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Vermont service providers brace for loss of money to keep people housed

A row of brick buildings with porches on two stories
Ric Cengeri
Vermont Public File
Apartments at Fort Ethan Allen in Colchester. A state anti-homelessness program that helps people pay back rent or cover security deposits or moving expenses is facing an anticipated 70% reduction in funding.

This story, by Report for America corps member Carly Berlin, was produced through a partnership between VTDigger and Vermont Public.

Four years ago, Igor Motriak hurt his back while working a construction job. The injury put him out of work, and the loss of income put his housing on the line. The 42-year-old immigrated to the Vermont from Ukraine in 2016, and because he lacked a green card at the time of the injury, he couldn’t access benefits like pandemic-era unemployment insurance or stimulus checks. He worried he would lose the Barre apartment he shared with his wife and two children and end up homeless.

“I was in very bad situation,” Motriak said.

Motriak sought help from Capstone Community Action. The central Vermont anti-poverty nonprofit drew on a pool of flexible funds — boosted by COVID-19 relief aid — aimed at diverting homelessness or exiting households from emergency shelter. People in need could get small amounts of money for things like security deposits, short-term rent help, or moving costs, to help stabilize their housing situations.

Motriak’s family got funding to catch up on rent and cover utility bills, which Motriak called “a miracle.” Paired with some longer-term rental assistance, the funding helped them stay put. They live in the same apartment today.

But the funding for the housing stabilization program they benefited from is expected to drop back to pre-pandemic levels this coming fiscal year, which begins on July 1. As Vermont sees rates of homelessness tick up — and the state scales back its safety-net motel voucher program for unhoused people — service providers worry that a potential two-thirds funding cut could stymie their efforts to prevent people from losing their housing in the first place, and to place people experiencing homelessness into housing.

“It’s extremely poor timing to be losing these funds,” said Alison Calderara, chief of programs and advancement at Capstone. “We really wanted to be able to have all the tools in our toolbox to be able to place people into stability.”

The “flexible client-based financial assistance” funds, as they’re dubbed in the homelessness services world, flow from the Department for Children and Families’ Office of Economic Opportunity to local nonprofits like Capstone.

Last fiscal year, the office awarded about $5 million in these flexible funds to nonprofits across the state, according to the office’s director, Lily Sojourner. This coming fiscal year, the loss of the one-time money means a likely 70% cut in funding for the program, Sojourner said.

That reduction is not yet set in stone. The economic opportunity office, which decides how much of its budget will go toward homelessness programs statewide, is currently reviewing applications for funding and will finalize its decisions later this month, Sojourner said.

A sign in front of a parking lot lists various government offices
Carly Berlin
Vermont Public and VTDigger
The Agency of Human Services offices at the Waterbury State Office Complex on April 19, 2024.

The overall amount of funding set by the Legislature for the office’s housing and homelessness programs is not dropping in the coming fiscal year. But the one-time legislative earmarks that covered more than two-thirds of the flexible financial assistance funds last year did not materialize this legislative session, and were not a major topic of debate as lawmakers finalized their spending plan on homelessness programs.

As the Office of Economic Opportunity decides how to divvy up its pot of funding, its priority is expanding emergency shelter capacity, Sojourner said. That means devoting ongoing funding for shelters that got jump-started last year with one-time funds.

“As these projects come online, it’s about having the funding there so that they can maintain operations,” Sojourner said.

But providers and advocates worry that the lack of continuing funding for the housing stabilization funds from the Legislature this year could result in more Vermonters losing their homes.

“They’re just magnifying the problem by likely increasing the number of people becoming unhoused because they’re making these cuts,” said Frank Knaack, executive director of the Housing and Homelessness Alliance of Vermont.

Despite devoting less money for DCF’s housing stabilization funds, the Legislature is attempting to set up a separate program that could help tenants catch up on rent. An omnibus housing and land use bill passed by lawmakers in May carries $2.5 million for a program to help tenants cover back rent, intended to stave off evictions when tenants have fallen behind on payments.

But the program, set to be overseen by the Vermont State Housing Authority, would likely take some time to get up and running. Gov. Phil Scott has also signaled he may veto the bill containing the funding for reasons unrelated to the tenant program.

The temporary help from Capstone helped Motriak get back on his feet and recover from his injury. He now works at the anti-poverty nonprofit, helping people make their homes more energy efficient. He hopes more families will be able to benefit from the stabilization funds that kept his family housed.

“I’m reaching my hands up, and I’m hoping it’s going to continue going, because I’m sure it’s a lot of cases like mine around,” he said.

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Carly covers housing and infrastructure for Vermont Public and VTDigger and is a corps member with the national journalism nonprofit Report for America.
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