BILL ANALYSIS �
AB 221
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Date of Hearing: April 6, 2011
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Norma Torres, Chair
AB 221 (Carter) - As Introduced: February 1, 2011
SUBJECT : Housing and Emergency Shelter Trust Fund Act of 2006:
supportive housing
SUMMARY : Allows Emergency Housing and Assistance Funds
approved by the voters in the Housing and Emergency Shelter
Trust Fund Act of 2006 to be used for supportive housing
programs, which qualify for the Multi-family Housing Program
(MHP).
EXISTING LAW : The Housing and Emergency Trust Fund Act of 2002
and the Housing and Emergency Trust Fund Act of 2006 provided
$2.1 billion and $2.5 billion for affordable housing programs
respectively.
FISCAL EFFECT : Unknown
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: Multi-family Housing Program (MHP); 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
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.
AB 221
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Proposition 1C also maintained funding for the Multi-family
Housing Program -Supportive Housing (MHP-SH) which provides
funding for multi-family housing with a supportive service
component. Proposition 46 and Proposition 1C each included $195
million for the MHP-SH.
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 2010-11, HCD awarded $17 million to 25
projects which should produce 818 shelter spaces, exhausting the
funds left in Proposition 46 for the EHAP-CD program.
Purpose of this bill : According to the author, for various
reasons including the state's suspension of bond activity in
2008-2009 and the limited number of funded requests for shelter
projects under earlier rounds of EHAP-CD a substantial amount of
EHAP funding remains available for allocation. Since 2006, HCD
has awarded $31 million out of the Proposition 1C bond for the
EHAP-CD program, leaving $19 million in the program. In February
of this year, the Governor directed HCD to cancel all
outstanding NOFA's in anticipation of a pause on bond sales.
This included a NOFA for EHAP-CD for $6 million.
AB 221 would allow permanent supportive housing as a qualifying
use under the EHAP-CD. Under the existing program, EHAP-CD can
be used to fund emergency shelters which are not required to
have supportive services. This bill would allow projects that
serve homeless individuals and families and provide supportive
housing to compete for this funding.
According to the author, for various reasons including
suspension of bond activity in 2008 by the Pooled Money
Investment Board (PMIB) and the limited number of funded
requests for shelter projects under earlier rounds of the
EHAP-CD a substantial amount of EHAP funding remains available
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for allocation. A changing emphasis on supportive housing and a
tightening of operating dollars may have also influence 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
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.
While EHAP-CD has funding remaining, the Multifamily Housing -
Supportive Housing Program (MHP-SH) is oversubscribed and in
demand. In 2008-09 HCD awarded 21 loans for MHP-SH among eight
counties totaling $112.6 million leveraging $332.4 million for
the production of 1,243 units. In FY 2009-10, MHP-SH awarded
two loans among two counties totaling $3 million leveraging
$20.1 million for the production of 75 units. There is $51
million left in MHP-SH from the original authorization of $195
million.
Related Legislation : This bill is a reintroduction of AB 2536
(Carter) from last session. Both bills allow permanent
supportive housing as a qualifying use under the EHAP-CD. Under
the existing program, EHAP-CD can be used to fund emergency
shelters which are not required to have supportive services.
This bill would allow projects that serve homeless individuals
and families and provide supportive housing to compete for this
funding.
AB 2536 (Carter) was vetoed, see the veto message below:
This bill would change the use of housing bonds contrary to
the intent of the voters in approving Proposition 1C.
These funds were intended to help some of the most
vulnerable Californians by funding the construction of
emergency shelters that also provide supportive service.
It is not consistent with the intent of the voters to
redirect these funds to provide services to families in
permanent housing.
Support if amended : The California Partnership to End Domestic
Violence (CPEDV) would support AB 221 if it was amended. CPEDV
AB 221
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is concerned that it was not clear to their membership that they
could compete for EHAP-CD funds in prior rounds and therefore
domestic violence shelters have not submitted applications for
the program. They are concerned that now that they are aware
that they can compete for the funds, this bill may disadvantage
them by increasing the pool of eligible applicants.
Staff comments : This bill is permissive, which means HCD is not
required to open the EHAP-CD program up for MHP-SH projects to
compete. The committee may wish to consider making the
conditions of this bill a requirement if it supports the policy
direction.
REGISTERED SUPPORT / OPPOSITION :
Support
California Partnership to End Domestic Violence (CPEDV)
California Rural Legal Assistance Foundation
Corporation for Supportive Housing
Housing California
Western Center on Law Poverty
Opposition
None on file.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085