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This information seeks to provide guidance to communities looking to increase housing stability in low-vacancy, high-cost housing markets, such as those found in big cities like Los Angeles and Washington, D.C. Shallow subsidies — a long-term program model providing recently re-housed or precariously housed households with a small, flat rental subsidy — have been shown effective in providing stability to households during highly volatile periods in the household’s income and/or the housing market.

The relevant sources have been listed in each section, and notes from Built for Zero’s internal quality control check can be found at the end of the document.

Given that the clinical picture of COVID-19 is ever changing, and that the information about response is changing in turn, Built for Zero anticipates there might be new information on this topic. Please keep an eye out for updated information.

Sources: 

• Flexible Housing Subsidy Call Out Sheet – University of Southern California. August 6, 2018. Last accessed June 1, 2020.
• Successful Veteran Homelessness Program Poised to Innovate and Expand – National Alliance to End Homelessness, September 3, 2019. Last accessed June 1, 2020.

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What is a Shallow Subsidy? 

A Shallow Subsidy is a type of rental assistance that can be provided to recently re-housed or unstably housed individuals and families. Its purpose is to provide low income households in high rent communities to maintain their housing while they increase their income and other resources in order to maintain housing on their own in the future.

It differs from traditional rental assistance models such as Housing Choice Vouchers in terms of the amount of assistance it provides. While traditional programs ensure that the program participant never contributes more than 30% of their income toward rent, a Shallow Subsidy provides assistance based on a percentage of the Fair Market Rent (FMR) of the unit, depending on its size and location.

This resource explores the Supportive Services for Veteran Families (SSVF) Program’s Shallow Subsidy initiative. It provides rental assistance to very low-income and extremely low-income veteran households. Under the SSVF Shallow Subsidy, the SSVF grantee provides rental assistance payments directly to the veterans’ landlord based on 35% of the Fair Market Rate (FMR) for their unit in that community. Payments can continue for up to 2 years and the duration is based on the veteran’s household income. SSVF staff also offers case management services along with other housing stabilization services.

What are the benefits of the Shallow Subsidy model?

While the vast majority of Rapid Re-Housing participants remain housed 12 months after the program ends, some households find themselves struggling to manage a high rent burden after program exit, putting them at-risk of homelessness again. Although the household is earning income and no longer needs case management, their instability will continue without assistance that would help make rent expenses more manageable. In these cases, a Shallow Subsidy provides a “right-sized” option between Rapid Re-Housing and no support.

Shallow Subsidy can also be used to prevent homelessness. Low and very low income households are better able to provide for basic needs, attend to emergencies, retain employment, and the pay bills that keep them housed when provided with a modest rental subsidy.

From a community resource perspective, Shallow Subsidy programs cost less than traditional rental assistance models and require less intense case management, allowing providers to serve a greater number of households. 

Sources: 

• Short-term Impacts from the Family Options Study – US Department of Housing and Urban Development, July 2015. Last accessed June 1, 2020.
• Support Services for Veteran Families 2014 Annual Report – US Department of Veterans Affairs, July 2015. Last accessed June 1, 2020.

Why should communities look into the Shallow Subsidy Model now?

Due to the novel coronavirus pandemic, the United States is on the precipice of an economic downturn that could be protracted. As unemployment rises and median income levels wane, low- and very low-income families are harder and harder pressed to come up with rent every month. A Columbia University study predicts that homelessness will rise by 40-45% by the end of 2020.

Should the economic downturn persist over a number of years, it is likely that low-income and extremely low-income households will require longer term  economic assistance to stay in their homes. Implementing a Shallow Subsidy program can help reduce the number of households becoming homeless as well as those who might return to homelessness by providing right-sized assistance. By using a lower intensity intervention on a greater number of households, community systems can preserve capacity to serve the additional high acuity households becoming homeless.

Example of a Shallow Subsidy Program:
Friendship Place Veterans Services Division, Washington, D.C.

We sat down with Jonathan Whitted, Friendship Place’s Assistant Director of the Veterans Services Division, to talk about the Shallow Subsidy program he oversees.

On October 1, 2019, Friendship Place, a Supportive Services for Veteran Families (SSVF) grantee in Washington, D.C. joined 9 other cities in launching a new program component: Shallow Subsidy. Although Friendship Place’s SSVF Rapid Re-Housing (RRH) project was largely successful at getting and keeping participants housed, staff felt like there needed to be an option for participants who didn’t need the intensive support of Permanent Supportive Housing (PSH) after RRH ended, but still needed some financial support to avoid becoming homeless again. The Shallow Subsidy model was the right fit for their needs.

• How does Friendship Place’s Shallow Subsidy program work?
  
  Because this Shallow Subsidy project is a component of the SSVF grant, the same eligibility criteria apply; participants must be SSVF eligible veterans and their income must be 50% of the Area Median Income (AMI) or below. Additionally, for the Shallow Subsidy project, participants needed to agree to obtain housing within D.C. city limits.
  
