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AB-2817 House California Challenge Program.(2021-2022)

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Date Published: 08/26/2022 09:00 PM
AB2817:v94#DOCUMENT

Enrolled  August 26, 2022
Passed  IN  Senate  August 23, 2022
Passed  IN  Assembly  August 24, 2022
Amended  IN  Senate  June 29, 2022
Amended  IN  Senate  June 14, 2022
Amended  IN  Assembly  May 19, 2022
Amended  IN  Assembly  March 29, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 2817

Introduced by Assembly Members Reyes and Luz Rivas
(Coauthors: Assembly Members Friedman, Grayson, Haney, and Stone)
(Coauthor: Senator Wiener)

February 18, 2022

An act to add Chapter 2.9 (commencing with Section 50495) to Part 2 of Division 31 of the Health and Safety Code, relating to housing.


LEGISLATIVE COUNSEL'S DIGEST


AB 2817, Reyes. House California Challenge Program.
Existing law establishes the Department of Housing and Community Development in the Business, Consumer Services, and Housing Agency. The department is responsible for administering various housing programs throughout the state, including, among others, the California Emergency Solutions and Housing Program, which, among other things, provides rental assistance and housing relocation and stabilization services to ensure housing affordability to people who are experiencing homelessness or who are at risk of homelessness.
This bill, upon appropriation of funds by the Legislature, would establish the House California Challenge Program, to be administered by the department, in partnership with the California Health and Human Services Agency, for the purpose of providing direct rental assistance to help persons who are experiencing homelessness obtain housing. The bill would require the department, upon appropriation of those funds by the Legislature, to allocate $1,000,000,000 for purposes of the program each fiscal year for 5 years, beginning with the 2022–23 fiscal year. The bill would require 10% of the funds to be awarded as grants to recipients, as defined, for the purpose of helping participants locate and obtain permanent housing and would require 80% of the funds to be allocated by the department for specified uses, including long-term rental assistance, master leasing of units, and short-term funds for prevention, self-resolution, and diversion services, as specified. The bill would authorize up to 10% of the funds to be used for administrative costs. Under the bill, and to the extent allowable under federal law, any assistance, services, or supports received pursuant to the program would not be considered income or a resource of the participant for purposes of determining eligibility for, or benefits pursuant to, any public assistance program.
This bill would require a recipient that receives grant funds under the program to submit an annual report to the department that includes specified information, including ongoing tracking of the specific uses and expenditures of grant funds, the number of homeless individuals and households served by the grant funds, and outcome data for households served through program funds. The bill would require the department, on or before January 1, 2024, and annually thereafter, as specified, to submit a report to specified Senate and Assembly committees that includes a summary of the reports submitted to the department by recipients and an evaluation of the outcomes and status of the program.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 (a) The Legislature finds and declares all of the following:
(1) In January 2020, an estimated 161,548 people experienced homelessness in California at a single point in time, as reported by the United States Department of Housing and Urban Development. This is the highest number since 2007, and represented a 17-percent increase since 2018. Experts predict significant increases in homelessness in 2022 resulting from the COVID-19 economic downturn.
(2) African Americans are disproportionately represented among California’s homeless population. While 6.5 percent of Californians identify as Black or African American, almost 40 percent of the state’s homeless population is African American. Indigenous populations are over six times more likely to experience homelessness than the general population. Latinx Californians are least likely to access housing and services available in their communities.
(3) Research suggests homeless populations are at far greater risk for consequences of COVID-19. Early studies estimated that people experiencing homelessness are two to three times as likely to die from COVID-19 than the general population. COVID-19 is putting pressure on local homeless systems to open safe sites for people to shelter, in noncongregant settings, to avoid the spread of COVID-19.
(4) Homelessness is a statewide crisis in California that requires a statewide, comprehensive solution that meets the scale of need. Housing subsidies are one of the most effective interventions for reducing homelessness, and have succeeded in reducing homelessness in several states and nationwide.
(b) Therefore, it is the intent of the Legislature to create a comprehensive, statewide homelessness solutions program. This program will fill gaps within the state’s response to homelessness, scale evidence-based solutions while promoting innovation to move people quickly into permanent housing, establish greater flexibility and a more nimble process in implementing a response to homelessness, facilitate critically needed collaboration between different levels of government, foster a streamlined process at the local and state levels to fund and build housing opportunities more quickly, hold grant recipients and the state accountable for achieving results, and focus on evidence-based housing and housing-based services solutions and long-term state and local structural changes.
(c) It is further the intent of the Legislature, that through the adoption of the statewide homelessness solutions program, state and local governments will achieve measurable reductions in homelessness.

SEC. 2.

 Chapter 2.9 (commencing with Section 50495) is added to Part 2 of Division 31 of the Health and Safety Code, to read:
CHAPTER  2.9. House California Challenge Program

50495.
 For purposes of this chapter, the following definitions apply:
(a) “Agency” means the California Health and Human Services Agency.
(b) “Applicant” means an applicant that applies for funding under this chapter, which may include a city, county, tribal government, nonprofit provider, public housing authority, or continuum of care, or a combination of these entities working together.
(c) “Department” means the Department of Housing and Community Development.
(d) “Diversion services” means services to connect individuals and families to alternate housing arrangements, case management services, and financial assistance to divert the household from shelter use and into permanent housing, including, but not limited to, housing arrangements with friends or family.
(e) “Eligible population” means persons experiencing homelessness and persons exiting rapid rehousing, transitional housing, or an institutional setting who are homeless and have no other housing options upon exiting those housing arrangements.
(f) “Holding fees” means payments to a private-market landlord as an incentive to hold a housing unit available for an eligible participant while the participant or landlord is waiting for approval to rent or lease the housing unit.
(g) “Homeless” has the same meanings as defined in Section 578.3 of Title 24 of the Code of Federal Regulations.
(h) “Housing First” has the same meaning as defined in Section 8255 of the Welfare and Institutions Code.
(i) “Housing navigation services” means services that assist program participants with locating, applying for, and moving into permanent housing.
(j) “Landlord incentives” means incentives to landlords to provide permanent housing, including, but not limited to, payment of security deposits, holding fees, signing bonuses, repairs made in advance of occupancy to ensure compliance with habitability standards, and contractors to assist the landlord in making repairs.
(k) “Master leasing” means the process in which a single lease is executed that covers multiple properties or units within a single multifamily property that are leased from a landlord to a recipient and the recipient sublets the lease to participants. The single lease shall comply with all applicable provisions of this chapter and shall be subject to the rights and responsibilities of tenancy under the laws of this state.
(l) “Operating subsidy” means a subsidy paid to a housing developer that allows an individual or household to occupy a permanent housing or supportive housing project while paying no more than 30 percent of their income on rent for the cost of operating projects, including building security, utilities, janitorial costs, staffing, paying off debt, and similar costs in existing affordable and supportive housing projects. An “operating subsidy” may include an operating subsidy reserve for at least 17 years.
(m) “Participant” means a person or household that is a member of the eligible population and receives assistance under this chapter.
(n) “Prevention” and “self-resolution” mean using targeted person-centered, short-term housing or services approaches to assist households who are at imminent risk of homelessness or have recently fallen into homelessness to maintain their current housing or identify an immediate and safe housing alternative within their social network.
(o) “Reasonable rent” means an amount of rental payment that does not exceed two times the fair market rent and is consistent with the market rent in the community in which the multifamily rental housing is located. For purposes of this subdivision, “fair market rent” means the rent, including the cost of utilities, as established by the United States Department of Housing and Urban Development pursuant to Parts 888 and 982 of Title 24 of the Code of Federal Regulations, as those parts read on January 1, 2021, for units by number of bedrooms, that must be paid in the market area to rent privately owned, existing, decent, safe, and sanitary rental housing of nonluxury nature with suitable amenities.
(p) “Recipient” means an entity that applies for and receives funds from the department for the purposes of the program.
(q) “Rental assistance” means a tenant-based rental subsidy provided to a landlord to assist a tenant in paying the difference between 30 percent of the tenant’s household income and the reasonable rent for the multifamily rental housing unit, as determined by the recipient.
(r) “Sustainability plan” includes, but is not limited to, connections to other state, local, or federal programs that can support an individual beyond the term of the program established pursuant to this chapter to ensure the participant does not fall back into homelessness.
(s) “Tenancy transition services” means services that use evidence-based models to help participants move from homelessness to permanent housing, including assessing a participant’s preferences and barriers to successful tenancy, developing an individualized housing support and crisis plan, assisting with the housing application and search process, linking participants to resources to cover move-in costs, assisting and arranging for a move, and other evidence-based services that a participant may require to move into permanent housing.

