Legislature(2007 - 2008)SENATE FINANCE 532
02/19/2008 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB101 | |
| SB158 | |
| SB231 | |
| SB233 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 101 | TELECONFERENCED | |
| + | SB 158 | TELECONFERENCED | |
| + | SB 231 | TELECONFERENCED | |
| + | SB 233 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 231
"An Act relating to the Alaska housing trust fund and
to the Alaska Council on the Homeless; and providing
for an effective date."
Co-Chair Stedman related that SB 231 is sponsored by the
Governor. He summarized that the bill creates an Alaska
Housing Trust Fund within the Alaska Housing Finance
Corporation (AHFC). There is a $10 million capital
expenditure for FY 09. The appropriation is in SB 22, the
mental health budget. There is $2.5 million from each of
four sources: general funds, AHFC, Mental Health Trust
Authority, and private funds.
9:17:31 AM
DAN FAUSKE, CEO/EXECUTIVE DIRECTOR, ALASKA HOUSING FINANCE
CORPORATION, DEPARTMENT OF REVENUE, explained that he is
also chairman of the Governor's Council on the Homeless. He
reported that it is obvious that there is a homeless
problem. It is cheaper to house people than to incarcerate
them. On any given day there are thousands of homeless in
Alaska, some of which are children. He reported that AHFC
recognizes that the problem is worsening. The original
concept was the creation of an endowment to try to support
municipal governments and non-profits involved in this
issue.
MARK ROMICK, DIRECTOR, PLANNING DEPARTMENT, ALASKA HOUSING
FINANCE CORPORATION, DEPARTMENT OF REVENUE, explained that
SB 231 makes changes to existing statutes. The primary
change is to take the current Alaska Council on the
Homeless, which has been operating under Administrative
Order, and include it within AHFC statutes. The second
major portion of the bill is to amend AHFC's authority to
get involved in projects not currently dealt with. This
would allow AHFC to be more flexible in participating in
projects addressing homelessness and providing affordable
housing throughout Alaska. The final change would add a
specific fund to AHFC's statutes called the Alaska Housing
Trust Fund, which is a broad fund that could be used for a
number of different purposes, such as affordable housing and
housing for the homeless called Supportive Housing. The
bill limits the funding to families or individuals below 80
percent of the median income with a substantial priority for
those below 30 percent of the median income.
9:22:12 AM
Co-Chair Hoffman asked if there would be interaction in
rural areas with regional housing corporations. Mr. Romick
said there would be. One of the representatives on the
Council is a representative from the regional housing
authorities.
Senator Elton asked what the median income is. Mr. Romick
explained that the median income varies by region in the
state. Mr. Romick said the federal definition is used and
is based on family size and census area. Senator Elton
referenced the "Ratio of Average Home Price to Median Family
Income" chart by the Alaska Housing Trust. He requested
more information about how often the census information is
changed. Mr. Romick said every year HUD releases new median
income figures for Alaska. Senator Elton asked if the price
of fuel is a factor in determining median income. Mr.
Romick explained that the cost of housing and living is not
considered. He explained the American Community Survey.
Co-Chair Stedman asked about the median home price. Mr.
Romick said it is the average sale price. Co-Chair Stedman
asked if it were possible to look at the median home price
rather than the average. He used Sitka as an example of
higher level homes that skewer the statistics. Mr. Romick
offered to supply those figures. He said the median house
value in Sitka in 2006 was $280,000, whereas the average
sale price was $450,000. Co-Chair Stedman thought that kind
of information would be important for the committee to
consider.
9:27:58 AM
JEFF JESSE, EXECUTIVE DIRECTOR, ALASKA MENTAL HEALTH TRUST
AUTHORITY, DEPARTMENT OF REVENUE, expressed surprise that
the vast majority of housing resources tend to go to people
at 70 percent of the median income, when the vast majority
of the people who are homeless, or at risk for homelessness,
are at 30-40 percent or less. One of the reasons the
funding is going to the higher income group is that all low
income housing developments have to pencil out. They are
funded by many entities and programs. Somewhere in the
business plan is a component for revenue from the tenant and
higher income populations can contribute more. Another
factor is that people at 40 percent are homeless for a
reason: mental health problems, disability issues, substance
abuse issues, domestic violence issues, or other sorts of
difficult situations. Housing for these people is not very
successful due to these other issues.
Mr. Jesse reported that housing developers are good a
putting together the package, but they know nothing about
support services for their clientele. He named several
programs available as support services, but that are not
proficient at providing housing for their clientele because
the housing process is very complex. The result is that the
two sectors have not been integrated.
