LEGISLATIVE FISCAL ESTIMATE

[Second Reprint]

ASSEMBLY, No. 2098

STATE OF NEW JERSEY

217th LEGISLATURE

 

DATED: DECEMBER 19, 2017

 

 

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 (2R) will 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 available through the State accounting system indicates that $3.9 million in Housing Choice Voucher Program funds remain unencumbered as of December 8, 2017.  If the bill were in effect in 2017, 1.5 percent of that amount, or $58,500, would be reserved for the pilot program. The amount allocated in 2018 and thereafter may differ.

 

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

 

·         Approximately 100 project-based rental assistance vouchers have been awarded by the State to homeless veterans through the Housing First Initiative.

BILL DESCRIPTION

 

      Assembly Bill No. 2098 (2R) 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. 

      The bill requires the Commissioner of Community Affairs to annually allocate to the pilot program at least 1.5 percent of the unencumbered amount that 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 availability 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.34:1B-207 et seq.).

      The Section 8 Housing Choice Voucher Program supports two types of financial assistance in order to provide access to affordable housing.  Under the tenant-based voucher program, a public housing authority (PHA) issues an eligible family and the family selects a housing unit of its choice.  Under the project-based voucher program, a PHA enters into an assistance contract with a project owner for specified units and for a specified term.  The PHA refers families from its waiting list to the project owner to fill vacancies.  Because the assistance is tied to the housing unit, a family who moves from the project-based unit does not have any right to continued housing assistance.  They may be eligible for a tenant-based voucher when one becomes available.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS concludes that the enactment of Assembly Bill No. 2098 (2R) would have no effect on State finances, and may require the reallocation of federal funds awarded to New Jersey for the 2018 Housing Choice Voucher Program.  New Jersey received $251.7 million for the 2017 Housing Choice Voucher Program.  Assembly Bill No. 2098 (2R) requires the Commissioner of Community Affairs to allocated 1.5 percent of the unencumbered budget authority allocated to DCA for the Housing Choice Voucher Program to support the “Veterans Affordable Housing Section 8 Voucher Pilot Program.”  Information available through the New Jersey Comprehensive Financial System indicates that approximately $3.9 million in Housing Choice Voucher Program funds remain unencumbered as of December 8, 2017.  Based on these data, the OLS estimates that the maximum amount that may be reserved for the pilot program is $58,500. However, the amounts required to be allocated in 2018 and thereafter may differ.

      According to the “Point-in-Time Estimates of Homelessness” released by HUD in Part 1 of the 2017 Annual Homeless Assessment Report to Congress (AHAR), there were 583 homeless veterans in New Jersey as of January 2017.  Of that population, 494 veterans were sheltered, or staying in emergency shelters, transitional housing programs or safe havens; and 89 veterans were unsheltered.  The AHAR defines “unsheltered homeless” as people whose primary nighttime location is a public or private place that is not designated for, or ordinarily used as, a regular sleeping accommodation for people.  The AHAR Point-in-Time Estimates of Homelessness provide a snapshot of homelessness on a single night.  The one-night counts are conducted during the last 10 days of January each year and are one type of data reported in the AHAR. 

      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, and 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 32 applications in response to the September RFP.  In response to a Fiscal Year 2018 OLS Discussion Point, the DCA noted that it has awarded 273 projected-based Housing Choice Voucher Program vouchers to veterans through the two requests for proposals.  As of March 2017, 63 households occupied designated project-based housing units.  The DCA also administers 832 Housing Choice Vouchers through the federally-supported Veterans Affairs Supportive Housing Program (VASH).  Approximately 850 veterans were being served through the VASH Program.  VASH provides rental assistance to homeless veterans who received case management and clinical services through the Department of Veterans Affairs.  Additionally, the State provides 100 tenant-based housing vouchers for homeless veterans through the State Rental Assistance Program (SRAP).  These totals do not include vouchers that may be reserved for veterans by New Jersey’s 85 county and municipal housing authorities.

      On March 30, 2016, the DCA announced that it will issue 500 SRAP vouches 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 DCA issued an RFP for the “Housing First” initiative.  The RFP states that 400 chronically homeless veterans and 100 homeless veterans will receive assistance through the program.  In response to a Fiscal Year 2018 OLS Discussion Point, the DCA noted that 29 chronically homeless households and two homeless veteran households had leased housing; 59 chronically homeless and 8 homeless veteran households had been issued vouchers and were searching for housing; and 20 voucher applications submitted by chronically homeless veteran households were under eligibility review.

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.).