Assembly Standing Committee on Housing and Community Development

Please feel free to submit written testimony through the position portal on the Committee's website. This will become part of the official record of the bill. This hearing room in Room 126 will be open for attendance of this hearing. And of course, all are encouraged to watch the hearing from its live stream on the Assembly's website. I want to thank you for your patience and understanding. With that, we have one bill, which I am authoring, so I will present and pass the gavel on to Ms. Sanchez.

All right. And with that, thank you, Madam Chair and Members. AB 3093 responds to California's escalating homelessness crisis by refining and enhancing our primary housing planning process, the RHNA process, to include some of the most vulnerable Californians, those experiencing or at risk of homelessness. The bill comes directly from HCD's recent report on recommended RHNA reforms.

It won't surprise anyone in this room to hear that our current efforts and homelessness aren't enough. Despite significant financial investment, homelessness in California has increased 53% since 2013, and on any given night, approximately 181,000 Californians experience homelessness, with 123,000 of them sleeping outside. Homelessness is a housing problem and the state cannot fix what it does not track.

Our current RHNA process's lowest income category, the very low income category, ranges from zero all the way up to 50% of the area median income or AMI, but it's too broad. Most housing in this category ends up being affordable for those earning closer to 50% of the AMI, leaving Californians with the lowest incomes underserved.

This bill introduces two new income categories to the RHNA process for the next cycle, the acutely low income and extremely low income categories. These categories would capture the housing needs of Californians earning up to 15% and 30% of the AMI, respectively. These are our constituents who are at most risk of or are already experiencing homelessness.

The RHNA process, from HCD's determination of statewide housing needs to the implementation of local housing elements, is our main tool for addressing the housing needs of all Californians. This bill would require the regional councils of government to provide HCD with homelessness data to help determine the housing needs for the proposed income categories.

AB 3093 will provide the state with the tools to hold local governments accountable for their homelessness housing element commitments. It will also allow local governments to track their progress towards ending homelessness and highlight best practices that keep Californians housed. Here with me today is the Deputy Director of HCD's Housing Policy Development Division, Megan Kirkeby, to testify in support. And when the time comes, I would respectfully ask for your aye vote.

Thank you, everyone. Today... Yes, I'm Megan Kirkeby. I'm our Deputy Director for Housing Policy Development at HCD. Not much to add there. That was a beautiful description of what this bill is trying to achieve. Defining these subcategories within RHNA and allowing homeless specific information into the RHNA prepares regions and locals to develop targeted programs and strategies that cater to the needs of unhoused individuals and families, those who are at dire risk of homelessness. This daylights the part of the population that is in greatest risk of falling into homelessness.

We know, as you've probably heard me even say this before, cost burden is a wonky term, but we all should get real familiar with it. When folks are spending a real high percentage of their income on their housing costs, they are one emergency away from homelessness. All of us can fall into that situation.

Any of us would be susceptible when we are living that close to the margins. And so this really just separates out that very low income population, really helps us dig into the folks we need to really be tracking, really be working on, and gives locals that tool to really speak to their plan to address that population, their strategies in their housing elements. So also respectfully ask for your aye vote today.

Thank you for testimony. Do we have any supporters in the room?

Thank you so much. Good afternoon. Catherine Charles, here on behalf of Housing California in support.

And Mark Stivers with the California Housing Partnership in support. Thank you.

Andres Ramirez on behalf of All Home and the Non-Profit Housing Association of Northern California in support.

And before we move on to opposition, may we please establish quorum?

[Roll Call]

And do we have any opposition?

Good afternoon. Caroline Grinder on behalf of the League of California Cities. We submitted our concerns position this morning. Would you like me to come up? Okay. Okay. Hello. Caroline Grinder on behalf of the League of California Cities. We submitted our concerns letter today, which I think details some of our initial concerns. I think we absolutely share the goal of this bill, which is to address homelessness and boost the supply of affordable housing in our communities. I think the timing is definitely something that we're worried about.

With the cuts to some of our affordable housing programs and the lack of commitment to ongoing funding to address homelessness, we worry that some of these additional obligations for our communities will be especially challenging. I think a couple of things that we wanted to draw some attention to is we do worry that this could be duplicative of existing housing element law, which already does require cities to plan for the needs of emergency shelters, and also look at how we can plan adequately for extremely low income households.

So as we're looking to maybe look at some of those concerns, the things that we're interested in seeing is, one, how will these new housing allocations or sites identified differ from what cities are already identifying through their housing element process? How will these allocations be determined so that cities can fulfill these obligations?

