CSAC Bulletin Article

HCD: Preliminary Plan to Distribute First Year SB 2 Homeless Funding

April 12, 2018

The Department of Housing and Community Development (HCD) unveiled a plan last week for distributing the first year of homelessness funding available pursuant to SB 2 (Chapter 364, Statutes of 2017) by modifying their existing Emergency Solutions Grant (ESG) program.

Department staff presented the proposal verbally last Tuesday to the Assembly Budget Subcommittee No. 4. The proposal would allocate first year SB 2 homelessness funds to local governments on a formula basis through each county or region’s Continuum of Care (CoC).

A proposed funding formula was included in trailer bill language released by the Department of Finance earlier this year. Eligible uses for the funding would be based on a modified version of the existing ESG program. According to the HCD staff presentation, the modified program would allow locals to use the funding for:

  • Rental assistance
  • 15-year capitalized operating reserves for supportive housing
  • Local programs that establish flexible housing subsidy pools
  • Operating support for short-term emergency solutions (e.g. navigation centers)
  • Landlord incentives (e.g. providing funding to property owners willing to accept Housing Choice Vouchers while a renter is waiting for approval of their voucher)
  • Homelessness planning
  • Data systems

The first two quarters of funding for SB 2 are expected to be available in July and are estimated at $129 million. The Department would modify the ESG program through a public process in advance of the funding, with a goal of putting out guidelines for a 30-day comment period on June 1. HCD testified that they would plan to issue a Notice of Funding Availability for these one-time funds by July, with funding being distributed by August.

Members of the Budget Subcommittee No. 4 seemed open to HCD’s proposal and asked that accountability and outcome measures also be included. CSAC, along with the Urban Counties Caucus and the County Behavioral Health Directors Association, testified that flexibility for the funding is key and that disbursing the funding to counties as soon as possible is a priority. We will continue to evaluate the HCD proposal, including any written information, once it becomes available.

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