New Homelessness Bill Allows Vouchers to Cover Security Deposits, Upsets Civil Rights Protections for Some Tribal Housing

The “Reducing Homelessness Through Program Reform Act” is a major overhaul of how federal programs like Emergency Solutions Grants (ESG), Continuum of Care (CoC), and Housing Choice Vouchers (HCV, or Section 8) operate. This bill is less about creating new programs and more about fixing the engines of the existing ones, focusing heavily on streamlining processes, increasing flexibility for providers, and, crucially, removing some financial hurdles for people trying to get housed.

The Security Deposit Game Changer

For anyone who has ever tried to move with a Section 8 voucher, the biggest headache is often the upfront cost. Even if your rent is covered, you still need cash for the security deposit and sometimes a holding fee just to keep the unit while the Public Housing Agency (PHA) does its paperwork. This bill (SEC. 5) addresses that directly: PHAs can now use their housing assistance funds to cover these costs—up to one month’s rent—for both security deposits and holding fees. This is huge. For a family finally getting off the streets, this eliminates the single largest barrier to signing a lease, meaning a voucher is now much closer to being an actual key to a new home. The Secretary will set a cap on how much of a PHA’s budget can go toward these costs, but the flexibility is a massive win for tenants.

More Flexibility, More Risk for Service Providers

Service providers running CoC programs are getting a mixed bag of changes (SEC. 4). On the plus side, they can now apply for funding notifications that cover two full fiscal years, which is great for long-term planning and stability. However, that second year of funding isn't guaranteed. If a local coordinating group (the collaborative applicant) decides a project is performing poorly, they can pull that second year of funding and replace it with a new project. While this aims to boost accountability, it puts pressure on providers who might be dealing with especially complex populations. It also increases the administrative cap for ESG programs from 7.5% to 10% (SEC. 3), giving local organizations a little more breathing room to pay for things like office rent and utilities—a necessary change given rising operational costs.

Less Paperwork, Faster Inspections

This bill recognizes that bureaucracy can be a huge roadblock. It pushes for a massive reduction in documentation requirements (SEC. 10), requiring the Comptroller General to study how much paperwork is stopping people from getting help and suggesting ways to simplify eligibility proof. For PHAs, the bill introduces significant flexibility in unit inspections (SEC. 5), allowing for remote video inspections or accepting inspections done up to a year prior. This means less waiting time between finding a unit and moving in, which is critical in tight rental markets. If a unit passed an alternative inspection in the last year, a tenant can move in before the final inspection, provided the final check happens within 15 days of occupancy.

The Need for Speed vs. Oversight

One provision aimed at speeding things up involves a hefty $5 million upgrade to the E-Snaps system, which handles applications for homeless assistance (SEC. 6). To accelerate development, the bill explicitly waives standard federal paperwork reduction rules. While cutting red tape to modernize outdated government tech sounds great, waiving these rules reduces a layer of oversight that usually ensures accountability and transparency in large federal IT projects. This is a trade-off between speed and careful spending that watchdogs will be keeping an eye on.

Civil Rights Carve-Outs and the Advisory Committee

Perhaps the most complex and potentially concerning provision is an exemption granted to specific CoC awards received by Indian tribes and tribally designated housing entities (SEC. 4). For these projects, two major civil rights laws—Title VI (which prohibits discrimination based on race, color, or national origin) and Title VIII (the Fair Housing Act)—will not apply. While the intent may be to respect tribal sovereignty, removing these protections for housing projects, even those off-reservation, creates a two-tiered system where some recipients of federal aid lack the standard civil rights safeguards against discrimination.

On a positive note, the bill establishes a new Advisory Committee on Homelessness (SEC. 8) that must include people with lived experience. The bill goes further by requiring the Secretary to figure out how to compensate these experts without causing them to lose their existing federal benefits (like housing aid)—a crucial step toward valuing the input of those most affected by these policies.