Are You Ready for the Newly Established California Emergency Solutions and Housing Program?

Administrative Entities will Request the Funds-
-Continuum of Care Service Areas are the Targeted Regions-
-Subrecipients May Receive Funding to Implement Eligible Activities-

The California Emergency Solutions and Housing Program was established recently by California Senate Bill 850 Housing (SB 850), which requires 50% of the funds collected under Senate Bill 2 Building and Jobs Act (SB 2) on and after January 1, 2018, and before December 31, 2018, to the California Department of Housing and Community Development (HCD) for the California Emergency Solutions and Housing Program. Year 1 breakdown of funds from SB 2 includes $57.5 million for the California Emergency Solutions and Housing Program.

Requirements include:

  1. Applicant needs to be an administrative entity designated by the Continuum of Care;
  2. Qualified subrecipients need to carry out eligible activities (project selection process must avoid conflicts of interest);
  3. Prioritized assistance to homeless households over households at risk of homelessness is required;
  4. Emergency housing interventions are limited to no more than 40 percent of funds;
  5. Operational Coordinated Entry System (CES) is required;
  6. Operational Homeless Management Information System (HMIS) is required;
  7. Commitment to Housing First is required;
  8. Numeric goals and performance measures must be described in application to HCD;
  9. Action plan not required but encouraged (funds may be used to develop plan);
  10. Funds may only be requested for eligible activities (as listed bellow);
  11. Project selection process must be documented;
  12. Funding request to HCD must be based on an assigned allocation (as quoted below);
  13. Match is not a requirement.

1. Applicant needs to be an administrative entity designated by the Continuum of Care

HCD will issue a Notice of Funding Availability (NOFA) that will allow “administrative entities to request funding for eligible activities relating to homelessness within specified Continuum of Care service areas by submitting an application in response to a notice of funding availability,” according to SB 850 (6), which also notes in section 50490

“(a) “Administrative entity” means one of the following that has been designated by the Continuum of Care to administer California Emergency Solutions and Housing Program funds:
(1) A unit of general purpose local government.
(2) A nonprofit organization that has previously administered HUD Continuum of Care funds as the collaborative applicant, as that term is defined by Section 578.3 of Title 24 of the Code of Federal Regulations.
(3) A unified funding agency, as that term is defined by Section 578.3 of Title 24 of the Code of Federal Regulations.”

The bill requires administrative entities to enter into a five-year contract with HCD if awarded. The bill allows up to five percent of the awarded funds “for administrative costs related to the planning and execution of eligible activities.”

2. Qualified subrecipients need to carry out eligible activities

Qualified subrecipients will be needed to carry out the eligible activities, which are noted below. Administrative entities will describe or provide “documentation of the local program or project selection process anticipated to be used to allocate available funds to subrecipients qualified to carry out the eligible activities,” as noted in 50490.3 (4).

Conflict of Interest

Section 50490.3 (4) also noted immediately after referring to subrecipients that

“In order to satisfy the requirements of this subdivision, the applicant’s proposed program or project selection process shall avoid conflicts of interest in program or project selection and shall be easily accessible to the public.”

3. Prioritized assistance to homeless households over households at risk of homelessness is required

Section 50490.4 (6c) states that

“an administrative entity that is allocated funding under the program for an eligible program or project funded shall prioritize assistance to homeless individuals and families over assistance to individuals and families at risk of homelessness.”

4. Emergency housing interventions are limited to no more than 40 percent of funds

Administrative entities cannot “use more than 40 percent of any funds . . . in a fiscal year for operating support for emergency housing interventions as described in paragraph (4) of subdivision (a), as noted in 50490.4 (6f). Paragraph (4) states

“Operating support for emergency housing interventions, including, but not limited to, the following:
(A) Navigation centers that provide temporary room and board and case managers who work to connect
homeless individuals and families to income, public benefits, health services, permanent housing, or other shelter.
(B) Street outreach services to connect unsheltered homeless individuals and families to temporary or permanent housing.
(C) Shelter diversion, including, but not limited to, homelessness prevention activities, and other necessary service integration activities to connect individuals and families to alternate housing arrangements, services,
and financial assistance.”

