HOUSE BILL REPORT

HB 1142

BYRepresentatives Winsley, Leonard, Day, Ferguson, Nutley, Padden, Dorn, Todd, Belcher, Anderson, Rector, Wineberry, Locke, Hargrove, R. Meyers, Rasmussen, Valle, Heavey, Jones, Jacobsen, Pruitt, Dellwo, Beck and Brekke

Enacting the rental housing allowance act.

House Committe on Housing

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (8)

      Signed by Representatives Nutley, Chair; Leonard, Vice Chair; Winsley, Ranking Republican Member; Anderson, Ballard, Inslee, Padden and Todd.

House Staff:Kenny Pittman (786-7392)

AS REPORTED BY COMMITTEE ON HOUSING FEBRUARY 10, 1989

BACKGROUND:

The Aid to Families with Dependent Children Program (AFDC) was created by the federal Social Security Act of 1935 in response to the poverty created by the Depression, and as an ongoing source of support for those who are unable to support themselves.

The Department of Social and Health Services administers the AFDC program in the state.  It has been estimated, in the state of Washington, that over 50,000 households receive AFDC assistance.  There are single parent households that rely on AFDC, as their sole source of income.  This group of households have traditionally applied for other types of federal housing assistance to meet their basic shelter needs.  The available housing assistance has not been able to meet the demand in recent years.

In 1988, the Legislature authorized unclaimed lottery prizes, up to 50 percent and not to exceed 1 million dollars, to be deposited quarterly in the general fund.  This allocation was only for the fiscal year ending June 30, 1989.

SUMMARY:

SUBSTITUTE BILL:  The Rental Housing Allowance program is established as a two-year pilot program in the Department of Community Development (DCD).  The Department of Community Development is authorized to make grants to cities and/or counties to assist very low-income single parent households obtain adequate basic shelter.  The grant assistance is limited to single parent households that rely on Aid to Families with Dependent Children (AFDC) as their sole source of income.  Assistance consists of a fixed, monthly housing allowance payment that is applied toward the household's rent.

The Department of Community Development is required to select up to eight local cities and/or counties for participation in the two-year rental housing allowance pilot program.  The Department of Community Development will award grants to those selected cities and/or counties for the purpose of administering local housing allowance programs.  The programs will be administered jointly by DCD and the selected cities and/or counties through a local organization that administers local housing assistance programs.

In awarding funds, DCD shall consider factors it deems appropriate, including but not limited to: (a) the number of eligible households in the jurisdiction; (b) the availability of suitable housing in the jurisdiction; and (c) the ability of the local government to contribute to the administrative costs.  The Department of Community Development shall provide for a geographic distribution of local housing allowance programs.

The Department of Community Development is required to establish: (a) the maximum rent, unit size, and fixed monthly housing allowance payment based on household size; and (b) the minimum housing quality standards for the assisted housing unit; and (c) the amount paid to eligible organizations to administer local rental housing allowance programs.  The amount paid to eligible organizations is limited to 50 percent of the costs necessary to administer the program.

The selected cities and/or counties are required to: (a) insure that the housing meets the standards required by DCD; (b) approve the lease between the owner and the eligible household; (c) enter into a contract with the owner of the housing to make fixed, monthly housing allowance payments on behalf of the eligible household, if terms and conditions are met; and (d) make fixed, monthly housing allowance payments to the owner of the leased housing unit.

The contract to the owner for fixed, monthly housing allowance payments on behalf of an eligible household shall be equal to the terms of the lease, not to exceed 12 months.  Assistance is limited to appropriations to the rental housing allowance program and is not considered an entitlement.

A rental housing allowance fund is created in the custody of the state treasurer.  Amounts as of June 30, 1989, of all unclaimed lottery prizes in excess of 1 million dollars and up to 3 million dollars shall be deposited in the rental housing allowance fund for the rental housing allowance program. Amounts above the 3 million dollars deposited in the rental housing allowance fund shall be deposited in the Washington housing trust fund.

Beginning with the fiscal year ending June 30, 1990, all unclaimed prizes in excess of 1 million dollars shall be deposited into the Washington housing trust fund.

The Department of Community Development is authorized to adopt rules necessary to carry out the two-year rental housing allowance pilot program.

The rental housing allowance pilot program expires on June 30, 1991.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The Department of Community Development shall determine the amount paid to eligible organizations to administer local rental housing allowance programs.  The amount paid to eligible organizations is limited to 50 percent of the costs necessary to administer the program.

A rental housing allowance fund is created in the custody of the state treasurer.  Amounts as of June 30, 1989, of unclaimed lottery prizes in excess of 1 million dollars and up to 3 million dollar prizes shall be deposited in the rental housing allowance program. Amounts above the 3 million dollars deposited in the rental housing allowance fund shall be deposited in the Washington housing trust fund.

Beginning with the fiscal year ending June 30, 1990, all unclaimed lottery prizes in excess of 1 million dollars shall be deposited into the Washington housing trust fund.

The general fund appropriation is reduced from 3 million dollars to 1 million dollars and the substitute provides for an emergency clause.

Appropriation:    The sum of 1 million dollars, or as much thereof as may be necessary, is appropriated to the Department of Community Development from the state general fund for the biennium ending June 30, 1991.

Fiscal Note:      Requested January 30, 1989.

Effective Date:The bill contains an emergency clause and takes effect immediately.

House Committee ‑ Testified For:    Representative Shirley Winsley, prime sponsor; and Mike Ryherd, Low-Income Housing Congress.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    The bill is desperately needed.  There are single parent households on AFDC that are paying excessive amounts of their income for housing. Making a fixed monthly payment on behalf of the eligible household will help remove this burden without any effect on the AFDC payment.

House Committee - Testimony Against:      None Presented.