the number of substance abusers rose; but because the probability rose that you would be homeless, given that you were mentally ill or a substance abuser. Indeed, the decline in State, county, and VA mental hospitals since 1975 was more than offset by increases in the number of mentally ill people institutionalized in private hospitals, nursing homes, and prisons and jails. Whether this is good or bad, I would defer to Dr. Torrey on. But people who are in jails are not on the streets, so if you want to explain the number of people on the streets, that's not going to explain it in terms of social trends of what is happening.

  As Dr. Martha Burt points out, this change in the conditional probability of being homeless, given that you have some other debilitating condition, is almost the entire story of why homelessness rose, and it cannot by its very nature be a story about pathology.

  I am convinced that it's mainly a housing market story, but I don't want to take the time to go into the details of how it's a housing market story, various changes in filtering modes, and things like that, because the force that is driving the housing market adjustments, growing earnings inequality, is not something that this subcommittee can address. That's one confusion, the question about understanding causality in a real sense, in an interesting sense of why there are social trends, not why individual people are homeless rather than other individual people.

  My next confusion is the penchant that people have for pretending that everybody means the same thing when they use and hear the word ''homeless.'' In fact, there are at least three distinct usages that I am very familiar with; there are probably more.
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  First, there is the traditional American usage that the Chairman has referred to when he was growing up, a synonym for ''vagrant.'' In fact, up until 1982, New York Times stories on homelessness were indexed under the category of vagrants and vagrancy. Homelessness in this traditional American usage is a status that depends on what you wear and what you drink, not where you sleep. It's not a housing market status. People still use that. There's nothing wrong with using it, but it's a distinct usage.

  Second, there is a traditional British usage as a synonym for ''squatter,'' a housing market term having nothing to do with clothing or pathologies. If you read the London Times in the 1960's and 1970's, there were many, many stories about homelessness, none of them about vagrants.

  Finally, you have the current American official usage, which happens to be a total mess: ''. . . the sum of people living on streets and in places called shelters.'' This is a definition so totally inexact that no one has ever actually used it. That's why I am a little bit disturbed about ideas of taking surveys of something when we don't know what we're surveying.

  Why is it that we have no usable definition of ''homelessness''? That we don't know what we're talking about when we do it, when we say the word ''homelessness''? The reason, I think, is that we haven't come to grips with looking for what's wrong with homelessness. People have several times used the words, ''. . . the homeless problem.'' What is ''the homeless problem''?

  What I'm saying here essentially is, yes, let's get down to fundamental questions, but I think the fundamental questions that the Chairman outlined are not fundamental. The fundamental question is, ''What's wrong with homelessness?'' I think once you think about that, you can decide which definition you want to use, and you can decide fairly quickly what the programs are that make sense. Let me give you some quick examples, because those are what you're doing, OK?
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  This is the message that I most want the subcommittee to hear, that you have to make up your mind what's wrong. That's why I don't think I'm giving very good testimony today; I feel like I'm coming in to a movie that's half over, and asked to give comments on what's going to happen next, because I don't know where you're heading. Unless you define what's wrong with homelessness, I can't help you.

  OK. One message, I think an example; I won't necessarily recommend either one of these, but an example of the type of thought that I think is appropriate on this question. Suppose that what you want to do is minimize the negative externalities experienced by middle-class people, the inconvenience of being importuned by panhandlers, the unpleasantness of encountering unkempt people, the health dangers of exposure to contagious diseases. There is merit to this as a goal. Then you would use the traditional American definition. You wouldn't use the current official definition, since a considerable portion of street people are not homeless under any of the possible definitions that are around. You would have representatives of police and legal scholars like Bob Ellickson here today rather than a bunch of social scientists. And you would be concerned about the most visible of the street people. You would have no reason to discuss housing at all, and you would be most concerned about labor markets and therapeutic interventions.

  But your discussion of therapeutic interventions would be quite different from the kind of discussion that I heard from Dr. Torrey. For a fixed sum of money, you would be asking not how many lives can be turned around, but rather, how many people could be made to disappear or moved to less conspicuous places and times. Your emphasis on local control, if this is your goal, would be appropriate, since these are local problems. That's one possible answer to the question of why homelessness is wrong and one possible set of directions in which you could go if that's your answer.
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  Another possible answer, suppose that what you want to do is minimize the number of people whose housing is grossly inadequate; that for some people to lack housing totally, or to have grossly inadequate housing, is unacceptable in a developed country. Then you would concentrate on housing, but you would not countenance spending any Federal money to improve the quality of one person's housing while another person's housing was still grossly inadequate. So you would be led to immediately think about Section 8 and to two major reforms in how Section 8 works.

  First, you would reduce the amount that individual recipients get, since the essential goal is avoiding gross inadequacy, not providing nice housing; and second, you would make Section 8 an entitlement program because no person's gross inadequacy is any less offensive than any other's. That is the direction in which you would go. You would be concerned with Federal responsibilities, not with local initiatives, and you would not be interested in therapeutic interventions, first of all, because they don't deal with the problem that you're dealing with, and they're expensive, and because history, the 1970's and the 1960's, has shown that under the right market conditions, almost everyone can find housing, albeit of fairly low quality; but not necessarily live very good lives, but that's not your goal in that case.

  These are only two of the alternatives. There are many other possibilities. They are probably the most salient; they point in different directions, and I offer them to you only as important examples, not as definitive.

  What they have in common is that both lead to the conclusion that for a given amount of money, it is better to make small interventions into many lives than large interventions into a few. Some of the recent research I've been doing leads me to believe that this property holds for any reasonable and reasonably tight specification of goals.
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  In summary, then, unless you think clearly and specifically about what you're trying to accomplish, you are unlikely to accomplish it. And I very much applaud your going into the fundamental questions. I hope you continue in this direction. Thank you.

  [The prepared statement of Dr. Brendan O'Flaherty can be found on page 63 in the appendix.]

  Chairman LAZIO. Thank you very much.

  Our next witness is Dr. Dennis Culhane. He is Associate Professor of Social Welfare Policy at the University of Pennsylvania, and is a Senior Fellow at Leonard Davis Institute of Health Economics. His primary area of research is homelessness, where he studies the dynamics of public shelter use, the geographic and housing market factors associated with housing instability, and design and evaluation of homelessness prevention programs.

  He is currently leading a team in the implementation of the Anchor System, a homeless service management information system that tracks use of services, and we welcome you here today.


  Dr. CULHANE. Thank you, Mr. Chairman. Thank you, Members of the subcommittee. I appreciate this opportunity to speak with you today.
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  If we're the experts, I can understand why the Congress and the U.S. in general are confused about this issue, and I sympathize with having to deal with the varying interpretations you've heard this morning. But if I might, I would like to stick to the research that we've been undertaking at the University of Pennsylvania, which I think sheds a bit more light on some of the more specific aspects of the population, how many people experience homelessness, who is exactly among the population, and what some of the reasons for that are.

