A California-wide Strategy for Ending Chronic Homelessness Is Emerging

–Recent Legislation and Associated Funding Related to Locating and Developing
Permanent Supportive Housing is Key to Formulation and Implementation– 

–Finding Space to Solve Chronic Homelessness is Critical—

–Leveraging State with Federal and Local Public and Private Funding is Crucial– 

Recent California legislation has enacted several new laws and created several new funding sources regarding the location and development of permanent supportive housing including those listed below. They are advancing an emerging state-wide strategy for ending chronic homelessness. These laws and funding sources should be incorporated into county and city plans to prevent and end local homelessness.

Recent legislation and funding sources include the following:

Recent Legislation Impacting the Location of Permanent Supportive Housing

AB-2162 Planning and zoning: housing development: supportive housingrequires “supportive housing be a use by right in zones where multifamily and mixed uses are permitted, including nonresidential zones permitting multifamily uses, if the proposed housing development meets specified criteria, and would require a local government to approve, within specified periods, a supportive housing development that complies with these requirements.”

SB-744 Planning and zoning: California Environmental Quality Act: permanent supportive housing states that “The local government may require a supportive housing development subject to this article to comply with written, objective development standards and policies.However, the local government shall only require the development to comply with the objective development standards and policies that apply to other multifamily development within the same zone.”

SB-450 California Environmental Quality Act exemption: supportive and transitional housing: motel conversion. “This bill (does), until January 1, 2025, exempt from CEQA projects related to the conversion of a structure with a certificate of occupancy as a motel, hotel, residential hotel, or hostel to supportive or transitional housing, as defined, that meet certain conditions.” The Legislature found and declared (a) “An interim motel housing project makes only minor interior or exterior alterations to a structure certified for occupancy as a motel, hotel, residential hotel, or hostel, to facilitate the use of the structure as supportive or transitional housing” and (b) “Upon the termination of the use for supportive or transitional housing, the use of the structure reverts back to that authorized by the certificate of occupancy in effect before the project.”

AB-1397 Local planning: housing element: inventory of land for residential development states that “Sites shall be identified as needed to facilitate and encourage the development of a variety of types of housing for all income levels, including multifamily rental housing, factory-built housing, mobilehomes, housing for agricultural employees, supportive housing, single-room occupancy units, emergency shelters, and transitional housing.”

AB-1515 Planning and zoning: housing maintains “When a proposed housing development project (including supportive housing) complies with applicable, objective general plan and zoning standards and criteria, including design review standards, in effect at the time that the housing development project’s application is determined to be complete, but the local agency proposes to disapprove the project or to approve it upon the condition that the project be developed at a lower density, the local agency shall base its decision regarding the proposed housing development project upon written findings supported by substantial evidence on the record that both of the following conditions exist: (1) The housing development project would have a specific, adverse impact upon the public health or safety unless the project is disapproved or approved upon the condition that the project be developed at a lower density. As used in this paragraph, a “specific, adverse impact” means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety standards, policies, or conditions as they existed on the date the application was deemed complete. (2) There is no feasible method to satisfactorily mitigate or avoid the adverse impact identified pursuant to paragraph (1), other than the disapproval of the housing development project or the approval of the project upon the condition that it be developed at a lower density.”

SB-330 Housing Crisis Act of 2019, which requires “a local agency that proposes to disapprove a housing development project (including supportive housing) that complies with applicable, objective general plan and zoning standards and criteria that were in effect at the time the application was deemed to be complete, or to approve it on the condition that it be developed at a lower density, to base its decision upon written findings supported by substantial evidence on the record that specified conditions exist, and places the burden of proof on the local agency to that effect. The act requires a court to impose a fine on a local agency under certain circumstances and requires that the fine be at least $10,000 per housing unit in the housing development project on the date the application was deemed complete.”

New Funding Sources Created by Recent Legislation that Encourage Leveraging of Federal and Local Public and Private Funds for Development of Permanent Supportive Housing

No Place Like Home Program dedicates “up to $2 billion in bond proceeds to invest in the development of permanent supportive housing for persons who are in need of mental health services and are experiencing homelessness, chronic homelessness, or who are at risk of chronic homelessness.” Eligible applicants are Counties either solely or with a housing development sponsor.

