BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 1109 (Bonilla) - Emergency Housing and Assistance Program.
Amended: May 2, 2013 Policy Vote: T&H 11-0
Urgency: No Mandate: No
Hearing Date: August 12, 2013
Consultant: Mark McKenzie
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 1109 would allow an exception to repayment
requirements for capital development loan recipients under the
Emergency Housing and Assistance Program (EHAP-CD) if the
property subject to the original loan is converted from an
emergency shelter or transitional housing to permanent
affordable housing for the homeless, as specified.
Fiscal Impact:
Minor one-time costs, less than $50,000, for the Department
of Housing and Community Development (HCD) to revise
existing regulations to allow an exception to EHAP-CD
repayment conditions for deferred loans. Minor ongoing
costs to update loan documents for loan recipients who wish
to convert a property to permanent affordable housing.
(Emergency Housing and Assistance Fund)
Potential 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.
Background: Under existing law, HCD administers the EHAP to fund
capital development activities for emergency shelters,
transitional housing, and safe havens that provide shelter and
supportive services for homeless individuals and families, and
to provide operating grants for emergency shelters, transitional
housing, and supportive services for homeless individuals and
families. The capital development activities provided under
EHAP-CD have historically been funded with general obligation
bond funds, while operational funding provided through the
AB 1109 (Bonilla)
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EHAP-operating facility grant program is supported by the
General Fund. Proposition 1C, the Housing and Emergency Shelter
Trust Fund Act of 2006, provided $50 million in general
obligation bond funds for EHAP-CD, nearly all of which has been
allocated.
HCD allocates EHAP-CD funds as grants in the form of forgivable
deferred loans with terms of five years for rehabilitation
projects, seven years for substantial rehabilitation, or ten
years for acquisition and rehabilitation or new construction.
All loans have a 3% simple interest rate, with deferred payments
as long as the project is used as an emergency shelter or
transitional housing, and the loan is forgiven in its entirety
at the end of the term. If the property subject to the loan is
no longer used as an emergency shelter or transitional housing
within the term of the loan, HCD terminates the grant and
requires repayment of the deferred loan in full.
Proposed Law: AB 1109 would allow a capital development loan
recipient under the Emergency Housing and Assistance Program
(EHAP-CD) to maintain the deferral and forgiveness conditions of
the original loan if the property is transitioned from an
emergency shelter or transitional housing to permanent
affordable housing, including permanent supportive housing, and
serves people who are homeless or at risk of homelessness.
Related Legislation: AB 873 (Chau), which is scheduled for
hearing in this Committee on August 19, would allow 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, and requires that any EHAP-CD funds that remain
after June 30, 2015 be transferred for use in the Supportive
Housing Program. Since both AB 1109 and AB 873 amend the same
section of law, both bills will need to be amended to address
chaptering conflicts prior to final action by the Legislature.
Staff Comments: This bill is intended to allow EHAP-CD
recipients to compete for federal housing funding by allowing
them to convert existing facilities to permanent housing without
being subject to the repayment terms of the original loan. The
federal government has adopted a new approach to combatting
homelessness which focuses funding priority on permanent, rather
than transitional housing.
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Staff notes that permanent supportive housing that serves the
homeless or those at risk of homelessness generally has
associated complementary supportive services, such as drug and
alcohol treatment, mental health counseling, and workforce
training. By allowing for the transition of emergency shelter
and transitional housing to permanent housing that serves the
homeless and those at risk of homelessness, the bill could
create cost pressures to provide more state funding for
operational facility grants under EHAP or for the Supportive
Housing Program, to pay for the services associated with the new
use.