  A lot of the research that has been done over the last decade has, unfortunately, been very limited in that it has used samples of people counted on a given day who are homeless, and that tends to overrepresent people who have long-term homelessness relative to longitudinal studies. And the research I am going to present today is based on data which the City of New York and the City of Philadelphia collect, because they register every person who goes into a public shelter. Just like a person who stays in a hospital, they register the admission date and the discharge date. This gives us a very accurate picture of the number of people who actually stay in a public shelter, what their characteristics are, and what some of the determinants are of their use of public shelter. So I am going to focus on that. It's an admittedly conservative definition of homelessness because it is only looking at people who use public shelters; nevertheless, I think you will find it instructive.

  The first study which I would like to summarize here this morning addresses the scope of the homelessness problem; in other words, the number of people who have used public shelter in these two cities. Basically, what we have found is that since 1990, between 1990 and 1995, about 275,000 different people stayed in a public shelter in New York City. And in Philadelphia, it was about 78,000 people who stayed in a public shelter in that 6-year period. That represents about 5 percent of Philadelphia's population and about 4 percent of New York City's population. Those are significant proportions of the population that are experiencing homelessness.
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  Now, of course, the general population is not always the appropriate population to look at in terms of who experiences homelessness. You have to adjust it by poverty, for example, and when you do that, you see that in fact about 10 percent of the poor children in New York City stayed in a public shelter just in 1995. This chart which I have to my left shows the age distribution, the percentage of the population by age, that experienced a public shelter stay in 1995. What you can see is that the highest rate of risk is children, and the younger your age, the higher your rate of risk, such that the highest risk age group for homelessness in both of these cities was people under the age of 1. So in New York City about 4 percent of the children under the age of 1 stayed in a public shelter in 1995 alone.

  If you, again, adjust that by race and by age, you will see that indeed about 16 percent of the poor black children in New York City who are under the age of 5 stayed in a public shelter last year.

  Now, that risk grows for people in their 20's and 30's. The people in their 20's are people who are primarily the mothers of those children, and the people in their 30's are the single adults.

  In terms of how the population breaks up, you've heard a lot about substance abuse and mental illness, and those are very clearly important characteristics of segments of the population. But what you must remember is that 40 percent of the shelter users in these cities are children; 20 percent are their parents, so 60 percent are in families; and 40 percent are the single adults. So that when people talk about half of the homeless or a third having mental illness and substance abuse problems, they're really dealing with that 40 percent, primarily, who are the single adults. So just putting it in perspective, that would mean that about 20 percent of the population overall, if you include children, has a substance abuse or mental health problem.
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  The second study which I would like to summarize for you this morning is a study that you have in front of you in the Journal Housing Policy Debate, which the Fannie Mae Foundation has published recently. What that study looks at is where homeless families lived before they became homeless. Today I have brought two maps of New York City. The two maps compare the distribution of poverty and the distribution of the prior addresses of homeless families. What you may observe is that while poverty is more broadly dispersed, homelessness is very concentrated. A neighborhood is essentially either a homelessness-producing neighborhood or it is not, and that is not true in the case of poverty.

  In the case of New York we found, for example, that about 70 percent of the families came from just three neighborhoods: Harlem, the South Bronx, and the Bedford-Stuyvesant/East New York area. Similarly, in Philadelphia, 70 percent of the families came from just three fairly tightly clustered neighborhoods. So these families aren't coming from all over the place, they're tending to come from a fairly tight set of areas.

  What are the characteristics of these neighborhoods? First, they have very high concentrations of African Americans and women with children, particularly children under the age of 6. So these are women who have lots of child care responsibilities and are probably less likely to be in the labor market because their kids are not yet of school age.

  These neighborhoods have much higher rates of housing crowding and families doubling up, and sub-families, so multiple families are living in a unit intended for one family.

  Now, this doubling up and crowding occurs even though these areas have the lowest rents in both of these cities. They are the lowest rent neighborhoods, and they also have the highest rates of vacancy. So there are vacant units where these families live, vacant units next to them, but they are doubling up. Why are they doubling up? Because even though these are the lowest rent areas, these families are paying much higher percentages of their income on housing than families in other parts of the city. So they double up as a way of coping with the fact that their income doesn't cover their housing costs. These are the neighborhoods where homeless families come from.
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  Interestingly, we also found that housing abandonment was a very strong predictor of where homeless families have lived. This should be a very important indication to you as you consider, for example, the impact of welfare reform on some of these neighborhoods. There are landlords in these neighborhoods who basically can't afford to cover the maintenance costs and the taxes on these properties, and they have more vacancies because the families are all doubling up into units to try to afford the rents. Essentially what happens is that many of these landlords end up giving up with these properties, sending the keys to City Hall. In the case of New York City, for example, this has created an enormous problem where the city now has to manage all of these abandoned properties. The city receives no property tax revenues from these buildings, and now they have to manage and operate these buildings at tremendous cost. Moreover, many of the families who live in these buildings end up in the shelter system. About 20 percent of the families who come into New York shelters come from these buildings, and that's an additional public cost. So it creates a ripple effect of public costs that are borne by the cities and by local governments as a result of the failure, essentially, of these housing markets to survive because these families have such low incomes.

  Last, I want to focus on this issue of the single adults. I've spoken a lot about families this morning. We did another study which was based on patterns of shelter use among the single adult population; again, that's that 40 percent of the population that does not have children with them. And we've heard a lot today about characteristics implied about that group.

  What we did was, we said, ''All right, let's look at how many times these individuals come into the shelter system, and how long they stay when they do come in, and are there characteristics that distinguish them?'' And our study produced three groups. We call them the ''transitionally'' homeless, the ''episodically'' homeless, and the ''chronically'' homeless.
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  The ''transitionally'' homeless, as shown in this graph here, they stay in shelter, usually they enter one time, they stay about 50 days, they leave, and they don't come back. That represents 80 percent of the shelter-using population.

  The other population, the ''episodically'' homeless, they tend to come in four or five times over the course of a 3-year period. They rack up about 250 days, but they only represent about 10 percent of the population.

  And the last group, the ''chronically'' homeless, they are also about 10 percent of the population, but interestingly, they consume 50 percent of the resources in the shelter system. So about 10 percent of the population is using up half of the resources. So on any given day, half of the shelter population is in this chronic group.

  Now, what are the policy implications of these three groups? Let me start with the ''chronically'' homeless first because I think that this speaks directly to the legislation which is pending here.

  Obviously, the chronically homeless are not in an emergency situation. They're in the shelter system; they stay about 700 days out of a 3-year opportunity. They are a fairly stable population in terms of where they're living, but essentially, shelter is functioning as permanent housing for this population. I think this is an unwise use of these resources, that half of the emergency shelter resources are essentially being spent to provide permanent housing in shelters for a population that has a lot of special needs.

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  When we look at the characteristics of these populations, and unfortunately this graph isn't a little bigger so that you could see it, but it's included with my written testimony, we found that about 80 percent of this population has some serious health problem; either substance abuse, which is about 50 percent of the population; a mental health problem, about a third of them have a mental health problem; or a medical condition, another third have that. All told, about 85 percent of this group has a serious health condition. And I think that the provisions in the bill which would require increasing amounts of money for permanent housing should be targeted for this population. That's where the biggest net savings would be in terms of shelter costs because this population is using up all of the shelter resources, and it's inappropriate to call this an ''emergency housing problem.''

