BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 384 (Leyva) - Veteran housing: multifamily units: underserved veterans ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: January 6, 2016 |Policy Vote: V.A. 5 - 0, T. & | | | H. 9 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: January 19, 2016 |Consultant: Mark McKenzie | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 384 would require that a percentage of state bond funds allocated annually for purposes of the Veterans Housing and Homeless Prevention (VHHP) Act of 2014 be reserved for housing underserved veterans. The Department of Veterans Affairs (CalVet) to annually determine the percentage of reserved funds in consultation with appropriate local agencies, beginning July 1, 2017. SB 384 (Leyva) Page 1 of ? Fiscal Impact: Estimated CalVet costs of approximately $206,000 annually for two PY of staff to establish the program, annually determine the underserved veteran population, consult with local agencies, and determine the percentage to reserve for these purposes. (Housing for Veterans Fund) Unknown costs to the Department of Housing and Community Development (HCD) and the California Housing Finance Agency (CalHFA), likely less than $50,000, to revise existing VHHP guidelines. (Housing for Veterans Fund) Potential delays in the allocation of VHHP bond revenues for projects that qualify for funding under the current program guidelines. This would occur when there are insufficient applicants to fully allocate reserved funds, in which case the funds would revert back to the Housing for Veterans Fund for other authorized VHHP purposes. Background: Existing law, the Veterans Housing and Homeless Prevention Bond Act of 2014 (approved by the voters at Proposition 41 in June of 2014), authorizes the issuance of $600 million in general obligation bonds to provide multifamily housing to veterans. The VHHP requires CalHFA, HCD, and CalVet to establish and implement a program that focuses on veterans at risk of homelessness or experiencing temporary or chronic homelessness. The program funds the acquisition, construction, rehabilitation, and preservation of affordable multifamily supportive housing, affordable transitional housing, affordable rental housing, or related facilities for veterans and their families to allow veterans to access and maintain housing stability. The VHHP Act specifies that up to five percent of bond funds may be used for administrative purposes. Existing law requires the administering departments to establish and implement programs that focus on veterans at risk of homelessness or experiencing temporary or chronic homelessness, and do the following: Leverage public, private, and nonprofit funding sources. Prioritize projects that combine housing and supportive services, as specified. Promote public and private partnerships. SB 384 (Leyva) Page 2 of ? Foster innovative financing opportunities Ensure that program guidelines and terms provide requirements or scoring criteria to advance applicants that combine permanent and/or transitional housing with supportive services for veterans, or for partnering with developers or service providers with experience offering housing or services to veterans. The administering departments must also ensure that at least 50 percent of funds awarded for capital development be used to provide housing to veteran households with extremely low incomes. The VHHP Act provides flexibility for the administering departments to review, adopt, amend, and repeal guidelines or terms related to the program. HCD adopted initial VHHP program guidelines in February 2015, and has issued two rounds of funding to date. Proposed Law: SB 384 would require that a percentage of VHHP funds be reserved each year for housing "underserved veterans." Specifically, this bill would: Define "underserved veterans" as those veterans either experiencing or at risk of experiencing homelessness at a disproportionate rate to their veteran or nonveteran counterparts, as determined by the most recent federal Annual Homeless Assessment Report (AHAR) that includes an assessment of veteran homelessness. Require a percentage of state funds used for housing veterans in multifamily housing units pursuant to the VHHP to be reserved for housing underserved veterans. Require CalVet to determine the percentage of funds to be reserved annually, beginning July 1, 2017, in consultation with appropriate local agencies using the most recently released AHAR, or other similar source CalVet deems appropriate. Require reserved funding to revert to the Housing for Veterans Fund if there are insufficient applications for proposed housing projects intended for underserved veterans. The funds would then be made available for other VHHP purposes. Related SB 384 (Leyva) Page 3 of ? Legislation: AB 639 (Perez), Chap 727/2013, established the VHHP and authorizes the issuance of $600 million in general obligation bonds to be used for housing homeless and low-income veterans, upon approval by the voters. SB 689 (Huff), which is currently in the Senate Transportation and Housing Committee, requires state agencies to prioritize projects under the VHHP that, for the purposes of providing mental health and drug services, either: 1) accept only residents that are prequalified to receive services from the U.S. Department of Veterans Affairs (VA), or 2) if they accept residents who receive services from agencies other than the VA, employ on staff or contract for a qualified mental health professional with at least two years' full-time relevant experience providing services to veterans. AB 253 (Hernandez), which is currently in the Senate Transportation and Housing Committee, requires state agencies to give a preference to applicants for funding under the VHHP that demonstrate a multiyear commitment of Mental Health Services Act Funding for the applicant's project funding plan. Staff Comments: SB 384 is intended to ensure that sufficient funding is set aside each year to address the needs of underserved vulnerable populations of veterans. The bill provides broad discretion to CalVet to determine the amount of funding needed each year, based upon a specified federal report or any similar document it deems appropriate. Staff notes that there does not appear to be provisions of the current VHHP law that would preclude a project specifically designed to assist underserved veterans from receiving an allocation of funding. In addition, the administering entities have not received any applications for such a project in the initial rounds of funding. CalVet indicates that it would require an additional two positions of staff, at an annual cost of approximately $206,000, to set up the program specific to underserved veterans, conduct annual outreach and coordination to determine the underserved populations, and establish a percentage of reserved funding each year. Current law allows up to five percent of bond revenues to be used for administrative purposes. Staff assumes these new positions could be funded from bond proceeds. SB 384 (Leyva) Page 4 of ? -- END --