BILL ANALYSIS Ó
AB 639
Page 1
Date of Hearing: April 17, 2013
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Norma Torres, Chair
AB 639 (John A. Pérez) - As Introduced: February 20, 2012
SUBJECT : Veterans Housing and Homeless Prevention Act of 2014
SUMMARY : Authorizes the issuance of $600,000,000 in general
obligation bonds for the constructions, rehabilitation, and
preservation of affordable multifamily, supportive, and
transitional housing for veterans, if approved by the voters at
the November, 2014, general election. Specifically, this bill :
1)Authorizes the issuance of $600 million in general obligation
bonds, the proceeds of which are to be made available to the
Department of Housing and Community Development (HCD) for the
purpose of constructing, rehabilitating, and preserving
affordable multifamily, supportive, and transitional housing
for veterans.
2)Restricts the use of bond proceeds to only those housing units
designated for veterans and their families.
3)Requires the program to be administered by HCD in
collaboration with the California Department of Veterans
Affairs (CalVet).
4)Requires HCD to establish a program to focus on veterans at
risk of homelessness or experiencing temporary or chronic
homelessness.
5)Requires HCD, to the extent feasible, to establish and
implement programs that, among other things:
a) Leverage public, private, and nonprofit program and
fiscal resources;
b) Prioritize projects that combine housing and supportive
services, such as job training, mental health and drug
treatment, or physical rehabilitation;
c) Promote public and private partnerships; and
d) Foster innovative financing opportunities.
AB 639
Page 2
6)Allows the Legislature, by majority vote, to amend the
provisions of the act for the purpose of improving program
efficiency, effectiveness, and accountability, or for the
purpose of furthering overall program goals.
7)Creates the Housing for Veterans Fund and requires the
proceeds of bonds issued and sold pursuant to the bill to be
deposited in the fund.
8)Subjects bonds deposited in Housing for Veterans Fund to
annual appropriation, as determined by the Legislature.
9)Requires the measure to be submitted to the voters at the
November 4, 2014, general election.
10)Contains an urgency clause.
EXISTING LAW:
1)Provides for farm and home purchase benefits for qualifying
veterans under the Veterans Farm and Home Purchase Act of 1974
and subsequent acts, which are collectively referred to as the
CalVet Home Loan Program (Military & Veterans Code Section
987.50, et seq.).
2)Defines "home" as a parcel of real estate upon which there is
a dwelling house or other buildings that will, in the opinion
of CalVet, suit the needs of the purchaser and the purchaser's
dependents as a place of abode; a condominium; a mobilehome;
and cooperative housing (Military & Veterans Code Section
987.51).
3)Authorizes the Veterans Bond Act of 2008 for the purpose of
creating a fund to provide farm and home aid for veterans in
the amount of $900 million (Military and Veterans Code Section
998.400, et seq.).
4)Authorizes the Veterans Bond Act of 2000 for the purpose of
creating a fund to provide farm and home aid for veterans in
the amount of $500 million (Military and Veterans Code Section
998.300, et seq.).
FISCAL EFFECT : Unknown
AB 639
Page 3
COMMENTS :
Background : In 2009, the federal government announced a
five-year plan to end homelessness among veterans as part of an
overall federal plan to end homelessness. The Five-Year
Initiative to End Homelessness among U.S. Veterans is a
comprehensive plan that includes preventive measures like
discharge planning for incarcerated veterans re-entering
society, supportive services for low-income veterans and their
families, and a national referral center to link veterans to
local service providers. Additionally, the plan calls for
expanded efforts for education, jobs, health care, and housing.
Implementation has required unprecedented collaboration among
federal agencies, local governments, and private sector
partners. Now in its third year, the initiative has seen
positive results. From 2010 to 2012, the number of veterans
experiencing homelessness on a single night in the U.S.
decreased 18 percent, from 76,329 to 62,619.
Various studies indicate that veterans are more likely than the
general population to become homeless, and make up a
disproportionate share of the homeless population. Although
veterans are only about 8% of the U.S. population, they make up
approximately 15% to 20% of the homeless population. While
veterans experience homelessness throughout the country, the
problem is particularly acute in certain areas, including
California, which is home to 25%, or about 19,000, of the
nation's homeless veterans. Los Angeles alone is home to over
8,000 homeless veterans. With respect to the nation's homeless
veterans who are unsheltered, nearly 44%, or just under 12,000,
are located in California.
Although a substantial percentage of California's homeless
veterans served during the Vietnam era, the ranks of homeless
veterans from Operation Iraqi Freedom and Operation Enduring
Freedom (OIF/OEF) are growing. Service providers report that
they have seen a sharp increase in OIF/OEF veterans seeking
shelter and other services, and there is growing concern that
veterans from these recent conflicts are falling into
homelessness more quickly than veterans from previous conflicts.
Female veterans are another growing portion of the homeless
veterans' population. While still making up less than 10% of
the total homeless veterans' population, service providers
AB 639
Page 4
report that the number of homeless women veterans has been
rising steadily in recent years. Studies indicate that female
veterans are at a far greater risk of homelessness than male
veterans. While they face many of the same challenges as their
male counterparts, they are far more likely to have been victims
of sexual trauma either before or during the military service,
experience unemployment at a higher rate than male veterans, and
are often single mothers caring for young children.
In addition to the veterans who are already experiencing
homelessness, there are many more veterans who have unstable
housing situations that place them at risk of homelessness. For
some, remaining housed may be as basic as having more affordable
housing options. For others, the challenges are more complex and
may involve a range of issues from lack of job training to
needing ongoing treatment for substance abuse or mental health
issues.