  The second group, the ''episodically'' homeless, this is the group we think is the street homeless population. They probably shuttle in and out of other institutions in between shelter stays. They are probably quite costly to the corrections and health systems that they interact with, as well as to the shelter system. They represent a significant problem from the perspective of the public. This is the group that I think transitional housing should be targeted for. Obviously, shelter is not enough to help these individuals. They're not stable enough for permanent housing. They have many of the same characteristics of the chronically homeless in terms of health problems, but they're much younger. So it is a younger population, not willing to live in the shelter system and all of the restrictions that it imposes.

  But these are folks who are very appropriate for residential treatment programs, which can be coming through traditional HHS programs or through Medicaid-funded services or, if they are funded through homeless program funding, transitional housing. But currently, transitional housing is usually not targeted toward this population. You end up getting healthy families who could otherwise make it in the housing market or who are going to end up there anyway, living in transitional housing. It is not targeted toward this very hard-to-serve population. Providers don't often want to focus on this hard-to-serve population, but I think it might be worth considering targeting those resources for that purpose.
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  And last, this ''transitionally'' homeless population I think represents both good news and bad news. On the one hand, the good news is that the shelter system, by measures that we have, seems to work. If 80 percent of the people come in and use it on an emergency basis, they stay for 50 days and they don't come back, that's success, I think, on those measures. So we should be glad that it's doing that.

  But the bad news is that so many people end up using the emergency shelter system. Our traditional safety net programs, income maintenance programs, obviously aren't working if, in New York City, for example, last year 20,000 individuals who don't have a lot of health problems, they have more than the general population, for sure, but they're not as seriously disabled in any way as these other populations, that so many of them end up having to go into a shelter in the first place.

  And I think this is what raises a lot of concerns about what's going to happen with welfare reform. A lot of States are cutting general assistance, if they even have the program. They are cutting Medicaid eligibility for this population. You're going to see a lot more people who are going to have emergencies, who don't have a lot of mental health problems or substance abuse problems, who are going to end up coming into the shelter and using it as an emergency resource.

  For that reason I think it is important to protect some resources for shelter, although I don't know what the specific percentage should be. I know that's what you need to consider, but I don't know what that must be. But I think certainly, in light of what's about to happen with these welfare and Medicaid cuts, we should be concerned that a lot of folks are probably going to end up coming in the system.
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  The bad news is, I think, made worse by the fact that a lot of these folks are going to lose Medicaid eligibility. What's happening is that the shelter system is becoming the secondary health and welfare system. I was in a shelter in Detroit, and they actually had a unit, a part of the shelter, that was called the ''post-hospital discharge unit'' and people literally were brought there by ambulances. It has like 16 beds in a space about this big, and you have people in hospital gowns laying on rubber mattresses. They were eating lunch that day that consisted of Frosted Flakes in pie tins. It was quite gruesome. I thought, ''Am I seeing the future of health care here?'' We see that now this very indigent single adult population, which always had Medicaid, which always could go to a hospital, could get detox, could get these services, now they're not going to be eligible for those programs. And the ones that are, that are in managed care programs, the managed care programs are going to be discharging them earlier, and they love to take advantage of the free care provided by shelters.

  So I think that's what you need to be concerned about, is that shelters are being overloaded with an enormous amount of services, and it ends up actually creating an incentive for other systems to dump their clients into the homeless system. That's true especially in the case of substance abuse programs, mental health programs, and people coming from the jails. Everywhere I go in this country and talk to homeless providers, they are very concerned about the increasing number of people who are coming out of the prison system and ending up in the shelter system. I don't think the public would be very happy to know that the guy who is panhandling on the street, and they're already uncomfortable being approached by a panhandler, would like to know that he just got out of a State or Federal prison.

  So I think those are things that are worthy of consideration.
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  Last, I just want to encourage, and actually applaud, your provision in the legislation which includes some funding for States and cities to create data base systems that will help them to track this problem. That's going to be crucial for understanding what the impact is of all these welfare and Medicaid cuts; and if they indeed end up putting a lot of people into the homeless system, we're going to need some better facts. I think that we've heard a lot of rhetoric this morning, and that's what happens when there are not good facts at hand. The kind of data which we have in New York and Philadelphia has been enormously useful, I think, in giving us some exact figures of this nature, and I think as we have more of that data around the country, it will inform your deliberations and policy in the future, and I think that's going to be critical.

  So thank you.

  [The prepared statement of Dr. Dennis Culhane can be found on page 68 in the appendix.]

  Chairman LAZIO. Thank you very much, Doctor.

  Our next presenter is Dr. Martha Burt, and I thank you for joining us. Dr. Burt is a Principal Research Associate at The Urban Institute here in our capital. She has been involved in planning for and the analysis of a national probability-based study of urban homelessness.

  In 1992 she authored ''Over the Edge,'' where she analyzed the causes of growing homelessness in the 1980's.

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  I welcome you here today. Thank you, Dr. Burt.


  Dr. BURT. Thank you, Mr. Chairman. I am very happy to be here, and I must say that it is easier to get here from Philadelphia than from Anne Arundel County.


  Even when you give it an hour and a half.

  Chairman LAZIO. I'm from New York. I know.

  Dr. BURT. Part of my written testimony is some facts, and I think I am not actually going to go over them because we've already heard from Dennis many of the most important facts. I do want to help you try to sort out why you get different facts on the proportion of people who are mentally ill and the proportion of people who have substance abuse problems and the proportion who are families, from Dennis and from some other sources.

  The main difference has to do with whether you are looking at a point in time or whether you are looking over time. And what Dennis has almost uniquely in the country is the capacity to look at how many people have come in to homeless shelters over the course of a year, over the course of 2 years, now up to 6 years in Philadelphia and New York. And therefore, what he has the capacity to do is to understand how many short-term people there are in relation to the long-termers. In any single moment of time, the long-termers fill up more slots. It's the same in welfare. In the welfare caseload, half the people at any given time are long-term welfare dependent; half the people at any given time in the homeless population are long-term homeless. But when you look at people cycling through, there are many, many more short-termers than there are long-termers. So when the average turnover, the average length of stay, in shelters in Philadelphia is 60 days, it means every bed is occupied by six people during the course of a year. That is why you get 10 percent, in Dennis' figures of the long-term
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chronics, and why you get 50 percent, even in my figures, for national data of a single point in time.

  We are going to have a second national study with data from 1996. My figures are from 1987, so you can look at them, but you need to know that they are from 1987. There now has been a second national study done that is a sample of the whole country, including rural areas and suburban areas, whereas the 1987 study was only urban, and those data will be available in about a year. But they have been collected already. So we will know much more.

  On a one-time basis about homelessness in this decade, the new 1996 study does include quite a lot of ways in which we can try to estimate lengths of homelessness, but it still is a cross-sectional study.

  So having said that, I should say that our data, mine and Dr. Culhane's, agree very strongly on the proportion of our long-term homeless, and also the characteristics of the long-term homeless; which I mean 4 years or more since they last had a permanent home. That doesn't mean that they've never been anywhere that's called ''housing'' in between; it's just since they last had a place they called ''home.'' Eighty-four percent of those people have had either treatment for mental illness, in-patient treatment for chemical dependency, or both. I include in my testimony a chart or table that shows you the characteristics of people who have one or the other, or both types of treatment, and compares those to the people who do not have either. Fundamentally, you are looking at many more males, this is 1987, before crack; probably females have gone up since then, much more single, over 90 percent are single; they have been homeless for a very long time, so the overlap is really substantial.
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  The overlap is also very substantial serving time in State or Federal prisons on felony convictions. You look at the people who have done felony time you see that they are even more likely than the general homeless population at a single point in time to have either mental illness or substance abuse problems, especially substance abuse.

