Evidence illustrates the connection between the stability and quality of housing and various health and social outcomes. States have, for many years, sought to make investments in bolstering and aligning health, behavioral health, and housing services and supports with the goal of improving housing stability and health outcomes and lowering costs.
Implementing health and housing initiatives requires partnerships among Medicaid systems, other health and behavioral partners, and key housing partners such as state housing finance agencies (HFAs), and local partners such as continuums of care for homelessness (CoCs) and public housing authorities (PHAs). Public housing authorities (sometimes referred to as public housing agencies) can and should be key partners for states seeking to implement supportive housing for targeted groups of Medicaid-eligible individuals and households.
States have pursued different ways to make investments in health and housing, including through the Medicaid program by using state plan amendments, a variety of waivers, and managed care arrangements to cover housing-related services. Most recently, states have received federal approval for Medicaid programs to pay for up to six months of rental assistance. Medicaid funding of short-term rental assistance, along with other housing-related services under Medicaid, presents a unique opportunity to align resources and demonstrate the effectiveness of supportive housing on a larger scale. It also presents risk and creates pressure for state Medicaid programs that are implementing short-term rental assistance to do so in a fashion that does not produce a housing “cliff” at the end of the six months but instead provides transition into long-term housing stability. To that end, Medicaid programs have increased incentive to work with PHAs to minimize the likelihood of a cliff and prioritize the existing pool of rental assistance resources within the community.
It is important to note that, regardless, all states pursuing health and housing initiatives can take advantage of partnerships with PHAs as part of a robust strategy to develop, identify, and increase the affordability of housing. PHAs administer significant affordable housing resources and serve a very low-income population that is largely eligible for Medicaid and are served by state Medicaid programs and their partner health and social service agencies. PHAs, along with the other housing sector partners mentioned above, can play a key role as Medicaid agencies think about how to engage and pay housing providers, such as landlords.
While PHAs typically operate at the local level, there are examples of statewide PHAs and local PHAs that perform key functions in partnership with state agencies across the state. This blog post highlights three state-level partnerships between PHAs and state health agencies administering Medicaid funded housing-related supports. They provide examples of how PHA expertise can be leveraged in the implementation of health and housing initiatives at a statewide level. The role of the PHA varies in each of the examples, as does the scope of work between the state health agency and the PHA partner. What they have in common is:
- The PHA performs, or will perform, key functions at a statewide level.
- The organization with PHA authority also manages additional housing resources for which Medicaid recipients may be eligible.
- The PHA has expertise, experience, and/or administrative infrastructure to calculate and pay rent to landlords and performs that role along with other housing-related functions that have not typically been part of health care services.
Background on PHAs
Public housing and rental subsidy programs managed by PHAs provide affordable housing for eligible low-income families, the elderly, and people with disabilities. PHAs are created by state law and may operate at the state, county, or city level. While PHAs are not federal agencies, the federal Department of Housing and Urban Development (HUD) has oversight over many of the programs they administer and most of the funding they receive. Chief among these federally funded resources is public housing, which provides affordable rental units owned and managed by the PHA, and tenant-based rental subsidies through the Housing Choice Voucher (HCV) program. HCVs, which include “special purpose” vouchers targeted to certain high-risk populations, such as people with disabilities, provide a long-term rental subsidy that the tenant can use to rent units on the private market, with tenants typically contributing 30 percent of their income. There are approximately 3,300 PHAs in the country1 authorized to manage different types of affordable housing for low-income renters. Some PHAs are quite large, serving populous metropolitan areas and counties, while others are quite small with few staff or resources.
The federal-to-local structure of HUD housing assistance does not align with the federal-to-state structure of Medicaid, which requires that a “single state” agency be accountable for the administration of Medicaid programs and funds. Few states have a state-level PHA, and the scope, resources, and authority of those state PHAs vary greatly. In states without the benefit of a willing state-level PHA partner, the sheer number of local PHAs can be daunting for Medicaid agencies contemplating how best to approach and establish effective health and housing partnerships. On the part of many local PHAs, limited capacity and funding for administrative functions, along with high demand for the resources already under their purview, create “bandwidth” concerns that can be an obstacle to partnering with Medicaid programs.
But the rewards can be significant when these obstacles are overcome. In PHAs, state Medicaid programs have a partner with housing and rental assistance resources, and for states implementing short-term rental assistance or state-funded vouchers, the infrastructure and experience to perform functions will be key for implementation. In addition to paying landlords, PHAs have expertise in landlord outreach and recruitment, rent calculation, housing inspection, and more. Given that landlords in the private rental market are unlikely to enroll individually as Medicaid providers or enter a six-month lease, the expertise and longer-term resources of PHAs will be enormously impactful for administering Medicaid-financed short-term rental assistance.
For its part, Medicaid agencies can bring additional administrative resources to PHAs, whether through state funding, Medicaid administrative match, or 1115 infrastructure funding. They can also provide service or staff resources to ease and streamline bureaucratic processes, such as acquiring documents and completing housing and rental assistance applications. PHAs are often concerned about the health care and supportive service needs of their tenants, especially around the behavioral health and home-based services that contribute to stable tenancies. Medicaid offers a long-term sustainable source of funding for housing support services, health care, and behavioral health care — services that PHAs recognize their clients need to be housed, and remain housed, successfully.