  The amount of the subsidy provided to each household is a 35% flat rate that varies with unit size Fair Market Rent (FMR for the area); participants must pay any amount of rent owed over the flat subsidy amount directly to the landlord. Participants are also generally required to cover their own utilities, although some assistance is available to veterans in case of emergency.
  
  Participants enrolled in the Shallow Subsidy program receive “light touch,” housing-focused case management for the duration of their participation. Participants may remain in the program for up to two years, at which time they can be re-certified for another 2-year period if their situation requires it.
  
  
  
• How does Friendship Place measure the success of the Shallow Subsidy Program?
  
  While the SSVF program requires grantees to report certain metrics, the Program Manager is most interested in the following measures at this time:
  • Number of veterans served at the end of the 2-year grant term
  • Number of veterans connected to employment
  • Number of eligible veterans that applied to housing designated for seniors
  • Number of veterans that increased their income
  • Number exited to a permanent housing destination
  • Number of veterans who rate their experience in the program positively
    
    
• What impact of the program on the participants have staff observed?
  
  Jonathan reports that people enrolling in the Shallow Subsidy program were very excited about it. One participant couldn’t believe that this assistance existed and was very open to doing whatever it took to get it. Even as this participant transitioned case management, Jonathan saw they were still excited about it. The participant said they had a lot of things they planned to do for themself knowing that they would have stability going forward.
  
  Jonathan also shared a story of another participant who was enthusiastic about the program,  but was healing from a recent injury and disengaged while in the process of enrolling. When staff re-engaged the participant, they expressed anxiety about their ability to pay most of the rent on their own. Case management staff worked with them on a budget, problem-solving, and accessing community resources to build their confidence. To date, the participant hasn’t missed any rental payments and their health continues to improve.
  
  To date, all veterans participating in the program have been able to maintain housing where it may have been difficult otherwise. For some participants the program has given them the ability to increase income and obtain certain benefits by eliminating the stressors of wondering how housing can be maintained. Jonathan also talked about the staff’s ability to resolve conflicts between landlords and participants. In these cases, relationships were mended and participants were able to create stability in their housing situation.
  
  

• What advice would Friendship Place’s Shallow Subsidy Program Manager give to a community considering starting a program of their own?
  
  Jonathan observed that what sets apart a good program from others isn’t the program model alone; it’s also how it’s implemented. What makes a strong program, Jonathan says, is making sure that you’re always putting the participant’s needs ahead of the program’s. Truly great programs put case management first and eliminate barriers for the participants they serve. Finding ways to “say yes” is very important. Staff should always try to find a path forward for the participant somewhere by “meeting them where they are.”
  
  “You can use money to solve a problem for a participant and it may or may not work out.” Jonathan explained. “But more consistently, case management is what helps people get where they need to be. That can be forgotten. A case manager can do more than all the money in the world could’ve done.”
  
  Jonathan emphasized how important the role of participant education is in the success of the model. Because the participants enrolled in Shallow Subsidy are largely already self-sufficient, case management’s role is oriented more toward budgeting and problem-solving. Showing the participant how to navigate community resources and how they can budget effectively have been some of their strongest practices in helping clients achieve stability.
  
  Additionally, he underscored regular case conferencing as a means to best coordinate services between providers. This allows them to decide collectively who might need extra assistance after Rapid Re-Housing, whether from the Shallow Subsidy program or another program that might be a better fit.
  
  Jonathan also recommended helping participants smooth the process of accessing other VA and community services by preparing referral packets on the participant’s behalf. 

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QUALITY CHECK

Learn more about our process for vetting information.

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What context was the data underlying this recommendation collected in?

• Built for Zero compiled this information in response to community/partner need for information on how to combat the expected inflow into homelessness after nationwide Eviction Moratorium ends.
• The data that informed this resource comes from Friendship Place, a homeless service provider based in Washington, D.C., in addition to articles from HUD, NAEH, and the University of Southern California.

What context or question do we recommend this resource for?

• We recommend this resource for communities aiming to respond to the number of people returning to homelessness and/or the number of people becoming homeless in their jurisdiction.

What other contexts do we reasonably think this recommendation might apply to, and on what basis?

• N/A.

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Who reviewed this data, and what are their credentials to assess it?

• A Built for Zero staff member with over 5 years of experience with the CoC and SSVF programs researched and composed this resource.
• The community member from D.C. cited in this resource has worked with the SSVF program at Friendship Place, a high-performing grantee, for nearly 8 years.

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When was the data underlying this recommendation collected?

• Data supporting this resource were collected during the week of May 22, 2020.

Do we have reason to believe the situation has materially changed since that date, or is likely to change soon?

• We do not expect more data on Friendship Place’s Shallow Subsidy program until the completion of its two-year grant term in October 2022.

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What specific component of this resource do we recommend?

• N/A

Are there any specific elements of this resource we do not recommend?

• No.

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What elements of this resource were we unable to assess?

• The Shallow Subsidy model has not been tested under the conditions of a global pandemic and economic depression.

What elements of this resource do we want to know more about?

• How does the Shallow Subsidy model compare with other Homelessness Prevention programs? How effective is a Shallow Subsidy model at keeping low and extremely low income families in housing during an economic depression?