5. Operational Coordinated Entry System (CES) is required

Administrative Entities must document that “the Continuum of Care service area has a functioning CES (Coordinated Entry System)” that meets “the applicable HUD (U.S. Department of Housing and Urban Development) requirements (Section 50490.3 (3A).”

As noted in Section 50490 (3f),

“Coordinated Entry System,” or “CES,” means a centralized or coordinated assessment system developed pursuant to Section 576.400(d) or Section 578.7(a)(8), as applicable, of Title 24 of the Code of Federal Regulations, and related requirements, designed to coordinate program participant intake, assessment, and referrals. In order to satisfy this subdivision, a centralized or coordinated assessment system shall cover the entire geographic area, be easily accessed by individuals and families seeking housing or services, be well advertised, and include a comprehensive and standardized assessment tool.”

Section 50490.3 (3B) states that if the system in place does not meet HUD requirements, “a minimum of 20 percent of the allocation to the Continuum of Care service area” can “be used to implement or update its systems to comply with the applicable HUD requirements.”

6. Operational Homeless Management Information System (HMIS) is required

Administrative Entities must document that “the Continuum of Care service area has a functioning HMIS (Homeless Management Information System)” that meets “the applicable HUD requirements (Section 50490.3 (3A).”

As noted in Section 50490 (3h),

‘HMIS’ means a Homeless Management Information System, as defined in Section 578.3 of Title 24 of the Code of Federal Regulations. The term “HMIS” also includes the use of a comparable database by a victim services provider or legal services provider that is permitted by HUD under Part 576 of Title 24 of the Code of Federal Regulations.”

Section 50490.3 (3B) states that if the system in place does not meet HUD requirements, “a minimum of 20 percent of the allocation to the Continuum of Care service area” can “be used to implement or update its systems to comply with the applicable HUD requirements.”

7. Commitment to Housing First is required

Any eligible activities funded that provide permanent housing must “incorporate the core components of Housing First, as provided in subdivision (b) of Section 8255 of the Welfare and Institutions Code,” which states

‘Housing First” means the evidence-based model that uses housing as a tool, rather than a reward, for recovery and that centers on providing or connecting homeless people to permanent housing as quickly as possible. Housing First providers offer services as needed and requested on a voluntary basis and that do not make housing contingent on participation in services.”

8. Numeric goals and performance measures must be described in application to HCD

Administrative entities are required to describe numerical goals and performance measures in the application in collaboration “with the relevant Continuum of Care.” Goals and measures will “be used to evaluate success in implementing eligible activities described in the application (Section 50490.3 (5).”

This section also states that

“At minimum, the application shall evaluate the following project or system performance
measures based on HMIS data from the Continuum of Care service area, as set forth in the department’s notice of funding availability:
(A) The number of homeless persons served.
(B) The number of unsheltered homeless persons served, and the average length of time spent as homeless before entry into the program or project.
(C) The number of homeless persons exiting the program or project to permanent housing.
(D) The number of persons that return to homelessness after exiting the program or project.”

9. Action plan not required but encouraged

Administrative entities can include in their application submission, “the most current plan addressing actions to be taken within the Continuum of Care service area to address homelessness.” If there is no current plan, administrative entities may request funds to develop a plan in the application submission.