1 State policymakers can identify PHAs in their state by using the US Department of Housing and Urban Development (HUD) PHA directory.
State Examples:
Arizona
The Arizona Behavioral Health Corporation (ABC) is a PHA in Arizona that serves individuals with behavioral health needs. Building on 20 years of partnership, ABC contracts with HOM Inc. to pay rents and perform day-to-day operations of the housing programs it administers. In 2021, Arizona’s Medicaid program, the Arizona Health Care Cost Containment System (AHCCCS), made ABC, together with HOM Inc., the single statewide administrator of the AHCCCS Housing Program (AHP).
AHP grew out of the 1987 Arnold v. Sarn verdict requiring the State of Arizona to provide permanent supportive housing for individuals with serious mental illness residing in Maricopa County and led to statewide investment in permanent supportive housing. AHP is targeted to individuals experiencing homelessness and have serious mental illness. AHCCCS provides funding for state-funded rental subsidy vouchers, eviction prevention, housing support activities, and special projects through AHP.
ABC is designated as a public housing agency for administration of 194 HUD mainstream vouchers. It also administers 11 continuum of care grants, which include CoC vouchers. As such, it can help provide CoC services and vouchers to AHP participants when appropriate. In partnership with HOM Inc, it administers the state rental subsidies through AHP. ABC provides the systems-level administration, including interfacing with AHCCCS and managed care organizations; managing eligibility, referrals, and wait lists; coordinating with the housing management information system; financial management; training; and evaluation. HOM Inc. provides the direct services, including issuing vouchers, engagement with and payment to landlords, housing search assistance, inspections, and eviction prevention.
Prior to contracting with ABC as the statewide administrator, Arizona operated AHP through the regional behavioral health agencies. Moving from regional to statewide operation allowed Arizona to standardize services and housing programs across the state, introduce and expand housing supports, ensure more seamless accountability and oversight, and reduce administrative costs.
In October 2022, AHCCCS received approval for a Medicaid section 1115 demonstration waiver that includes targeted investments for health-related social needs and the state’s Housing and Health Opportunities program. Arizona’s waiver includes approval to provide up to six months of short-term rental assistance through the Medicaid program. To implement this benefit, Arizona is identifying PHAs with the most members who meet the established criteria and is approaching them to discuss setting aside a number of their vouchers to support a partnership that will allow for a seamless transition from six months’ short-term rental assistance (under Medicaid) to the permanent subsidy available through the PHA. ABC is designing an algorithm that will identify individuals on the PHA waitlists who are most likely to be able to transition to long-term housing assistance resources at the end of the six months. For those individuals who cannot be placed in PHA vouchers at the end of the six months, they can transition to the state-funded voucher through AHP. Arizona has also identified that ABC, in partnership with HOM Inc., will administer the six months of Medicaid rental assistance, leveraging their experience and expertise with administering federal and state vouchers as well as CoC resources.
Louisiana
In 2011, Louisiana passed legislation that recreated the state housing finance agency as the Louisiana Housing Corporation (LHC) and consolidated several state housing functions within the corporation. Among these was the authority for the LHC to operate as a PHA for the statewide administration of the Louisiana Permanent Supportive Housing (PSH) program. The LHC also serves as the lead agency for the Balance of State Continuum of Care for the Homeless, covering about 50 percent of the state’s geography, including three of its larger cities.
Within the LHC, the Louisiana Housing Authority (LHA) manages a portfolio of HUD-funded project-based and tenant-based rental subsidy vouchers that are used exclusively for the Louisiana PSH program. The program is operated through a formalized partnership between LHC and the single-state Medicaid agency, the Louisiana Department of Health (LDH). Referrals for subsidies and subsidized units come directly from LDH, which has responsibility for ensuring that referred participants have access to tenancy-support and other housing-related services under Medicaid or other services’ funding streams.
The existence of a state-level PHA has provided LDH with a lead partner when opportunities arise for PHAs to apply for additional rental subsidies from HUD. LDH and LHC have partnered in applying for and implementing federal opportunities such as the Section 811 Project Rental Assistance (PRA) Program and recent HUD Notice of Funds Availability for non-elderly disabled rental assistance vouchers. When LDH received funding for additional rental subsidies in 2018, the longstanding partnership with the state-level PHA allowed the state to quickly stand up a state rental subsidy program that followed many of the same guidelines as HUD voucher programs and used the existing systems of the LHA to execute rental assistance agreements and make rent payments, verify rent reasonableness, calculate the tenant’s share of rent payment, and provide fiscal management of subsidy funds (My Choice State Rental Assistance Program (RAP) Policies and Procedures, 2019).
