BILL ANALYSIS                                                                                                                                                                                                    



                                                          SB 781 
                                                          Page  1

Date of Hearing: August 18, 1998

              ASSEMBLY COMMITTEE ON APPROPRIATIONS 
                    Carole Migden, Chairwoman

           SB 781 (Speier) - As Amended: July 8, 1999 

Policy Committee:                              Human  
ServicesVote:6 - 3

Urgency:     No                   State Mandated Local  
Program:NoReimbursable:   -

  SUMMARY  

This bill establishes a $5 million rental subsidy program for  
CalWORKs recipients, to be administered at the option of  
counties that document a need for housing assistance for  
CalWORKs families.  The bill authorizes subsidies for current  
and former CalWORKs recipients for up to three years, provided  
the recipient's family income is at or below 150 percent of the  
federal poverty level.  In addition, the bill requires that to  
qualify, a family must spend at least 50 percent of its income  
on housing costs, reside in a homeless shelter, or be considered  
at risk of homelessness due to shared living conditions.

The bill directs the Department of Social Services and  
representatives of county welfare departments to develop an  
allocation formula that considers the size of a county's  
CalWORKs population, the number of CalWORKs families paying more  
than 50 percent of their grant and income in rent, and the  
federal fair market rent levels.

  FISCAL EFFECT  

The bill appropriates $5 million from federal block grant funds  
to support the program.  Actual costs could be significantly  
greater than this amount, potentially exceeding $50 million  
annually, depending on the number of counties that participate  
in the program, and the number of families each county elects to  
serve.

  COMMENTS
  
  1)Purpose of the Bill  .  According to the author, this bill is in  








                                                          SB 781 
                                                          Page  2

  response to the extremely high cost of housing in some regions  
  of California, and the potential barrier such housing costs  
  can impose on a family's ability to make a successful  
  transition from welfare to work.  The author notes a  
  two-bedroom apartment in San Francisco averages close to  
  $1,600 per month.  

  2)High Rental Costs for CalWORKs Families  .  A recent study  
  conducted by the San Francisco Department of Human Services  
  indicates that 40 percent of the county's CalWORKs families  
  pay over 50 percent of their income and grant on rent and that  
  one in five pay over 70 percent.  Similarly, 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 federal Section 8 housing waiting list, of  
  which 5,500 are CalWORKs recipients.  Only 500 are expected to  
  receive Section 8 housing.

  Analysis Prepared by  : William Wehrle / APPR. / (916) 319-2081