Severe mental illness places an individual at high risk for homelessness. Approximately one-third of the nation’s homeless persons have a severe mental illness. It is estimated that over 11,000 individuals with mental illness in North Carolina are in need of housing. Failure to secure safe, affordable housing is perhaps one of the greatest barriers to recovery. The primary reason for the lack of housing for people with mental illness is financial status. Many people disabled by mental illness receive Supplemental Security Income (SSI) as their income source. In 2000, an individual living on SSI income in North Carolina received $512 a month, placing them below 25% of median income. This places them in the category of "extremely low income" as defined by the federal government, those making less than 30% median income. Not a single housing market area in the United States exists where a person with mental illness receiving Supplemental Security Income (SSI) can afford to rent a modest efficiency apartment. The low-income status also makes it extremely difficult for developers to create housing opportunities for these individuals, even when they take advantage of various state and federal programs.

Many changes need to occur at the federal level to expand housing opportunities, but there also are things that North Carolina can do:

The federal government allows states, within specified regulations, to offer state supplemental payment programs for aged, blind and disabled adults. In North Carolina, Special Assistance is funded through state and county dollars. Under federal guidelines, payments could be made to eligible individuals in a variety of living arrangements. In 1974, North Carolina elected to make Special Assistance payments only for care in adult care homes. In 1997, 44 states were providing supplemental payments to aged, blind, or disabled adults. Only six states limit payments to adult care home type facilities, North Carolina being one of these. As a result, 9,000 individuals with mental illness or developmental disabilities reside in adult care homes in North Carolina, a setting inappropriate for the needs of most.

North Carolina could allow individuals to use Special Assistance funds outside of adult care homes. The federal government allows special assistance to be used to cover such items as food, shelter, clothing, and utilities and other necessities when SSI benefits are insufficient to cover basic needs. "Uncoupling" Special Assistance payments from adult care homes would provide individuals an average of $434 a month. When combined with the average SSI benefit of $512, many individuals could afford an apartment and take advantage of supported services provided through the mental health authorities.

In many North Carolina communities, however, affordable housing units are simply not available. State funds are needed to leverage federal housing dollars, state Housing Trust Fund dollars, and private sector funds (such as low-income housing tax credits). In 1999 it was estimated that a $3 million appropriation would generate 70 new units annually. To access these funds there should be a requirement that the developer establish a plan for how supportive services will be provided.

Once units are built, funds are needed to subsidize operating costs or rent because of the extremely low-income status of these individuals. For example, if an individual receives $512 in SSI payments, about $150 is available for housing, clearly not enough to rent even a subsidized apartment. In most cases, state rental subsidy funds could used as transition funds while a person waits to receive federal Section 8 assistance. This transition shifts the cost from state to federal funds.

Legislation to allow persons eligible for Special Assistance the choice of living in an adult care home or using Special Assistance for a supported independent living arrangement has been introduced into the General Assembly by Sen. Jeanne Lucas (S928) and Rep. Verla Insko (H1148). This legislation is supported by a range of advocates for mental health, developmental disability, and the elderly as well as state agencies and county government. There is strong opposition from the powerful adult care home industry.

$16 million in funds to support housing rental subsidy and production for the MH/DD/SA system are contained in the Coalition 2001 budget request (H380 & S369).