BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: AB 767
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: Ammiano
VERSION: 4/30/09
Analysis by: Mark Stivers FISCAL: Yes
Hearing date: June 16, 2009 URGENCY: YES
SUBJECT:
Proposition 1C: Homeless Youth and BEGIN programs
DESCRIPTION:
This bill extends the setaside of Proposition 1C funds for the
Homeless Youth and BEGIN Programs by two years.
ANALYSIS:
In November 2006, California voters approved Proposition 1C, the
$2.85 billion Housing and Emergency Shelter Trust Fund Act of
2006.
Proposition 1C included $50 million for the Homeless Youth
Program, administered by the Department of Housing and Community
Development (HCD) as a subcomponent of the omnibus Multifamily
Housing Program (MHP). Under the Homeless Youth Program, HCD
funds transitional and permanent housing for homeless and
emancipated foster youth tied to supportive services that assist
the youth in stabilizing their lives and developing the skills
and resources they need to make a successful transition to
independent, self-sufficient adulthood. Proposition 1C sets
aside the $50 million for this program for a period of 30 months
from first availability (which is July 31, 2009). Any funds not
encumbered within these 30 months revert for use in MHP, for
which homeless youth developments may continue to apply in
competition with other non-homeless youth housing.
Proposition 1C also included $125 million for Building Equity
and Growth in Neighborhoods (BEGIN) Program. Administered by
HCD, BEGIN provides grants to local governments for the
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provision of downpayment assistance loans to low or moderate
income homebuyers who purchase a home in a new development for
which the local government has reduced one or more regulatory
constraints that impede the development of affordable housing.
These funds are also set aside for 30 months from first
availability (which is November 17, 2009). Any funds not
encumbered within these 30 months revert for use in HCD's
omnibus homeownership program, the CalHome Program.
This bill extends the setaside of Proposition 1C funds for the
Homeless Youth and BEGIN Programs by two years. Specifically,
the bill:
Provides that any funds not encumbered for the purposes of the
Homeless Youth Program by July 31, 2011 shall revert for use
in MHP, unless HCD determines that funds should revert sooner
due to diminished demand.
Provides that any funds not encumbered for the purposes of the
BEGIN Program by November 17, 2011 shall revert for use in the
CalHome Program, unless HCD determines that funds should
revert sooner due to diminished demand.
Includes an urgency clause.
COMMENTS:
1.Purpose of the bill . According to the author, demand for both
the Homeless Youth and BEGIN programs has been substantial but
not sufficient to use all of the available funds within 30
months. In addition, the current freeze on application and
commitment activity for bond-funded programs is effectively
truncating the 30 month period, and the turmoil in the
financial markets is slowing development activity in general.
As a result, approximately $24 million of Homeless Youth
funding is scheduled to revert to MHP on July 31, 2009.
Similarly, $40 million is scheduled to revert from BEGIN to
CalHome on August 17, 2009. Roughly $7.5 million of this
BEGIN amount represents pending applications that cannot be
funded until the current freeze on award commitments is
lifted.
2.Likelihood of funds being used during the extension .
Developing housing for homeless youth is challenging, in part
due to the limited funding available for necessary supportive
services. Nonetheless, HCD believes, based on conversations
with developers who would like to submit new applications and
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the experience of program staff, that there would be a slow
and but relatively steady stream of applications if funding
were to remain available under the Homeless Youth setaside.
With respect to BEGIN, HCD staff indicates that they have been
contacted by many cities, counties and developers interested
in submitting applications. Based on these contacts, HCD
anticipates that the remaining $40 million could be awarded by
June 30, 2010.
3.Urgency clause . In order for the bill to take effect before
the reversions are scheduled to occur, this bill contains an
urgency clause.
Assembly Votes:
Floor: 78-0
Appr: 17-0
H&CD: 7-0
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
June 10, 2009)
SUPPORT: Department of Housing and Community Development
(sponsor)
OPPOSED: None received.