  I want to focus my testimony on these long-term homeless with chronic disabilities because I think that that is where the bulk of the homeless money should be going. I totally understand that if you look at it over time, those are not the highest numbers of people who experience homelessness in the course of a year, but, as much of Dennis' testimony would point out, that is much more on the side of being a housing problem and potentially solvable with housing money, which in my opinion should not be coming out of homeless money. There's much more housing money than there is homeless money. And since that is within the bailiwick of this subcommittee, the fact is that Section 8 and public housing stuff is covering only about a third of the eligible families at the moment, and going down all the time. And the issues of actually being able to find and afford housing are much more pertinent to the short-term homeless, primarily families. There are major issues of being able to find and afford housing for the chronics, but a housing voucher is not the only thing needed to keep them in housing. So therefore I want to recommend that the homeless housing dollars focus on people who probably need long-term or permanent assistance.

  One of the things that I wanted to point out is that the long-term disabled homeless are highly geographically concentrated. They are in the big cities; they are not in the suburbs. Some of them are in rural areas, and if they are in rural areas, they are going to be in locations where there are facilities or hospitals or prisons where they get discharged and they end up in those communities.
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  So it would be very advisable to target the funds, certainly the permanent housing funds, and even a major part of the other funds, to the major cities and to those particular rural areas where there are specific problems. This could potentially be accomplished by cutting out, I know this is going to be really popular, the urban counties from the eligibility of the 320 jurisdictions that currently get this kind of money, and giving that money to States to distribute in areas of greatest need.

  The second thing that I want to discuss is, do we know what to do with the long-term chronic homeless? And the answer to that, amazingly enough, is yes. We really do, actually, know what to do for the long-term chronic homeless, thanks to research that has gone on over the past decade under the McKinney demonstration programs for the chronically mentally ill and substance abusers. We do know that we can create housing programs that work. We do know that we can find, convince to enter, and retain about 80 percent of chronically mentally ill and substance abusing long-term homeless people in these programs.

  We also absolutely know that without services, they do not work.

  The critical services are not services that are available from any other agency, and this is very different from the situation that you find in the two-thirds of supported housing that is going to families, the transitional housing that is going to families, where the services like child care and employment are available from other agencies. The critical services for chronic homeless people with disabilities are negotiating with landlords and neighbors, handling situations of decompensation where somebody stops taking their meds or starts drinking again or starts drugging again, assuring that the rent is paid, that the housing is clean, supplying tangible goods where necessary such as furniture, transportation, or food, and again I want to stress that these services are not available from any other location. Quite a lot of research, including recent research on ''shelter plus care'' as well as the McKinney demonstration programs, suggests that without those services, people leave the housing. Not only do they leave the housing, but the housing is lost because they do not leave in pleasant ways. They leave in ways where they've had fights with neighbors, where the housing is damaged in serious ways, where they have alienated landlords; and the consequence is that the program has to start all over with another landlord because that unit is no longer available to the people in the program.
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  So it is actually a lot cheaper and a lot easier on the program to provide the necessary services to keep people stably in the housing than it is to have the programs have to start all over and have the people back out on the street.

  There is a good part of my written testimony where I talk about who has responsibility for people with chronic and severe disabilities who may become homeless, and the basic answer is, nobody. There are obvious places where the responsibility is assigned, but it is also equally obvious that nobody is taking that responsibility. The Federal Government had never had primary care responsibility for this population. It has demonstration projects and research responsibilities, and it did have some small amount of money which, in comparison to what States put in, is trivial, which in the 1980's was block-granted to the States, usually to the State mental health authority under the Alcohol, Drug Abuse and Mental Health Block Grant.

  State government agencies, including health, mental health, substance abuse, and corrections, obviously do have responsibility for this population but tend to have interpreted that responsibility only as, ''When they are in my hands, I will feed them; but as soon as they leave my walls, I don't have any further responsibility for them.'' And this is in the face of actually reducing the walls considerably, so that as we have heard many times, the actual number of beds and capacity of State systems for these people have shrunk drastically over the years.

  In addition to the reductions in actual services, because whatever else you may say about mental hospitals, they did put roofs over people's heads; they fed them and they kept them busy, there have been drastic reductions in income support programs related to this specific population. SSI has now been cut for people with primary diagnoses of substance abuse. Many of the programs that I was talking about that were successful in getting people off the streets relied on SSI income and the State supplement for housing to run those programs. So they now don't have an income stream for that population.
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  In addition, General Assistance in many States has been cut for the able-bodied homeless, many of whom actually are disabled. If they have a good caseworker, they can get on SSI; it takes about a year, assuming that they don't have a primary diagnosis of substance abuse. But what has happened in those States that have tracked what happened to disabled people who have been on GA is that they many of them end up in shelter.

  So I think that this has several implications for how McKinney program funds should be used. The first I have already said, which is that the program should be focused on the needs of the severely and chronically disabled among the homeless first; second, that the program should be targeted by geography to the major cities, and then let States decide on how the remainder gets distributed around the balance of States. Some States actually put some of their money, their 30 percent, back into the major cities, recognizing that that's where the major need lies.

  Second, you have a proposal to do a national competition for the permanent housing part of the money, which I would actually strongly suggest that you make at the State level. One of the things that has happened in the last couple of years is that through what's called the ''SuperNOFA'' process, the HUD supported housing programs actually have mostly gotten combined, and they are being handed out to jurisdictions on the basis of their capacity to demonstrate need, produce a continuum of care plan, and show how they are going to use the funds to fill that continuum of care. I would very much urge that the benefits of that, believe it or not, it actually does work, are not jettisoned with this proposal, and that you still retain that focus and the requirement that there be a rational plan for how to use this money, and that the part that goes to permanent housing could either be a set-aside within each State, which could be done on a State-level competition, or that potentially HUD regional offices could do the judging of which proposals should be funded.
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  The most important aspect of how you allocate permanent housing funds is that you want to do it against need, and you want the money to go where it belongs. If you leave the competition at the national level, the national people have no way of judging who needs it most. They're back in the same national competition of potentially giving a lot of money to the best proposal writers rather than targeting it where it belongs.

  Obviously, I think that you should not cap services; or if you're going to cap them, cap them only for the things like child care and employment services, which can be gotten elsewhere. You should keep as much as you possibly can any of the advantages of the SuperNOFA.

  One of the problems of block grants in the past has been that the money goes out there and there is no accountability for it. The legislation does not require any kind of reporting, so we have lost at the national level the capacity to know how any of this money gets used. That is counter to the sentiments and the basic premises of this Congress, I think, and I would very, very strongly urge that you retain within your bill earmarking for specific kinds of services, and that you retain accountability. I am very strongly in favor of the additional incentive for data systems at the locality.

  Thank you very much.

  [The prepared statement of Dr. Martha Burt can be found on page 50 in the appendix.]

  Chairman LAZIO. Thank you.

