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Senate panel debates HAP Round 7 trailer language tying disbursements to pro‑housing designations and local matches

Senate Budget and Fiscal Review Subcommittee No. 4 · May 20, 2026
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Summary

HCD and homelessness program staff explained trailer bill language to administer Homeless Housing Assistance and Prevention (HAP) Round 7 funding with new accountability: pro‑housing designation and phased local matching requirements tied to initial and second disbursements, and streamlined system performance measures; lawmakers raised timing, equity and statutory oversight concerns and held the item open.

The subcommittee examined trailer bill language to govern administration of the Homeless Housing Assistance and Prevention program (HAP) for a proposed Round 7 of funding and to align accountability measures across rounds.

Sarah Poss, branch chief for homelessness programs and accountability, told the panel the Governor’s budget proposed $500 million in General Fund for HAP Round 7 contingent on enhanced accountability and performance metrics. The trailer bill would require HAP‑eligible large cities and the counties containing them to obtain a pro‑housing designation and demonstrate a percentage of qualifying local matching funds before receiving initial and second FY26‑27 disbursements. The language also seeks to streamline California System Performance Measures (SPMs) by authorizing the California Interagency Council on Homelessness (Cal ICH) to publish a single consistent set of metrics across HAP rounds, and to provide a framework for recapturing unexpended funds for reallocation within regions.

LAO staff cautioned the committee that moving or consolidating SPMs without legislative guardrails could reduce statutory accountability and that the proposed language lacks clarity on the local match amount and timing, which could slow distribution. The LAO and some committee members warned that requiring pro‑housing designation and phased matches could pose an administrative lift for jurisdictions that have yet to begin the designation process and might delay disbursements that the Legislature intended to release quickly.

Senator Cabaldon and others pressed whether the trailer bill effectively removes or alters the current statutory SPMs and whether moving metric authorities to Cal ICH would limit legislative control. HCD officials said the intent is to maintain existing SPMs and to provide a single, clearer rubric so grantees are judged consistently across rounds; they said Cal ICH would adopt metrics consistent with existing HDIS/HMIS data to avoid new reporting burdens.

Several members also expressed concern about requiring a permanent dedicated local funding source as part of the match when the May Revision did not include new statewide HAP appropriations. HCD said the proposal phases matches and offers technical assistance to jurisdictions that need help obtaining pro‑housing designation.

The subcommittee held the item open and asked for clearer statutory language, specifics on local match calculation and timing, and assurances that SPMs tied to outcomes (numbers experiencing homelessness and exits from homelessness) will remain part of HAP accountability.