50495.5.
 Upon appropriation of funds by the Legislature for the express purpose of establishing, administering, and funding the program pursuant to this chapter, the House California Challenge Program shall be established for the purpose of providing direct rental assistance to help persons who are experiencing homelessness obtain housing. The program shall be administered by the Department of Housing and Community Development as the lead agency. The department shall administer the program in partnership with the California Health and Human Services Agency.

50496.
 Upon appropriation of funds by the Legislature, as described in Section 50495.5, the department shall allocate one billion dollars ($1,000,000,000) for purposes of the program each fiscal year for five years, beginning with the 2022–23 fiscal year.
(a) The department shall create a competitive grant application process and award grants to applicants in geographically diverse communities.
(1) Applicants for funding shall provide information regarding all of the following:
(A) How the applicant can leverage existing programs to provide rental assistance and permanent housing for participants under this program.
(B) The applicant’s prior experience administering programs with successful outcomes for the target population.
(C) The anticipated number of households to be served and permanently housed by rental subsidies provided under the program.
(D) The anticipated number of households to be served that would also be subsidized using any other local, state, or federally funded rental subsidy program.
(E) How the applicant will determine service needs and ensure participants are connected to adequate services.
(2) Recipients may use grant funds for any of the following eligible uses to provide services to the eligible population:
(A) Landlord incentives.
(B) Housing navigation services.
(C) Tenancy transition services.
(D) Holding fees.
(E) Costs of establishing leases with landlords.
(b) The department shall allocate the money each fiscal year according to the following schedule:
(1) Ten percent of the funds shall be awarded as grants to recipients for the purpose of helping participants locate and obtain permanent housing.
(2) Eighty percent of the funds shall be allocated by the department for the following:
(A) At least 70 percent of the funds shall be allocated by the department to provide the following uses directly to participants or to landlords providing housing to participants:
(i) Long-term rental assistance in an amount not to exceed reasonable rent.
(ii) Master leasing of units to sublet to participants.
(B) Short-term funds for prevention, self-resolution, and diversion services.
(C) Up to 20 percent of the funds allocated pursuant to this paragraph shall be allocated for operating subsidy reserves, capitalized over at least 17 years for affordable housing projects that serve the eligible population.
(3) Up to 10 percent of the funds may be used for administrative costs of the department and the agency and for administrative costs of recipients.

50496.5.
 Recipients of funds under the program shall comply with the core components of Housing First, as defined in subdivision (b) of Section 8255 of the Welfare and Institutions Code.

50497.
 Notwithstanding any other law, and to the extent allowable under federal law, assistance, services, or supports received pursuant to this chapter are not income or a resource of the participant for purposes of determining eligibility for, or benefits pursuant to, any public assistance program. Participation in other benefits or housing or housing-based services programs shall not disqualify a person or household from being a participant for purposes of housing or services funded pursuant to this chapter.

50497.5.
 The department shall partner with relevant state entities and recipients to develop sustainability plans for participants that need housing assistance beyond five years.

50498.
 (a) A recipient that receives grant funds under the program shall submit a report to the department on or before January 1 of the year following receipt of the funds, and annually thereafter until all funds have been expended. The report shall be on a form provided by the department, and shall include all of the following, as well as any additional information that the department deems appropriate or necessary:
(1) Ongoing tracking of the specific uses and expenditures of grant funds, broken out by eligible uses, and including the current status of the funds.
(2) The number of homeless individuals and households served by the grant funds in the previous year, and the total number of homeless individuals served cumulatively during all years of the program, disaggregated by race, age, and gender identity.
(3) Outcome data for households served through program funds, including the type of housing that a household obtained upon exiting homelessness and the percent of successful exits from homelessness.
(4) The types of rental assistance provided with the grant funds and the number of households receiving each type of rental assistance.
(b) On or before January 1, 2024, and annually thereafter until all the funds have been expended, the department shall submit a report to the Assembly Committee on Housing and Community Development, the Senate Committee on Housing, the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, the Senate and Assembly Committees on Human Services, and the Senate and Assembly Committees on Health that includes a summary of the reports submitted to the department pursuant to subdivision (a) and an evaluation of the outcomes and status of the program, including a description of any sustainability plans for participants that need housing assistance beyond five years.