10. Funds may only be requested for eligible activities

Funds can be used for one or more of the following eligible activities:

“(1) Rental assistance and housing relocation and stabilization services to ensure housing affordability to people experiencing homelessness or at risk of homelessness. Rental assistance provided pursuant to this paragraph shall not exceed 48 months for each assisted household, and rent payments shall not exceed two times the current HUD fair market rent for the local area, as determined pursuant to Part 888 of Title 24 of the Code of Federal Regulations.
(2) Operating subsidies in the form of 15-year capitalized operating reserves for new and existing affordable permanent housing units for homeless individuals and families.
(3) Flexible housing subsidy funds for local programs that establish or support the provision of rental subsidies in permanent housing to assist homeless individuals and families. Funds used for purposes of this paragraph may support rental assistance, bridge subsidies to property owners waiting for approval from another permanent rental subsidy source, vacancy payments, or project-based rent or operating reserves.
(4) Operating support for emergency housing interventions, including, but not limited to, the following:

(A) Navigation centers that provide temporary room and board and case managers who work to connect homeless individuals and families to income, public benefits, health services, permanent housing, or other shelter.
(B) Street outreach services to connect unsheltered homeless individuals and families to temporary or permanent housing.
(C) Shelter diversion, including, but not limited to, homelessness prevention activities, and other necessary service integration activities to connect individuals and families to alternate housing arrangements, services, and financial assistance.

(5) Systems support for activities necessary to maintain a comprehensive homeless services and housing delivery system, including CES, data, and HMIS reporting, and homelessness planning activities.
(6) To develop or update a CES system pursuant to subparagraph (B) of paragraph (3) of subdivision (a) of Section 50490.3, or to develop a plan addressing actions to be taken within the Continuum of Care service area to address homelessness pursuant to subdivision (b) of Section 50490.3.”

11. Project selection process must be documented

As noted in 50490.3 (4), the application submitted by administrative entities need to describe or provide documentation of the project selection process that will be used to allocate funds to qualified subrecipients. The project selection process requires avoidance of conflict of interest. Administrative entities must also include a project selection process in collaboration with the Continuum of Care in an annual report to HCD.

12. Funding request to HCD must be based on an assigned allocation

The amount of funds recently allocated was approximately $57.5 million. These funds will be allocated, as noted in Section 50490.2 (a) 1–3B,

“using a formula that is based off of the formula utilized, as of June 30, 2018, for the allocation of grants pursuant to the California Emergency Solutions Grants Program (Chapter 19 (commencing with Section 50899.1)), and that includes the following formula components:
(1) The 2017 point-in-time count published by HUD that includes both sheltered and unsheltered homeless.
(2) The number of extremely low income households in rental housing that pay more than 50 percent of household income on rent, based on HUD’s most recent Comprehensive Housing Affordability Strategy dataset.
(3) (A) The number of persons below the federal poverty line divided by the total population within the Continuum of Care service area, based on data from the United States Census Bureau.
(B) The formula required by this subdivision shall afford double weight to the factor described in this paragraph.”

13. Match is not a requirement

“Funds available under the program are not required to be matched (Section 50490.2 2.d).”

3 Comments

  1. Tony Gardner on July 18, 2018 at 10:46 am

    Hi Joe,

    Thanks for keeping us informed; these funding sources are moving fast, so the more communities know sooner, the better. Do you know – has the original State ESG Program funding been ended? I get that the program has been combined with the SB 2 program, but I thought that the separate State ESG funds were also to be combined with SB 2 funds. From the above, it seems like the only funding for this new hybrid program is from the SB 2 fees.

    Thanks!

    Tony

    • Joe Colletti, PhD on July 28, 2018 at 10:38 am

      Hey Tony – The original state ESG Program funding has not ended and the separate state ESG funds will be combined with SB 2 funds. SB 850 states that HCD is to allocate “any moneys that have not yet been made available pursuant to a notice of funding availability or request for proposal as of June 30, 2018, from the above-described moneys appropriated for the Emergency Solutions Grant Program by the Budget Act of 2016 for expenditure by an administrative entity within each Continuum of Care service area for the purposes of this program.” Thus, the large chunk of funds for the hybrid program, California Emergency Solutions and Housing Program, will be from SB 2 Trust Fund in the amount of $57.5 million. HCD has not published the estimated amounts for each jurisdiction. NOFA for Round 1 of funds is supposed to be released in August and Round 2 NOFA in early 2019.

      • Tony Gardner on July 30, 2018 at 10:57 am

        Thanks for the clarification!

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