HOUSE BILL REPORT

HB 2405

BYRepresentatives Rector, Winsley, Nutley, Padden, Anderson, Leonard, Jacobsen, Dellwo, Wang, Brekke, Todd, Moyer, Inslee, Scott, Valle, Wood, Phillips and O'Brien

Establishing the homelessness prevention program.

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, Inslee, Padden, Rector and Todd.

House Staff:Kenny Pittman (786-7392)

Rereferred House Committee on Appropriations

Majority Report:  The second substitute bill be substituted therefor and the second substitute bill do pass.  (20)

      Signed by Representatives Locke, Chair; Grant, Vice Chair; Silver, Ranking Republican Member; Youngsman, Assistant Ranking Republican Member; Appelwick, Belcher, Bowman, Brekke, Dorn, Doty, Ebersole, Hine, Inslee, Padden, Peery, Rust, Spanel, Sprenkle, Valle and Wang.

Minority Report:  Do not pass.  (2)

      Signed by Representatives McLean and Nealey.

House Staff:      Susan Nakagawa (786-7145)

AS REPORTED BY COMMITTEE ON APPROPRIATIONS FEBRUARY 3, 1990

BACKGROUND:

The homeless population has increased throughout the state. A recent survey conducted by the University of Washington, for the state Department of Community Development, found that a large percentage of the homeless were homeless as a result of a sudden job loss or other economic adversity.  This group of homeless only needed temporary housing assistance until a new job was found or the economic crisis was addressed.

The majority of current federal and state programs focus on activities that assist persons once they have become homeless. Some programs do allow the use of a percentage of the funds for homelessness prevention.  This is usually limited to a one-time payment for back rent or a mortgage payment.

In 1986, the Legislature established the Housing Trust Fund.  The purpose of the program was to provide a source of funds to local governments, nonprofit organizations, and public housing authorities to assist in the development of housing for persons and families with special housing needs and with incomes at or below 50 percent of the county median income.  The state Department of Community Development (DCD) is responsible for the administration of the Housing Trust Fund.

Currently, DCD accepts applications from local governments, nonprofit organizations, and public housing authorities.  The funds can be used to finance a variety of activities to make housing affordable to low-income people and people with special housing needs.  DCD is required to rate and give preference to applications based on: (a) the leveraging of other funds; (b) applicant contributions; (c) local government contributions; (d) projects that encourage ownership, management, and other project-related opportunities; (e) housing available to low-income persons for at least 15 years; (f) applicant's ability, stability, and resources to implement the project; (g) greatest need served; and (h) housing for the lowest income.

The Housing Trust Fund preference criteria that rates applications on the degree of leverage of other funds and the 15 year occupancy for low-income persons has the effect of eliminating homelessness prevention programs as fundable projects.

SUMMARY:

SUBSTITUTE BILL:  The Homelessness Prevention Pilot Program is established in the state Department of Community Development (DCD).  DCD is directed to select at least three eligible organizations to implement homelessness prevention programs at the local level. Grants and technical assistance, through the Washington housing trust fund, will be made available to eligible organizations to implement local homelessness prevention programs. Eligible organizations are defined as local governments, nonprofit organizations, and public housing authorities.

The assistance through the state's pilot program must be used: (a) to provide interest free loans of temporary rental or mortgage assistance to families in immediate danger of losing their housing as a result of insufficient income to pay housing costs; and (b) to provide technical assistance to eligible organizations to develop and implement local strategies to prevent homelessness.

In selecting eligible organizations for participation in the homelessness prevention pilot program, DCD must consider, but not be limited to the organization's:  (a) ability, stability, and resources to implement the local program; and (b) efforts to coordinate necessary support for families with children.  DCD shall, to the extent feasible, provide for a geographic distribution of local homelessness prevention programs throughout the state.

The recipient eligible organization is required to establish priorities of eligibility for temporary mortgage or rental assistance and to determine eligibility to participate regarding the income of families with children.

The determination of eligibility must include a determination that the family is subject to eviction due to nonpayment of rent or foreclosure for nonpayment of mortgage installments.  This determination must be based on illness, unemployment, underemployment, or any other failure of resources beyond the person's control.

The recipient eligible organizations must also verify the loss of income and determine the family does not have adequate resources to make the required housing payment.  No family can continue to receive assistance through the local homelessness prevention program if other federal, state, or local rental or mortgage assistance becomes available.

The Department of Community Development is required to adopt rules to implement the Homelessness Prevention Pilot Program. The rules must include but are not limited to:  (1) the maximum length of available assistance to families with children; (2) the eligibility and application process for eligible organizations; (3) the criteria to award grants and technical assistance to eligible organizations;  (4) the criteria eligible organizations must use when entering into contracts with families with children to make mortgage or rental assistance payments on their behalf; and (5) the efforts of the eligible organization to coordinate other support programs with the housing assistance payments, such as job search or retraining programs.

The Housing and Trust Fund program is amended to:  (a) include the activities of the Homelessness Prevention Pilot Program as an eligible activity; and (b) exempt the leverage and 15 year occupancy requirements on applications from eligible organizations that request participation as a local homelessness prevention pilot program.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The substitute bill establishes the Homelessness Prevention Program as a pilot program in the Department of Community Development (DCD). Eligibility for temporary rental or mortgage assistance is limited to families with children. DCD must select at least three eligible organizations to implement local homelessness prevention programs and to provide for a geographic distribution of pilot programs.  The appropriation is changed from the housing trust fund to the general fund and is increased from $250,000 to $500,000.

CHANGES PROPOSED BY COMMITTEE ON APPROPRIATIONS (SECOND SUBSTITUTE BILL):  The appropriation is deleted.  A technical adjustment is made broadening eligibility for the program to all organizations eligible under the Housing Trust Fund program.

Appropriation:    (Housing)  $500,000 from the general fund to the Department of Community Development.

(Appropriations)  The appropriation is deleted.

Fiscal Note:      Available.

House Committee ‑ Testified For:    (Housing) Representative Shirley Rector (Sponsor); Dorothy Roberts, League of Women Voters; Joel Crosby, Spokane City Councilman; Andrea Dahl, Association of Washington Cities; Mike Doubleday, City of Seattle; Tony Lee, Washington Association of Churches (with concern); Jeff Powell, Washington Association of Realtors; and Ben Bonkowski, Department of Community Development (with concern).

(Appropriations)  Representative Shirley Rector; Dorothy Roberts, Pierce County Shelter; and Louise Bachelor.

House Committee - Testified Against:      (Housing) No one.

(Appropriations) No one.

House Committee - Testimony For:    (Housing) The problem of homelessness is not just limited to the large cities of the state, this problem is in the rural areas of Washington. Once people become homeless it takes time to get them back on their feet.  This bill will help people from becoming homeless by keeping them in their homes.  The longer period of temporary housing assistance will allow them time to get back on their feet. The concern is over establishing additional funding in the housing trust fund without providing separate funding for the program.  The funding could then be provided through the housing trust fund.  The substitute bill addresses the major concern over separate funding for the program (DCD).

(Appropriations) Homelessness has rapidly increased; families with children are among the fastest growing population of the homeless.  Recent studies indicate that homelessness in rural areas is also increasing.  This legislation establishes a preventive measure to assist families in danger of becoming homeless.

House Committee - Testimony Against:      (Housing) None.

(Appropriations)  None.