Part One: General Section 811 Questions
Question #1: What is the Section 811 Program?
The Section 811 Supportive Housing for Persons with Disabilities program is a U. S. Department of Housing and Urban Development (HUD) supportive housing program that assists the lowest income people with significant and long-term disabilities to live independently in the community by providing affordable housing linked with voluntary services and supports. According to the Section 811 statute, the purpose of Section 811 is "to enable persons with disabilities to live with dignity and independence within their communities by expanding the supply of supportive housing that:
- Is designed to accommodate the special needs of such persons;
- Makes available supportive services that address the individual health, mental health and other needs of such persons; and
- Promotes and facilitates community integration for people with significant and long-term disabilities."
Question #2: What is the Frank Melville Supportive Housing Investment Act?
In December of 2010, Congress passed bi-partisan legislation - the Frank Melville Supportive Housing Investment Act (Melville Act) - which includes important Section 811 reforms to stimulate the creation of thousands of new integrated permanent supportive housing units every year. The Melville Act revitalizes and reinvigorates the Section 811 program as a federal mechanism to assist states to develop new policies and more systematic approaches for expanding integrated supportive housing for high-need, high-cost individuals who may be living unnecessarily in an expensive institutional setting, or who may be homeless, or at risk of either condition.
Question #3: What has changed as a result of the Melville Act?
Since its inception, the Section 811 program (and its precursor the Section 202 Supportive Housing for the Handicapped program) was used to create group homes and independent living apartment complexes that were exclusively reserved for people with disabilities. Before the Melville Act was signed into law, competitive Section 811 funding was made available by HUD every year only to nonprofit organizations seeking to develop supportive housing. Section 811 provided these nonprofits with two types of funding: (1) a Capital Advance to buy, rehabilitate, or construct the housing; and (2) a Project Rental Assistance Contract (PRAC) to cover the costs of operating the housing (i.e., maintenance/repair, insurance, utilities, project reserves, etc.) that could not be covered by tenant rents. Section 811 tenant rents were - and continue to be - set at 30% of tenant income to ensure affordability for people with disabilities with the lowest incomes.
The new Melville Act incentivizes the creation of more integrated Section 811 housing approaches through two new options:
- A new Section 811 Project Rental Assistance (PRA) approach provides PRA funding directly to State Housing Agencies working in partnership with State Human Services/Medicaid agencies to create integrated supportive housing. Under the PRA approach, no more than 25% of the units in the Section 811 assisted property can be set aside for people with disabilities.
- A new Section 811 Multifamily approach which provides both Section 811 Capital Advance and PRAC funding to a nonprofit organization to create integrated supportive housing. Under the Section 811 Multifamily option, no more than 25% of the units in the Section 811 assisted property can be set aside for people with disabilities.
[NOTE: The Melville Act continues to permit the development of group homes and independent living apartments exclusively for people with disabilities. The Melville Act also ended the Section 811 Mainstream tenant-based rental assistance program and permanently transferred 14,000 Section 811 Mainstream vouchers to the Section 8 Housing Choice Voucher program.]
Question #4: Why were Section 811 program reforms needed?
Section 811 reforms were essential for several reasons:
- States are now seeking new strategies to develop more integrated supportive housing opportunities that are consistent with the community integration mandates within the Americans with Disabilities Act (ADA). Numerous states have federal Olmstead-related lawsuits/settlement agreements (see below) which require the creation of thousands of new integrated supportive housing opportunities for people with disabilities who are either leaving restrictive settings (i.e. ,nursing homes, public institutions etc,) and/or who cycle between homelessness, jails, and institutional settings.
- Since the Section 811 program was authorized in the early 1990s, disability housing and services policies have evolved to focus more on consumer choice, Medicaid-financed community-based services and integrated housing opportunities. The Section 811 program did not keep pace with these improvements in community living for people with disabilities.
- The "old" Section 811 Capital Advance/PRAC model and development process was very time consuming. Most nonprofit Section 811 developers relied on Section 811 Capital funding to cover most of the cost of creating the housing, and rarely leveraged funding from mainstream affordable rental housing development programs. As a result, Section 811 consistently received very low ratings from the federal Office of Management and Budget, and was producing fewer than 1,000 new units each year. Major reforms to this symbolic program were essential to securing the program's future viability.
Question #5: What is integrated supportive housing?
