BILL ANALYSIS Ó
AB 639
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 639 (John A. Pérez)
As Amended September 4, 2013
2/3 vote. Urgency
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|ASSEMBLY: |77-0 |(May 29, 2013) |SENATE: |36-0 |(September 10, |
| | | | | |2013) |
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Original Committee Reference: H. & C.D.
SUMMARY : Authorizes the issuance of $600 million in general
obligation (GO) bonds to fund the acquisition, construction,
rehabilitation, and preservation of multifamily supportive housing,
affordable transitional housing, affordable rental housing, and
related facilities for veterans and their families, if approved by
the voters at the June, 2014, statewide election.
The Senate amendments :
1)Move the measure from the November 2014 ballot to the June 2014
ballot.
2)Remove all references to using bond proceeds to fund services.
3)Designate the Department of Veterans Affairs (CalVet), rather than
the Department of Housing and Development (HCD), as the board for
purposes of the State General Obligation Bond Law.
4)Require CalVet to carry out the board duties in consultation with
HCD and the California Housing Finance Agency (CalHFA).
5)Require CalVet, HCD, and CalHFA (the departments) to work
collaboratively under a memorandum of understanding (MOU) to
implement the Veterans Housing and Homeless Prevention Act of
2014, as established by the bill.
6)Require the departments to enter into the MOU no later than August
15, 2014, to address their respective and shared responsibilities
in implementing, overseeing, and evaluating the Veterans Housing
and Homeless Prevention Act.
7)Require the departments to submit the MOU to the Senate and
Assembly Budget Committees.
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8)Limit the total administrative costs of implementing the bill to
5% of the bonds issued.
9)Require the departments to ensure that program guidelines and
terms provide threshold requirements or scoring criteria that
benefit applicants with experience in combining permanent or
transitional housing, or both, with supportive services for
veterans or for partnering with housing developers or service
providers with experience offering housing or services to
veterans.
10)Require that 50% of the funds awarded for capital development
serve extremely low-income households and that 60% of those units
be supportive housing.
11)Require that all of a household's income sources upon initial
tenancy be taken into consideration in determining whether a
potential tenant is eligible for supportive, affordable, or
transitional housing targeted to extremely low income households.
12)Allow the departments to fund projects consisting of fewer than
five units, in addition to projects of five or more units.
13)Allow the departments to fund projects serving mixed-income
populations.
14)Exempt any guidelines and terms developed to implement the bill
from the Administrative Procedures Act.
15)Provide that the bill does not permit the departments to
purchase, operate, or manage properties except in the event of a
foreclosure on a borrower or grantee.
16)Require HCD, in its annual report to the Governor and the
Legislature, to include an evaluation, in collaboration with
CalVet, of any programs established to expend proceeds from the
bonds.
17)Make technical and clarifying changes.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar to
the version that was passed by the Senate.
FISCAL EFFECT : According to the Senate Appropriations Committee:
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1)Total debt service of approximately $25 million annually (General
Fund).
2)Approximately $220,000 in one-time ballot printing/mailing costs
(General Fund).
COMMENTS : 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. Veterans'
homelessness is particularly acute in certain parts of the country,
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% are located in California.
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.
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
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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. 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 for lower-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 GO bond. Although GO bonds are always backed by
the full faith and credit of the state, the bonds issued for the
CalVet home loan program are unusual because the payments made by
the veterans participating in the program always have been
sufficient to retire the bonds. The program has never had a General
Fund cost. 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.
This bill establishes the Veterans Housing and Homeless Prevention
Bond Act of 2014 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 to fund the acquisition, construction,
rehabilitation, and preservation of multifamily supportive housing,
affordable transitional housing, affordable rental housing, and
related facilities for veterans and their families. The move would
leave CalVet with $530 million in bonds for its home loan program.
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The bill tasks HCD, CalVet, and the California Housing Finance
Agency with collaboratively administering the new funding program
and restricts the use of bond proceeds to housing units designated
for veterans and their families. Restructuring the bonds requires
voter approval, which would be sought at the June 3, 2014, statewide
election.
Analysis Prepared by : Anya Lawler / H. & C.D. / (916) 319-2085
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