SB 231-LOW-INCOME HOUSING; HOMELESSNESS    1:55:34 PM CHAIR DAVIS announced consideration of SB 231. DON BURRELL, Staff, Senator Davis, Alaska State Capitol, Juneau, AK, presented the changes for SB 231: per request of Senator Elton, words were added to state that at least one member of the Housing Trust Fund is a consumer of affordable housing. The two- year term was changed to a three-year term; and on page 4, line 22, after "reducing homelessness", "improve employment and vocational training opportunities for the homeless" was added. BRYAN BUTCHER, Public Affairs Director, Alaska Housing Finance Corporation (AHFC), Anchorage, AK, said AHFC was fine with the changes. 1:58:18 PM SENATOR DYSON moved to adopt the proposed committee substitute (CS) to SB 231, labeled 25-GS2006, Cook, Version C, as the working document of the committee. There being no objection, the motion carried. He asked how the agency could make loans at less than commercial terms to people who would not normally qualify for a commercial housing loan without exposing them to financial liabilities. Mr. BUTCHER replied that the primary intent of the housing trust is to aid the homeless in finding available housing, but not providing mortgages, although the hope is that they would get to that point in the future. SENATOR DYSON asked Mr. Butcher to confirm that this bill is not aimed at getting homeless people into ownership positions. MR. BUTCHER replied that is correct. SENATOR DYSON asked if the bill expands the capacity of public housing. 2:02:08 PM MR. BUTCHER replied that there are 3,000 to 4,000 people on the waiting list for public housing. There's a shortage of units and many are falling apart. This bill would make sure the available units remain at the current level of availability as well as expanding the current options. JEFF JESSE, CEO, Alaska Mental Health Trust Authority, Anchorage, AK, said his agency is designed to connect supportive social services with housing. People are homeless for many reasons, from substance abuse and domestic violence to mental health issues. The Council on Homelessness has found that without support services like case management, counseling, and crisis intervention, even if they get into housing they are unable to maintain it. The trust is just trying to keep them stable in the community. SENATOR DYSON asked if the bill has a fiscal note. MR. BUTCHER said there is a zero fiscal note in terms of administration. The program would be administered by AHFC. There is also a $10 million request in the Governor's capitol budget in four equal parts: $2.5 million from the AHFC dividend; $2.5 million from the state general fund; $2.5 million from mental health receipts, and 2.5 million from other receipts such as the Rasmuson Foundation and other private organizations. SENATOR DYSON asked if the $10 million would be used for building additional housing. MR. JESSE replied that the housing trust would be flexible. A project might have some capital money to buy down the overall cost of the project so it would be able to accommodate people at a lower income. It might also have a commitment of five to ten years of social service funding. It's important that this amount be committed up front so that if the housing trust is not funded in the future, those social service projects can continue for the next five or ten years. AHFC has agreed to develop project- based vouchers to help with rental assistance. The housing trust won't be a major funder of any particular project. It will take existing resources and help focus them on the homeless as opposed to what happens now with many of those resources going to people with higher incomes. SENATOR DYSON asked it that means that the $10 million will be for facilitators that bring people and housing together rather than building new housing. MR. JESSE gave the example of a developer renovating 60 units in Fairbanks. The developer had not been thinking of having any units focused on the homeless. When he learned about the housing trust and the ability to get some capital money and a social service partner that would provide support services for homeless people, he expressed interest in integrating them into mixed income projects. Mr. Jesse said the trust doesn't want large projects focused just on the homeless. It wants to integrate them into mixed income projects. He thinks many different strategies will come forward once there's a resource to access. SENATOR COWDERY asked if there would be a sunset date. 2:07:19 PM CHAIR DAVIS said there is not. She added that she didn't see the need for one since it is a much needed service. SENATOR THOMAS said that he was supportive of the bill but he did not know what the provision on page 2, line 7, number 1 meant where it says: to participate in the development of buildings or units that by their use address the purpose of the fund, which is to create housing but that by their operation appear non-residential in nature. MR. JESSE replied by referring to an article about safe harbor and a motel in Anchorage specifically focused on the homeless. Normally that's not considered residential for purposes of AHFC. AHFC cannot invest in a motel. And yet it's a critical strategy to getting the homeless off the street, getting them stabilized and then moving them into long-term housing. A motel doesn't look residential, but it is an important strategy in dealing with homelessness. SENATOR THOMAS said he's concerned about hearing from his constituents that their taxes are going to support reduced cost housing for people with drug and alcohol problems while they themselves are often required to be tested for drugs at their place of employment. 2:11:12 PM MR. JESSE said that's the point of bringing in support services. The trust doesn't want to enable people to continue an addictive lifestyle. He said that taxpayers actually pay those costs now, for example, in emergency rooms and criminal justice systems. Homelessness costs the state either way. SENATOR THOMAS said he would like to see documentation of the success of these kinds of programs and their overall costs. CHAIR DAVIS said she would provide this information but reminds the committee that everyone that's homeless does not fall into these categories. There are families that are homeless with young children. 2:15:12 PM SENATOR THOMAS moved the CS for SB 231, labeled 25-GS2006, Cook, Version C, from committee with individual recommendations and accompanying fiscal note(s). There being no objection, CSSB 231(HES) passed from committee.