And then also, how are we going to make sure that we're accounting for density as a benchmark for identifying these sites? We've absolutely had some good conversations with the staff so far. We look forward to continuing to have those as this bill moves forward. Thank you again for allowing us the opportunity to state our concerns position and look forward to working together.

Any other witnesses in opposition?

Sorry. Good. Good morning. Karen Lange on behalf of the Placer County Board of Supervisors. I apologize for not having a formal letter in. I got this direction last night. The Board wanted to raise a couple of points of concern with the current version of the bill.

They would appreciate the consideration of maybe a trigger mechanism where, if counties and cities are not reducing their homeless population, then these requirements could apply. But Placer County is very, very proud of the fact that they've actually reduced their homeless population per capita in 2020 is 18.4. In 2024, it was 17.

That doesn't necessarily line up with every county, but they're very proud of the work that they've done, and they've done that in collaboration with the City of Roseville and the City of Rockland. So it's not as though they're just moving folks between jurisdictions, they're coordinating together. So they appreciate the consideration of that.

And then they also were looking for clarity around how the work that they're doing now expanding shelter capacity and transitional housing fits into the RHNA requirement that the bill sets up. Do they have to... So they don't get in trouble with HCD, cause they've got some new tools lately.

Should they shift away from funding shelter beds and transitional housing and focus only on the permanent housing or, you know, what really would constitute a housing unit for the purposes of this bill so that we're not abandoning the emergency shelters that are urgently needed now so they can comply with this new goal.

So those are the concerns and reasons for their opposition. Now, I apologize for us being late, and we look forward to continuing to work with the author and the Committee to try to address Placer's concerns. And thank you for your time.

Is there any other opposition? I'll move it back to Committee for comments and questions. Ms. Quirk-Silva.

Thank you. I want to thank our Housing Chair for bringing this forward. I think this is really extremely important. I mean, we had a homelessness accountability hearing last week, and many of us voiced some of our concerns of progress being made for, of course, not only homeless, but extremely low income individuals who are, in fact, housed, but at the very edge of possibly losing housing.

In addition to other steps we can take to keeping people housed or prevention, we know there's more work to do there. But I would appreciate it if you could speak to the concerns of the League of Cities, as we know that in a lean budget time and seeing the May Revise as far as what support local municipalities can expect, it is a difficult time. If you could speak to that.

Yeah. Thank you for the question. Thank you for, also, the input and the quick turnaround. I agree it's a moment in time right now where we had to maybe make some immediate progress, given the timing of HCD's important work and the release of that report didn't necessarily align the best with our legislative calendar, but we were able to do so enough at this point here in May to be able to make some progress on this.

And I do think it's important to be able to really update the categories for which we are analyzing right now to better look at the extremely and the acutely low income categories. And I hear the concerns very strongly. I'm sure more observations, more ideas will be coming as this bill, if and as this bill moves forward that we want to make improvements on. If I could, I guess, comment on sort of three themes that, you know, really addressing these concerns. One, money.

You know, we share those concerns, and we've got to make sure that, you know, we are finding other strategies. I'm committed to work on those strategies that are going to work on affordable housing and market rate housing needs across the board. Very difficult to do in a down budget year.

But that doesn't mean we're not thinking ahead about a more perfect planning process, which wouldn't even commence until 2028. I think getting this going right now helps us, helps cities, helps regions be able to plan for the expectations on the next housing element cycle.

And then, of course, we've got ongoing work to be able to align money with the deeply affordable subsidies that we need to be able to meet some of these targets. Secondly, on issues of shelter and should they be counted or not counted, I think this is a moment in time where we can better maybe realign state strategies with a common value that I have and hopefully we all have. And that is, that is, shelter is not a home. It is not a housing unit.

It is helpful to manage homelessness in the more immediate to get somebody off of the streets and out of the elements. Right. But it is not ultimately a housing unit. And that individual is likely going to have to go to some kind of permanent supportive housing or related kind of unit that should be counted and separated from the broader low income category that currently would be captured under. So again, this is meant to be a clarifying bill. So I hope that that starts to get into some of the issue areas that I want to continue to work with opposition on those concerns to be able to make sure that those are addressed long before this would ever be implemented.

Mr. Grayson.

Thank you, Madam Chair. And I do want to also thank Chair Ward for this bill, bringing it forward. I think it brings to light some very important clarifications. You already brought out the point about when it comes to funding and the concerns of opposition and how that is an outlier.

