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 ----------------------------------------------------------------- |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