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  Each of the four of you is presenting a very different perspective, and I'm just filtering it through a policymaker's ear. It's making it extraordinarily difficult, frankly, to be able to formulate policy based on good data because we are relying on you all, who have been out in the field doing surveys and also having practical experience, to come together and give us some common vision as to where we need to be going.

  With that being said, let me ask you a few questions.

  Dr. Burt argues, really, for more earmarking, increased caps, and focusing on those people who are homeless who also have either addictive or mental illness challenges.

  What I am unclear about is Dr. Culhane's survey results, which indicate that there is a great deal of youth, of families of young people, that end up being counted as part of the homeless population. Can you try to reconcile that for me, number one; and number two, can you tell me, in the survey results that you have, does the head of the household also have either addictive or mental illness problems, and to what extent, for families, non-singles?

  Dr. CULHANE. Right. Now, the rates among families for these behavioral health/mental health/substance abuse problems is much, much lower than it is for the single adult population. The substance abuse rate is more than 50 percent less, so it's less than half the rate that it is among single adults; but still, it is higher than the general population. And 90 percent of the families don't have any major mental health problem, for example. I think it's even more than that. So it's a different population in that respect.

  I think what Dr. Burt was referring to, and what I was concurring with in my testimony, is that the chronically homeless are using up most of the resources in the shelter system, and so if there are permanent housing resources in the bill, they should be dedicated to that population----
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  Dr. BURT. That's what I meant.

  Dr. CULHANE. Yes, and I concur. That would free up more resources at the local level that are currently being spent on shelter, for dealing with the sort of temporary housing emergencies that bring families and other less disabled individuals into the system. That's where I think we need to really concede that we have two different populations here. The families and many of the singles really only need temporary assistance, some of which is shelter; but many of them could avoid having to stay in a shelter altogether if there were more community-based services that dealt with their housing crisis problems.

  Chairman LAZIO. But some of those families, according to what you've just testified, also have a head of household who needs supportive services.

  Dr. CULHANE. But they're definitely a minority of that population. They are about 10 percent of that population. So in 90 percent of the families, that's not the case.

  What you have happening is that these families come in because they have a genuine housing problem. We look at these neighborhoods that they're coming from, and these houses are falling apart. The buildings are falling apart, and they're living in crowded situations. It's very easy to understand why so many families have an emergency that brings them there. But once they get there, they end up staying not because they continue to have an emergency, but because they're waiting for a housing subsidy. So you have people in New York City, families who stay there, essentially, 200 days on average because they're waiting to get a Section 8 certificate that, of course is disappearing, but they're waiting to get placed into subsidized housing.
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  So that's another problem you have to worry about, I think. The more we use a shelter, stay as a requirement for becoming eligible for subsidized housing, the more you're going to have families coming in to do that. So I think that really it might be worthwhile thinking about how you create community-based homelessness prevention programs that deal with the emergencies that families have, that connect them with existing resources, that leverage the programs that are funded by mainstream agencies, and, frankly, where most of the money is. Most of the money that is being spent in these communities is not being spent in homeless programs, and I think that you have to try to create an incentive for communities to deal with those issues rather than having people come into the shelter system and then wait around for a housing subsidy.

  Chairman LAZIO. Well, let me ask you this, since I know you've written on public and Section 8 housing. One of the problems that we've had with public housing is federal preferences, in which we end up concentrating a good deal of the problem in certain developments, which overwhelms the community.

  What's the right way, in your opinion, of linking non-supportive housing for families that have income problems, and not other difficulties?

  Dr. CULHANE. My suggestion would be that you should fund housing assistance organizations in these communities who are already doing a very little bit of emergency assistance to families, which help them relocate. So some relocation assistance in the event that they have a housing emergency would be useful. You could also provide them with some loan programs where families are given a loan for the first month's and last month's rent and security deposit. You can provide these organizations with an incentive to connect these families to other services.
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  I don't see the shelter as necessarily solving many of the problems that these families have, and I don't think you should put the housing subsidies after shelter. You should not do that. You should try to create other programs----

  Chairman LAZIO. Could you repeat that please?

  Dr. CULHANE. Yes. Right now, basically, you have to go into a shelter to become eligible for some of these housing programs or, as you said, to get priority. That, I know, is no longer true in the case of public housing. But that has created a perverse incentive for families to stay in the system. What you should do is think about how you can provide emergency housing assistance to this population, because there are no long-term subsidies for these people. And there are so many families that have these emergencies, you're not going to be able to provide long-term subsidies. So you have to think about what kind of low-cost service that can serve many more people that you can provide, and that means some kind of emergency assistance that helps keep families housed. I mean, it's basically like paying for a good real estate agent to help relocate these families and help them, in some cases, make a doubled-up situation viable, dealing with falling-apart housing conditions, dealing with legal issues that they may have with landlords. That's the kind of thing I think you should be considering for the homeless families in particular.

  I don't know, Marti, if you wanted to speak to that.

  Dr. BURT. Yes. Actually, I think that many of us are not so far apart as it sounds to begin with. I think I completely agree with Dr. O'Flaherty that we need more housing; I mean, people can't afford the housing that's out there, and particularly in the neighborhoods where homeless families are coming from. The housing situations are terrible, but that shouldn't be coming out of the homeless money. The problem is----
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  Chairman LAZIO. May I interrupt you briefly? We need to be dealing with some level of reality. I think everyone realizes that we're not meeting the full needs of housing in the country.

  Dr. BURT. Right.

  Chairman LAZIO. The issue has been, particularly recently, whether housing has become sort of a lottery for the fortunate who are, obviously, all low-income. The idea that we're going to triple or quadruple housing expenditures is not likely, in my opinion.

  Dr. BURT. So you're going to have more families coming into shelter.

  Chairman LAZIO. Let us deal with what we have. We can bemoan it and wring our hands, or we can try and deal with what we have and do the best with what we have.

  What is the appropriate role for other agencies, like HHS or Labor, who have funding streams? Should they be coordinated more closely so that we get more value for the investment that we make?

  Dr. BURT. They can certainly be more coordinated, but what they do not have is housing resources. And in the research that has been done on programs that have a primary focus on case management and mental health support or substance abuse treatment or whatever, but can only ''help people find housing,'' because the program does not actually control any housing resources, they don't find it. Or, if they do find an apartment, and they can't keep people in it.
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  Chairman LAZIO. But isn't that a zero sum game to the extent that you take funding for supportive services out of the bricks and mortar? You're going to have fewer dollars to invest in housing, especially permanent solutions to housing, for the very population that you're talking about, the population that is 10 percent but spending 50 percent of the dollars.

  Dr. BURT. But if you build bricks and mortar and you don't have the services, they will destroy it.

  Chairman LAZIO. I think everybody agrees with that, but the question is, do you take that out of the HUD pool? Or do you try and coordinate that with HHS or Labor or the other agencies, and focus limited, scarce resources for bricks and mortar from HUD on construction?

  Dr. BURT. If you look at the experience of the Shelter Plus Care Program, where there is a matching requirement but where there is not a lot of service money in it from HUD to provide those services and where the requirement is to do that coordination and to find that match from non-HUD resources, they have an incredibly hard time finding it. What they have the hardest time finding it for is not the treatment services but the kind of services that I listed that actually keep people in the housing.

