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 AB 702 (SALAS) Page 2 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 AB 702 (SALAS) Page 3 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 AB 702 (SALAS) Page 4 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.