The funding will obviously have to be a conversation, but right now it's putting in place the infrastructure and the clarification of those categories. I understand maybe Placer County is doing an incredible job. I know that San Mateo County and Redwood City have partnered up together, and they're doing an impeccable job.

I'd like to see how it could be addressed in the bill to where maybe it's not community beds or shelters that count, but anything that would lead to permanent housing in the sense of maybe creating that category or that space where, and I'm not trying to get too prescriptive here with your bill, but something where a person can call home and say, this is where I'm living right now, and it leads to a permanent housing with wraparound services could count.

In other words, I'm just trying to express, there are some concerns that sound very legitimate, and I'm sure you're going to work with them. But this bill and adding these categories, as my colleagues said, is very, very important. And I'm very appreciative of bringing this light and making or adding more value to RHNA. And I think this really does that job so thank you.

Thank you, Mr. Grayson.

Mr. Lee.

Thank you, Madam Chair. I want to align some of my comments with Mr. Chair, who he just made that interim housing is not housing. Interim housing is interim by nature. Right. I just want to express that I do have some concerns overall. given the context of where we're at is California is nowhere on track, and we had an oversight hearing, of course, is nowhere on track to meet its low and very low income housing targets in the first place. And creating more categories is just showing that we are deeper behind on these issues.

Especially when, during the Administration's own proposed budget, they are slashing almost all the budgetary funds possible. So I just wanted to, I wasn't here for HCD's presentation, but I wanted to ask how they believe that having these goals will actually materialize to actually have a LI housing if we don't have any money and subsidy to do so. I just wanted to ask HCD how they believe that would happen.

I'm very grateful, because, you know, I think I'm going to take a moment to thank Assembly Member Grayson because a lot of what he did on data allows me to answer that question in a pretty complete way by saying, you know, you can go to HCD's website today and look at our annual progress report data, and we are significantly up in our lower income production as a state.

We have actually been, we have completed more units year by year for every single year of this Administration. The policies are working. We are, by measuring these things, we are seeing impact. We are, by the changes that all came out of the 2017 housing package, we are seeing, we are seeing year over year increases when you would think that we would be hampered by economic circumstances. The policies are, by documenting the data, we are seeing the policies move. And I think this is just an extension of that work.

Where we are calling out very low income is actually more than is not one group of individuals or one group of families, that there are different circumstances within that portfolio. And by really calling that out, the strategies can get more specific. And so every single housing element is required to do a special needs analysis. And this would give space to really call out, what are your plans on this population, this population. And yes.

Like, we do believe housing is the solution here, but that's probably going to be complemented with other strategies and support services and things like that differently for someone in the acutely low income category and someone in the very low income category for a region.

So I think that's basically what I would say is every time we've done this previously, where we've really called out a specific issue, we've made it transparent. We've made the data transparent. We've made policy around that data. We're seeing progress. And so I would, my expectation would be we see the same thing here.

But to be fair, when we made the data more transparent, we also try to partner more the solutions you talked about, which is, in many sense, money. The truth is to get these low income units, you have to have deep subsidies to do that. Right.

So I think...

And so if we remove the subsidies in our budget, then how are we going to be able to meet those goals?

So I think...

And to be fair, I mean, yes, we've objectively produced more housing, yes, over the time, but the economic circumstances, especially with the interest rates and stuff, was relatively recent too. I mean, the really slowdown in production is going to happen, especially where it feel in these next couple years, and especially coupled with our bad budget situation, is only going to compound these things. So that's why I ask. It's just that if we spotlight data, yes, it's important to be spotlighting these things.

But even as we see with our other targets, we're not meeting any of these targets. Above AMI and stuff, we're doing pretty, fairly well on those things, but we're not meeting those things without the subsidy there. And so by removing subsidy, I'm concerned that we're not gonna meet these goals without having the tools to actually fund these things.

And just welcome your thoughts on that. And I think, you know, we all work together in terms of what the funding portfolio is. But I would say, you know, we have, this Administration has put in significant funding into this segment of the population. The ongoing permanent local allocation funding is still around.

Prop 1 is a significant new source of funding that we are going to see come into this investment. And at the end of the day, we can all disagree about what the right amount of resource to put in is. But by making this data, I think it helps us have that conversation about what that need is, and it helps draw those resources that we do have to the most in-need part of the population.

Yeah, sorry, just one last question, because you mentioned Prop 1 is, I am curious, how do you believe that having this data now is going to interact with the Prop 1 funds coming in? Because Prop 1 was specifically designed for housing unhoused people.

