June 27, 2024

CSAC advocated for ongoing and sustainable homelessness funding as a top state budget priority consistent with the AT HOME plan, which also calls for clear accountability at all levels of government. In this difficult budget year, the path for additional funding for the Homeless Housing, Assistance and Prevention (HHAP) program was uncertain as no funding beyond the current Round 5 was included in the Governor’s January Budget or May Revision. CSAC is grateful that the final budget agreement includes funding for a Round 6 of the HHAP program as contained in the Legislature’s budget plan. The strong and sustained advocacy from counties about how critical this funding is to the progress we are collectively achieving at the local level was essential in securing this funding.

The final budget agreement provides $1 billion for a Round 6 of the HHAP program, which provides flexible funding to counties, large cities, and continuums of care (CoCs) to address homelessness in local communities. It also includes a May Revision proposal to cut $260 million from HHAP Round 5 supplemental funding that was originally bonus funding in prior HHAP rounds.

The housing trailer bill (AB 166) outlines the implementation of Round 6 of the HHAP program. Round 6 continues many of the core elements of Round 5. This includes the funding distribution (city/CoC/county breakdown, point-in-time count allocation methodology, supplemental Homekey funding) and collaboration requirements (regional homelessness action plan, joint application, identification of roles and responsibilities, signed MOU). In addition, contained in AB 166 are changes to program administration, regional plans, funding, and accountability. The list below outlines the key changes for HHAP Round 6 that differ from the prior round.

Program Administration

• The administration of the HHAP program is transferred from the California Interagency Council on Homelessness (Cal-ICH) to the Housing and Community Development Department (HCD) effective July 1, 2024.
• The Round 6 application must be made available by January 31, 2025 and due no later than 180 days from when it is made available.
• Final report deadlines are added for all HHAP rounds.
• The annual HHAP report will now be due on April 1 instead of January 1 of each year.
• The HHAP quarterly fiscal reports of funds expended and obligated must now be submitted monthly.

Regional Plans

• An update to the Round 5 regional plan can meet the requirement for a Round 6 regionally coordinated homelessness action plan.
• Federally recognized tribal governments in the region are now included on the list of entities who will be invited to the regional plan development meetings.
• The identification of roles and responsibilities in the regional plan must now include roles related to the Behavioral Health Services Act.
• The Round 5 requirement for a description of key actions to improve performance metrics has been modified to now require the inclusion of a system performance and improvement plan that describes key actions that will be undertaken to improve the system performance measures that are submitted.
• This system performance plan must describe how each jurisdiction is utilizing other local, state, and federal funding as key actions and must specifically address an extensive list of homelessness programs, human services programs, health programs, and behavioral health programs. Some of this new requirement replaces the prior round requirement of describing how the region is connecting individuals to a list of various wraparound services and health and human services programs.

Funding

• In order to utilize Round 6 funding for new interim housing other than interim housing for youth or for nonhousing solutions, the region must demonstrate how sufficient resources from other sources are being used to sustain existing interim housing and planned portfolio of permanent affordable housing.
• The eligible uses of funding are slightly modified and reorganized. There is now a new homelessness prevention category that captures existing eligible uses and a new nonhousing solutions category that captures existing eligible uses.
• The allocation for tribal applicants is increased from two percent to three percent.
• The one percent amount set aside in Round 5 for planning for and preparing the regional action plans is not included in Round 6.

Accountability

• In a section of the code related to housing element enforcement, the HHAP program is added to the list of programs where the Attorney General can be notified for taking action against local jurisdictions for violations of state law.
• In order to receive HHAP Round 6 funding, an applicant needs to meet earlier HHAP rounds obligation and expenditure deadlines (fully obligated Rounds 1-3, fully expended Round 1, expended at least 50 percent and obligated at least 75 percent of first disbursement of Round 4).
• In order to receive the second half of Round 6 funding, a city or county must have a compliant housing element.
• If HCD determines that a grantee has made insufficient progress on key actions or failed to improve on at least half of the region’s system performance measures, HCD may require a corrective action plan as part of regional plan update. The regional plan update, including corrective action plan if applicable, must be approved prior to the disbursement of the second half of Round 6 funding.