BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1109| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1109 Author: Bonilla (D), et al. Amended: 9/4/13 in Senate Vote: 27 SENATE TRANSPORTATION & HOUSING COMMITTEE : 11-0, 7/2/13 AYES: DeSaulnier, Gaines, Beall, Cannella, Galgiani, Hueso, Lara, Liu, Pavley, Roth, Wyland SENATE APPROPRIATIONS COMMITTEE : 5-0, 8/12/13 AYES: De León, Gaines, Hill, Lara, Steinberg NO VOTE RECORDED: Walters, Padilla ASSEMBLY FLOOR : 71-0, 5/24/13 - See last page for vote SUBJECT : Emergency Housing Assistance Program SOURCE : Housing California DIGEST : This bill deems an Emergency Housing Assistance Program Capital Development (EHAP-CD) award recipient that converts the emergency shelter or transitional housing development to permanent housing that serves people who are homeless or at risk of homelessness to be in compliance with the program's loan deferral and forgiveness conditions, as specified. Senate Floor Amendments of 9/4/13 require the Department of Housing and Community Development (HCD) preapprove the conversion, and specify new loan terms and conditions. CONTINUED AB 1109 Page 2 ANALYSIS : Administered by HCD, the EHAP supports the development and operation of emergency shelters, transitional housing facilities, and safe havens, each of which has a limited term of tenancy. EHAP has two components: the EHAP-CD, which funds capital needs; and the EHAP operating facility grant component, which funds operating costs. 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 10 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 entirely at the completion of these terms. This bill: 1. Deems an EHAP-CD recipient that coverts the emergency shelter or transitional housing development to permanent housing (i.e., housing that has no time limit on tenancy) that serves people who are homeless or at risk of homelessness to be in compliance with the program's loan deferral and forgiveness conditions. 2. Requires that HCD pre-approve the transition. 3. Requires HCD evaluate the compatibility of the permanent supportive housing with surrounding land uses, the suitability of the facility for use as permanent supportive housing, and project financial feasibility. 4. Requires, if approved, the new loan term be 20 years from the date of transition, except that the loan becomes due immediately if the facility ceases to serve as permanent supportive housing. FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee: Minor one-time costs, less than $50,000, for the HCD to CONTINUED AB 1109 Page 3 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. SUPPORT : (Verified 9/5/13) Housing California (source) Abode Services AFSCME California Rural Legal Assistance Foundation Corporation for Supportive Housing Everyone Home, Ending Homelessness in Alameda County Sacramento Housing Alliance United Outreach of El Dorado County Western Center on Law and Poverty ARGUMENTS IN SUPPORT : According to the author's office, the federal government has adopted a new approach to combating homelessness which focuses funding priority on permanent housing rather than transitional housing. In general, transitional housing providers have been able to renew their previous grants thus far, but they are not competitive for new monies, nor do they increase the competitiveness of their jurisdiction as a whole for new funding. Unfortunately, EHAP-CD recipients cannot transition their service model to compete for these new funds because state law locks them in to the emergency shelter and transitional housing model. This is true even if modifying their service model would allow them to better serve the target population or keep their doors open. This bill allows EHAP-CD recipients to be more competitive for federal housing funding by allowing them to convert existing facilities to permanent housing without requiring repayment of the EHAP loan. CONTINUED AB 1109 Page 4 ASSEMBLY FLOOR : 71-0, 5/24/13 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom, Blumenfield, Bocanegra, Bonilla, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley, Dahle, Daly, Dickinson, Eggman, Fong, Fox, Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell, Gray, Hagman, Hall, Harkey, Roger Hernández, Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein, Mansoor, Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas, Stone, Ting, Wagner, Weber, Wieckowski, Williams, Yamada, John A. Pérez NO VOTE RECORDED: Bonta, Donnelly, Grove, Holden, Skinner, Waldron, Wilk, Vacancy, Vacancy JA:k 9/5/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED