BILL ANALYSIS
SB 781
Page 1
Date of Hearing: July 14, 1999
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Dion Aroner, Chair
SB 781 (Speier) - As Amended: July 8, 1999
SENATE VOTE : 25-11
SUBJECT : CalWORKs: housing subsidies
SUMMARY : Establishes a rental housing subsidy program for
families participating in the California Work Opportunity and
Responsibility to Kids (CalWORKs) program. Specifically, this
bill :
1)States legislative findings and declarations that:
a) California has the greatest number of low-income renters
facing unaffordable rents and substandard conditions;
b) The average monthly rents in high-cost areas of the
state are as much as 60 percent or more above the statewide
median;
c) The average rent in high-cost counties is almost double
the maximum CalWORKs benefit;
d) Families in high-cost areas are at risk of homelessness;
e) Research proves that subsidized housing stabilizes
families at risk of homelessness;
f) CalWORKs recipients are required to participate in work
activities a minimum of 32 hours per week and are
ineligible for benefits after five years of assistance;
g) Counties that have housing crises have more difficulty
meeting CalWORKs work participation requirements;
h) Current subsidized housing programs do not meet housing
needs and the federal fair market rent standards do not
accurately reflect extremely high rents; and
i) It is the intent of the Legislature to establish a
transitional and time-limited housing program for CalWORKs
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recipients living in high-cost counties.
2)Requires the Department of Social Services (DSS) to oversee a
rental housing subsidy program to be administered by counties,
at their option.
3)Limits eligibility for a housing subsidy under this program to
families that are paying 50 percent or more of their grant and
income for rent, or are homeless or at risk of homelessness
due to living in shared or temporary living conditions, and
are:
a) CalWORKs families who are meeting CalWORKs work
participation requirements, or
b) former CalWORKs recipients who are receiving employment
retention services within a year of leaving aid, whose
income is less than 150 percent of the federal poverty
level
4)Permits counties to establish additional eligibility criteria.
5)Limits subsidies to three years and to the fair market rent in
the local area, as defined by an acceptable market study, not
to exceed:
a) 50 percent of the family's rent in the first year;
b) 40 percent of the family's rent in the second year; and
c) 30 percent of the family's rent in the third year.
6)Requires that rental units subsidized under this program shall
meet acceptable housing quality standards.
7)Requires counties to demonstrate an urgent need for housing
assistance in order to be eligible to receive funds for this
program, by documenting:
a) The number and percentage of CalWORKs families living in
shared housing;
b) The average rents by unit size in subcounty areas;
c) The vacancy rate among units that have a rental cost at
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or below 100 percent of the U.S. Department of Housing and
Urban Development (HUD) fair market rent levels for the
county; and,
d) The incidence of homelessness among CalWORKs families in
the county.
7)Requires counties to provide a 15 percent match from specified
sources.
8)Requires DSS and representatives of county welfare departments
to develop an allocation formula that takes into account the
size of the CalWORKs population, the number of CalWORKs
families paying more than 50 percent of their grant and income
in rent, and the HUD fair market rent levels.
9)Permits counties to designate a local agency to implement the
program.
10) Requires counties to develop a local plan,
which must be approved by the Board of Supervisors, that
outlines program design, amount and source of matching funds,
housing quality standards and evidence of consultation with
local stakeholders.
11) Requires DSS to ensure that each county
fulfills its responsibility under the plan.
12) Requires each participating county to
provide a status report on the program to DSS by March 1,
2003, and requires DSS to provide a report to the Legislature
by September 1, 2003.
13) Appropriates $5 million from the federal
Temporary Assistance to Needy Families (TANF) block grant to
DSS to fund the program.
14) Beginning in the 2000-01 fiscal year,
requires counties that elect to implement the housing subsidy
program to receive funds necessary to operate the program
within their single CalWORKs allocation.
EXISTING LAW
1)Provides states with federal funds through the TANF block
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grant program and requires states to match a portion of those
funds.
2)Establishes the CalWORKs program, which provides time-limited
cash assistance and supportive services to eligible low-income
families.
3)Requires CalWORKs recipients to participate in work activities
up to 32 hours per week.
4)Provides for a two-region CalWORKs maximum aid payment based
on regional housing variations with Region I including
counties with lowest quartile rents above $400 and Region II
including counties with lowest quartile rents below $400.
