BILL ANALYSIS
SENATE HOUSING & COMMUNITY DEVELOPMENT COMMITTEE
Senator Richard Alarcon, Chairman
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|BILL NO:SB 633 |HEARING: 4/5/99 |
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|AUTHOR: Sher |FISCAL:Appropriations |
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|VERSION: 2/24/99 |CONSULTANT: Yee |
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EMERGENCY SHELTER PROGRAM
Background and Existing Law
The Emergency Housing and Assistance Fund (EHAF) provides
funds to local governments and nonprofit organizations for
homeless shelter facilities (AB 1363, Sher, 1983). Funds
are used for rehabilitation, renovation, expansion, site
acquisition, equipment purchase, vouchers, operational
costs, and administrative costs. The Department of Housing
and Community Development (HCD) administers the program.
The 1998-99 Budget Act appropriated $2 million to the EHAF
for distribution to local governments and homeless
providers. Some counties used the funds to help pay for
the costs of using National Guard armories for homeless
shelters.
As federal and local funds for homeless programs decrease,
cities and counties struggle to fund the construction and
operation of new homeless shelter facilities. The author
wants to provide more funds to build more shelter
facilities.
Proposed Law
Senate Bill 633 appropriates $5 million to the Emergency
Housing and Assistance Fund for the Emergency Housing and
Assistance Program. The funds must be used for the
acquisition, conversion, rehabilitation, or construction of
permanent homeless shelter facilities.
SB 633 provides deferred payment loans, which are subject
to the following:
Loans have a 10-year term, secured by a deed of trust and
promissory note, with a simple interest rate of 3% per
annum. After 10 years, the loan is forgiven. If the
facility ceases to be used as a homeless facility during
the term of the loan, HCD can require the loan to be paid
in full.
Loans must be used to build more shelter space or to
replace the cold weather programs that have been
operating in National Guard armories.
Loans must be at least $100,000 and no more than $1
million per applicant.
Within urban areas, a one-to-one match is required.
Within nonurban areas, a one-to-three match is required.
Construction must begin within one year; HCD can give up
to a one-year extension.
Not more than 6% of the funds can be used for
administrative costs.
20% of the funds must be set aside for nonurban counties.
The bill requires HCD to distribute the funds and issue
statewide "Notices of Funding Availability," which must
include the criteria for evaluating applications.
SB 633 also makes five legislative findings and
declarations.
Comments
1. Brick and mortar . According to housing advocates and
state officials, population continues to grow at a rapid
rate and the need for affordable housing continues to grow.
Since housing construction cannot keep up with demand,
homelessness continues to be a problem for many cities and
counties. Homeless individuals and families are living in
the streets of urban cities, suburban areas, and rural
areas. State officials estimate that there are 150,000 to
300,000 homeless persons on any given night. Without
homeless shelters, these people have no place to go.
Local, state, and federal programs cannot satisfy the
demand for services. Until adequate housing can be built,
temporary shelters are the only resources to house the
homeless population. SB 633 provides cities and counties
with more resources to help their homeless population.
2. Transition period . During the last decade, cities and
counties relied on National Guard armories to help house
their homeless population. But according to housing
advocates, this alternative housing resource is in jeopardy
because of increases in the cost of staffing armories with
soldiers, janitorial costs, and security costs. Also, the
use of armories affects the readiness of the National Guard
when it responds to emergencies. Cities and counties are
making progress in finding other solutions to house their
homeless but more funds are needed to make the transition.
SB 633 will help local official's transition from armories
to other homeless shelter facilities.
3. Local participation . SB 633 requires a one-to-one
funding match for projects in urban areas and a
one-to-three funding match for projects in nonurban areas.
The matching requirements provide more capital to build
more homeless facilities and insure that local governments
will share the responsibility of housing their homeless
population.
4. Long-term commitment ? SB 633 provides forgivable loans
when a property is used as a homeless shelter facility for
at least ten years. When public funds are used to finance
affordable housing projects, public agencies require
affordability covenants that will maintain affordable rents
for 30 to 40 years. Since there is a great demand for
homeless shelter facilities, shouldn't a longer commitment
be made as a condition of using public funds for homeless
shelters? The Committee may wish to consider whether the
term of the loans should be increased to 15 or 20 years.
5. Another attempt . Last year, SB 1950 (Sher, 1998) would
have appropriated $5 million to the EHAF to fund the
construction of more homeless shelter facilities. By split
votes, SB 1950 passed the Senate and Assembly but Governor
Wilson vetoed the bill.
Support and Opposition (3/31/)
Support :
California Alliance for the Mentally Ill
California State Association of Counties
County of Orange
County of Santa Cruz Winter Shelter Advisory Committee
County of Santa Cruz Human Resources Agency
County of Santa Clara
Catholic Charities of San Bernadino/Riverside Counties
Cabrillo Economic Development Corporation
Coachella Valley Housing Coalition
Friends Committee on Legislation of California
League of California Cities
Housing California
HomeBase/The Center for Common Concerns
National Center for Youth Law
Ocean Park Community Center
Sonoma County Interfaith Shelter Network
Southern California Association of Non Profit Housing
SRO Housing Corporation
The Public Interest Law Project
The Homeless Prenatal Program
The California Immigrant Welfare Collaborative
The California Reinvestment Committee
Opposition : Unknown.