9:32:24 AM
Mr. Jesse reported that in other areas of the country there
is a new paradigm called Housing First. Support services
come after housing is found. Many states have created these
housing trust models. He recalled the Gates Foundation
strategy for dealing with homeless families. There is a
three-pronged strategy. First, small capital increments are
offered to buy down the costs of the projects. Second, and
most critical, funding is provided for ancillary support
services such as case management, treatment, employment
training and assistance. This connects social services to
the housing projects. It is important to commit to multiple
years, 5-10, of social services funding up front because
most social services agencies require more than one year of
funding before they will commit to a project. Also,
projects that are funded out of this initial capital
appropriation will have the social services component funds
obligated even during falling oil prices. The goal is to
ensure self sufficiency for the homeless with on-going help
from normal community service assistance programs.
9:36:59 AM
Mr. Jesse shared statistics regarding the population from
the Department of Corrections. About 42 percent of inmates
are trust beneficiaries. The recidivism rate is
substantially higher than that of the non-beneficiary
population. One of the primary problems is the lack of
safe, affordable housing. The rate of recidivism is very
high due to this problem. He reported that in 1995-6, there
were 1,000 homeless children and youth in Anchorage; in
2006, there were 2,900. The impact on these children is
great. He shared statistics about homeless children in
Anchorage schools. The Housing Trust addressed this issue
in the Gates Foundation Sound Families Initiative and
reduced the homeless children rate by anchoring the kids in
a home with support services. This is a very critical step
toward addressing the problem.
9:40:20 AM
Senator Elton inquired about the Council's duty to make
recommendations to the corporation. He asked what power the
recommendations entailed. Mr. Romick replied that the
Council has a very important, active role. It includes six
public members. He said that AHFC is comfortable with the
role of listening to the Council. Many of their programs
operate this way. The intent is to listen closely to the
Council, especially in allocating funds.
9:43:56 AM
Mr. Jesse said there was discussion about creating a
separate entity, but it was not cost effective. The Housing
Authority in AHFC is very efficient and effective already.
The key to success will be to blend support services into
that mechanism. The Council is seen as having an on-going
role due to the make up of its membership. This group can
be strategic in how to use a relatively small pot of money
that is designed to focus much larger resources where they
are needed.
Mr. Romick added that the other aspect of the Council's job
is to make broader public policy recommendations on the use
of other state resources made available by departments.
Members from the Department of Health and Social Services,
the Department of Corrections, and the Department of Public
Safety are on the Council. Senator Elton pointed out that
the power comes from the ability to use resources. He noted
he was still having difficulty with the Council and its
power to recommend.
9:47:19 AM
Co-Chair Hoffman asked about the 3,500 homeless in Alaska.
He said there was a reference to an AHFC homeless survey and
he requested a copy. Mr. Romick replied that it can be
found on AHFC's web site.
Senator Thomas said he was sympathetic to the homeless
issue. He opined that it is a complex problem and it is
hard to imagine a solution. He requested data that would
show a positive impact from programs such as this. He
thought the issue was not being addressed in education or in
corrections. He asked how the project could be demonstrated
as successful.
9:50:14 AM
Mr. Romick reported that there are a lot of studies that
attest to the success of the Housing First model. It has
been successful in reducing admissions to prisons and
emergency rooms and has had substantial cost savings to the
public. That data is being used to craft Alaska's program.
The other component of addressing the effectiveness issue is
the evaluation process. The Sound Families Program is one
of the best examples of how an evaluation process provides
feedback as to the effectiveness of the program.
Mr. Romick noted that costs to society from homeless
families are already known. He gave an example in Seattle
where $6 million was invested in two Housing First projects
resulting in a savings over a year of $3.5 million in
emergency room visits, ambulance services, and police calls.
9:53:21 AM
Mr. Jesse shared data from New York City two years after a
supportive housing project. The result was a reduced rate
of shelter use, psychiatric hospitalization, medical
hospitalization, and a reduction in jail days. In a pilot
program in California, the number of days in psychiatric
hospitals, incarceration, and days homeless were reduced,
and 42 percent were still housed in the program after two
years. In Alaska there have been pilot programs. In the
Bridge Home Program there was a decreased rate of offending
and hospitalization at API. Pilot programs are taking place
now in Alaska on a small scale and are working.
Senator Thomas wondered about consideration in the program
for the indigent population. Mr. Jesse said the preference
in the bill is for those people below the median income.
