BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



           ----------------------------------------------------------------- 
          |SENATE RULES COMMITTEE            |                        AB 873|
          |Office of Senate Floor Analyses   |                              |
          |1020 N Street, Suite 524          |                              |
          |(916) 651-1520         Fax: (916) |                              |
          |327-4478                          |                              |
           ----------------------------------------------------------------- 
           
                                           
                                    THIRD READING


          Bill No:  AB 873
          Author:   Chau (D)
          Amended:  9/6/13 in Senate
          Vote:     27

           
           SENATE TRANSPORTATION & HOUSING COMMITTEE  :  10-0, 7/9/13
          AYES:  DeSaulnier, Gaines, Beall, Cannella, Galgiani, Hueso,  
            Liu, Pavley, Roth, Wyland
          NO VOTE RECORDED:  Lara

           SENATE APPROPRIATIONS COMMITTEE  :  7-0, 8/30/13
          AYES:  De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg

           ASSEMBLY FLOOR  :  70-0, 5/16/13 - See last page for vote


           SUBJECT  :    Emergency Housing and Assistance Program

           SOURCE  :     Author


           DIGEST  :    This bill establishes new eligible uses and  
          priorities for the Emergency Housing Assistance Program.

           Senate Floor Amendments  of 9/6/13 add double-jointing language  
          with AB 1109 (Bonilla), and make three non-substantive  
          corrections.

           ANALYSIS  :    Administered by the Department of Housing and  
          Community Development (HCD), the Emergency Housing Assistance  
          Program (EHAP) supports the development and operation of  
          emergency shelters, transitional housing facilities, and safe  
                                                                CONTINUED





                                                                     AB 873
                                                                     Page  
          2

          havens, each of which has a limited term of tenancy.  EHAP has  
          two components, the EHAP capital development component  
          (EHAP-CD), which funds capital needs, and the EHAP operating  
          facility grant component (EHAP-OFG), which funds operating  
          costs.  Historically, EHAP-CD has received bond funds which may  
          only be spent on capital expenditures, and EHAP-OFG has received  
          General Fund support.

          HCD makes EHAP-OFG funds available in the form of grants, with  
          each county allocated a share of available funding based on  
          poverty and unemployment rates and 20% of funds reserved for  
          non-urban counties.  HCD awards EHAP-CD funds through a  
          statewide competition and makes the awards available in the form  
          of forgivable loans with terms of five years for projects  
          involving rehabilitation, seven years for substantial  
          rehabilitation, or ten years for acquisition and rehabilitation  
          or new construction.  HCD defers payments on these loans as long  
          as applicants use the facilities as emergency shelters or  
          transitional housing, and HCD forgives the loans at the  
          completion of the specified terms.

          Existing law allows counties to apply for HCD designation as a  
          designated local board (DLB).  Once designated, a DLB awards  
          EHAP-OFG funds within its county subject to an HCD-approved  
          local emergency shelter strategy.  A DLB also prioritizes  
          EHAP-CD applications from its county, which HCD uses in its  
          competition.  In the last round of EHAP-OFG funding, DLBs  
          represented 22 counties.

          In addition to EHAP, HCD administers the Supportive Housing  
          Program, which funds the development of permanent rental homes  
          (i.e., housing that has no time limit on tenancy) with support  
          services for persons who have a disability and are homeless or  
          at imminent risk of becoming homeless.

          This bill: 

          1.Allows HCD to award EHAP-CD funds in the form of a 20-year  
            forgivable loan for the conversion of emergency shelters or  
            transitional housing to permanent supportive housing for  
            homeless families or individuals.  

          2.Allows HCD to award EHAP-OFG funds for the rapid rehousing of  
            homeless clients.  

                                                                CONTINUED





                                                                     AB 873
                                                                     Page  
          3


          3.Allows HCD, with respect to EHAP award rounds that HCD  
            initiates between January 1 and June 30, 2015, to award funds  
            pursuant to requirements developed by HCD and included in the  
            notices of funding available exempt from the Administrative  
            Procedures Act and requires HCD to:

             A.   Make funding available on a competitive basis statewide  
               (i.e., not allocate funding by county and not delegate  
               funds or prioritization to the DLBs).

