Legislature(2007 - 2008)CAPITOL 106
01/29/2008 03:00 PM House HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
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| Start | |
| HCR14 | |
| HJR29 | |
| HB324 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HCR 14 | TELECONFERENCED | |
| *+ | HJR 29 | TELECONFERENCED | |
| *+ | HB 324 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 324-LOW-INCOME HOUSING; HOMELESSNESS 3:20:09 PM CHAIR WILSON announced that the final order of business would be HOUSE BILL NO. 324, "An Act relating to the Alaska housing trust fund and to the Alaska Council on the Homeless; and providing for an effective date." Version A was before the committee. 3:21:24 PM MARK ROMICK, Director, Planning & Program Development, Alaska Housing Finance Corporation (AHFC), Department of Revenue, informed the committee that HB 234 is the Alaska Housing Trust legislation that creates a trust fund within the AHFC and codifies the governor's council on the homeless. In addition, the bill will allow AHFC to address the needs of Alaskan residents who are homeless. 3:22:49 PM DAN FAUSKE, Chief Executive Officer/Executive Director, Alaska Housing Finance Corporation (AHFC), Department of Revenue, stated that HB 234 represents the efforts of many to establish a source of funding to address the ongoing issue of homelessness. He pointed out that $10 million, although not an endowment, will create some much needed funding. Mr. Fauske reminded the committee that it is much cheaper to house people than incarcerate them, and characterized the work that has been done as a step forward. 3:24:06 PM REPRESENTATIVE ROSES recalled a letter dated January 17, 2008, from the AHFC to Chair Wilson, that described the trust as a proven model to address homelessness. He asked for more information on the model. MR. ROMICK explained that there are approximately 600 housing trusts operating in 43 states in the U.S. These trusts successfully leverage, on average, approximately $9 for every $1 of money that comes into the trust from various sources. REPRESENTATIVE ROSES asked whether there are examples of unsuccessful housing trusts and the problems therein. MR. ROMICK said that, during the steering committee's development of the housing trust fund framework, there was discussion regarding housing trusts and how to avoid major problems. He opined that housing trusts failed due to the lack of funding; a housing trust is a complicated approach to housing due to the necessary coordination of capital development, operating support, and supportive services for the beneficiaries. Mr. Romick noted that the biggest lesson learned was that the design of the fund must coordinate all three programs. 3:27:16 PM REPRESENTATIVE GARDNER asked whether $10 million is enough to fund the housing trust. She further asked for the specifics of the "contributions from other private sources." CHAIR WILSON interjected that the funding is proposed by separate legislation. 3:28:12 PM MR. ROMICK answered that $10 million is a good starting point and will allow AHFC time to get the systems in place to move projects forward. Contributions of nongovernment funds have been committed by the Alaska Mental Health Trust Authority (AMHTA) and the Rasmuson Foundation. 3:29:08 PM REPRESENTATIVE GARDNER pointed out that the AMHTA is already expected to contribute $2.5 million. 3:29:35 PM JEFF JESSEE, Chief Executive Officer, Alaska Mental Health Trust Authority, Department of Revenue, provided historical information on the development of the housing trust. Several years ago the Bush Administration started an initiative to develop ten year plans to end homelessness across the country, and many states and communities responded with plans. The steering committee determined that to build sufficient capacity to address the majority of the needs of the homeless in Alaska would cost $15 million to $20 million per year for 10 years, not allowing for the factors of migration and economics. Mr. Jessee described the funding sources in the governor's bill, including the commitments from the AMHTA, and the Rasmuson Foundation, to fund $2 million of the $10 million total. Regarding private philanthropy, he opined that, following the state's commitment, the remaining $2.5 million could be raised. He cautioned that, although the AMHTA could continue to be a funding partner, the AMHTA and private philanthropy could not continue to contribute $5 million per year. Mr. Jessee emphasized that AHFC continues to generate more revenue than it spends, and suggested that its corporate receipts could go into the housing trust at the direction of the legislature. 3:34:08 PM CHAIR WILSON expressed her understanding that AHFC corporate receipts are in the general fund and the money would have to be appropriated at the expense of existing programs. She then directed the committee to turn to page 2, line 16, of the bill, and asked how much cost is estimated for the administration of the fund. 3:35:34 PM MR. ROMICK opined that the administrative costs of the fund, such as staff, training, and consulting, would probably not exceed five percent. 