BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 595
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: Cedillo
VERSION: 2/27/09
Analysis by: Mark Stivers FISCAL: yes
Hearing date: April 28, 2009 URGENCY: YES
SUBJECT:
Homeless Veterans Housing and Supportive Services Act of 2010
DESCRIPTION:
This bill places before voters at the November 2, 2010 election
a $1.5 billion general obligation bond measure to provide
supportive housing for extremely low-income veterans who are
homeless or at risk of homelessness.
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 $195 million for the Supportive
Housing Program. This program finances the development of
affordable housing units for persons who are disabled and
homeless or at risk of homelessness that are linked to
supportive services that improve the residents' ability to
retain housing, improve their health, and maximize their ability
to live and work in the community. The Department of Housing
and Community Development (HCD) administers the Supportive
Housing Program as a subcomponent of its omnibus rental housing
program, known as the Multifamily Housing Program (MHP).
In addition, HCD administers the Governor's Homeless Initiative,
which provided approximately $40 million in financing redirected
from Proposition 46, the Housing and Emergency Shelter Trust
Fund Act of 2002, to develop housing for persons with severe
mental illness who are chronically homeless. HCD also
administers this program as a subcomponent of the MHP Program.
SB 595 (CEDILLO) Page 2
Both of these programs serve veterans who otherwise meet the
tenant eligibility criteria, but assistance is not limited to
veterans. Neither program pays for the costs of supportive
services linked to the housing units. HCD currently is
reviewing applications that would use up the remaining
Supportive Housing funds and has only a small amount of money
left under the Governor's Homeless Initiative.
This bill :
1.Amends the statute governing the MHP program to allow direct
expenditures on, and the capitalization of reserves for,
supportive services integrally linked to the assisted units.
2.Places before voters at the November 2, 2010 election a $1.5
billion general obligation bond measure to provide supportive
housing for extremely low-income veterans who are homeless or
at risk of homelessness. These funds shall be administered
through HCD's MHP Program. With respect to these bond
proceeds, the bill:
Prohibits the use of bond funds for project operating
costs but allows the use of bond funds to capitalize
operating and service reserves.
Allows the Legislature to amend the MHP statute to
improve the efficiency and effectiveness of the program or
to further the goals of the program.
Requires the Bureau of State Audits to conduct periodic
audits to ensure that bond proceeds are awarded and spent
in a timely fashion and in compliance with the law.
Expresses the intent of the Legislature that federally
recognized California Indian tribes be eligible for bond
funding to the same extent as local governments.
3.Contains an urgency clause.
COMMENTS:
1.Purpose of the bill . According to the author, veterans are
disproportionately represented among the homeless, comprising
26% of the homeless population but only 11% of the population
as a whole. Approximately 30,000 to 55,000 veterans are
homeless in California on any given night, and about twice
that number experience homelessness in California over the
SB 595 (CEDILLO) Page 3
course of a year. While the state provides programs such as
the Cal-Vet Farm and Home Loan Program to assist veterans
achieve homeownership, the state provides very little housing
assistance to its neediest veterans, those who are homeless.
By issuing bonds to finance supportive housing for veterans,
the state can acknowledge the sacrifices made by these
veterans and help end the scourge of homelessness.
2.The bigger picture . Proposition 1C funded a variety of
affordable housing programs that provide emergency shelters,
transitional housing, affordable rental housing, and
homeownership opportunities for low-income households. HCD
expects to make its last awards under almost all of the
Proposition 1C programs by the end of 2010. Absent another
bond bill, a general fund appropriation, or the creation of a
new funding source dedicated to affordable housing programs,
these programs will shut down at that time, and no additional
low-income persons or families will be assisted. This bill
provides new funding for one program to serve just one segment
of the population, namely veterans. While the need for
supportive housing for veterans is obvious, it is not clear
that veterans are more deserving than other homeless persons
or other households in need of affordable housing generally.
The committee may wish to consider whether a bond bill should
be limited to veterans housing or serve veterans as part of a
more comprehensive affordable housing program.
3.Using bond funds for service reserves . Funding the service
component is the biggest challenge in providing supportive
housing, as there are few sources of funds to cover these
costs. Moreover, supportive housing remains affordable for 55
years, and no funding source will enter commitments of that
length. This bill seeks to help cover potential gaps in
service funding by creating a capitalized reserve to cover
service cost deficits. As a general rule, however, bond funds
are only used for capital expenses. For this reason in part,
the current Supportive Housing Program and Governor's Homeless
Initiative do not allow program funds to pay for the costs of
supportive services linked to the housing units. While this
bill does not allow bond funds to be used for the direct
provision of services, it does allow bond funds to be used to
capitalize reserves. This is a departure from past practice,
but one that is probably necessary to make supportive housing
work.
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4.Technical amendments .
On page 3, lines 35-36 strike "units, transitional
housing, and child care" and insert "and transitional
housing"
On page 3, line 37 after "care" insert ", child care,"
On page 9, line 6 after "costs" insert "or the cost of
supportive service"
Previous Votes:
Sen VA: 5-1
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
April 22, 2009)
SUPPORT: American Federation of State, County and Municipal
Employees
California Association of Veteran Service Agencies
Corporation for Supportive Housing
Western Center on Law and Poverty
OPPOSED: None received.