             B.   In addition to traditional applicants, accept  
               applications from public housing authorities, tribal  
               governments, and continuum of care entities.

             C.   Give priority for EHAP-CD funds to applicants proposing  
               to convert emergency shelters or transitional housing to  
               permanent supportive housing for homeless families or  
               individuals.

             D.   Give priority for EHAP-OFG funds to applicants that  
               propose rapid rehousing activities that leverage additional  
               funding sources or focus on high-cost users of more than  
               one system of care.

          1.Requires HCD to transfer any unobligated EHAP funds derived  
            from the Proposition 46 or 1C housing bonds that remain as of  
            June 30, 2015, to the Supportive Housing Program, less any  
            funds needed for state operations to support outstanding  
            awards as determined by HCD.

          2.Contains double-jointing language with AB 1109 (Bonilla).

           Comments
           
          According to the author, the federal government has adopted a  
          new approach to combating homelessness that focuses funding  
          priority on permanent housing, rather than transitional housing,  
          and on rapidly rehousing homeless individuals and families,  
          rather than shelters.  This bill aligns the state's emergency  
          housing program, EHAP, with these evidence-based strategies in  
          order both to improve outcomes and increase the competitiveness  
          of California applicants for federal funding opportunities.  


                                                                CONTINUED





                                                                     AB 873
                                                                     Page  
          4

           Adjusting to a small amount of money  .  The EHAP-CD component  
          currently has roughly $7 million available, and the EHAP-OFG  
          component has roughly $1 million available.  Given these  
          relatively minimal amounts, the bill seeks to streamline the  
          award process by allowing HCD to make the bill's changes to the  
          program via guidelines and by temporarily foregoing the DLB  
          prioritization process in favor of a statewide competition.  In  
          addition, to the extent that any EHAP-CD funds remain after one  
          more round of awards, the bill requires HCD to transfer the  
          small amount to the Supportive Housing Program.

           FISCAL EFFECT  :    Appropriation:  Yes   Fiscal Com.:  Yes    
          Local:  No

          According to the Senate Appropriations Committee:

           Minor and absorbable one-time costs to HCD to issue a new  
            notice of funding availability. (Emergency Housing and  
            Assistance Fund). 

           One-time diversion of approximately $500,000 in general  
            obligation bond funds in 2015 from the Emergency Housing and  
            Assistance Fund to the Housing Rehabilitation Loan Fund for  
            use in the Multifamily Housing Program.

           Potential future cost pressures to provide more operational  
            funds for supportive services that are offered in conjunction  
            with supportive housing.  HCD programs that may be subject to  
            future cost pressures are the EHAP-operating facility grant  
            program and the Supportive Housing Program, which are funded  
            from bond funds and the General Fund.


           ASSEMBLY FLOOR  :  70-0, 5/16/13
          AYES:  Achadjian, Alejo, Ammiano, Atkins, Bigelow, Bloom,  
            Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown, Ian  
            Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,  
            Dahle, Daly, Dickinson, Donnelly, Fong, Fox, Frazier, Garcia,  
            Gatto, Gomez, Gordon, Gorell, Gray, Hagman, Hall, Harkey,  
            Roger Hernández, Jones, Jones-Sawyer, Levine, Linder, Logue,  
            Lowenthal, Maienschein, Mansoor, Medina, Mitchell, Mullin,  
            Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea,  
            V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner,  
            Ting, Torres, Wagner, Waldron, Weber, Wieckowski, Wilk,  

                                                                CONTINUED





                                                                     AB 873
                                                                     Page  
          5

            Williams, Yamada, John A. Pérez
          NO VOTE RECORDED:  Allen, Buchanan, Eggman, Beth Gaines, Grove,  
            Holden, Melendez, Morrell, Stone, Vacancy










































                                                                CONTINUED