And I feel like I don't want to distract us too much today with a long conversation about Prop 1. But yes, I mean, Prop 1 is, you'll see a lot more information, but HCD has a role in it. Other departments and agencies will have a role in implementation as well.

You'll see us show up most in the Homekey and the veterans pieces of Prop 1, but we'll also have a role in the ongoing stewardship of the HHAP program, the ERF program, and the FHC program, where we'll be making sure that all these, all these systems are working together and that everybody is being friendly with each other, whether that's county behavioral health departments or CoCs or big cities or counties. Everybody brings something to the table, and we want to make sure that those things are efficiently deployed and having the biggest impact they can.

All right. Thank you.

Ms. Wilson.

Well, good. I think almost, good afternoon. About five minutes away. Well, appreciate the author and really the Chair for bringing this bill forward. I think it's important. I think if you don't see the gap, how can you fill it? And I think this gives an opportunity to have transparency in that area because there are, as was stated through testimony, there are various different needs within that, and it's really important to be able to recognize that.

I think what is key is that, you know, although we're in a deficit year this year, that won't always be the case. And our budget is dynamic and still not, the ink is not dry. The Governor has given his revision, but that's all he's done. And there's still work to be done on the legislative side to partner with him. So I think as far as, as it relates to how we fund housing, we're not done there. But just recognizing that it takes more than the state government to meet these targets. Right.

And to subsidize, there's local engagement as well as our nonprofit world, our CBOs. And so I just really appreciate the fact that recognizing that, that very low, that there are different needs within that this will give transparency. And I appreciate your willingness to work with the, I don't want to call them opposition, but work with the local governments who have concerns, who will have to, you know, now adjust to be able to provide this transparency.

But I think if we can have greater data in this area, it will help us be informed in how we properly target the communities who are the most vulnerable and who need housing. We know in the state that we are short on housing and we are short for the foreseeable future. We must produce, produce, produce, produce.

And we produce at all levels, from now these new categories to the highest level. But I think it's extremely important that we, you know, have the information so we can be targeted and work strategic about meeting those needs. So thank you so much for bringing it forward.

Thank you.

Is there a motion already? I was late. You got me because I was going to make the motion, but. All right, I'll second.

We have a motion and a second. Ms. Reyes.

Thank you. I also want to thank our Chair for authoring this. And I appreciated the comment that strategies become more specific the more information we have. And I believe that. I do agree. I want to be a believer, in other words.

But I also, when we sat through the hearing on accountability and transparency, how we have spent the money and how it's clear we're all being asked, how much did you invest? Tell me how many people you took off the streets? It causes disbelief in us because now we have to answer to our constituents.

But I want to be a believer, and I think that this is a good step in getting the information, just as my colleagues have said. And you know who most needs it, you know who you're really helping. Because if you're only helping those that are at 50%, then what about the zero to 15 and the 15 to 30? So being more strategic about it I think is going to be good for the people who most need the help. And as I said, I want to be a believer. So I absolutely look forward to having this be signed and that we actually get these reports.

Vice Chair Patterson.

Great. Thank you. I want to say, well I represent Placer County. Wanted to say that I agree with a lot of what Assembly Member Lee said. You know, something you're not going to hear every day in this building, but here we are. I've spoken a lot about my frustrations with the RHNA process in this Committee.

And I think, you know, in some ways, what, in some ways, I can see how we've set goals and we've set targets, but not necessarily the policies to do those. And sometimes I feel like the numbers, while it's leading to some rezones and things like that, aren't necessarily achievable. I have my own prediction.

We're going to do an office pool on the number of cities that meet their RHNA targets at the end of this particular cycle. But a couple comments just based on the conversation, I'm glad I went last for once. But there's a shelter, if you want to call it that, in my district called Acres of Hope.

And what they do is they're for basically women and children who are experiencing homelessness. But really it's, I wouldn't really even call it a temporary shelter. I mean, it's, these are, I mean, they're where they're living until they obviously can get to a situation where they have more, I don't know, I guess permanent.

But I mean, people are there for 18 months, two years, things like that. And so it would be hard for me to not count something like that towards RHNA goal. Now, I can understand, you know, if people are living in a tent or something like that. That's obviously a lot different.

But for all intents and purposes, these are the homes for these individuals for a significant period of time. I've lived in places for a lot less than two years, frankly. So I think we got to look at that a little bit. Also, I do like the comment again, aligning, maybe I'm taking out of context, but aligning the RHNA numbers with maybe with what we can actually achieve. Because one issue I can see happening is the cogs come up with some of these numbers and then they kind of split it up.