3:36:12 PM REPRESENTATIVE SEATON asked for a further description of the needs of the 4,000 households that are on a waiting list for public housing programs. MR. ROMICK explained that the 4,000 families include those waiting for public housing properties and those waiting for Section 8 housing choice vouchers. Regarding the allocation of funds from the trust fund, aside from the general categories of capital expenditures, operating assistance, and supportive services, that decision will be part of the charge of the governor's council. 3:38:34 PM MR. JESSEE informed the committee that when he was on the council for homelessness, he thought he had a handle on the housing matter, but he was surprised to learn that virtually all of the money for low income housing in the state comes from the federal government. In addition, the money funded for low income housing is set aside for those who earn 70 percent of the area median income and above; however, the greatest need is of those who earn 50 percent of the area median income and below. Mr. Jessee explained that the low income dollars are going to those with a relatively higher income level, although that is not the greatest need, for two reasons. The first reason is that low income housing projects have to prove that they are economic. All low income housing projects are built with many sources of funding, such as low income tax credits, HUD credits, and low interest commercial loans, and therefore, business plans must eventually show revenue from tenants. Higher rents bring more income, and thus the higher the income of the renters the more economic the project and there is more interest from developers. The second reason is that those who are living at 50 percent of the area median income and below generally have problems with substance abuse, mental health issues, developmental disabilities, domestic violence, or illnesses that keep them from working enough to afford housing. Mr. Jessee related that in most Alaska communities, an individual must work more than 100 hours a week at minimum wage to afford housing. He acknowledged that those with the greatest need are not good tenants and present unique difficulties for housers. The AMHTA has learned that there must be a bifurcated system with the social service workers, who know how to provide support services, but not necessarily how to build housing units. The social service workers can provide case management, tenant education, financial literacy, employment training, therapy and counseling. The housers can provide successful business models for developers. He gave the example of the $40 million Sound Families Initiative funded by the Gates Foundation. The Gates Foundation discovered that these projects need three components: capital money from the foundation to draw down the overall cost of the project to the developer; support services, including a five to ten year commitment of funding for those services; and partnering with housing authorities to project-base the Section 8 housing choice vouchers. 3:48:59 PM MR. JESSEE explained that the rental subsidy works such that an individual gets a rent voucher and has to search out a landlord who agrees to rent to them. This process is beyond the abilities of most of the individuals with the greatest need. With the Housing First model, part of the idea is to connect the voucher with a housing unit, so that the social services staff can put the client in the housing. After placement in housing, the client has a much greater chance of success. Further, addressing the issue of families, Mr. Jessee stated that, in some Title 1 schools in Alaska, more than half of the kids in a classroom transfer by the end of the year. He opined that a school, and its students, can not succeed when kids are moving to different schools each year. In Seattle, at the end of five years of influence by the Sound Families Initiative, the percentage of kids changing schools was down from 25 percent to less than 1 percent, because finding housing anchored kids in a community. 3:52:17 PM MR. JESSEE stressed that previous unsuccessful programs were those that did not have one of the three essential components, and so were too expensive, without support services, or without effective rental subsidies. He pointed out that, in addition to the value of housing to the health of families, the recidivism of those coming out of corrections or mental health facilities, when they do not have housing and support services, is high. 3:53:42 PM REPRESENTATIVE SEATON asked whether this program is similar to the Seattle Housing First program for public inebriates. MR. JESSEE explained that there is nothing in the creation of the housing trust connected to programs specifically where people can drink; however, that is not to say that the housing trust precludes such an option. 