The co-location of the PHA and Balance of State CoC within the state HFA has also facilitated “layered” and “braided” funding strategies to create and provide access to affordable, high-quality, community-integrated housing units for people with disabilities who qualify for the state’s permanent supportive housing program. Like all HFAs, the LHC administers a variety of federal programs providing capital funding for construction and rehabilitation of multi-family affordable housing. These include Low-Income Housing Tax Credits (LIHTC), Home Investment Partnership Program, federal Housing Trust Fund, and Community Development Block Grants. Louisiana has made particular use of Community Development Block Grant funds layered with LIHTC to build and set aside deeply affordable units for PSH. Project-based rental subsidies administered by LHA provide additional layering and affordability when vouchers are committed to specific projects. Other tenant-based rental subsidies administered by the agency are used to help PSH participants lease “scattered site” units in the private market. In addition to the state-funded program, federally funded rental subsidies include tenant- and project-based Mainstream vouchers, 811 PRA, CoC tenant-based rental assistance, and non-elderly disabled tenant-based rental assistance. Layering and braiding ensure that households pay no more than 30 percent of their income for rent and utilities.
Washington
Washington leverages a unique relationship with one of the state’s larger PHAs to administer state-funded rental subsidies on a statewide basis. The Division of Home and Community Services (HCS) of the Aging and Long-Term Support Administration (ALTSA) within the Washington Department of Social and Health Services serves people with activity-of-daily-living needs who are 18+ with a disability and older adults (65+). HCS seeks to offer people choice in accessing supports in community settings. In 2012, ALTSA began offering state-funded subsidies to provide rental assistance for individuals exiting institutional settings to live in market rate housing while searching for a permanent federal subsidy. Persons receiving these subsidies also receive Medicaid-funded tenancy supports and other Medicaid services to ensure successful tenancy in the community. The state rental subsidies are intended to provide interim support between institutionalization (e.g., individuals leaving nursing facilities or psychiatric hospitals) and permanent federal subsidies. Though state-funded, ALTSA rental subsidies are modeled after HUD’s Housing Choice Voucher Program but include additional flexibilities beyond what is allowed under federal rules, including an exception policy for fair market rents and continuing to pay the subsidy for up to six months (which can be extended if needed) for an individual who enters institutional level of care or becomes incarcerated. HCS’s Office of Housing and Employment also provides a variety of other housing-related resources for HCS clients and has partnered with several PHAs across Washington to get direct access to non-elderly and disabled 2 and Mainstream Vouchers.
ALTSA contracts with the Spokane Housing Authority (SHA) to centralize and simplify payment of rental assistance to landlords. In this arrangement, both HCS and SHA have dedicated staff to support service provision and rental assistance. HCS provides training and outreach to field staff and contracted providers, and SHA has developed interlocal agreements with PHAs for local housing quality standards inspections and to be able to operate in the other PHAs’ jurisdiction. The HCS/SHA contract was initially $130,000 over two years in 2016 and has since grown to $38.6 million over three and a half years.
HCS has been providing the ALTSA subsidy to those exiting skilled nursing facilities since 2012. In 2017, HCS expanded with the creation of the Governor’s Opportunity for Supportive Housing, which provides rental subsidies and supportive housing services for HCS clients exiting or diverting from state psychiatric hospitals. To date, HCS has supported 1,204 clients in market rate housing via the ALTSA subsidy, with an average use of 550 days. Of the 1,204 state subsidy clients, 50 percent are actively receiving the ALTSA subsidy, 15 percent have moved on to a permanent voucher, 14 percent exited services and stopped using the subsidy, 11 percent died while getting to live in their own home, 5 percent moved to residential setting, and only 5 percent had lengthy (>6 months) re-institutional stays.
For more information, please visit HCS’ Office of Housing and Employment website.
Conclusion
State Medicaid agencies and PHAs are looking to one another for partnerships now more than ever. Despite historic silos and ongoing challenges, there are successful state examples of partnerships to learn from. States that want to learn more about the PHAs in their state may review the list of PHAs that HUD maintains and the public housing and housing choice voucher dashboards.
PHAs are able to set waiting list preferences to prioritize access to public housing and vouchers to serve people with disabilities or those experiencing or at risk of homelessness, and those exiting institutions or at risk of institutionalization. In August 2024, HUD released guidance that includes changes to requirements and new discretionary waivers for how PHAs use Mainstream Vouchers to support community living for people with disabilities, including the ability to create a separate Mainstream Voucher waiting list and to adopt preferences that prioritize direct referrals. This may provide additional opportunities for Medicaid agencies to partner with PHAs.
For more on NASHP’s health and housing work, please visit our resource center and/or email Elaine Chhean at echhean@nashp.org.
Acknowledgments
This brief is based on conversations that took place during the HRSN Knowledge Network, which was a convening of states with HRSN 1115 waivers facilitated by the Corporation for Supportive Housing (CSH), NASHP, and a handful of former Medicaid directors. NASHP is appreciative of CSH’s partnership during that work, the 2022–2023 Health and Housing Institute, and on this publication. NASHP also would like to thank the state officials from Arizona, Louisiana, and Washington who generously gave their time to reviewing and providing feedback on this publication.
NASHP is thankful for support of this project by the Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services (HHS) under the National Organizations of State and Local Officials co-operative agreement.
