BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1109
                                                                  Page  1


          ASSEMBLY THIRD READING
          AB 1109 (Bonilla)
          As Amended  May 2, 2013
          2/3 vote 

           HOUSING                7-0                  APPROPRIATIONS       
          16-0                
           
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          |Ayes:|Torres, Beth       |Ayes:|Gatto, Harkey, Bigelow,          |
          |     |Gaines, Atkins,    |     |Bocanegra, Bradford, Ian         |
          |     |Brown, Chau,       |     |Calderon, Campos, Eggman, Gomez, |
          |     |Maienschein,       |     |Hall, Rendon, Linder, Pan,       |
          |     |Mullin             |     |Quirk, Wagner, Weber             |
          |     |                   |     |                                 |
           ----------------------------------------------------------------- 
           SUMMARY  :  Allows a loan recipient under the capital development  
          component of the Emergency Housing and Assistance Program  
          (EHAP-CD) to transition the property from an emergency shelter  
          or transitional housing to permanent affordable housing,  
          including permanent supportive housing, that serves people who  
          are homeless or at risk of homelessness.

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee, this bill would have a negligible state fiscal  
          impact.

           COMMENTS  :  EHAP-CD funds the construction, rehabilitation,  
          expansion, and site acquisition of emergency shelters and  
          transitional housing for homeless individuals and families.  The  
          program offers deferred payment loans at 3% simple interest to  
          local government agencies and nonprofit corporations.  Loan  
          terms range from 5 to 10 years based on the type of development  
          activity and are forgiven when the term is complete.  During the  
          loan term, use of the property for anything other than a shelter  
          or transitional housing triggers automatic loan repayment. 

          Under EHAP, emergency shelters can provide housing for homeless  
          individuals and families for up to six months, while  
          transitional housing may provide shelter for up to 24 month.  
          However, all new federal homeless assistance dollars are going  
          to support permanent housing solutions due to mounting evidence  
          that for most populations, temporary shelter is more costly and  
          less successful at reducing homelessness than permanent housing.  








                                                                  AB 1109
                                                                  Page  2


           Transitional housing providers have been able to renew their  
          previous federal grants thus far, but they are not competitive  
          for new monies and they do not increase the overall  
          competitiveness of their Continuum of Care (a Continuum of Care  
          is a geographical administrative unit through which homeless  
          assistance providers in a specific area work together to apply  
          for federal funding). 

          AB 221 (Carter), Chapter 546, Statutes of 2011, allowed HCD to  
          use EHAP funds for permanent supportive housing, but the bill  
          only applied to new loans and did not give existing loan  
          recipients the ability to convert.  Thus, providers who have  
          outstanding EHAP loans cannot transition their service model to  
          compete for new federal funds because state law locks them in to  
          the emergency shelter or transitional housing model until the  
          term of their loan ends.  This is true even if modifying their  
          service model would allow them to better serve their target  
          population.  This bill addresses this issue by allowing EHAP-CD  
          loan recipients to convert their facilities into permanent  
          affordable housing, including permanent supportive housing, for  
          those individuals and families who are homeless or at risk of  
          homelessness.


           Analysis Prepared by  :    Anya Lawler / H. & C.D. / (916)  
          319-2085
                                                                FN: 0000639