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