Clyde Barr Policy Analyst cbarr@mainehousing.org 207.624.5772 Continuum of Care Program: Solicitation of Comment on Continuum of Care Formula Docket No. FR5476N044 Clyde Barr Policy Analyst cbarr@mainehousing.org 207.624.5772

Current PPRN Calculation Combination of The formula used to award ESG program grant funds and CDBG funds Current CDBG “dual formula” system: Larger of the two calculations assigned, less a pro rata reduction* *ensures the total amount allocated is within the amount appropriated for funding Emergency Solutions Grants (ESG) Community Development Block Grants (CDBG) Under current PPRN formula, after a .2 set aside for US Territories and insular areas 75% of total CoC allocation is distributed to ESG entitlement communities (generally large metro cities and urban concentrated) Remaining 25% of CoC allocation is distributed to ESG non-entitlement communities Portland only ESG entitled community in Maine (ESG Entitled Principle City) Auburn: CDBG-MC (ESG Non-Entitled CDBG Principal or Metropolitan City) Bangor: CDBG-MC (ESG Non-Entitled CDBG Principal or Metropolitan City) Biddeford: CDBG-MC (ESG Non-Entitled CDBG Principal or Metropolitan City) Lewiston: CDBG-MC (ESG Non-Entitled CDBG Principal or Metropolitan City) Cumberland County: CDBG-UC (ESG Non-Entitled CDBG Urban County)

Previous Comments Not representative of the number of individuals & families experiencing homelessness in their geographic area CDBG formula was not appropriate for PPRN Disliked the reliance on “urban blight” as reflected in the age of the housing stock predominantly from western States, counties, and cities Opposed to reductions for renewal projects

Developing New PPRN Formulas HUD sought to maintain the basic structure Data sources need to be: Relevant Accurate Timely Readily available Chose not to incorporate PIT directly Used average of two years Relevant – to measuring homelessness Accurate – correct in all details Timely – of the moment Readily available – attainable for all jurisdictions WHY NO PIT Not all CoCs use the same methodology Not all CoCs conduct annual PIT count Direct inclusion of PIT counts into an allocation formula may create perverse incentives against objective PIT count methodologies HUD used an average of two years of PIT count data Helped quantify the relevance of potential formula factors measuring homelessness Insulated potential formulas from limitations of directly including PIT counts Using factors correlated with PIT count, proposed formulas mitigate the risk of data fluctuations in PIT counts that may be less prevalent

Overview of Proposed Formulas Goal: to approximate the actual homeless need in communities Diminished reliance on annual PIT Pre 1940s housing & Overcrowding not included

Overview of Proposed Formulas Formula A Formula B Formula C Formula D 10% * population 15% * poverty 25% * affordability gap 25% * rent-burdened ELI households 25% * rental units 25% * poverty 25% * population 50% * hybrid factor Overcrowding and pre 1940s housing not included in new formulas Affordability gap: measures the gap between the demand for and supply of rental units that are both available and affordable to ELI renter households Rent burdened ELI households: ELI households that pay more than 30% of income for housing. Rental units: renter occupied units Hybrid factor: combination of Rent burdened ELI households & Rental units – calculated by multiplying the number of rent-burdened ELI households by the ratio of: the jurisdiction’s percentage of renter occupied units divided by the national percentage of renter occupied units All data from ACS & Comprehensive Affordability Strategy (CHAS)

34% of CoCs funding could decrease between $307 - $25,955,807 Alt Formula “A” COCNUM COCNAME PPRN15 Baseline Allocation Alt Formula $ Diff PCT Diff ME-500 Maine Balance of State CoC $3,712,281 $4,157,086 $4,288,146 $575,865 15.51% ME-502 Portland CoC $1,222,088 $1,884,953 $624,340 -$597,748 -48.91% ME-5** One Maine CoC $4,934,369 $6,042,039 $4,778,650 -$155,719 -3.16% FORMULA WEIGHTS PEARSON’S CORRELATION 10% * population No significant correlation 15% * poverty .153 25% * affordability gap .310 25% * rent-burdened ELI Households .336 25% * rental units .444 Pearson’s correlation a measure of the linear correlation between two variables X (population etc. . .) and Y (average 2 year PIT count), giving a value between +1 and −1 inclusive, where 1 is total positive correlation, 0 is no correlation, and −1 is a negative correlation Calculated by HUD Not based on 75/25 ESG Entitled/non entitled split – HUD is interested in removing this split Baseline allocation calculated as: ((Total CoC PIT Count/National PIT Count)*Total Funding) 34% of CoCs funding could decrease between $307 - $25,955,807

