BILL ANALYSIS                                                                                                                                                                                                    






           SENATE TRANSPORTATION & HOUSING COMMITTEE       BILL NO: AB 702
          SENATOR ALAN LOWENTHAL, CHAIRMAN               AUTHOR:  Salas
                                                         VERSION: 6/1/09
          Analysis by: Mark Stivers                      FISCAL:  Yes
          Hearing date: July 7, 2009






          SUBJECT:

          Emergency Housing Assistance Program: veteran set-aside

          DESCRIPTION:

          This bill requires the Department of Housing and Community  
          Development each year to set aside a portion of Emergency  
          Housing Assistance Program - Operations Grant funds that is  
          equal to the percentage of veterans within the homeless  
          population for veterans-only projects or projects that give  
          preference to veterans.  

          ANALYSIS:

          Under current law, the Department of Housing and Community  
          Development (HCD) administers the Emergency Housing Assistance  
          Program (EHAP) to help finance emergency shelters and  
          transitional housing.  EHAP provides two separate types of  
          assistance: 1) grants to cover a portion of a facility's  
          operating costs (EHAP-OG for operations grants); and 2)  
          forgivable loans for the construction, rehabilitation, and  
          expansion of facilities (EHAP-CD for capital development).  

          Historically, the EHAP-OG component has been funded from the  
          General Fund at a level of $4 million per year.  Last year,  
          Governor Schwarzenegger vetoed this funding from the budget, and  
          at this time the budget for the 2009-2010 fiscal year contains  
          no new funding for this component of the program.  Proposition  
          46 and Proposition 1C, the housing bonds of 2002 and 2006,  
          provided funding for the EHAP-CD component, which HCD continues  
          to award.  

          AB 1594 (Veterans Affairs Committee), Chapter 776, Statutes of  
          2003, allows EHAP recipients to restrict occupancy on the basis  




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          of military veteran status if the veterans served possess  
          significant barriers to social reintegration and employment,  
          need specialized treatment and services, and the EHAP recipient  
          provides such treatment and services.  

           This bill  : 

           Requires HCD, in conjunction with the Department of Veterans  
            Affairs, to use existing data to annually determine the  
            percentage of veterans within the homeless population.
           Requires HCD each fiscal year to allocate a percentage of  
            EHAP-OG funds equal to the percentage of veterans in the  
            homeless population to sponsors of veterans-only projects or  
            projects that give preference to veterans.
           Provides that HCD shall allocate any veteran-setaside funds  
            not fully utilized within a given fiscal year to other  
            applicants within the same fiscal year.
          
          COMMENTS:

           1.Purpose of the bill  .  According to the author, veterans  
            represent a significant portion of the homeless population.   
            Although veterans account for only 11% of the total population  
            age 18 and older, homeless veterans represent 26% of the total  
            homeless population. Also, the author notes that regardless of  
            gender, veterans are more likely to be homeless than their  
            non-veteran counterparts, with male veterans being 1.25 times  
            more likely to be homeless and female veterans three times  
            more likely to be homeless than non-veterans. To address this  
            disproportionate need, the author would like to set-aside for  
            veteran-only or veteran-preference a portion of EHAP-OG funds  
            that is equal to the percentage of homeless persons who are  
            veterans.

           2.The problem with setasides  .  While set-asides are not unheard  
            of in state housing programs, they are problematic in that  
            they essentially favor one special needs group over others.   
            Are veterans more deserving of emergency shelter than  
            emancipated foster youth, victims of domestic violence, or  
            families with children?  Moreover, if set-asides for one group  
            are allowed, then all groups will want their own set-asides  
            until ultimately there is no shelter for homeless persons who  
            do not fit into a favored group.  As a policy matter,  
            set-asides should only be used when there is some structural  
            reason that the special needs group cannot compete on an even  
            playing field.  The author has provided no such evidence in  




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            the case of veteran-only shelters.  The committee may wish to  
            consider whether or not it is generally appropriate to  
            encourage set-asides of housing funds for specific special  
            needs groups, and if so, whether a set-aside is appropriate in  
            this case.  
          
