BILL ANALYSIS
AB 702
Page 1
Date of Hearing: April 15, 2009
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Norma Torres, Chair
AB 702 (Salas) - As Introduced: February 26, 2009
SUBJECT : Veterans Housing and Assistance Program
SUMMARY : Establishes the Veterans Housing and Assistance
Program (VHA) program (Program) within the Department of Housing
and Community Development (HCD) Specifically, this bill :
1)Describes the Legislature's intent to encourage the provision
of shelter coupled with effective personal rehabilitation and
self-sufficiency for homeless veterans.
2)Creates the Veterans Housing and Assistance Fund (Fund) in the
State Treasury to be funded upon appropriation by the
Legislature and used by HCD to operate the Program.
3)Requires HCD to adopt regulations to ensure the equitable
distribution of funds and that the Program is administered in
an effective and efficient way.
4)Requires that grants awarded by HCD be used for eligible
activities as defined by HCD's regulations including but not
limited to the following:
a) operating facilities, including operations staff
salaries, maintenance, repair, and utilities.
b) providing for capital development programs such as
acquisition, leasing, construction, and rehabilitation of
sites for emergency shelter and transitional housing;
c) administrative costs;
d) operating expenses relating to supervising and
counseling clients;
e) providing residential rental assistance; and
f) leasing or renting rooms for provision of temporary
shelter.
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5)Allows nonurban counties to use up to 15% of allocated funds
to pay the cost of leasing or renting individual units, hotel
or motel rooms for use as emergency shelters.
6)Provides that funding for capital development programs be
provided as grants in the form of forgivable deferred loans
with the following terms:
a) five years for rehabilitation;
b) seven years for substantial rehabilitation; and
c) ten years for acquisition and rehabilitation or new
construction.
7)Requires deferred loans to be secured by a deed of trust and
promissory note.
8)Provides that the loan will be forgiven at the end of the term
unless the use of the property changes so that it is no longer
being used as an emergency shelter or as transitional housing
in which case the loan will be due in full.
9)Provides that repayment of the loan be deferred as long as the
project is used as an emergency shelter or transitional
housing.
10) Provides, to the extent possible, the VHA program will not
conflict with the federal Susan B. McKinney Homeless
Assistance Act.
11) Provides that any repayments, interest or new
appropriations will be deposited in the Fund and may not be
transferred to any other fund except to the Surplus Money
Investment Fund.
12) HCD may require transfer of the moneys from the Program to
the Surplus Money Investment Fund for investment. All
interest, dividends and pecuniary gains from these investments
shall accrue to the Fund.
13) Requires that the emergency shelter and services will be
offered on a first come first service basis and no individual
or household may be denied shelter or services because of an
inability to pay.
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14) Provides that a provider of emergency shelter or
transitional housing may restrict occupancy by sex or in the
case of housing offered exclusively to veterans, to 24 years
of age or younger on the basis of age.
15) Requires that not less than 20% of moneys in the Fund must
be available to nonurban counties during any given year.
16) Requires that funds designated for facilities operation
that are allocated to nonurban counties and are not awarded by
the end of that fiscal year shall be allocated in the next
fiscal year to urban counties.
17) Requires that funds for capital development that are set
aside for nonurban counties that are not awarded to by the end
of the second fiscal year shall be awarded to urban counties
in the subsequent year.
18) Requires that funds allocated for non-rural counties be
based on a formula that accords at least 20% weight to each of
the following factors:
a) the number of people below the poverty line in the
region; and
b) the number of persons unemployed within each region;
19) Requires HCD to disburse grant funds as quickly as
possible.
20) Prohibits HCD from using more than 5% of the amount of
funds available for administrative costs.
21) Requires HCD to issue a notice of funding availability
(NOFA) which must include the maximum and minimum grant
amounts and the criteria for evaluating the applications.
22) Requires HCD to issue a NOFA to potential applicants and
designated local boards as soon as funding becomes available
for the VHA program.
23) A local government must solicit, receive and select among
applications for grants from eligible organizations in an
open, fair and competitive process.
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24) Requires the applications to be ranked by a designated
local board or by HCD in their absence.
25) Allows HCD to restrict a designated local board from
selecting any application requiring a grant for capital
developments if the amount requested by the application
exceeds the limits determined by the department or the
department determines that the designated local board is not
qualified to evaluate the application.
26) Requires HCD to determine the requirements of the grant
contract and contract directly with the grant recipient.
27) Requires the designated local board to regulate the
performance of any grant contract within their region subject
to HCD's oversight.
28) Prohibits HCD from performing a secondary rating or ranking
review of those grant applications that have been selected by
a designated local board according to a local ranking criteria
that has been approved by HCD.
