BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: ab 2536
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: carter
VERSION: 6/1/10
Analysis by: Mark Stivers FISCAL: yes
Hearing date: June 22, 2010
SUBJECT:
Housing bond allocations for emergency and supportive housing
DESCRIPTION:
This bill allows the Department of Housing and Community
Development (HCD) to expend specified bond funds earmarked for
the Emergency Housing Assistance Program (EHAP) either for the
EHAP program or for the Supportive Housing Program.
ANALYSIS:
As approved by the voters, the Housing and Emergency Shelter
Trust Fund Act of 2002, Proposition 46, authorized the issuance
of $2.1 billion in general obligation bonds to finance various
affordable housing programs, most of which HCD administers.
Among other things, Proposition 46 included funds for the
following programs:
$910 million for the Multifamily Housing Program (MHP), which
funds the new construction, rehabilitation, and preservation
of permanent and transitional rental homes for lower income
households, through loans to local governments and developers.
$195 for the Supportive Housing Program, a subprogram of MHP
which funds rental homes with support services for persons who
have a disability and are homeless or at imminent risk of
becoming homeless.
$195 for EHAP, which provides grants for the rehabilitation,
renovation, expansion, and site acquisition of emergency
shelters and transitional homes for homeless individuals.
In November 2006, California voters approved Proposition 1C, the
$2.85 billion Housing and Emergency Shelter Trust Fund Act of
2006. Among other things, Proposition 1C included funds for the
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following programs:
$345 million for MHP.
$195 million for the Supportive Housing Program.
$50 million for EHAP.
On May 13, 2010, HCD issued a Notice of Funding Availability
under the EHAP Program soliciting applications for $40 million
in available funds. To the extent that all of these funds are
awarded, this will exhaust the Proposition 46 EHAP funds and dip
into $20 million of the Proposition 1C allocation. HCD expects
to offer and award the remaining $30 million in EHAP funds in
2011.
This bill allows HCD to expend the funds earmarked for EHAP in
both Propositions 46 and 1C either for EHAP or for the
Supportive Housing Program.
COMMENTS:
1.Purpose of the bill . This bill seeks to expand the funding
options for providers seeking to assist and serve the state's
homeless population. According to the author, a substantial
amount of EHAP funding remains available while the Supportive
Housing Program is oversubscribed and has a limited amount of
funding remaining to finance the many projects ready to go.
Moreover, in recent years the focus of efforts to combat
homelessness have shifted from simply providing shelter to the
more comprehensive "housing first" model, in which homeless
persons are placed in housing first and they encouraged to
take advantage supportive services, such as drug and alcohol
treatment, mental health counseling, and workforce training.
These housing first projects are eligible for funding under
the Supportive Housing Program but not under EHAP. Therefore,
it makes sense to make the EHAP funds available for all
approaches that serve homeless individuals and families.
2.Program status . Since the passage of Proposition 46 in 2002,
HCD has received $300 million in applications and made $171
million in awards under EHAP. Because of the relatively large
amount of money available for EHAP under Proposition 46, only
$7 million of these awards have come from Proposition 1C funds
as HCD generally has tried to exhaust Proposition 46 funds
before tapping into Proposition 1C funds.
In spite of the large amount of funds awarded to date, the
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EHAP program has had its challenges. Because these EHAP funds
come from general obligation bonds, HCD can only fund capital
improvements, not operating costs. Shelter operators have
always had difficulty arranging operating grants, never more
so than now as public and philanthropic entities cut back
support. As a result, many operators are reluctant to build
or expand. In addition, HCD's $1 million limit on EHAP awards
may not work for larger projects that cost more than $1
million but have few other sources of revenue. While the
needs of the homeless have not gone away, these factors have
surely dampened demand for EHAP funds.
3.HCD's discretion . This bill does not require HCD to shift any
funds from EHAP to the Supportive Housing Program but rather
allows HCD to do so. HCD will have greater flexibility and
discretion to make the funding available where it is most
needed.
4.Redirecting voter-approved allocations . In general, lawyers
consider the allocation of funds within voter-approved bond
bills to be like a contract with the voters and believe that a
reallocation of these funds requires new voter approval.
Propositions 46 and 1C, however, expressly included language
approved by the voters that states:
The Legislature may, from time to time, amend the
provisions of law related to programs to which funds are,
or have been, allocated pursuant to this subdivision for
the purpose of improving the efficiency and effectiveness
of the program, or for the purpose of furthering the goals
of the program.
While this bill does not directly amend the statutes governing
EHAP or the Supportive Housing Program, it effectively allows
a broader use of EHAP funds to further the goal of meeting the
housing needs of homeless individuals and families.
Assembly Votes:
Floor: 77-0
Appr: 17-0
HCD: 8-0
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
June 16, 2010)
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SUPPORT: California Rural Legal Assistance Foundation
Corporation for Supportive Housing
Housing California
Western Center on Law and Poverty
OPPOSED: None received.