35% of CoCs funding could decrease between $646 - $25,410,952 Alt Formula “B” COCNUM COCNAME PPRN15 Baseline Allocation Alt Formula $ Diff PCT Diff ME-500 Maine Balance of State CoC $3,712,281 $4,157,086 $4,205,686 $493,405 13.29% ME-502 Portland CoC $1,222,088 $1,884,953 $631,500 -$590,588 -48.33% ME-5** One Maine CoC $4,934,369 $6,042,039 $4,703,350 -$231,019 -4.68% FORMULA WEIGHTS PEARSON’S CORRELATION 25% * poverty .153 25% * affordability gap .310 25% * rent-burdened ELI Households .336 25% * rental units .444 35% of CoCs funding could decrease between $646 - $25,410,952

37% of CoCs funding could decrease between $406 - $25,701,362 Alt Formula “C” COCNUM COCNAME PPRN15 Baseline Allocation Alt Formula $ Diff PCT Diff ME-500 Maine Balance of State CoC $3,712,281 $4,157,086 $4,254,856 $542,575 14.62% ME-502 Portland CoC $1,222,088 $1,884,953 $612,211 -$609,877 -49.90% ME-5** One Maine CoC $4,934,369 $6,042,039 $4,536,819 -$397,550 -8.06% FORMULA WEIGHTS PEARSON’S CORRELATION 25% * population No significant correlation 25% * poverty .153 50% * hybrid .393 Hybrid is a combination factor of rental units & rent-burdened ELI Households 37% of CoCs funding could decrease between $406 - $25,701,362

37% of CoCs funding could decrease between $8,279 - $22,436,373 Alt Formula “D” COCNUM COCNAME PPRN15 Baseline Allocation Alt Formula $ Diff PCT Diff ME-500 Maine Balance of State CoC $3,712,281 $4,157,086 $3,795,378 $83,097 2.24% ME-502 Portland CoC $1,222,088 $1,884,953 $701,758 -$520,330 -42.58% ME-5** One Maine CoC $4,934,369 $6,042,039 $4,166,388 -$767,981 -15.56% FORMULA WEIGHTS PEARSON’S CORRELATION 25% * poverty .153 25% * affordability gap .310 50% * hybrid factor .393 37% of CoCs funding could decrease between $8,279 - $22,436,373

A Deeper Look. . . 100 Largest PIT 100 Smallest PIT 38% - 44% of CoCs see decreased funding Mean PIT: 4,075 Median PIT: 2,165 100 Smallest PIT 23% - 26% of CoCs see decreased funding Mean PIT: 189 Median PIT: 185 Top 100 PIT Max Top 100 PIT Min NY-600 New York City CoC 75,323 SC-503 Myrtle Beach, Sumter City & County CoC 1,319 Formula A -18% Formula A 20% Formula B -17% Formula B 27% Formula C -11% Formula C 24% Formula D -0.3% Formula D 14% Bottom 100 PIT Max Bottom 100 PIT Min IL-501 Rockford/Winnebago, Boone Counties CoC 327 MD-510 Garrett County CoC 9 Formula A -14% Formula A 70% Formula B -13% Formula B 69% Formula C -16% Formula C 51% Formula D -14% Formula D 75%

Big Picture of “Alt” Formulas % Negative Funding by Census Regions Region Alt “A” Alt “B” Alt “C” Alt “D” National 34% 35% 37% New England 54% 50% Mid-Atlantic 65% 70% 67% 74% Midwest ENC 42% 44% 45% Midwest WNC 39% South Atlantic 22% 25% 28% East South 13% West South 15% 18% Mountain 11% 17% Pacific 24% 29% Region 1: Northeast Division 1: New England – CT, ME, MA, NH, RI, & VT Division 2: Mid Atlantic – NJ, NY, & PA Region 2: Midwest Division 3: East North Central – IL, IN, MI, OH, & WI Division 4: West North Central – IA, KS, MN, MO, NE, ND, SD Region 3: South Division 5: South Atlantic – DE, FL, GA, MD, NC, SC VA, DC, & WV Division 6: East South Central – AL, KY, MS, TN Division 7: West South Central – AR, LA, OK, TX Region 4: West Division 8: Mountain – AZ, CO, ID, MT, NV, NM, UT, & WY Division 9: Pacific – AK, CA, HI, OR, & WA *Puerto Rico & other US territories are not part of any census region or census division