Numerous studies have shown that providing housing along with
the supportive services individuals need to address mental
health, substance abuse, and other issues has a net benefit in
terms of public costs. For example, in 2009, the Los Angeles
Economic Roundtable compared the public costs for individuals in
supportive housing compared to similar individuals who were
homeless. The study concluded that the typical public cost for a
homeless person is $2,897 per month, compared with just $605 per
month in public cost for a resident in supportive housing. The
stabilizing effect of housing plus supportive services is
demonstrated by a 79% reduction in public costs. In short,
public costs go down when people are no longer homeless.
Overview of current state programs : Despite California's high
number of homeless veterans, the state does not have any
programs that are directly targeted at serving this population,
or at serving lower-income veterans who are at risk of
homelessness. HCD offers various programs that support the
development of multifamily rental housing for low income
Californians, including supportive and transitional housing, but
none are veteran-specific. HCD's programs have been funded since
2002 from two voter-approved housing bonds, Proposition 46 of
2002 and Proposition 1C of 2006. These funds are nearly gone and
it is unclear when additional funds will be available for these
programs. In addition, the elimination of redevelopment agencies
meant a loss of around $1 billion per year in affordable housing
funding, funds that generally worked in concert with state
AB 639
Page 5
dollars and other sources of funding to produce affordable units
to serve low-income Californians.
CalVet runs the California Veteran Farm and Home Purchase
Program, often referred to as the CalVet Home Loan Program,
which was established in 1921 and reauthorized in 1943 and again
in 1974. The program provides loans to veterans for
single-family residences, including condominiums and planned
unit developments; farms; units in cooperative developments; and
mobilehomes in rental parks or on land owned by the veteran.
While the program has assisted over 420,000 veterans over the
years, it has seen a sharp decline in activity over the last
decade. In 2003, the program issued 1,130 new loans; in 2012 it
issued just 83. In the same time period, the program's portfolio
of outstanding loans declined from 20,169 to 7,913.
CalVet's Home Loan Program is funded primarily by veterans'
bonds, a type of tax-exempt general obligation bond. The program
is fully self-supporting and does not have a cost to the General
Fund. The principal and interest on the bonds and the
administrative costs are repaid from interest charged to the
veteran loan holders. The Legislature has placed on the ballot
and California voters have approved 23 veterans' bonds since
1943 to provide funding for the program. The most recent was
Proposition 12 in 2008, which authorized $900 million in bonding
authority. The prior bond, Proposition 32 of 2000, authorized
$500 million in bonding authority. To date, CalVet has not
issued any of the bonds approved under Proposition 12, and has
about $230 million in bonding authority left under Proposition
32.
Purpose of the bill: AB 639 establishes the Veterans Housing and
Homeless Prevention Act to restructure $600 million of the $900
million in bonds approved by the voters for the CalVet Home Loan
Program in 2008 and use them instead to fund the construction
and rehabilitation of affordable multifamily, supportive, and
transitional housing for veterans. The move would leave CalVet
with $530 million in bonds for its home loan program. The bill
tasks HCD with administering the new funding program in
collaboration with CalVet and explicitly restricts the use of
bond proceeds to those housing units designated for veterans and
their families. The focus of the program would be on housing for
veterans who are homeless or at risk for homelessness and in
need of services such as mental health counseling, substance
abuse treatment, job training, and physical therapy to address
AB 639
Page 6
injuries. Restructuring the bonds requires voter approval, which
would be sought at the 2014 general election.
According to the author, "The Legislature must advance a
comprehensive, coordinated, and cost-effective approach to
respond to the housing and services needs of our veterans. The
Veterans Housing and Homeless Prevention Act of 2014 will expand
housing and service options for veterans, cost-effectively
leverage public dollars, reduce the number of homeless veterans
and the attendant public costs, and place California at the
forefront of our nation's efforts to end veterans' homelessness
by 2016."
Arguments in support : New Directions, which provides housing and
supportive services to veterans in the Los Angeles area, argues:
"There is a national effort to end homelessness among veterans
and the creation of affordable housing with support services is
a key part of that effort. Veterans who remain homeless, or are
on the edge of homelessness, utilize a disproportionate amount
of public services such as emergency rooms, jails, and treatment
centers. The creation of more affordable housing will not only
save money by stabilizing the lives of tens of thousands of
veterans, it is the honorable thing to do for a population that
has put their lives on the line for our country."
Double-referred : AB 639 was also referred to the Committee on
Veteran's Affairs, where it will be heard should it pass out of
this committee.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Veteran Service Agencies (sponsor)
Corporation for Supportive Housing (sponsor)
AFSCME
Affirmed Housing Group
American Legion-Department of California
AMVETS-Department of California
Association for Los Angeles Deputy Sheriffs
Burbank Housing Development Corporation
California Building Industry Association
California Conference of Carpenters
California Labor Federation
California Professional Firefighters
AB 639
Page 7
California Rural Legal Assistance Foundation
California Hospital Association
California Special Districts Association
Century Housing
Cities of Murietta and Oakland
Counties of Butte, Del Norte, Los Angeles, and Solano
Hospital Corporation of America
Housing California
League of California Cities
Los Angeles Police Protective League
Los Angeles Probation Officers Union
Los Angeles Regional Reentry Partnership
New Directions, Inc.
Non-Profit Housing Association of Northern California
Riverside Sheriffs' Association
Salvation Army Haven
San Diego Housing Federation
SEIU California
State Building and Construction Trades Council
Swords to Plowshares
United Native Housing Development Corporation
United Way of Greater Los Angeles
U.S. VETS
VFW-Department of California
Vietnam Veterans of America-California State Council
Western Center on Law and Poverty
Opposition
None on file
Analysis Prepared by : Anya Lawler / H. & C.D. / (916)
319-2085