The legislation requires that $1,800,000,000 be awarded in at least 4 rounds. Department of Housing and Community Development (HCD) announced the availability of approximately $400 million in Round 1 Competitive Allocation funds for the NPLH program. Applications were due in January 2019 and awards were recently announced that included funding for more than 800 permanent supportive housing units.

A Notice of Funding Availability (NOFA) for the next competitive round of $400 million was recently released and applications are due January 8, 2020.

The legislation allowed HCD to distribute a non-competitive allocation of $190 million to that required counties to submit a Noncompetitive Allocation Acceptance Form and an executed copy of the Authorizing Resolution to HCD by August 15, 2019. Counties that failed to submit the required documentation had their unawarded non-competitive transferred into the NPLH Competitive Allocation for future NOFA Allocations. The deadline for counties that submitted their required documentation to submit project applications for their non-competitive allocation is February 15, 2021.

Housing for a Healthy California Program, was created in order to provide grants to counties for permanent supportive housing for individuals who are recipients of or eligible for health care provided through the California Department of Health Care Services, Medi-Cal program.

A 2019 NOFA for Housing for a Healthy California Program Article I – National Housing Trust Fund Allocation Funds was released in May, 2019 by HCD that made approximately $33 million in National Housing Trust Fund (NHTF) Allocation funds for the Housing for a Healthy California (HHC) program. Applications were due August 13, 2019. Awards will be made by the end of 2019.

A NOFA for an additional $33 million is scheduled to be released in February, 2020 and applications will be due by May, 2020. Target Population will be persons who are “Chronically homeless or is Homeless and a High-cost health user upon initial eligibility, is a MediCal beneficiary, is eligible for Supplemental Security Income, is eligible to receive services under a program providing services promoting housing stability, and is likely to improve his or her health conditions with Supportive housing.”

Permanent Local Housing Allocation Program, was created in order to help cities and counties implement plans to increase the affordable housing stock including permanent supportive housing. Approximately $165 million in allocations will soon be available.  The NOFA regarding the formula allocation for entitlement local governments, which was initially scheduled for release in September, is still being developed and circulated for approval. There will be a 2-month time period between issuance of the NOFA and the application deadline. A competitive NOFA restricted to non-entitlement local governments will be released several months after the formula allocation NOFA. Applicants will likely have 3+ months to prepare applications.

Supportive Housing Multifamily Housing Program(SHMHP) was created out of the Multifamily Housing Program (MHP). “Eligible use of funds may include, but are not limited to, real property acquisition, refinancing to retain affordable rents, necessary on-site and off-site improvements, reasonable fees and consulting costs, capitalized reserves, facilities for childcare, after-school care, and social service facilities integrally linked to the restricted supportive housing units. Also, eligible projects “must have a minimum of five supportive housing units, or a minimum of 40 percent of total units must be supportive housing units, whichever is greater, and must have associated supportive services for the intended target population living in the restricted units, pursuant to Health and Safety Code Section 50675.14.”

HCD will not release another set aside for the SHMHP. However, applications including permanent supportive housing projects may be submitted during the next round of funding for the Multifamily Housing Program (MHP), which is noted below.

Multifamily Housing Program provides funds to be used for permanent financing for affordable multifamily rental and transitional new construction, acquisition, rehabilitation, and conversion housing developments. Eligible applicants include local public entities, for-profit and nonprofit corporations, and limited partnerships in which an eligible applicant or an affiliate of an applicant is a general partner. Applicants or their principals must have successfully developed at least one affordable housing project. 

HCD announced the availability of approximately $250 million in funding in a NOFA, which was released in June, 2019. Applications were due in August, 2019 and award announcements are expected in December, 2019.

HCD is scheduled to release another NOFA in early 2020.

Next Steps

Next steps involve being thoughtful about the inter-relatedness of land-use and policy planning. Strengthening land-use policies to advance permanent supportive housing is crucial. However, land-use policies are more than tools to increase permanent supportive housing. Policy planning is also critical regarding location, which can impact the ability of residents accessing services, transportation, and other essential community amenities.