5)Provides for housing programs to encourage the construction of
affordable housing for low- to moderate-income families
through the California Housing Finance Agency, the State
Department of Housing and Community Development, and the
Treasurer's Office.
FISCAL EFFECT : The Senate Appropriations Committee found
$140,000 in annual administrative costs, $25 million in annual
program costs, and unknown significant county costs, at county
option. This bill was subsequently amended to appropriate $5
million from federal TANF block grant funds.
COMMENTS :
1)The author reports that a two-bedroom apartment in San
Francisco averages close to $1,600 per month. A recent study
conducted by the San Francisco Department of Human Services
indicates that 40 percent of CalWORKs families pay over 50
percent of their income and grant on rent while 22 percent pay
over 70 percent. Santa Clara County reports that the average
monthly rent in the San Jose area is $1,471 per month and that
the average cost for new tenants seeking unsubsidized
apartments increased by 29 percent over the past two years,
from $935 to $1,208. Santa Clara also reports that there are
approximately 28,000 families on the Section 8 housing waiting
list, of which 5,500 are CalWORKs recipients. Only 300-500
are expected to receive Section 8 housing.
Supporters argue that the high cost of housing prevents
families from successfully transitioning from welfare to work
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because they are constantly at risk of losing their housing.
This bill is intended to assist recipients to focus their
efforts on obtaining and retaining employment.
3)This bill contains an appropriation of $5 million from TANF
block grant funds, intended to fund the first year of the
program. The $5 million is allocated to the counties based on
a formula that is to be devised by DSS and representatives of
county welfare departments. For subsequent years, counties
would receive funds within their CalWORKs single allocation at
a level "necessary to operate the program." It is unclear
whether the necessary level means a funding level at the $5
million appropriated in the first year or a greater amount.
4)The recently promulgated final federal TANF regulations define
"assistance" as "Cash, payments, vouchers and other forms of
benefits designed to meet a family's ongoing basic needs
(i.e., for food, clothing, shelter, utilities, household
goods, personal care items, and general incidental expenses)."
If a family is receiving TANF "assistance" then the TANF time
limits and work and participation, child support assignment,
and TANF data collection requirements apply. This bill
authorizes rent subsidy benefits to former CalWORKs recipients
who are receiving employment retention services within one
year of the receipt of aid. These recipients would be subject
to the TANF "assistance" restrictions. The federal
regulations also permit states to establish separate state
programs. By using state maintenance of effort (MOE) funding
for a separate state program for former CalWORKs recipients,
it is possible to avoid the TANF restrictions on these
families. The federal regulations pose no risk of penalty
for states that are exercising the flexibility to design and
implement separate state programs with MOE funds where one or
more of the TANF assistance requirements are inappropriate.
REGISTERED SUPPORT / OPPOSITION :
Support
Alameda County Board of Supervisors
Association of Bay Area Governments
Cabrillo Economic Development Corporation
California Catholic Conference
California Church IMPACT
California Housing Council, Inc.
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California Interfaith Coalition
California State Association of Counties
Californians for Justice
Catholic Charities of San Bernardino/Riverside Counties
City and County of San Francisco
Coachella Valley Housing Coalition
Coalition for Ethical Welfare Reform
Coalition of Homeless Service Providers (of Monterey County)
Community Action Board of Santa Cruz County
Corporation for Supportive Housing
Corporation for Supportive Housing
County Welfare Directors Association
Emergency Services Network of Alameda County
Friends Committee on Legislation
Gubb & Barshay, LLP
HomeBase/The Center for Common Concerns
Housing California
Jericho
Lake County Community Action Agency
League of California Cities
Los Angeles Coalition to End Hunger and Homelessness
Lutheran Office of Public Policy
Mercy Housing Inc.
National Center for Youth Law
Ocean Park Community Center
Orange County Homeless Issues Task Force
Rural California Housing Corporation
San Mateo County Board of Supervisors
Santa Clara County Board of Supervisors
Santa Cruz County Human Resources Agency
Shelter for the Homeless (Orange County)
Sonoma County Interfaith Shelter Network
Southern California Assoc. of Nonprofit Housing
SRO Housing Corporation
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
None received
Analysis Prepared by : Curtis Child / HUM. S. / (916) 319-2247
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