Someone at zero would have preference; however, the program
is not exclusive to this population.
Senator Elton commented that the priority is for people at
30 percent of the median income for the economic area in
which they reside. He opined that the problem with that is
expenses might vary depending on which census area the
person lives in. He asked if the funds could be used for
counseling services and if that is a requirement in order to
receive housing support. He requested a definition of the
mandate in the bill.
Mr. Romick said the mandate is fairly broad and includes the
development of actual units, but it is targeted for long-
term prevention which includes having an income. The
mandate is not only to construct housing units, but to also
provide support services such as life skills counseling.
AHFC and the Council will decide how the programs would be
structure. Additional requirements could be added.
10:00:16 AM
Senator Olson inquired how to prevent those at 70 percent
from slipping down to 40 percent due to decreased funding
and lack of resources. Mr. Romick explained that existing
federal resources would not be taken from the 70 percent
population. New resources will be made available to the 40
percent group. Mr. Jesse agreed that there are not enough
resources to go around. There may be a need to rebalance
the resources and a more careful analysis of the needs of
the 70 percent group. Now, the resources are going there by
default and there is no systematic method. Mr. Jesse
emphasized that homelessness is not free. He listed some of
the expenses: emergency room care, criminal justice issues,
mental health issues, and other emergency needs.
Senator Olson asked how many on the waiting list might come
off. Mr. Romick said as many as possible. There are
currently 4,000 waiting for rental assistance. He gave an
example of how 33 families could come off the waiting list
for 5 years with an investment of $800,000 to $1 million.
Mr. Jesse related that the 10-year plan to end homelessness
is very popular nationwide. There is a projection that $15
million over 10 years would take care of the current
homeless population in Alaska. There are many variables and
possible changes in economic conditions.
10:06:01 AM
Senator Huggins requested clarification on page 2, line 9,
of the bill. Mr. Romick explained that one of the best ways
to stem the flow of people entering the homeless system is
to prevent homelessness in the first place. He gave an
example of someone close to eviction due to the inability to
pay rent. In such a situation, the clause on page 2, line
9, would allow AHFC to become involved to prevent
homelessness from happening due to an economic event. There
was a study in New York that showed a small investment of
$2,000 per person, help with a monthly payment, saved many
from homelessness. "One paycheck away from homelessness" is
a real issue for many people.
Mr. Jesse gave another example of beneficiaries in Alaska
who needed a short stay at API and were evicted from their
apartments during that time. The process of looking for a
new apartment was expensive. In this type of situation, a
short-term loan could have help.
Senator Huggins commented on the national mortgage crisis
and wondered if the bill applies as a remedy to that. Mr.
Romick thought it would not target subprime mortgage
situations. There are limits to how far the fund would go
to forestall foreclosure. The intent of that section is not
to keep people who make poor decisions in housing. Mr.
Jesse agreed that this mechanism cannot address the subprime
issue. The nature of the sidebars in the bill looks at
people 80 percent below the median income, targeting those
at 30 percent or below.
10:12:28 AM
Senator Huggins asked for clarification about subsection (4)
on page 2. Mr. Romick responded that ATIA would have
flexibility in working with a specific organization that had
a skill in a particular area. He gave an example of a
mental health provider who has the capacity to enter into a
partnership with a housing provider.
Senator Thomas asked about page 2, line 20, (e). He
wondered if it was limited to public or private nonprofit
corporations or if there was any opportunity for private
corporations. Mr. Romick replied that it is limited to tax
exempt organizations. The only way for a for-profit
organization to participate is in partnership with a tax
exempt organization.
10:14:45 AM
Co-Chair Stedman noted four fiscal notes accompanying the
bill. He asked if the $2.5 million from other revenue
sources had been secured. Mr. Jesse said it had not.
Currently, the trust has contributed $1 million and the
Rasmussen Foundation has also contributed $1 million, so $2
million of the $5 million has been raised. The Mental
Health Authority trustees have the authority to commit their
resources should the legislature elect to go forward with
this initiative. He voiced confidence about raising the
remaining $1.5 million.
10:15:56 AM
PAT LUBY, ADVOCACY DIRECTOR, ALASKA ASSOCIATION OF RETIRED
PERSONS (AARP), ANCHORAGE, testified that AARP strongly
supports the legislation. Many older renters are at risk
for homelessness. There are many children who are homeless.
SB 231 will make a difference.
SB 231 was heard and HELD in Committee for further
consideration.
10:17:33 AM
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