BILL ANALYSIS
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| SENATE HOUSING & COMMUNITY DEVELOPMENT COMMITTEE |
| Senator Richard Alarcon, Chairman |
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|Bill No:SB 781 |Hearing: 4/19/99 |
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|Author: Speier |Fiscal:Appropriations |
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|Version:4/12/99 |Consultant:Yee |
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HOUSING SUBSIDIES IN HIGH COST COUNTIES
Background and Existing Law :
At the state level, three state agencies administer various
housing programs to encourage the construction of
affordable housing: California Housing Finance Agency,
Department of Housing and Community Development, and
Treasurer's Office. State housing programs target housing
for low to moderate individuals and families.
After Congress enacted the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996, the state enacted
the Welfare to Work Act of 1997 (AB 1542, Thompson et al,
1997). Under the 1997 Act, the CalWORKs program requires
families on welfare to participate in welfare-to-work
activities.
In high cost housing areas, it is difficult for families to
move from welfare to work because they have to pay so much
for housing. San Francisco officials want to develop a
housing subsidy program to help CalWORKs families live in
the community that they work in.
Proposed Law :
Senate Bill 781 requires the Department of Housing and
Community Development (HCD) to implement a housing subsidy
program that may be administered in high-cost counties.
The program must include the following:
Subsides to families who are successfully meeting
participation requirements under the welfare-to-work
component of the CalWORKs program or former CalWORK
recipients who are receiving retention services within
one year of receipt of aid and whose income level is less
than 150 percent of the federal poverty level.
Subsides shall be limited to fair market rents in the
local area, as defined by an acceptable market study, and
shall apply for no longer than three years: 50% first
year; 40% second year; and 30% third year.
Participating counties must provide a 15% match.
Counties shall be allocated a dollar amount based on a
formula that takes into account the size of the county
CalWORKs population, the number of families paying more
than 60% of their grant and income in rent, and the HUD
Fair Market Rent Levels. The formula shall be determined
by a work group consisting of representatives from the
county welfare department and HCD.
Counties may develop program eligibility criteria and may
designate a local agency, including a county welfare
department, or community-based organization to implement
the program.
Participating counties must develop a CalWORKs housing
stabilization plan that outlines the program design and
includes details about population being served, local
matching funds, housing quality standards, and evidence
of consultation with local stakeholders.
The County CalWORKs Housing Stabilization Plan must be
approved by the county board of supervisors.
Rental units must meet acceptable housing quality
standards.
SB 781 also defines a "high-cost county" and includes
legislative findings and declarations.
Comments :
1. Welfare-to-work participants . According to San
Francisco officials, more than 60 percent of CalWORKs
families have to pay more than 50% of their income and
grant moneys on rent. High housing costs prevent families
from being truly self-sufficient because they are
constantly at risk of losing their housing. In some cases,
families are forced to move to lower cost areas away from
jobs in order to obtain housing. SB 781 provides housing
assistance to CalWORKs families in high cost areas.
2. Only high-cost counties . SB 781 gives high-cost
counties the option of participating in a housing subsidy
program. Nine counties are eligible for the program:
Marin, San Francisco, San Mateo, Santa Clara, Santa Cruz,
Orange, Santa Barbara, Alameda, and Contra Costa Counties.
Each participating county must provide a 15% match in
funds.
3. Program costs . Under the housing subsidy program,
eligible and participating counties will be allocated a
dollar amount based on a formula that takes into account
the number of CalWORKs population, rent levels, and federal
rent information. The formula will be determined by a
working group which will include the participating county
welfare department and HCD staff. The author estimates the
program will cost between $20 and $25 million for the first
year and may increase to $50 million on the second year as
more CalWORKs families enter the labor market. What is the
estimated cost of the program for the third and subsequent
years? How will the program be funded?
4. Administrative costs . After HCD develops the subsidy
program, the participating counties can develop program
criteria to administer the program. Counties may designate
a local agency or community-based organization to implement
the program. How much will it cost to administer the
program? Should there be a cap on administrative costs?
If so, how much?
5. Ensuring quality rental units . With the federal
Section 8 subsidy program, local agencies have inspectors
that perform an annual inspection of each unit to insure
minimum quality standards. SB 781 requires rental units to
meet acceptable housing quality standards but doesn't
specify how the quality standards will be implemented. How
will the program insure that the housing units maintain
minimum quality standards? Should an annual inspection be
required? If so, will the community-based organization be
qualified to complete the inspections?
6. Reporting program results . As the Legislature approves
new housing programs, it is useful to look back and
evaluate the effectiveness of the program. Some programs
outlive their usefulness but continue only because
legislators forget about them. SB 781 provides a
three-year subsidy program to CalWORKs families moving from
welfare to work. Since the program will be administered by
participating counties and various local agencies and
community-based organizations, shouldn't they provide an
assessment of the program after three years? The Committee
may wish to consider an amendment that requires each
participating county to report the results of the program
to HCD and HCD to report to the Legislature.
7. Housing stabilization plan approval . Before counties
participate in the program, SB 781 requires the county to
prepare and approve a Housing Stabilization Plan that
outlines the program design. Should HCD have the
opportunity to review and comment on the plan before any
funding is provided? The Committee may wish to consider an
amendment to require each participating county to provide
HCD with a copy of the stabilization plan.
8. Sunset date . SB 781 provides a three-year declining
subsidy to CalWORKs families as they move from welfare to
work. Unless and until an evaluation of the program is
completed, the Legislature won't know how effective the
program will be. One way to allow the Legislature to
evaluate the new program is to establish a sunset date,
which will require legislation to extend the program. The
Committee may wish to consider an amendment to include a
sunset date of January 1, 2004.
Support and Opposition : (4/14/)
Support :
Association of Bay Area Governments
Cabrillo Economic Development Corporation
Californians for Justice
California Interfaith Coalition
California Rural Legal Assistance Foundation
Catholic Charities of San Bernadino/Riverside Counties
City and County of San Francisco
Coachella Valley Housing Coalition
Coalition for Ethical Welfare Reform
Community Action Board of Santa Cruz County
Counties of Alameda, Santa Clara, and San Mateo
County Welfare Directors Association of California
Emergency Services Network of Alameda County
Friends Committee on Legislation
Gubb & Barshap, LLP
Homebase/The Center for Common Concerns
Housing California
Lake County Community Action Agency
Los Angeles Coalition to End Hunger & Homelessness
Lutheran Office of Public Policy-California
National Center for Youth Law
Ocean Park Community Center
Orange County Homeless Issues Task Force
Rural California Housing Corporation
SRO Housing Corporation
Shelter for the Homeless (Orange County)
Sonoma County Interfaith Shelter Network
Southern California Association of Non Profit Housing
The California Immigrant Welfare Collaborative
The California Reinvestment Committee
The Homeless Prenatal Program
The Public Interest Law Project
Western Center on Law and Poverty.
Opposition : Unknown.