  Chairman LAZIO. Let me ask you, Dr. Torrey.

  Dr. TORREY. Let me comment, first of all, on Dr. Culhane's figures. First of all, we know that the persons on the streets who are not using shelters, the persons living on the streets are strongly disproportionate to the substance abusers and the seriously mentally ill. So since he is just dealing with people in the shelters, by definition, he is counting fewer of the severely mentally ill.
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  Second, he is dealing with self-report, and if I ask 50 percent of the seriously mentally ill homeless if there is anything wrong with them, they will tell me no, because in their mind the CIA really did put those electrodes in their heads. So when you are dealing with self-report, you automatically are decreasing your percentage.

  And third, the migratory, the transitional group, I have seen many of the transitional group who have been in his New York City shelters and Philadelphia shelters, because now they're here, and three weeks from now they're going to be in Los Angeles because they're trying to keep one step ahead of the CIA or the KGB or whatever.

  And answering your question specifically, yes, and that's part of my testimony, is you need to tie your programs to the HHS, to the Labor stream, and there needs to be priority given to the long-term chronically mentally ill who are participating in treatment programs. You have a finite pot; you have a finite amount of money; you have finite housing. And realistically, you are right, that's what we're going to have to deal with.

  So if you really want to make a dent on the homeless, then you have to give priority to the alcoholics who are on Antabuse, to the substance abusers who are in drug rehab programs, and to the severely mentally ill who are actually getting medications at the time they go into the housing. Then you will start to make a dent on it. To do it by yourself, without tying into the HHS, without tying into the Labor funding, and block-granting it to the States, I think you're not going to see any difference 5 or 10 years from now.

  Chairman LAZIO. Thank you.
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  Mr. Jackson.

  Mr. JACKSON. Thank you, Mr. Chairman.

  I would like to ask a question of Dr. Culhane and Dr. Burt. Let me first begin by thanking all of the panelists for, I think, a quite outstanding testimony. There are probably parts of each of your testimonies that I agree with, and some parts that I probably disagree with. I really appreciated Dr. Torrey's analysis that our subcommittee alone, focusing on brick and mortar, cannot address and solve the problems of homelessness by ourselves. Even in light of that, since the 1960's we have had a housing crisis in the number of units that we have built nationally, and since that time we have fallen far short of the number of homes that we have been able to create with the role that the Government has played by addressing housing issues. So it's a ''both/and'' and I think that your testimony was helpful and very enlightening.

  My first question is to Dr. Culhane and Dr. Burt. I am interested in what you anticipate the impact of the Welfare Reform Act will be on homelessness in our country, taking into account that already impoverished people are going to be denied public assistance, leaving them even more needy, if you will, in terms of their housing needs? You are probably aware of that bill; 2 years and you're off, and I believe 5 years mandatory ending to those benefits by the Federal Government.

  I am interested in your assessment of that bill.

  Dr. CULHANE. Well, obviously it's not going to decrease the number of people who have housing emergencies or who show up at shelters. It's likely going to increase it; the question is, how much? What we can say is that we know, for example, among poor families, families with young children, we have about 10 percent of the poor children as being in a shelter in a 1-year period in both of these cities. So I would suspect that if you had an increase. And if it does increase, even by 50 percent, you're now up to a range of like 15 to 20 percent for poor children, just in 1 year, ending up in a shelter system, not to mention what might happen over several years.
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  So we're going to be in a situation where you could have possibly one-third of the poor kids in this country will end up having some kind of shelter experience in a 2- or 3-year period, which is a pretty damning fact.

  The problem is particularly acute for African American families and their communities because, really, people showing up in shelters is just the end result of what's going to happen at the community level. What's really going to happen is, you reduce income for these families, and it's going to have a real bad impact on the housing market and on the viability of the private stock, in particular, where essentially a lot of landlords are just barely making it and breaking even at this point, and I think you could see a wave of abandonment occur as essentially people who own this housing can't make taxes and maintain those properties anymore. And that's going to have very bad neighborhood-level effects. That's the other thing; it has crime and all sorts of other things increase as the quality of the neighborhood deteriorates.

  So I would say that that's another thing to consider, is the community-level impact.

  Dr. BURT. I'm not sure whether you're aware of it, but The Urban Institute is at the moment, and for the next 5 years, involved in a major national project to look at the impacts of welfare reform on the well-being of children and families. One of the systems that we are going to be looking at is the emergency services system and the homeless system, and child welfare as well, because those are among the concerns that we have about the consequences of welfare reform, which is basically going to hit families.

  I think the answer is that we don't know yet. Everybody is worried; everybody is speculating. Dennis has speculated in the same direction that virtually everybody else is doing. I think the only actual facts that you have are to look at those States like Pennsylvania and Michigan that have done studies of the consequences of cutting able-bodied single people off of GA, and the answer is that they end up in shelters more.
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  Mr. JACKSON. I appreciate that, Dr. Culhane and Dr. Burt.

  I would like to ask a follow-up question to Dr. Culhane, and then I would like to ask a question of Dr. O'Flaherty.

  You discussed the impact of higher rents on one's ability to maintain their housing. In your research, did you find that a person or family becomes in greater risk of homelessness as they dedicate more of their monthly income to rent?

  Dr. CULHANE. Yes. That was one of the primary variables at the neighborhood level that predicts to a neighborhood generating homelessness, that these are neighborhoods where, despite the fact that they're the lowest-rent neighborhoods in both of these cities, the families in them are paying a higher percentage of their income toward rent than families anywhere else in the city. So they can't move anywhere where it's cheaper and they're still paying the highest percentage of their income toward their housing costs.

  This leads them to be doubling up and crowding. And those are both preconditions for homelessness, or a housing emergency, if you are doubling-up or crowding. This occurs despite the fact that housing is available in these neighborhoods. There is a disproportionately high rate of vacancies in these neighborhoods, but that again points to the problem I was just referring to, which is that it is going to make it more difficult for owners to maintain these buildings because they have more vacancies and they can't make their costs.

  Mr. JACKSON. OK. I appreciate that.
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  Dr. O'Flaherty, you made a very compelling case about the evolving definition of homelessness. You even talked, I think, briefly about perspectives, depending on what your vantage point is, your perspective or definition of homelessness can be shaped by that vantage point, from vagrancy to ''can I pump your gas'' to ''hey, there's someone who smells.''

  I am interested and maybe I didn't hear it clearly in your testimony about your definition. You seem to have a passion for this issue. What is your definition in light of your analysis of looking at it from perspectives? And compare that definition, too, if you will, quickly, to how you perceive our definition of homelessness as it actually appears to be.

  Dr. O'FLAHERTY. I don't have a definition. I believe that the sensible way to approach the issue is to deal with a number of well defined groups. There are people sleeping on the streets; there are families in shelters; there are people staying in missions; there are people staying in single adult shelters; there are squatters; there are people staying in ''abandoned buildings.'' I would define these, I can define these; normal people can talk about them. I would also add a group of people, the people you see on the street, panhandlers, recyclers, groups of these. These are well defined groups, reasonably well defined groups. I'm not exactly sure where ''squatters'' end and begin, but these are good definitions. And I would say that we should talk about squatters, we should talk about families in shelters, we should talk about families in lousy housing, we should talk about people in detox centers, just as what they are. There's no need for adding them together. I don't see any reasons for adding them together. And then with each group we should say, ''What is the problem here? How do we address the problem here?''

