It is homelessness grant season for communities like Nashville-Davidson County.
The Department of Housing and Urban Development has dropped the Notice of Funding Opportunity (NOFO) for the Continuum of Care (CoC). In addition, the Metropolitan Development and Housing Agency (MDHA) has received its annual Emergency Solutions Grant (ESG) allocation from HUD. The deadline for ESG applications is on August 30.
This column has covered several CoC grants, so we’re taking a look at ESG funding, but first, here’s a brief history about some of these different HUD funding sources.
The Continuum of Care or CoC is a three-pronged approach:
- A designated geographic area, which in our case is Nashville-Davidson County;
- An organized community effort to build a system that is capable of preventing and ending homelessness for people in a collaborative way; and
- A competitive federal funding stream to support this work.
The CoC funding process is competitive. But since Nashville-Davidson County has focused on systems improvement, it has been able to steadily increase its annual grant awards from $3.2 million in 2017 to $9.7 million in 2023. The CoC award amount also depends on the increase in the federal allocation, which is determined by the U.S. Congress.
At the end of July, HUD announced that it will provide more than $3.5 billion in competitive funding to homeless service providers across the nation, which is the highest annual allocation ever. In comparison, HUD awarded a little over $2 billion in 2017.]
CoC grants focus mainly on ending homelessness by creating and maintaining permanent housing and the needed support services. Eligible activities that CoC grants can pay for include acquisition, rehabilitation, new construction, leasing, rental assistance, supportive services, operating costs, Homeless Management Information System (HMIS) and project administration.
The Emergency Solutions Grant (ESG) program provides funding for five program components: street outreach, emergency shelter, homelessness prevention, Rapid Rehousing and HMIS. It also permits up to 7.5 percent of funds to be allocated for administrative activities of a recipient.
Unlike the CoC funds, the city’s allocation is predetermined. MDHA makes $400,212 available through the ESG program, which is a formula-based federal allocation that is based on geographic size, population, and poverty rates.
To give you an idea of what this means, let’s take a look at last year’s final grant awards, which totaled $412,461.
All organizations that receive ESG funding must provide a 100-percent match. This means, if Agency A receives $40,000, then they must come up with $40,000 in other funding that is dedicated to the same programs the $40,000 are allocated for. Match funding can be in cash, donated buildings or materials, and/or volunteer services. For example, this could be a portion of a staff’s salary who will work on those programs. It could be in-kind donations or volunteering. In other words, if someone has donations of food, hygiene items, clothing, tents or other materials for their outreach program that they use ESG funding for, those donations can be recorded as a match. (As a side note, CoC funding requires a 25 percent match).
The ESG program was authorized through Title IV of the McKinney-Vento Homeless Assistance Act of 1987. It actually was called the Emergency Shelter Grant program back then. But in 2009, the Homeless Emergency Assistance and Rapid Transition to Housing (HEARTH) Act amended the McKinney-Vento Act and renamed it from Emergency Shelter Grant to Emergency Solutions Grants program.
In its 104-page request for application document, MDHA explained that “the change in the program’s name … reflects the change in the program’s focus from addressing the needs of homeless people in emergency or transitional shelters to assisting people to quickly regain stability in permanent housing after experiencing a housing crisis and/or homelessness. The key changes that reflect this new emphasis are the expansion of the homelessness prevention component of the program and the addition of a new rapid re-housing assistance component.”
No more than 60 percent of the total ESG allocation can be used for emergency shelters. When we look at the grant funding allocations, you will quickly see that ESG is by far not enough to address homelessness in Nashville. On Jan. 26, 2024, Nashville volunteers counted just under 2,100 people who were sleeping in shelters or were found sleeping outdoors.
This does not include most of the 800 students that have already been recorded by Metro Nashville Public Schools as being unstably housed on day 1 of the current school year. At the end of the last school year, that number rose to 4,500 students. But only about 7-10 percent of these students will meet the literal homeless definition of sleeping in temporary housing such as shelters or transitional homelessness programs, outdoors, in cars or other places not meant for human habitation. The ESG and the CoC programs only fund interventions that address literal homelessness.
The good news is that in response to the COVID pandemic, the federal government made billions of additional temporary dollars available to cities and states. This created an influx of dollars to address homelessness. If you regularly read my column, you may be aware that Nashville allocated $50 million in October 2022 to specifically address homelessness in our city. Of those funds, $25 million were designated to help create more housing units. The remaining $25 million were allocated for temporary housing (about half of the funds were dedicated to shelter/temporary housing) and the rest went toward programs and supports of permanent housing that actually end homelessness. At present about $15 million seems to remain unspent based on the most recent report.
The bad news is that those dollars expire and must be used by the end of 2026. They are not renewable. After that, our local system is back to depending largely on the regular federal grant awards including the CoC and ESG programs. I hope the city already has a sustainability plan in place. Pushing the responsibility off to nonprofits as has been outlined by city officials so far, is not the answer. At a minimum, the city should lead transparent sustainability planning sessions including CoC members and grant recipients.
For those of you who are extremely curious, besides the CoC and ESG dollars, other ongoing federal funding sources that are available to address homelessness can include Community Development Block Grants (CDBG), Housing Opportunities for Persons With Aids Program (HOPWA), HOME Investment Partnerships Program, and multiple other federal grants managed by different departments to address the needs of families, Veterans, youth, people with mental illness and/or substance use disorders, etc.
Another good news item for Nashville is that we are now in a place where we should be able to start examining all these different funding sources (which we started to do before the pandemic shifted our focus), evaluate the need through HMIS data that has been collected over the past few years (data that was still inconsistent prior to the pandemic), and develop a strategic approach that outlines how to advocate and invest available resources to actually end homelessness. To do so, we will need strong leadership. With Mayor Freddie O’Connell’s push for an Office of Homeless Services while he was still a council member, the city seems positioned well for that leadership. And with a little bit of critical reflection, I am sure we’ll get there.