29) Requires each designated local board to submit a local
emergency shelter strategy for its region to HCD for approval
including but limited to the following:
a) a statement of goals and how the goals will be achieved;
b) a statement of priorities and how the priorities
complement the local continuum of care planning process;
c) a description of the application process and ranking
criteria from the Program;
d) copies of the application forms that the Program will
used to evaluate request for grants; and
e) a statement of how grant recipients will be encouraged
to develop year-round emergency shelters and transitional
housing to meet the needs of the homeless veterans
population and a description of how the local plan serves
the needs of veterans and their families at risk of
homelessness
30) Requires HCD to establish a deadline by which date the
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designated local board must submit a strategy for review.
31) Requires the designated local legislative body to make the
strategy available to shelter and service providers once it is
approved by HCD.
32) Requires that funds allocated to a region must remain
available for funding applications within the region for a
time period or dollar limit to be specified by HCD's
regulations.
33) Provides HCD may specify a time period or dollar limit for
the distribution of capital development funds that is
different than the time period or dollar limit for the
distribution of noncapital funds.
34) Requires the funds to revert back to HCD when the
designated local board cannot use the funds.
35) Requires the Director of HCD to establish a statewide
advisory board on emergency and transitional housing.
36) Allows HCD to adopt emergency regulations to create the
Program.
37) Includes the following definitions:
a) "Department" means the Department of Housing and
Community Development (HCD).
b) "Designated local board" means a group including social
service providers and a representative of local government
who has met HCD's requirements for distribution of grants
allocated by HCD.
c) "Director" means the Director of HCD.
d) "Eligible organization" means an agency of local
government or a nonprofit corporation that provides or
contracts with community organizations to provide emergency
shelter or transitional housing for veterans or both.
e) "Emergency shelter" means housing with minimal
supportive services for homeless veterans that is limited
to occupancy of six months or less.
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f) "Nonurban county" means any county with a population of
less than 200,000 as determined by specified publications.
g) "Region" means a county or a consortium of counties that
voluntarily band together by action of a designated board.
h) "Safe Haven" means supportive housing for seriously
mentally ill homeless veterans, many of who have
co-occurring substance abuse problems that have been unable
or unwilling to participate in high-demand housing
programs.
i) "Transitional housing" means all of the following:
i. housing with supportive services for up to
24 months that is exclusively designated and targeted for
recently homeless veterans;
ii. housing that includes self-sufficiency
development services with the ultimate goal of moving
recently homeless veterans to permanent housing as
quickly as possible;
iii. limiting rents and services and fees to an
ability-to-pay formula reasonable consistent with US
Department of Housing and Urban Development (HUD)
requirements for subsidized housing for low-income
people; and
iv. rents and service fees paid for housing may
be reserve in whole or in part to assist residents in
moving to permanent housing.
j) "Urban county" means any county that is not a nonurban
county.
aa) "Veteran" means a veteran as defined by the
Military & Veterans Code Section 980.
EXISTING LAW:
1)Establishes the Emergency Housing and Assistance Fund within
the State Treasury (Health & Safety Code Section 50800.5).
2)Directs HCD to adopt regulations for the administration of the
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Emergency Housing and Assistance Program (EHAP) to ensure
equitable distribution of funds and administration in an
effective and efficient manner (Health & Safety Code Section
50801.5)
FISCAL EFFECT : Unknown
COMMENTS :
The EHAP-CD and EHAP programs :
The Department of Housing and Community Development (HCD)
operates two programs that fund the construction and operating
expenses of homeless shelters and transitional housing, the
Emergency Housing and Assistance Program Capital Development
(EHAP-CD) and the Emergency Housing and Assistance Program
(EHAP).
The EHAP-CD provides funding to acquire, build, and convert or
rehabilitate emergency shelters, transitional housing and safe
havens that provide shelter and supportive services for homeless
families and individuals. The funds are made available as
deferred payment loans at 3% simple interest for terms ranging
from five to ten years based on the type of development
activity. In 2002, the voters approved the Housing and
Emergency Trust Act of 2002, which included $195 million for the
EHAP-CD. In 2006, the voters approved the Emergency Housing
Shelter Trust Fund Act of 2006, Proposition 1C, which authorized
$2.85 billion in general obligation bonds to continue several
existing bond-funded housing programs and to develop new
infrastructure programs to support housing development. Among
the existing programs, the EHAP-CD received $50 million in
funding.
The Emergency Housing and Assistance Program (EHAP) provide
operational grants to emergency shelters, transitional housing
projects, and supportive services for homeless individuals and
families. This program has been funded by the General Fund in
the past, however, the Governor vetoed the $4 million in funding
for the program last year. EHAP is the only state-funded
program that supports the operational costs of emergency
shelters and transitional housing. Local jurisdictions can use
the EHAP grants as a match to federal dollars availabe in the
Federal Emergency Shelter Program (FESG). Housing California,
which advocates for increasing the supply and variety of decent,
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safe and affordable housing for homeless and low-income people,
surveyed emergency shelters around the state and found that the
state stands to lose millions more in federal funding as a
result of the veto of these funds. Housing California estimates
that 20% of shelters will be forced to close a program and two
shelters report they may have to close permanently.
