New era of emergency housing created by pandemic now faces fiscal cliff

SPRINGFIELD – For Illinois’ homeless populations and those that serve them, the COVID-19 pandemic accelerated a crisis – the volunteer, mostly faith-based shelters that had long been the backbone of the state’s emergency housing system were closing their doors.

But with the crisis – and a sudden influx of temporary federal, state and philanthropic funding – came an opportunity to move away from an already-stressed emergency housing system to what advocates say is a more dignified and effective one.

Those same advocates, however, say the new system, largely based on using government vouchers to fund private hotel rooms, is on the edge of a fiscal cliff as federal COVID-19 response funding dries up.

It’s a pressing issue, more than 220 housing advocacy organizations wrote to Gov. JB Pritzker this week, because Illinois is already about 4,500 beds short of the 11,300 it needs to accommodate all individuals seeking shelter on a given night, according to a recent report to a state homelessness task force.

“Without a significant increase in state funding, the severe shelter shortage will worsen,” the advocates wrote in the letter dated Dec. 21, coinciding with the first day of winter. “(Illinois Shelter Alliance) members estimate that at least 1,600 existing shelter beds could be lost during 2023 due to federal COVD-19 relief funds, mostly being spent on hotel vouchers, being fully expended.”

The Illinois Shelter Alliance is a coalition of more than 50 emergency and transitional housing organizations from throughout Illinois that have organized to push for increased state emergency housing investment.

The ask for the upcoming fiscal year which begins July 1 is a $51 million, six-fold increase to a long-stagnant emergency housing line item to sustain the new system and create a bridge to a more permanent one.

It’s increasingly important, the letter noted, as Alliance members reported up to 76 percent of the churches and other facilities that have provided congregate shelters previously are unable or unwilling to resume doing so due to closures, declining membership and COVID-19 concerns.

“So, pre-pandemic, the shelter model was people survive the winter because churches let them sleep on the floor,” Doug Kenshol, executive director of the emergency housing organization South Suburban PADS, one of the signers of the letter, said in a phone call. 

The pandemic, he said, changed things “almost overnight.”

Providers rallied to raise the funds for hotel rooms before federal aid was provided in late March 2020 via the Coronavirus Aid, Relief, and Economic Security, or CARES Act. Federal allotments have largely sustained the new model since that point. 

“The current model has been so much better than what came before,” Kenshol said. “Now that we have people in hotel rooms, it’s more dignified. They have privacy, they have stability, safety. They’ve got a locked door. They can take showers.”

Kenshol, who is also a founding member of the ISA, said while the pandemic has represented a breaking point, the old system was always inadequate and underfunded.

Since Fiscal Year 2003, state funding stagnated at about $10 million annually, a number that, factoring in inflation, amounted to a 50 percent cut over that span, advocates wrote. It amounts to just 6 percent of the funding that would be needed to make sure that all who need it have shelter.

Kenshol illustrated the effects of disinvestment on human terms, recalling an individual who was dropped off by ambulance at a suburban shelter in the years prior to the pandemic. The person had been out in the cold, experienced frostbite and had all his fingers amputated.

“And then the individual was dumped off at a shelter, a place with no professional staffing. A place operated entirely by volunteers,” Kenshol said. “This person could not feed himself or bathe himself and he was being dropped off at the church for shelter.”  

As federal funds dry up, he said, the emergency housing system could end up in worse shape than it was prior to the pandemic if more funds are not made available.

“And so we’ve been in a panic at various points during the last two years that funding is ending and we have no other option, that we’ll hit a cliff and everybody is just going to be put out into the street,” he said.

The requested increase would bring state emergency and transitional housing funding to $61.4 million, up from a $10.4 million allotment that’s been relatively static for years.

Of that, $20 million would sustain 1,600 beds which advocates say are in danger of disappearing. Roughly $29 million would go toward increasing the number of emergency shelter beds by 1,500, leasing approximately 1,000 apartments to rapidly rehouse families, and increasing the number of available hotel vouchers by more than 500.

About $2 million of the budget request would be used to help agencies with employee recruitment and retention, including hiring staff to work with people to find alternatives to going to a homeless shelter.

But it’s also part of a broader long-term vision that, in the coming years, could add as many as 3,000 beds.

The ISA members noted that while the federal hotel voucher funds are drying up, state agencies will soon make available another $57 million in federal funding allocated specifically for the purchase or renovation of sites to serve as fixed-site and non-congregate shelter. Many local governments are also providing capital development funds from their federal allocations.

While this creates a “once-in-a-generation opportunity to build a more humane and effective crisis housing system” with federal resources, the advocates wrote, state funding is “crucial” to providing the ongoing operational funding for the new system.  

Thus, a large part of the money used for vouchers in the upcoming fiscal year could be used in later years to fund the provider-run shelters that are created with the federal funds.

Kenshol said for organizations like South Suburban PADS – which is looking to purchase up to two hotels and potentially an apartment building – the state funding is necessary for it to be able to demonstrate fiscal solvency on its applications for federal funding.

The Pritzker administration has acknowledged the importance of providing such shelter, both in a June housing report, entitled “Home Illinois,” and through a recent Dec. 8 announcement that the Department of Human Services was increasing current-year emergency housing appropriation by $5 million through a redistribution of funds already allocated to IDHS.

“I’ve said it before and I’ll say it again: shelter is not a privilege — it’s a right,” Pritzker said in a news release coinciding with the recent funding announcement. “With the winter season well underway and snowy days on our horizon, we are investing $5 million to ensure that no Illinoisan goes without the shelter they need to stay warm, safe, and healthy.”

A spokesperson for Pritzker said he and IDHS “look forward to working with advocates to ensure sustained investments in these critical programs in the years to come.” He noted that the current-year IDHS budget included an additional $15 million for homeless prevention programs, including the recent $5 million increase.  

In their letter, the advocates thanked the Pritzker administration for its focus on ending homelessness. Increasing emergency housing capacity, they said, is the most important next step to getting there.

“We and others will do everything we can do to make sure the State of Illinois does create enough affordable housing that will end homelessness, but, even under the best circumstances, that will take a number of years,” Bob Palmer, an ISA member and policy director for Housing Action Illinois, said in an email. “Right now, we have to have a much more well-resourced emergency shelter system, especially not to go backwards in terms of serving people who are without a home today.”

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