  Mr. JACKSON. I am interested in how you see the efforts of this institution and the Federal Government and how you at least perceive our definition of the homeless issue to be, because if you see them in various categories, then certainly our efforts, based upon our limited definition, could be focused on only a single category and not on the multiplicity of categories that you have suggested.
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  How do you perceive----

  Dr. O'FLAHERTY. I perceive your efforts as pretending to be focused on one category, but in fact being scatter-shot and not that well defined because you aren't admitting that there are different groups that you would like to focus on, and different reasons to focus on different groups.

  I think most public opinion is driven by people they see on the street. I have heard lots of people talking about people they see on the street. For the most part, none of us here today have talked about people you see on the street. The people you see on the street are a distinct problem from the families that are in shelters. To use one word and to hold, I don't care how many bills you deal with; it's just a question of paper, but how you allocate resources between people you see on the street and families in shelters is a decision you should make, and you should make it explicitly rather than pretending that when you say you deal with ''homeless,'' and that's all you're dealing with, you have to specify.

  The other thing is, if you're doing these studies, you're also going to have serious problems unless you specify it very well. There are serious problems, for instance, if you just look at comparisons of what people call ''shelters.'' It's not clear at all that people call the same thing ''shelters.'' Dr. Martha Burt, in the census, did surveys of shelters six months apart. The numbers from those surveys are wildly discrepant. They were both excellent surveys, both done very well----

  Dr. BURT. Actually, they're right on, only 200 off----
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  Dr. O'FLAHERTY. No, not city by city. City by city, the shelter rate to correlation is about .5.

  Mr. JACKSON. Thank you, Mr. Chairman.

  Chairman LAZIO. Thank you very much.

  Mr. Kennedy.

  Mr. KENNEDY. Thank you very much, Mr. Chairman.

  I want to apologize to our witnesses and to the other members of the panel for being late. I've been circling around this city for the last hour or so.

  I do want to thank all of our witnesses for your testimony. I want to particularly thank Mr. Lazio for holding this hearing. I think it is important, and an important step to show that this subcommittee is going to be more engaged in the actual policies that we pursue in this country with regard to housing in general and homelessness specifically.

  I think that when we look at the number of people that require housing in America, the fastest growing number of Americans of any category in America is now the poorest of the poor. And as a result of actions that we took in the last Congress, we see the general housing budget cut by over 25 percent; we see the homelessness budget cut by about 26 percent. And this is not just on the Republicans. When I look at the homeless budget proposed by the Administration of only $823-million, it simply isn't enough.
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  I would caution all of you to be somewhat careful about getting diverted into side arguments about families versus mentally ill versus other kinds of issues. While it's important, we shouldn't lose sight of the fact that the overall budget that we are generating with regard to how much money we're willing to spend on homelessness issues is of primary importance. We ought to keep this Congress and the people of America focused on the fact that we have millions of Americans that are simply not getting the kind of shelter that has been the promise of our Nation for several decades.

  I think it is important that you keep in mind, when you come to an opportunity like this, to hammer home the necessity for all of us to keep our eye on the major issue before us, which is whether or not we have the conscience in this country to take care of the mentally ill and families, that we need to spend more money making sure that we are providing for the poorest and most vulnerable amongst us.

  I would just say to my friend, Mr. Lazio, who I think is showing the kind of interest and leadership on this issue that many of us were hoping for in terms of his interest in writing this bill, that the amount of money that he has put in is more than the Administration's, for which I thank him. But I don't think that we ought to take a sense that that is the reality of where the American people are. I think the American people would be willing to support a much greater amount in terms of homeless assistance.

  But I also have some other concerns. I have a letter here which I would like to submit for the record, Mr. Chairman, from the Pine Street Inn in Boston----

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  Chairman LAZIO. Without objection, it will be included in the record.

  [The referenced letter can be found on page 42 in the appendix.]

  Mr. KENNEDY.----One of the finest homeless shelters in our country, which has a range of homeless programs that are associated with it. But they have voiced some concern about using the CDBG formula for the distribution of the funds because of the fact that while that attains an evenhanded approach with regard to the distribution of funds, it does not necessarily take into account where the homeless are. I think what we ought to be doing is making sure that the funds are spent where the homeless are, not just making sure that every State or every community is treated equitably. I think that's a laudable goal in some programs, but in something like homelessness I think you really do have to make sure that you're providing the funds where homeless people live, despite the issues of where they might migrate to.

  The second issue that I wanted to just bring up is the notion of the caps, the 10 percent on the emergency shelter, and the services cap. While I think that those can be laudable goals, there are concerns that I have heard from some of the homeless that requiring a 10 percent cap can be a very difficult cap to actually attain. I would hope that we could try to find some flexibility. We all want to see a limit on the amount that goes into that, but I think that mandating that by regulation or by law could ignore the realities that many of these organizations actually face on the ground.

  I think also, by distributing these funds through the State governments, the difficulty is that they in many cases are now going to be strapped with dealing with the whole welfare reform issue. This might very well fall into a secondary sort of manner in terms of importance, and I think that's something that we ought to take into account as well.
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  So I want to thank you, Rick, for showing such interest, and let you know that I think in general people have supported the idea of getting away from all the mandated programs. I think of a few years ago when we looked at the McKinney Act, we had about 33 different programs that we were mandating, and each one of them got about 27 cents.

  So I think the idea of going to the block grant makes some sense. But I think that trying to build in some flexibility for the kinds of realities that these folks are facing on the ground would probably help the legislation as well.

  If any of you have a comment, or if the Chairman wants to comments on those concerns, I would be happy to hear them.

  Dr. TORREY. First of all, I think the Pine Street Inn is a good example. I've been in the Pine Street Inn, and as far as I know, it's the largest de facto mental institution in the City of Boston now in terms of the number of homeless mentally ill in there.

  I think you are absolutely right, Mr. Kennedy. I think the American people are willing to support putting more money into these programs if they think it's going to make any difference, and I think the concern of the American people generally is that they feel the money that has gone into these programs and is going into these programs hasn't made any difference. We see more mentally ill, total; we see more homeless; we see more substance abusing among the homeless. That is increasing rather than decreasing.

  Mr. KENNEDY. Well, just hang on one second, sir. While that might be true, the reason why you're seeing so many more people with mental illness is because we don't put money into community homes. A lot of these people used to be taken care of by institutions. We saw what the institutions did; we were outraged as a Nation; and so we said, ''We'll deinstitutionalize the mentally ill.'' So we deinstitutionalized the mentally ill and we haven't put any money into community mental health.
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  So the fact that that now falls on your shoulders doesn't, I think, give you the right to come in here and suggest that that's a problem that we ought to take a walk from. We need to be able to deal with this issue, and that means that you have to deal with it.

  I'm sorry that you have to feel that the reality is that the money has to come out of the homeless budget, but it does have to come out of a budget. If that's the budget where we can find the money to take care of these folks, then I'd appreciate it if you would stop knocking it.

  Dr. TORREY. I'm not knocking it, sir, and I'm not telling you to take a walk.

  Mr. KENNEDY. Well, it sure sounded like it.