Veterans' specific shelters are eligible for funding from both
the EHAP-CD and EHAP programs. Health and Safety Section
50801.5(b) permits emergency shelter and transitional housing
providers to restrict occupancy exclusively to military veterans
if the veterans served possess significant barriers to social
reintegration and employment due to a physical or mental
disability, substance abuse, or the effects of long-term
homelessness that require specialized treatment and services.
The provider of emergency shelter or transitional housing must
also provide the specialized treatment and services. HCD
provided a breakdown of the veteran's specific shelters that
received funding from the EHAP-CD program from Proposition 46.
Seven shelters received $6.9 million in program dollars,
resulting in 342 beds statewide. This number reflects only the
veterans' specific shelters that received funding through HCD it
does not account for the beds that are available to veterans in
non-veterans specific shelters. HCD does not collect
information on the number of veterans who are served in those
shelters.
This bill would create the Veterans Housing and Assistance
Program which would be modeled after the EHAP-CD and EHAP but
would be available to homeless shelters and transitional housing
providers that only serve veterans. There is no identified
funding source for the program established in the bill.
Proposition 1C funds are not available to fund a new emergency
shelter construction program for veterans-only as they were
approved by the voters to fund the existing EHAP-CD program.
As noted above, the Governor vetoed funding for EHAP which
provides operation grants to homeless shelters. This bill
would be dependent upon some future source of funding which has
not yet been identified by the author.
Need for the bill :
According to the author, veterans represent a significant
portion of the homeless population. There are approximately
195,827 veterans that are homeless with an estimated 49,724
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veterans homeless in California. Although veterans account for
only 11% of the total population age 18 and older, homeless
veterans represent 26% of the total homeless population. Also,
the author notes that regardless of gender, veterans are more
likely to be homeless than their non-veteran counterparts with
male veterans being 1.25 times more likely to be homeless, and
female veterans three times more likely to be homeless than
non-veterans. According to the author, this bill is necessary
because there are no programs that direclty address the
homeless veterans problem.
Staff comments :
This bill would direct potential future resources of the state
to serve homeless veterans through a program to provide grants
and loans for veterans-only emergency shelters and transitional
housing. As the author points out veterans represent 25% of the
homeless population and are a subset of the larger homeless
population that needs services and housing. Because this bill
establishes a policy direction for future funding, that may be
available for the development of affordable housing, it raises
several policy questions that the committee may wish to
consider:
1)Is it clear that veterans are under-served by the existing
EHAP-CD program and therefore a new program for veterans'
specific shelters is necessary to fill this potential gap? HCD
has information on the number of beds that have been created
in the veterans' specific shelters that have been funded using
the EHAP-CD program, yet this number does not reflect the
total number of veterans served by all the shelters funded
through the EHAP-CD. Homeless veterans have access to
shelters which are both veterans' specific and those that
serve a larger population. HCD provides the funds to build
shelters but does not quantify the number of veterans that are
served by the homeless shelters.
2)Does creating a program solely for veterans solve the problem
of a lack of housing for homeless veterans? The homeless
veterans population varies depending upon the community.
Larger cities like Los Angeles and San Francisco may have a
proportionally larger homeless veteran populations than
smaller cities. It is unclear whether or not there would be
enough demand by veterans organizations and local governements
who would access the proposed program funding to build
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shelters for homeless veterans. If this program was funded in
the future, and there was not enough demand by veterans
specific shelters, would the funding be available to other
shelter providers who serve the larger population but also
veterans?
Committee amendment :
The committee may wish to consider that homeless veterans are
certainly a deserving population that should be served by the
state's housing programs. It is unclear, however, from the
current data collected by HCD to what degree homeless veterans
are being served by all the shelters that receive loans under
EHAP-CD, not just the veterans-specific shelters. The EHAP-CD
program has existing funding, $50 million from Proposition IC
that is available to homeless shelters for construction costs.
In light of this, the committee may wish to consider whether it
is the best use of limited resources to create a new program for
veterans' specific shelters, or if it would be better to
re-authorize funding for the EHAP program vetoed by the
Governor.
The author has agreed to amend the bill to re-authorize the
existing EHAP program which provides operational grants to
homeless shelters and transitional housing providers.
Double referred : The Assembly Committee on Rules referred AB
702 to the Committee on Housing and Community Development and
the Committee on Veterans Affairs. If AB 702 passes this
committee, the bill must be referred to the Committee on
Veterans Affairs.
REGISTERED SUPPORT / OPPOSITION :
Support
Veterans Village of San Diego (sponsor)
Opposition
None on file.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085