37% of CoCs funding could decrease between $8,531 - $18,982,831 Custom Calculation COCNUM COCNAME PPRN15 Baseline Allocation Alt Formula $ Diff PCT Diff ME-500 Maine Balance of State CoC $3,712,281 $4,157,086 $5,194,189 $1,481,908 39.92% ME-502 Portland CoC $1,222,088 $1,884,953 $841,561 -$380,527 -31.14% ME-5** One Maine CoC $4,934,369 $6,042,039 $5,705,002 $770,633 15.62% FORMULA WEIGHTS PEARSON’S CORRELATION 15% * poverty .153 15% * pre-1940 housing .113 20% * affordability gap .310 50% * hybrid .393 Inclusion of pre-1940s housing Overcrowding (.277) has similar result – might be multicollinearity Multicollinearity is a phenomenon in which two or more predictor variables in a multiple regression model are highly correlated, meaning that one can be linearly predicted from the others with a substantial degree of accuracy. Problem with pre-1940s housing Decreases over time – especially if it is a static measurement A dynamic measurement would be “housing stock 75+ years old” 37% of CoCs funding could decrease between $8,531 - $18,982,831

% Difference Maine Alt Formulas COCNUM PPRN15 Alt A Alt B Alt C Alt D Custom ME-500 $3,712,281 15.51% 13.29% 14.62% 2.24% 39.92% ME-502 $1,222,088 -48.91% -48.33% -49.90% -42.58% -31.14% ME-5** $4,934,369 -3.16% -4.68% -8.06% -15.56% 15.62% Including pre-1940s housing has a positive impact in the northeast and a negative impact in the west and south Atlantic Have not found any formula that PCoC has the potential for gaining funding over previous year

“Alt” Formulas vs. Custom % Negative Funding by Census Regions Region Alt “A” Alt “B” Alt “C” Alt “D” Custom National 34% 35% 37% New England 54% 50% 39% Mid-Atlantic 65% 70% 67% 74% Midwest ENC 42% 44% 45% 43% Midwest WNC South Atlantic 22% 25% 28% 40% East South 13% West South 15% 18% 24% Mountain 11% 17% Pacific 29% Nationally % of CoCs losing funding is consistant

HUD wants to know our thoughts: The four proposed formula options Factors and corresponding weights Dual or multi-formula system On language that would prevent a CoC from losing more than a certain portion of their PPRN Other comments on CoC formulas Including should they keep 75/25 split or adjust it

The four proposed formula options Thoughts on. . . The four proposed formula options More than 1/3 of CoCs could see funding decrease with all proposed funding formulas New England & Mid-Atlantic states are disproportionately affected

Factors and corresponding weights Thoughts on. . . Factors and corresponding weights Including pre-1940s housing increases funding in the Models with the hybrid factor have the most CoCs that could lose funding There is not a one size fit all

DUAL OR MULTI-FORMULA SYSTEM Thoughts on. . . DUAL OR MULTI-FORMULA SYSTEM Support a dual or multi-formula system Regional differences should be accounted in funding system Pre-1940s housing Variable’s impact will decrease with time

Thoughts on. . . language that would prevent a CoC from losing more than a certain portion of their PPRN YES – HUD should adopt language that would prevent a CoC from losing more than X% of its funding

Thoughts on. . . Other comments on CoC formulas ESG 75/25 split should be discontinued Other comments on CoC formulas ESG 75/25 split should be discontinued 75/25 ESG Entitled/Non-entitled Split Alt A Alt B Alt C Alt D MCoC -35% -36% -38% PCoC -32% -28% 75/25 ESG Entitled/Non-entitled Split Alt A Alt B Alt C Alt D MCoC -35% -36% -38% PCoC -32% -28% PCoC has best funding within these formulas However 45% - 51% of CoCs nationally see funding decline HUD has indicated interest in removing this split Open to other ways to target densely populated urban areas NYC/LA/Houston see funding increase Chicago/DC/Philly see finding decrease

Other comments on CoC formulas Thoughts on. . . Other comments on CoC formulas Declining importance of annual PIT a good idea Hypothesis, including more robust count data from new HUD Performance Metric 3 (number of homeless persons) could: Smooth out funding discrepancies Provide a truer picture of need

Questions?