BILL ANALYSIS Ó
AB 639
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Date of Hearing: April 30, 2013
ASSEMBLY COMMITTEE ON VETERANS AFFAIRS
Al Muratsuchi, Chair
AB 639 (John A. Pérez) - As Introduced: February 20, 2013
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.
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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 at this time.
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COMMENTS :
Argument for the bill : New Directions, a non-profit entity that
provides housing and supportive services to veterans in the Los
Angeles area, states:
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.
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
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."
According to the Committee on Housing and Community Development:
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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 dollars and other
sources of funding to produce affordable units to serve
low-income Californians.
California Veteran Farm and Home Purchase Program : 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. The
restrictions on the program do not permit development of
affordable multifamily, supportive, and transitional housing of
the kind contemplated by this bill.
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
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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.
CalVet Home Loan Program will continue : It is important to note
that the existing CalVet Home Loan Program will retain
approximately $300 million dollars in bond authority and
continue to function. According to CalVet staff as interest
rates rise in the open market, the CalVet Home Loan product will
become increasingly attractive. This bill leaves a substantial
amount of money for the existing program to continue and expand
as the state and national economies recover from recession.
Bond proceeds will be used exclusively for veterans and their
families : As a final matter, although bond authority is being
repurposed from the CalVet Home Loan program it still will
provide housing exclusively for veterans and their families.
According to the bill, "The bond proceeds shall only be used for
units designated for veterans and their families."
Previous Committee : Assembly Housing and Community Development
Ayes: 7Noes: 0
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
Association of California Healthcare Districts
Burbank Housing Development Corporation
California Association of Veteran Service Agencies
California Building Industry Association
California Conference of Carpenters
California Hospital Association
California Labor Federation
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California Medical Association
California Nurses Association
California Professional Firefighters
California Rural Legal Assistance Foundation
California Special Districts Association
California State Sheriffs' Association
Century Housing
Cities of Burbank, Murietta and Oakland
Counties of Butte, Del Norte, Los Angeles, Santa Clara, and
Solano
Hospital Corporation of America
Housing California
JP Morgan Chase & Co.
League of California Cities
Los Angeles County Sheriff's Department
Los Angeles Probation Officers Union
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
North Coast Veterans Resource Center
Redding Veterans Resource Center
Riverside Sheriffs' Association
Sacramento Veterans Resource Center
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
Vietnam Veterans of California, Inc.
Western Center on Law and Poverty
Opposition
None on file.
Analysis Prepared by : John Spangler / V. A. / (916) 319-3550
AB 639
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