BILL ANALYSIS
AB 2536
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2536 (Carter)
As Amended August 20, 2010
Majority vote
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|ASSEMBLY: |77-0 |(June 3, 2010) |SENATE: |34-0 |(August 24, |
| | | | | |2010) |
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Original Committee Reference: H. & C.D.
SUMMARY: Allows Emergency Housing and Assistance Program (EHAP)
funds approved by the voters in the Housing and Emergency
Shelter Trust Fund Acts of 2002 and 2006 to be used for
supportive housing programs.
The Senate amendments add language to avoid chaptering conflicts
with AB 2762 (Housing Committee).
AS PASSED BY THE ASSEMBLY , this bill allowed Emergency Housing
and Assistance Program (EHAP) funds approved by the voters in
the Housing and Emergency Shelter Trust Fund Acts of 2002 and
2006 to be used for supportive housing programs.
FISCAL EFFECT: The costs for the Department of Housing &
Community Development (HCD) to include supportive housing
projects in future notice of funding availability (NOFA) for
Emergency Housing and Assistance Program - Capital Development
(EHAP-CD) projects would be minor and absorbable within existing
resources.
Comments: Background: In 2002, California voters approved
Proposition 46, the $2.1 billion Housing and Emergency Shelter
Trust Fund Act. Proposition 46 provided funding for the
following programs: Multifamily Housing Program; Emergency
Housing Assistance Program (EHAP); Supportive Housing;
Farmworker Housing Grant Program; CalHome Program; Local Housing
Trusts; Code Enforcement Program; California Homebuyer
Downpayment Assistance Program; and, Jobs Housing Improvement
Account. Funds provided under Proposition 46 were mostly
exhausted by the end of 2006.
In November 2006, California voters approved Proposition 1C, the
Housing and Emergency Trust Fund Act of 2006. Proposition 1C
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maintains funding provided under Proposition 46 for most of the
programs noted above including the Emergency Housing Assistance
Program Capital Development (EHAP-CD). The EHAP-CD program
provides grants for the construction, rehabilitation or
conversion of housing for emergency shelters. Proposition 46
and Proposition 1C authorized funding for EHAP-CD for $195
million and $50 million receptively.
Both bond Acts require the Bureau of State Auditor (BSA) to
periodically audit the bond proceeds to ensure they are being
used in a timely manner and for the purpose outlined in the
bond. In November 2009, BSA audited the bond supported housing
programs, and found that HCD had promptly awarded funds for
eight of the ten programs funded by Proposition 1C. However as
of December 2008, HCD had not awarded any funds from Proposition
1C for EHAP-CD or the Affordable Innovation Fund.
In response to the auditor's finding, HCD explained that they
still had funds from the Proposition 46 for EHAP-CD and they
intended to use all of those funds before making any awards from
Proposition 1C. In July of 2009, HCD announced that it was
awarding $7 million in conditional wards for EHAP-CD. The
awards were conditional because of the freeze the Pooled Money
Investment Board (PMIB) placed on bond awards made after
December 18, 2008. HCD recently announced that they have
permission from the Department of Finance (DOF) to issue NOFAs
again, effective immediately. As a result, HCD plans to issue a
NOFA for EHAP-CD for $39 million.
Purpose of this bill: According to the author, the auditor's
report and the demand for the program provide evidence that a
deficiency exists in EHAP-CD. Since 2006, HCD has released one
NOFA for the EHAP-CD program. HCD received $24.5 million in
applications for $47 million in funding. Only $7 million
awarded from those applications. Suspension of bond activity in
December of 2008 alone does not explain why the funds have been
slow in being sought by shelter providers. Rather other
developments in housing policy have also influenced why shelters
have not sought out these funds. While shelters play an
important role in assisting the homeless population,
increasingly shelters find themselves more dependent on less
reliable funding to provide for the operation of shelters. This
added pressure makes it less likely that shelters have
additional funds for rehabilitating or constructing new
shelters. In addition, the approach to combating homelessness
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has shifted to a "housing first" model that seeks to secure
longer-term housing as a way to stabilize and better address the
needs of the homeless population.
The Multifamily Housing - Supportive Housing Program (MHP-SH)
has only $20 million remaining. MHP-SH provides loans to
acquire, construct or rehabilitative multi-family housing with a
supportive housing program. The program is oversubscribed and
in demand. HCD issued three NOFAs and received $268 million in
applications for the roughly $177 million that was available for
MHP-SH.
The approach in AB 2536 recognizes the new realities facing
shelters and seeks to expand ways to assist the homeless
population. Making supportive housing projects eligible for
bond funds under this program while at the same time retaining
the eligibility of shelters to also compete for the funds, helps
to advance the policy goals of housing the homeless and putting
bond dollars to work on shovel ready projects.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085
FN: 0006655