3:54:44 PM REPRESENTATIVE FAIRCLOUGH called the committee's attention to page 3, line 14, that directs four members of the Alaska Council on the Homeless will have experience or expertise in working with housing development, financing, and consumers of affordable housing. She asked what members of the population will be encouraged to participate in the administrative board. MR. ROMICK explained that that category is designed to bring experience from those who are involved in homeless services, such as providers of affordable housing, social service workers, consumers of affordable housing, bankers, or real estate agents. REPRESENTATIVE FAIRCLOUGH opined that real estate developers and financial officers should also be included. She suggested that the two-year service term for council members should be expanded to a four-year term. MR. ROMICK said that a four-year term could be considered. MR. JESSEE relayed that the Senate committee substitute (CS) will reflect a longer term. 3:56:54 PM REPRESENTATIVE GARDNER asked for the definition of "economic area" as used on page 1, line 12, of the bill. MR. ROMICK explained that an economic area is traditionally defined through the census area. In an emergency, or in the case of a natural disaster, there are reasons, other than geographic, to focus attention on a homeless population; thus the use of the term "economic area" will allow more flexibility. 3:58:41 PM REPRESENTATIVE GARDNER asked for an example. MR. ROMICK gave the example of the down turn of the fishing industry in Bristol Bay and the loss of jobs and homes as a result. MR. JESSEE gave another example that some communities in Southeast may be affected by a loss of the timber industry, whereas neighboring fishing communities are unaffected. 3:59:35 PM REPRESENTATIVE ROSES asked for the definition of "homelessness" for adults versus children. MR. ROMICK acknowledged that there are a couple of different definitions primarily used by the federal government. The definition that the AHFC will use for this program is broad and generally includes those who might not normally be considered homeless, such as those who are living in camps or are doubled up with other families and relatives. The reason for this broad definition is to address the needs of both those who are traditionally considered to be homeless and those who are near homelessness; part of the purpose of the legislation is to prevent homelessness. 4:01:34 PM REPRESENTATIVE ROSES recalled that a factor in the definition of homelessness related to the lack of a permanent mailing address or the number of times families changed residences. MR. ROMICK stated that there is no tie to the number of times a person or family changes residences. 4:02:30 PM REPRESENTATIVE GARDNER asked for clarification of page 2, line 7, that allows the corporation to participate in the development of buildings or units that, by their use, address the purpose of the fund but that, by their operation, appear nonresidential in nature. MR. ROMICK explained that currently the AHFC has a statutory definition of what is considered residential housing. This definition is specific in the sense that it goes to the intent and nature of the relationship between the tenant and the owner of the property. This definition prevents the AHFC from participating in some projects that are residential, but may be in a different category; for example, the Anchorage Safe Harbor Inn. Mr. Romick noted that the intent of line 7 is to allow the purpose of the fund sufficient flexibility to address homelessness. 4:05:10 PM CHAIR WILSON asked for the definition of "units." MR. ROMICK answered that a building is a structure and a unit is the unit in which someone lives. In response to a further question, he said that there are numerous structure types that could be funded by this legislation. The structures are not referred to as projects, but rather, affordable housing, in order to avoid negative connotations. The intent is that this type of housing will be integrated anywhere into the community. MR. JESSEE assured the committee that affordable housing is moving away from the concept of projects and developers are interested in developing 100 to 150 units, some of which will be sold at fair market value and some at lower income levels. Contemplating partnering with social services for support encourages the inclusion of units for homeless individuals, as in the Seattle example, with the long term goal of successful neighborhoods. 4:09:06 PM REPRESENTATIVE SEATON suggested that the definition of homeless should be cited in legislation. 4:09:36 PM REPRESENTATIVE GARDNER recalled Mr. Jessee's testimony that the $10 million is sufficient to begin this program. She then asked what would happen to the structures built with this money if there is no continued financial support in subsequent years. MR. ROMICK explained that, if the project or building can no longer function as it was intended, the AHFC would continue to use it to provide housing in another manner. 4:11:25 PM CHAIR WILSON suggested that the report that is required by the bill should be issued by the first day of January of each year. REPRESENTATIVE GARDNER opined that offices are in transition prior to the convening of the session. 