And so I do get a little bit concerned that there's going to be some trading. Not trading, but maybe, hey, just in this region, Sacramento has more homelessness. And so let's give some larger numbers to some of the outlying jurisdictions that, by the way, don't have the services that may be here in Sacramento.

But I do think as a whole having to say, hey, look, you need to... Cities, we've given you a lot of money. Maybe you should start planning on how you're going to spend that money and finding the spot. So I kind of, I'm good with the concept, but I do think that there's still some work that needs to be done. And I do think that there's a good point about Placer County, at least in my conversations.

I don't know if you really got into this that much, but I do like the trigger mechanism in terms of you're already zoning for certain areas like this already, but Placer County might be an outlier. But the 17 people per 10,000 and decreasing is somewhat unique.

But so maybe their strategies or things that they're working on actually are working and we don't have to mess with them too much. But I don't see that really being the standard statewide, as you know. I mean, it's increasing everywhere, but it does make sense. I'd like to see things where there are.

You named another example where there's success that we keep going that route and not mess with that too much. But so, hopefully, it sounds like you're going to keep working on those. And I think that's a good thing. I'll probably lay off today just while some of these issues are worked out, but I think it's going to be fast and furious through the process, I imagine. Right. So. Cause this is going to go on the floor before possible, and then, yeah.

Assuming we also get through Appropriations.

And maybe there'll be some changes in the Senate, and we'll get another crack at it over here. But looking forward to continuing the discussions. Happy to participate in them in any way I can. And I don't think it's a mistake to hold the feet, you know, to the fire a little bit for jurisdictions to prepare for this population. So thanks.

Thank you.

Seeing no further questions or comments, would the Chair like to close?

Thank you, Madam Chair. I think I want to maybe just really build on Assembly Member Wilson's comments who I thought summarized things very well about the rationale and the need for this and the benefit that we could be able to by measuring this. And again, I'll come back to this sentence, you can't really track your progress until you...

Well, you can't really know how you're, how close you're getting to your goal unless you're able to really track that progress. I'm reminded, as I was sort of presented this issue and thinking about wanting to author this bill, something that the City of San Diego did when I was a Council Member there back in 2018, which was a comprehensive, really intensive review of homelessness strategies, including housing support that we had as well. That was a one off.

That was one city really getting a deep dive into a lot of information that really produced what those goals need to be for the foreseeable years into the future to be able to meet, ultimately, the population's needs. Now step back, you know, view out a little bit. This is really just a much broader analysis of the same.

What is ultimately that housing goal that you need to be able to prevent people from falling into homelessness in the first place and then also resolve those who are experiencing homelessness by addressing these two categories. I want to commend Placer County and your member cities as well for some of the evidence that we are seeing.

That's wonderful that there's such proactive intentionality for addressing this issue. And I would think that, as you are coming up on these eight year cycles, that a lot of that work and that trajectory would probably also be reflected in what the need is. You're demonstrating that you're reducing that need through your own local policies and strategies.

And so that probably would actually reduce the so called burden, reduce that number that would otherwise need to be net for the next eight year cycle. I think all of these things are ultimately connected, but it gives us a target to be able to point to for eight year cycles into the future, which is important because, as revenues come back and as we are able to invest more and more into homeless, into housing and homelessness strategies.

I remember the last time that we were thinking about HHAP programs, for example, in 2017 and 2018. Admittedly, I wasn't here then, but as a local official, we were wondering, is the state just sort of making up its goals on the fly because it didn't have that, didn't know what the target goal was.

So we said that big cities are going to get this and little cities are going to get that, and there's going to be a minimum threshold, and we are going maybe going to use the point in time count, but it was just the best information that we had at the time to be able to align some of those funding decisions.

Updating the RHNA process will give us even better information on which to be able to make future budget decisions and be able to efficiently align those dollars in those strategies with reliance and with partnership with locals to be able to tailor.

Because not only are the inputs into homelessness and those ultimate goals or numbers going to vary region by region and city by city, but their own strategies to be able to work on resolving and meeting those numbers are also going to vary region by region and city by city. And so with that, I respectfully ask for your aye vote.

This motion do pass the Assembly Committee on Appropriations. Madam Secretary, please take the roll.

[Roll Call]

Seven to one with one not voting.

Thank you.

Thank you.

Thank you so much.

With that, we are adjourned.