Last Wednesday the Senate unveiled Budget trailer bill language for the “No Place Like Home” (NPLH) proposal, which Governor Brown recently endorsed as part of his Fiscal Year 2016-17 May Revision.  Although the NPLH proposal was initially introduced by the Senate in January, draft legislative language was not available until late last week.  While some specific details regarding the mechanics of the bond component are still under development, the NPLH initiative aims to provide $2 billion in bond financing – supported through a portion of Mental Health Services Act (MHSA) funding – to construct permanent supportive housing to address local communities’ chronic homeless and mentally ill populations.  

Specifically, the NPLH proposal would use MHSA funding to finance up to $1.8 billion in competitive financing to support the development or refurbishment of supportive housing, $200 million in non-competitive financing for counties as a “first wave,” and $6.2 million in funding to provide technical assistance and grant preparation assistance to counties.  For the competitive component of the proposal, counties would be grouped into the following categories for purposes of competing: Los Angeles, Large, Medium, and Small.  The competitive process will include at least four rounds of funding.  In addition, the California Department of Housing and Community Development (HCD) would be responsible for developing guidelines and regulations in conjunction with an appointed advisory committee.  

RCRC, the California State Association of Counties (CSAC), Urban Counties of California (UCC), and the County Behavioral Health Directors Association of California (CBHDA) met with leadership from the Senate, Department of Finance (DOF), and HCD last Friday to discuss a number of concerns and technical issues the groups have with the proposal.  Although RCRC, CSAC, and UCC do not have a formal position on the proposal, staff from these respective county organizations worked together to develop consensus over proposed amendments to address a number of policy concerns and technical components of the proposal.  These requests included:

  • Increasing the proportion of funds available in the noncompetitive process;
  • Identifying counties as sole applicants for funds (but preserve the option for those counties who are working with or want to co-apply with a developer);
  • Adding two more county representatives on the advisory committee: from 1 CAO/Supervisor and 1 Behavioral Health Director to 2 CAOs/Supervisors. (1 from large, 1 from small), 1 BH Director, and 1 county staff/planner/housing staff person to provide more technical expertise and better communicate with HCD;
  • Requesting that local members are appointed by statewide associations, as done throughout current law and practice;
  • Broadening the proposed alternative process by allowing counties from each competitive grouping to apply;
  • Clarifying whether a county can participate in both the alternative and competitive processes;
  • Capping amount available through alternative process (somewhat dependent on whether a county can participate in both alternative or competitive or not);
  • Adding language to the alternative process to require the use of the four competitive groupings; and,
  • Adding a section reflecting CBHDA’s simple structural request to allow MHSA funding to be used for housing vouchers outside of Full Service Partnerships.

New draft amendments were received today from the Senate.  Although some minor technical amendments requested by RCRC, CSAC, UCC and CBHDA were incorporated in the draft, many major requests were not accepted.  We will continue to meet with the Legislature and the Administration over the next couple days to reiterate changes needed to the proposal.  Additionally, the DOF and the State Treasurer’s Office are in the process of developing language that will provide more specifics as to how the bond revenue financing component will be implemented.  However, Fiscal Year 16-17 is not included in the proposal, meaning counties that are currently developing budgeting plans for MHSA-funded programs should not see any impacts in the next fiscal year.  It is our understanding that specific language will be released in the coming days.  The current version of the NPLH Budget Trailer Bill language is available here.