BILL ANALYSIS Ó
AB 1109
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1109 (Bonilla)
As Amended September 6, 2013
2/3 vote
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|ASSEMBLY: |71-0 |(May 24, 2013) |SENATE: |38-0 |(September 12, |
| | | | | |2013) |
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Original Committee Reference: H. & C.D.
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 supportive housing that
serves people who are homeless or at risk of homelessness and
still have the loan deferred and forgiven at the end of the loan
term.
The Senate amendments :
1)Limit the bill to transitions to permanent supportive housing
that serves people who are homeless or at risk of
homelessness, rather than transitions to any type of permanent
affordable housing.
2)Require a project to obtain approval from the Department of
Housing and Community Development (HCD) prior to a transition
to permanent supportive housing to ensure that the proposed
transition is consistent with all EHAP requirements.
3)Require HCD to evaluate the suitability of the building for
use as permanent supportive housing and the project's
financial feasibility in considering whether to approve a
transition.
4)Require a loan term of 20 years from the beginning of the
approved use as permanent supportive housing for a
transitioned project.
5)Require HCD to terminate the loan and require repayment of the
deferred loan in full if a transitioned property is no longer
being used as permanent supportive housing during the loan
term.
AB 1109
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6)Include chaptering amendments to address conflicts between
this bill and AB 873 (Chau) of the current legislative
session.
AS PASSED BY THE ASSEMBLY , this bill allowed a loan recipient
under EHAP-CD to transition the property from an emergency
shelter or transitional housing to permanent affordable housing
and still have the loan deferred and forgiven at the end of the
loan term.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
1)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)
2)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.
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 five 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
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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.
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 existing
EHAP-CD loan recipients to convert their facilities into
permanent supportive housing for those individuals and families
who are homeless or at risk of homelessness. HCD would have to
evaluate whether the new use meets all requirements of the EHAP
program, the project is financially feasible, and the building
is suitable for permanent supportive housing before approving a
transition.
Analysis Prepared by : Anya Lawler / H. & C.D. / (916)
319-2085
FN: 0002622