Supportive housing is an evidence-based approach that combines permanent affordable rental housing with voluntary, flexible and individualized services to assist the most vulnerable people with disabilities to live in the community. Through a substantial body of research conducted over the past 20 years, supportive housing has proven to be a cost-effective and successful approach to addressing the affordable housing and supportive services needs of people with significant and long term disabilities who need community-based supports and services to live in the community.
Question #6: What is Olmstead?
The landmark 1999 U.S. Supreme Court's Olmstead vs. L.C. decision (527 U.S. 581) held that title II of the Americans with Disabilities Act (ADA) prohibits the unjustified segregation of individuals with disabilities. According to the U.S. Department of Justice (USDOJ) Olmstead website, in enacting the ADA, Congress recognized that "historically, society has tended to isolate and segregate individuals with disabilities and .... such forms of discrimination .... continue to be a serious and pervasive social problem. For these reasons, Congress prohibited discrimination against individuals with disabilities by public entities."
USDOJ guidance implementing ADA regulations require public entities to "administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities." The preamble discussion of this regulation explains that "the most integrated setting" is one that "enables individuals with disabilities to interact with nondisabled persons to the fullest extent possible".
Under the Olmstead decision, the Supreme Court held that public entities are required to provide community-based services to persons with disabilities when: (a) such services are appropriate; (b) the affected persons do not oppose community-based treatment; and (c) community-based services can be reasonably accommodated taking into account the resources available.
Question #7: Why is Olmstead important to the reformed Section 811 program & the integrated supportive housing approach?
The reformed Section 811 program is an important tool for states to ensure they are in compliance with the ADA, as interpreted by Olmstead, and to implement Olmstead-related settlement agreements in states. During recent years, disability rights organizations and USDOJ have undertaken various legal actions (i.e., investigations, lawsuits, settlement agreements, etc.) to ensure that state governments are complying with the community integration requirements of the ADA. As a result, numerous states are now legally required to expand integrated supportive housing opportunities. For example, six separate Olmstead settlement agreements in four states require the creation of an estimated 20,000 new integrated supportive housing opportunities. Other states are looking to programs such as Section 811 to show that the state is taking affirmative steps to reduce reliance on segregated settings and to expand integrated housing opportunities.
Part Two: Questions on the New Section 811 PRA Approach
Question #8: What is the new Section 811 PRA approach?
The Melville Act authorizes a new and separate competitive Section 811 Project Rental Assistance (PRA) option to promote the creation of integrated permanent supportive housing units. The PRA approach is a 'stand alone' project-based rental assistance approach to help governments systematically and efficiently create integrated and highly cost-effective supportive housing units in affordable rental housing developments. Under the PRA approach, Section 811 project-based rental assistance funds are competitively awarded by HUD directly to State Housing Agencies working in partnership with State Human Services/Medicaid agencies to create integrated supportive housing. Under the PRA approach, no more than 25% of the units in the Section 811 assisted property can be set aside for people with disabilities.
Question #9: What entities are eligible to apply for competitive PRA funding?
According to the statute, eligible applicants for PRA funds are State Housing Agencies and other appropriate entities working in partnership with State Health and Human Services/Medicaid agencies.
Question #10: What are the requirements of the partnership between State Housing Agencies & State Health & Human Services (HHS)/Medicaid agencies?
In order to apply for Section 811 PRA funds, a joint state agency partnership is required between the state Housing Finance Agency (or other appropriate entity as determined by the HUD Secretary) and the state health and human services agency as well as (if different) the state agency responsible for the administration of the State Medicaid Plan. The state Housing Finance Agency must have a formal written agreement with the state health and human services agency/Medicaid agencies. This agreement must address:
- The target population to be served.
- Outreach and referral methods for reaching the target population.
- Supportive service commitments for tenants.
More information on the specifics of the Section 811 PRA agreement will be forthcoming in the Section 811 Proposed Rule to be published by HUD in the Federal Register.
Question #11: What activities are eligible under the PRA approach?
PRA funds can only be used as project rental assistance funding. Section 811 Capital Advances are not an eligible activity in the PRA program. All Section 811 PRA units are required to accept a 30 year use restriction as a condition of receiving Section 811 PRA funds.
Question #12: What projects are eligible to receive PRA funds?
Eligible projects will be selected by the State Housing Agency (or other eligible applicant as determined by the HUD Secretary) and can be either new or existing multifamily developments in which the development costs are paid for with other public or private sources, including projects that have a commitment of federal Low Income Housing Tax Credits, HOME funds, or other commitments of funding from federal, state, or local government or any other source. Project owners can be nonprofit or for-profit developers and must agree to a 30 year use Section 811 use restriction. The Section 811 use restriction is conditioned on the continued appropriation of Section 811 renewal funding.
Question #13: How are PRA units selected by the HFA & when can they be selected?
The Melville Act clearly states that the HFA is not required to identify projects that will include PRA units in its PRA application to HUD. Instead, HUD must allow HFAs to "subsequently identify eligible projects pursuant to making commitments" for allocations of federal Low Income Housing Tax Credits, HOME assistance, or other HFA capital sources. HUD will be providing guidance on the specifics of this approach in the forthcoming Section 811 Proposed Rule.
Question #14: How will Section 811 PRA funding actually work?
PRA assistance will be provided by HUD through a 15 year renewable contract that provides initial PRA funding for a term of 5 years. PRA funding will then be renewed annually - as is the current Section 811 PRAC funding and all Section 8 contract funds - subject to annual Congressional appropriations.
Question #15: Who is eligible to live in a PRA-funded unit?
A household composed of one or more persons with a disability who is at least 18 years of age and less than 62 years of age, is extremely low-income (30% AMI), and who can benefit from the supportive services offered in connection with the housing.
Question #16: Are there examples of State HFAs that have successfully implemented strategies similar to the new Section 811 PRA approach?
TAC has posted case studies of successful state approaches to implementing strategies similar to the new Section 811 PRA approach in the 'Toolkit' (found on the right side of this website).
Part Three: Questions on the Section 811 Multifamily Capital Advance Approach
Question #17: What is the Section 811 Multifamily Capital Advance Approach?
The Section 811 Multifamily Capital Advance/Project Rental Assistance Contract (PRAC) modernizes the traditional Section 811 model by providing a Capital Advance as well as a Project Rental Assistance Contract (PRAC) to nonprofit developers for the development of integrated permanent supportive housing for very-low-income households with disabilities. Unlike the traditional Section 811 program, under the new Multifamily Capital Advance approach, no more than 25% of the units in the Section 811 project may have occupancy restrictions for non-elderly people with disabilities. As with the PRA approach, this new 25% limitation provides more opportunities for community integration for people with disabilities by including Section 811 units in rental properties that are primarily occupied by households without disabilities.
Question #18: Who is eligible to apply for Section 811 Multifamily Capital Advance funds?
Only nonprofit organizations are eligible to apply for Section 811 Multifamily/PRAC funding.
Question #19: What are eligible activities under the Multifamily Capital Advance Approach?
Section 811 funds are provided for Capital Advances and for PRAC, but only for the actual number of units that will be occupied by Section 811 eligible tenants. For example, if there will be 10 Section 811 units in a 50 unit nonprofit rental housing project, Section 811 Capital Advance/PRAC funding can only be provided for those 10 units.
Question #20: How Does Section 811 Multifamily Capital Advance/PRAC funding work?
Capital advances to purchase existing property or to develop new property, bear no interest and repayment is not required as long as the housing remains available for very-low-income persons with disabilities in accordance with the Section 811 statute for 40 years. The Melville Act requires HUD to use the HOME program cost limits for Section 811 Multifamily projects receiving Capital Advances. In certain cases HUD may:
- Waive those limits under the same circumstances that HUD can waive HOME limits generally;
- Waive the HOME cost limits to provide for the cost of special design features to make the housing accessible to persons with disabilities; the cost of special design features necessary to make individual dwelling units meet the special needs of persons with disabilities; and the cost of providing the housing in a location that is accessible to public transportation and community organizations that provide supportive services to persons with disabilities.
Under the PRAC, HUD makes monthly payments to cover any part of the costs attributed to units occupied by very low-income persons with disabilities that is not met from project income. The amount provided under the contract for each year covered by the contract for any project cannot exceed the sum of the initial annual project rentals for all units and any initial utility allowances for such units.
Multifamily projects that have Low Income Housing Tax Credits (LIHTC) will have an initial contract term of 30 years. Multi-family developments that do not have LIHTC have an initial term of 20 years.
Question #21: Who can live in units funded under the Multifamily Capital Advance Approach?
A household composed of one or more persons with a disability who is at least 18 years of age and less than 62 years of age, is low-income (at or below 50% AMI), and who can benefit from the supportive services offered in connection with the housing.
Question #22: Are there examples of integrated supportive housing properties that are similar to the new Section 811 Multifamily Capital Advance/PRAC approach?
TAC has posted supportive housing project profiles in the 'Toolkit' (found on the right side of this website).