4:12:42 PM CHAIR WILSON further suggested that the term of office for the members of the Alaska Council on the Homeless should be more than two years. 4:13:13 PM REPRESENTATIVE CISSNA added that memberships can be political, and thus suggested that a five-year term would bridge changes in the administration and help to maintain an institutional history. 4:14:33 PM REPRESENTATIVE SEATON referred to page 3, line 27, and asked for the amount of the per diem cited. MR. ROMICK responded that AS 39.20.180 refers to the per diem of the AHFC board and is about $60 a day. 4:15:37 PM REPRESENTATIVE GARDNER pointed out that the length of service would be difficult for council members who are also commissioners, and for volunteers. 4:16:06 PM CHAIR WILSON recommended that members' terms are staggered in order to prevent the transition of the entire board at once. 4:16:43 PM REPRESENTATIVE ROSES pointed out that a member can be re- appointed after a two-year term. He related his personal experience of serving on boards and commissions, and opined that a far greater problem is the number of commissioners that are designated to serve. 4:18:55 PM REPRESENTATIVE GARDNER asked whether the impact of a change of administration on members, who are also commissioners, is addressed on page 3, line 17. CHAIR WILSON clarified that line 17 addresses an absence for one meeting. MR. ROMICK indicated that this provision is identical to that of the AHFC board statute that allows board members, who are also commissioners, to appoint a permanent designee. 4:19:54 PM CHAIR WILSON asked whether the same designee continued through a change in administration. MR. ROMICK said sometimes. 4:20:32 PM REPRESENTATIVE ROSES expressed his belief that, if there is going to be a designee, the bill should specify. CHAIR WILSON preferred commissioner's designee. 4:21:04 PM REPRESENTATIVE KELLER opined that commissioners come and go and thus have a better perspective with the changes in administration. Alaska has a problem with tunnel vision in bureaucracies and an overall view is important. 4:22:05 PM REPRESENTATIVE SEATON related his understanding that the intent and the usage is that the member will be a commissioner or designee. He made a conceptual request to add "or designee" to the language of the bill. 4:23:07 PM STEPHANIE WHEELER, Executive Director, Office of Faith Based & Community Initiatives, Department of Health and Social Services, informed the committee that, through the National Project Homeless Connect in Anchorage, she interviewed several chronically homeless individuals. She stated that there are individuals who are working, or have sources of income, but who are unable to find safe and affordable housing, nonetheless. She noted that she chairs the statewide Homelessness Ends in Alaska-Advisory Team, and two of its four goals are to increase affordable housing and to promote locally delivered family support services. Ms. Wheeler shared that the 2003 Office of Faith Based & Community Initiatives Task Force surveyed needs statewide and determined that the concern heard most often was the lack of adequate safe and affordable housing for individuals and families. She stated that the DHSS, the Office of Faith Based & Community Initiatives, and the Homelessness Ends in Alaska-Advisory Team strongly support the creation of a housing trust fund. 4:26:21 PM CHAIR WILSON closed public testimony. 4:26:54 PM REPRESENTATIVE ROSES, speaking as a landlord, related his experience with tenants who qualify for the Section 8 Housing Choice Voucher Program. He stated that there are restrictions to the program that cause problems for the landlord. In addition, he opined that sometimes homelessness is a choice. Representative Roses said that, through his experience as a teacher, he is well aware of the impact to those who are homeless, particularly on families, and wanted to ensure a clear definition to prevent the confusion of homeless children with children whose families are transient. 4:30:01 PM CHAIR WILSON related her experience with renters. 4:31:28 PM REPRESENTATIVE GARDNER re-stated that the committee wants to include in the bill a definition of homeless, a provision for commissioner council members to appoint a designee, and staggered terms for the board members. 4:32:03 PM REPRESENTATIVE FAIRCLOUGH asked to include the cost of the administration of the program that will be taken from the corpus of the fund. She expressed her desire to see that cost capped. 4:32:23 PM REPRESENTATIVE CISSNA stated her strong support of HB 324. She noted her experience in her community and inquired as to the capacity of the program. Representative Cissna opined that the situation is worsening in Anchorage and there is a need for the program, along with an understanding of the underlying causes. 4:34:01 PM REPRESENTATIVE ROSES clarified that his statements did not intend to say that Section 8 tenants are less responsible or respectful than other renters. CHAIR WILSON agreed. [Although not formally stated HB 324 was held over.]
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