BILL ANALYSIS �
AB 221
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ASSEMBLY THIRD READING
AB 221 (Carter)
As Introduced February 1, 2011
Majority vote
HOUSING 5-0 APPROPRIATIONS 17-0
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|Ayes:|Torres, Atkins, Bradford, |Ayes:|Fuentes, Harkey, |
| |Cedillo, Hueso, Jeffries, | |Blumenfield, Bradford, |
| |Miller | |Charles Calderon, Campos, |
| | | |Davis, Donnelly, Gatto, |
| | | |Hall, Hill, Lara, |
| | | |Mitchell, Nielsen, Norby, |
| | | |Solorio, Wagner |
| | | | |
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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).
FISCAL EFFECT : According to the Assembly Appropriations Committee,
the costs for Housing and Community Development (HCD) to include
supportive housing projects in future projects would be minor and
absorbable within existing resources.
COMMENTS : 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
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receptively.
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 10
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 notice of
fundraising ability (NOFA's) in anticipation of a pause on bond
sales. This included a NOFA for EHAP-CD for $6 million.
AB 221 (Carter) 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
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earlier rounds of the EHAP-CD a substantial amount of EHAP funding
remains available 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) of 2010. Both bills 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.
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.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085
FN: 0000960
AB 221
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