  Dr. TORREY. I'm telling you that what you do has to be coordinated with people who have responsibility for the seriously mentally ill and the substance abusers, that by yourself you can't do it.

  Mr. KENNEDY. That's fine. Well, I appreciate that.

  Chairman LAZIO. Yes, sir?

  Dr. O'FLAHERTY. I found what Mr. Kennedy said very interesting. I think he did a very good job of answering one of Mr. Jackson's questions about a good definition of ''homelessness''; he means, what sort of activities outrage people by lack of housing and things like that, and I think it was a very good approach that Mr. Kennedy was taking.
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  I think the way that he's going leads pretty closely to one of the things that I said before he got here, that if you take that kind of view, the way to go is to increase Section 8 and increase it in some directions, decrease it in others. If the problem is that there are people that are having grossly inadequate housing, then one direction, one way; make Section 8 an entitlement and reduce the amount.

  Mr. KENNEDY. Fair enough. I would like to see more Section 8s, but in any event, that's fine. That's fine.

  Dr. CULHANE. Just to speak to the issue of special needs housing in particular, let's use the example of Philadelphia. There are about 20,000 people who have a serious mental illness in the City of Philadelphia. That's by epidemiological data. The City of Philadelphia only has 1,000 housing units that are dedicated, with supports, for people who have serious mental illness. So there is a gap there of about 19,000.

  Now, not all these individuals need to live in a supported unit. Half of them are already living with their families. But about 3,000 of that 20,000 ended up being homeless and in a shelter in Philadelphia in a 3-year period. That's about 10 percent, over 10 percent, of the group.

  So I think just to cover that population, there's a shortfall of a couple thousand units, just in the City of Philadelphia.

  New York State and New York City over the last 5 years created a program, the New York, New York Program, that built about 5,000 units of supported housing, and the number of single adults who are homeless in New York City dropped by 50 percent in that 5-year period. That's the only place in the country that I've ever heard about that had an actual drop in the number of people who were homeless in any period of time, and the number of sheltered adults went from 42,000 in 1988 to about 21,000 in 1995.
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  Mr. KENNEDY. Has that changed too, Dennis, or not?

  Dr. CULHANE. Now it's changed. Now it's going up again. So last year was the first time that that downward trend was reversed, and there was a 16 percent increase in the average daily census.

  But they went from having 9,500 people in shelter on a given day, in the single population, down to 5,000. That's a pretty dramatic reduction, a cut in half, basically, on the dollars that had to be spent on shelter, because they were in supported housing. And those people, they stay in that housing. They have 85 percent retention rates, as Marti was talking about. These are successful programs.

  That just goes to show that an investment of that kind of resource can have a dramatic impact on the number of people who are homeless and in shelters, and New York's a good example.

  Dr. BURT. Right.

  I think part of what I was saying in terms of advising you to target money on the chronically mentally ill and the chronic substance abusers is that we're talking about a finite population, and if you solve their housing problems with supported housing, which means services attached to them, you will solve it and you will have this effect.

  The problems of the families are severe and I am not in any way saying that they are not important, but they are infinite. There is a pool of families out there who are desperate and who will continue, and do continue, and Dennis' numbers show you that they continue to come in. They come in more if you have to be in a shelter before you get public housing, and now most places aren't doing that so they've dropped their rolls drastically. They will continue to come in because their situation will continue to be desperate, and there will be new ones there. As soon as you solve one of their problems, as soon as you give one of them a housing unit, you will have another. The faster you give one of them a housing unit, the faster you will have two more there, because they're desperate.
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  So, as Dr. O'Flaherty has been recommending, you have to segment the population and so have we, basically. You can, with your permanent housing resources for homelessness, deal with the chronically long-term homeless with severe disabilities who will not leave homelessness without it, who can be stably housed, and who will not be replaced with others like themselves.

  Dr. Torrey's ''the one from L.A. will be in New York'' is true, but the ''one from New York will also be in L.A.'' So if you house them in both places, they will stay where they are and where you give them housing.

  You have a very, very different problem with the much, much larger pool of families who are in desperate situations, and they will keep coming. And the more you make shelters a rich resource for them, the more they will come. So we have to come up with some alternative approaches for how to solve the problems that they have with their housing situations, without making shelter be the only place where they get any kind of services.

  Mr. KENNEDY. Well, of course. I think there's no question that that's true. If I misunderstood your point, Dr. Torrey, I would apologize. I think that there's no question that we want to get people out of shelters and into both transitional and permanent housing. I want to say that the Chairman last year did support an amendment that I offered to try to increase the number of Section 8s.

  So I think that these are important issues, but I think that you've also got to make sure that you keep your eye on the sort of general issue, that of the need for us to continue to support homeless programs in general. That drumbeat has got to be sounded over and over again. You're seeing a 25 percent reduction last year; you're going to see another major reduction if the Administration gets its way this year.
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  And so what I don't want us to do is to argue about what's in the pie. We also have to argue about how big this pie really is, and I think the slices issue is an important one. But when you're in here and you're seeing these programs cut, you've got to make sure that people get the message that there's simply not enough resources that are going into fighting this problem. When we see people, Democrats and Republicans, condemning the amount of money we spend on housing in general, and everybody walks before some monstrosity of public housing and then condemns the whole thing, it becomes a self-fulfilling prophecy that we end up with more and more people seeking homelessness assistance.

  So I do think that we've got to deal with the issue of transitioning out of shelters, but I also think it's important to keep our eye on the main issue of how much money we commit to the problem.

  Anyway, Mr. Chairman, thank you very much.

  Chairman LAZIO. I thank you.

  As usual, you have identified one of the areas in which we can make some improvements in the bill, and we're going to be doing that with respect to the CDBG formula. I think that was one of the weaknesses of the bill, and it is my intention to move toward, probably, the emergency shelter grant formula as a more important formula for that. But I will be happy to continue to work with you on that.

  The second point that I want to make briefly is that there has been a good deal of discussion about communities with mental health challenges. This year, for the second year in a row, the President's budget recommends a cut in the only program that really fosters new development, the Section 811 program for the disabled. You've been very supportive in the past, and I think we need to continue to try to urge our colleagues to increase, as opposed to decrease, funding in that important program.
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  The third thing I want to note is to note for the record, tomorrow we are scheduled to have a hearing on H.R. 2, the Housing Opportunity and Responsibility Act of 1997. It is scheduled for 9:30; but in order to accommodate those Members who have made arrangements to participate in the Family Bipartisan Retreat, which is coming up this weekend, the afternoon's first panel may immediately follow Secretary Cuomo's appearance in the morning, depending on time. I expect the afternoon session to be completed by 3:30 p.m.; otherwise, the witness list that was issued on March 3rd remains the same.

  Mr. KENNEDY. So we're going to go straight through?

  Chairman LAZIO. We're going to try, as long as we can arrange all the witnesses and there is no major problem for any Member. If there are any problems and you alert me to them, we'll try to work that out.

  I want to thank the panel for taking the time to inform this subcommittee, and also, of course, the travel time that it took to get here and your preparation for your remarks. I very much appreciate it.

  Thank you. This hearing is adjourned.

  [Whereupon, at 10:56 a.m., the hearing was adjourned, to reconvene at the call of the chair.]

  [Insert offset folios 1 to 50 here.]
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