           3.No applications  .  Since 2004, veteran-only and  
            veteran-preference shelters and transitional housing  
            facilities have had the ability to apply for both EHAP-CD and  
            EHAP-OG funding.  According to HCD, in the five years that  
            this authority has been in place, a number of veteran-only or  
            veteran-preference facilities have received EHAP-CD funds, but  
            HCD has received no such applications under the EHAP-OG  
            program to which this bill applies.  Given that no  
            veteran-shelter providers have applied for funding in the last  
            five years, the committee may wish to consider the need and  
            utility of a set-aside for veteran-oriented facilities.
          
           4.No funding  .  The Legislature and governor last appropriated  
            funds to the EHAP-OG program of fiscal year 2007-2008.  The  
            governor vetoed funding from last year's budget, and he did  
            not propose, nor did the Legislature add, funding to the  
            2009-2010 budget.  As a result, the EHAP-OG program is  
            currently dormant.  While this bill would affect allocations  
            in future years when funding is possibly restored, it would  
            have no immediate impact.  

           5.Veterans already being served  .  While it is true that veterans  
            make up a significant portion of the homeless population, this  
            bill presumes that existing facilities are not serving  
            veterans at all.  Though they may not restrict occupancy to  
            veterans or give preference to veterans, it is likely that all  
            existing facilities have served and do serve a significant  
            number of veterans among their general populations.  The  
            author has provided no evidence that veterans are currently  
            being underserved by the EHAP-OG program.  Moreover, by  
            setting-aside a share of funding for veteran-only or  
            veteran-preference shelters, this bill will actually guarantee  
            that veterans are disproportionately overserved, because those  
            shelters that do not receive the set-aside will continue to  
            serve veterans.  

           6.What is the percentage of homeless veterans  ?  This bill  
            requires HCD each year to calculate the percentage of veterans  
            within the homeless population.  While this task is not  
            entirely straight forward and the data is not particularly  




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            reliable, there are datasets that HCD could use.  Statewide  
            homeless data is compiled by aggregating the biennial  
            single-night homeless counts conducted by cities and counties  
            that wish to receive federal housing funding.  According to  
            these counts, California had a homeless population of 160,000  
            persons in January 2007.  This dataset does not include data  
            on the number of veterans in California.  

            It appears that the most useful data on homeless veterans is  
            contained in the annual Project CHALENG for Veterans report,  
            compiled in coordination with the U.S. Department of Veterans  
            Affairs (VA).  This data is based on estimates reported by the  
            CHALENG points of contact, usually local VA homeless program  
            coordinators from around the country.  The most recent report  
            estimates that during the January 2008 point-in-time survey  
            there were approximately 26,800 homeless veterans in  
            California.  Although the time periods covered by these two  
            surveys are not the same, if HCD were to use this data, the  
            percentage of homeless veterans within the homeless population  
            would be 16.75 percent.

           7.Technical amendments  .
                 On page 3, line 38 strike "in the Emergency Housing and  
               Assistance Fund" and insert "made available in any Notice  
               of Funding Availability issued after January 1, 2010"
                 On page 3, line 40 strike "during any fiscal year"
                 On page 4, line 7 strike "during the fiscal year" and  
               insert "within a specific funding round"
                 On page 4, line 8 strike "in that fiscal year" and  
               insert "within that same funding round"

          Previous Votes:
               Senate VA:         6-0
               Assembly Floor: 78-0
               Assembly Appr: 12-5
               Assembly VA:     6-0  
               Assembly HCD:    6-0  

          POSITIONS:  (Communicated to the Committee before noon on  
          Wednesday,  
                     July 1, 2009)

               SUPPORT:  None received.
          
               OPPOSED:  None received.