LEGISLATIVE FISCAL ESTIMATE

[First Reprint]

ASSEMBLY, No. 2098

STATE OF NEW JERSEY

217th LEGISLATURE

 

DATED: JULY 6, 2016

 

SUMMARY

 

Synopsis:

Establishes “Veterans Affordable Housing Section 8 Voucher Pilot Program.”

Type of Impact:

No effect on State Finances.  Potential reallocation of federal funds.

Agencies Affected:

Department of Community Affairs.

 

 

Office of Legislative Services Estimate

Fiscal Impact

Year 1 

Year 2 

Year 3 

 

State Finances

No Fiscal Impact – See comments below

 

 

 

 

·         The Office of Legislative Services concludes that the enactment of Assembly Bill No. 2098 (1R) would have no impact on State finances and may require the reallocation of federal funds awarded to New Jersey for the Housing Choice Voucher Program.

 

·         Information on the amount of unencumbered Housing Choice Voucher Program budget authority is not available at this time. The OLS estimates that a maximum of $589,800 would have to be reserved for the pilot program.

 

·         The Department of Community Affairs (DCA) has indicated that the State has reserved approximately 1,200 project-based and tenant-based rental assistance vouchers for veterans through various State and federal programs. This does not include vouchers awarded by county and municipal housing authorities.

 

·         The State also intends to award an additional 100 project-based rental assistance vouchers to provide housing to homeless veterans through the Housing First initiative.

 

 

BILL DESCRIPTION

 

      Assembly Bill No. 2098 (1R) of 2016 requires the Commissioner of Community Affairs to establish and operate a project-based voucher pilot program under the federal Housing Choice Voucher (Section 8) Program for veterans and their families who are confronting homelessness or are residing in unsafe housing. The Section 8 Housing Choice Voucher Program assists in making safe and quality housing in the private rental market available to low and very-low income households by reducing housing costs through direct rent subsidy payments to landlords.  This program is funded by the U.S. Department of Housing and Urban Development (HUD).

      The bill requires the Commissioner of Community Affairs to annually allocate to the pilot program at least 1.5 percent of the unencumbered amount HUD provides to the State’s Department of Community Affairs’ Housing Choice Voucher Program for five years. In awarding vouchers under the pilot program the bill requires the commissioner to consider geographic diversity, the available of supportive services on the project site, and the proximity of supportive services to the project location. During the first two years of operation of the pilot program the commissioner must award at least half of the vouchers allocated to the pilot program to projects located within an eligible municipality as defined in the “Urban Transit Hub Tax Credit Act,” P.L.2007, c.346 (C.34B:1-207 et seq.).

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS concludes that the enactment of Assembly Bill No. 2098 (1R) would have no effect on State finances and may require the reallocation of federal funds awarded to New Jersey for the Housing Choice Voucher Program. New Jersey received $240 million for the Fiscal Year 2016 Housing Choice Voucher Program. The HUD regulations permit a public housing authority to reserve 20 percent of its available voucher funding for project-based vouchers. Information available through the New Jersey Comprehensive Financial System indicates that the DCA has budgeted $496.6 million for housing vouchers; 20 percent of that amount is $39.320 million.  Assembly Bill No. 2098 (1R) requires the Commissioner of Community Affairs to allocate 1.5 percent of the unencumbered budget authority allocated to the DCA for the Housing Choice Voucher Program to support the “Veterans Affordable Housing Section 8 Voucher Pilot Program.” Based on these data, the OLS estimates that the maximum amount that may be reserved for the pilot program is $589,800.

      According to the DCA, data available through the federal Homeless Management Information System indicate that there are 1,356 homeless veteran households in New Jersey.  The department also noted that there are 1,183 housing vouchers reserved for the homeless veteran population. There are 810 Housing Choice Vouchers provided through the federally-supported Veterans Affairs Supportive Housing Program (VASH). The VASH provides rental assistance to homeless veterans who received case management and clinical services through the Department of Veterans Affairs. There are 273 project-based Housing Choice Vouchers reserved to provide housing for veterans who are homeless or at-risk of homelessness.  The State provides 100 tenant-based vouchers for homeless veterans through the State Rental Assistance Program (SRAP). These totals do not include vouchers that may be reserved for veterans by the State’s 85 county and municipal housing authorities.

      In May and September 2015, the DCA issued requests for proposals (RFP) to provide rental assistance to veterans through the Housing Choice Voucher Program.  Each RFP announced the availability of 100 15-year project-based rental assistance vouchers for veterans and their families who are confronting homelessness or are residing in unsafe housing. These initiatives targeted very-low income individuals and households where a veteran is the head of household. Eligible RFP applicants were government entities or for-profit or nonprofit organizations registered to conduct business with the State of New Jersey that have an established track record of successfully providing housing and supportive services to veterans. Applicants were required to have site control of existing market-rate rental housing units that would be available for occupancy within three months. Program participants are required to pay no more than 30 percent of their adjusted annual income towards their housing costs.

      The DCA received 14 proposals in response to the May RFP and awarded project-based vouchers to 12 applicants on July 20, 2015. As of April 2016, 26 families and 2 individuals have leased housing units through the Housing Choice Voucher Program. The annual value of these vouchers is $665,664. The DCA received 32 applications in response to the September RFP and awarded 173 project-based vouchers to 29 applicants in November 2015. These projects must enter into a contract for their vouchers within two years. The annual value of these vouchers is $1,197,270.  The department has indicated that two individuals and one family have leased units through this program.

      On March 30, 2016 the DCA announced that it will issue 500 SRAP vouchers through a new Statewide Housing First Program. In the “Housing First” model, homeless individuals and families are provided with permanent affordable housing as quickly as possible, and then with case management and social services as needed. The provision of housing allows other services, such as medical care, drug treatment, and job training, to be provided in a coordinated manner.  On April 7, 2016 the department issued an RFP for the Housing First initiative. The RFP states that 400 chronically homeless households and 100 homeless veterans will receive assistance through the program. The deadline for RFP submission was May 27, 2016 and awards are scheduled to be announced on July 5, 2016.

 

Section:

Local Government

Analyst:

Scott A. Brodsky

Senior Fiscal Analyst

Approved:

Frank W. Haines III

Legislative Budget and Finance Officer

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).