June 29, 2023

The Housing and Homelessness budget trailer bill (AB 129) contains significant changes to the Homeless Housing, Assistance and Prevention (HHAP) program. Many of the provisions are consistent with the AT HOME plan and reflect the advocacy of CSAC, counties, and partner organizations. The required regional collaboration, comprehensive homelessness plan development, and the identification of specific roles and responsibilities for each jurisdiction will help further efforts toward the establishment of a comprehensive homelessness response system. Unfortunately, there is no commitment to ongoing funding for the HHAP program. This lack of multi-year funding will limit the effectiveness of these new provisions and hinder the ability of local governments to make long-term progress to address homelessness.

AB 129 was passed by the Senate this morning and is anticipated to be passed by the Assembly this evening. CSAC has already started to engage with the Administration on implementation related to tools, resources, and timeline considerations needed to effectively comply with these program changes. Below is a summary of the key highlights of the HHAP program language in AB 129.

HHAP Funding Amounts

The budget agreement provides funding for HHAP in 2023-24 without an ongoing funding commitment.

• Establishes Round 5 of the HHAP Program to be funded at $1 billion in 2023-24
• States legislative intent to provide funding for the HHAP program in 2024-25
• Makes one percent of funding (after state administrative costs) available to develop required regional plans
• Provides 80 percent of funding as base allocations
• Maintains existing HHAP distribution ratios for big cities, continuums of care (CoCs), and counties (42%, 30% and 28% respectively)
• Applicants have the option of designating another applicant in their region to serve as the fiscal agent for administration of the funding
• Eliminates bonus funding
• Sets aside 17 percent as supplemental support for Homekey
• Provides two percent for tribal applicants
• Advances redeployment of bonus funding allocated in prior years as supplemental HHAP funding

Required Regional Plan

The trailer bill includes new requirements for regional coordination, comprehensive plan development, and identification of roles and responsibilities.

• Requires counties, big cities, and CoCs to apply as part of a region, to coordinate on the development and submission of a regionally coordinated homelessness action plan, and to be a signatory on the plan
• The plan must include:
  • Identification of roles and responsibilities for all participating jurisdictions regarding outreach and site coordination, siting and use of available land, the development of shelter, interim, and permanent housing options, and the coordination and connection to the delivery of services
    • Small cities (those with population under 300,000) may elect to engage and collaborate on the plan and will have roles and responsibilities identified
  • System performance metrics on a range on homelessness metrics
  • Key action towards accomplishing performance metrics including sources of funding, lead entity on each step, timeframe, and how to measure success.
  • List of actions to prevent individuals falling into homelessness as they exit institutional settings
  • Explanation of how each jurisdiction is using the list of identified federal, state, and local homelessness funding
  • Explanation of how region is connecting individuals to eligible wrap around services
  • Actions to address racial and gender equity
• The plan development shall include a public stakeholder process with at least three public meetings
• Specific entities invited to the plan development include those with lived experience, local department leaders, service providers, managed care plans, and street medicine providers
• Requires the HHAP application to be available by September 30, 2023, and for the regional plan to be due no later than 180 days from the date the application is available.

Uses of HHAP Funding

The trailer bill lists a broad range of eligible uses of HHAP funding in three categories.

• Reorganizes and expands uses of HHAP funding into three major categories – (1) Permanent housing solutions; (2) Interim housing solutions; and (3) Services for people experiencing homelessness
• Applicants must demonstrate that the region has dedicated resources to permanent housing prior to using funding for new interim housing solutions

• Permanent housing solutions include rental subsidies, landlord incentives, move-in expenses, operating subsidies, rapid rehousing, diversion support programs, services for people in permanent housing, and capital for permanent housing
• Interim housing solutions include navigation centers, operating expenses in existing congregate care sites, operating expenses in new and existing non-congregate care sites, motel or hotel vouchers, services to people in interim housing, capital funding for new non congregate shelter sites, capital funding for clinically enhanced shelter sites, and youth-focused services in transitional housing
• Services for people experiencing homelessness include street outreach, services coordination, systems support, and improvements to emergency shelters
• Applicants are allowed to use funding for additional purposes with approval of Council

Accountability Provisions

The trailer bill includes mechanisms for the California Interagency Council on Homelessness (Cal ICH) to monitor progress, provide technical assistance, and potentially withhold funding until improvement.

• Counties, CoCs, and big cities within a region must sign an MOU, while small cities may also sign and commit to participation
• The second installment (50% of the base allocation) will be contingent on submission of a regional plan update
• The council may withhold the second installment from a jurisdiction that repeatedly fails to take action as specified in the regional plan or that takes action adverse to achieving the objectives of the plan until the jurisdiction comes into compliance
• The council shall provide technical assistance to jurisdictions to help ensure compliance
• The council may monitor expenditures and programmatic activities to ensure compliance

Supplemental Funding

The trailer bill establishes additional requirements for eligibility for the Homekey set aside and redeployed bonus funding.

• In 2023-24, $100 million will be provided to Round 5 applicants as supplemental funding to applicants upon approval of regional plan
• In 2024-25, $260 million will be provided to Round 5 applicants as supplemental funding as long as applicants have an approved regional plan and counties and cities demonstrate that they have a compliant housing element
• For the supplemental Homekey funding, a city or county must have an approved regional plan and demonstrate that they have a compliant housing element in order to apply