(a) An administrative entity shall use funds allocated pursuant to subdivision (a) of Section 50490.2 for one or more of the following eligible activities:

(1) Rental assistance and housing relocation and stabilization services to ensure housing affordability to people experiencing homelessness or at risk of homelessness. Rental assistance provided pursuant to this paragraph shall not exceed 48 months for each assisted household, and rent payments shall not exceed two times the current HUD fair market rent for the local area, as determined pursuant to Part 888 of Title 24 of the Code of Federal Regulations.

(2) Operating subsidies in the form of 15-year capitalized operating reserves for new and existing affordable permanent housing units for homeless individuals and families.

(3) Flexible housing subsidy funds for local programs that establish or support the provision of rental subsidies in permanent housing to assist homeless individuals and families. Funds used for purposes of this paragraph may support rental assistance, bridge subsidies to property owners waiting for approval from another permanent rental subsidy source, vacancy payments, or project-based rent or operating reserves.

(4) Operating support for emergency housing interventions, including, but not limited to, the following:

(A) Navigation centers that provide temporary room and board and case managers who work to connect homeless individuals and families to income, public benefits, health services, permanent housing, or other shelter.

(B) Street outreach services to connect unsheltered homeless individuals and families to temporary or permanent housing.

(C) Shelter diversion, including, but not limited to, homelessness prevention activities, and other necessary service integration activities to connect individuals and families to alternate housing arrangements, services, and financial assistance.

(5) Systems support for activities necessary to maintain a comprehensive homeless services and housing delivery system, including CES, data, and HMIS reporting, and homelessness planning activities.

(6) To develop or update a CES system pursuant to subparagraph (B) of paragraph (3) of subdivision (a) of Section 50490.3, or to develop a plan addressing actions to be taken within the Continuum of Care service area to address homelessness pursuant to subdivision (b) of Section 50490.3.

(b) The administrative entity or a subrecipient, as applicable, shall establish the duration, amount, and other terms of assistance provided, consistent with the requirements of this chapter and other reasonable limitations established by the department in the notice of funding availability or in the contract with the department entered into pursuant to subdivision (a) of Section 50490.5.

(c) Unless otherwise exempted by federal rules, an administrative entity that is allocated funding under the program for a program or project that is an eligible activity shall utilize a CES that meets the requirements of Section 576.400(d) or Section 578.7(a)(8), as applicable, of Title 24 of the Code of Federal Regulations and related HUD requirements. Except in the case of a program or project specifically concerned with homelessness prevention activities as a part of shelter diversion activities authorized under subparagraph (C) of paragraph (3) of subdivision (a), an administrative entity that is allocated funding under the program for an eligible program or project funded shall prioritize assistance to homeless individuals and families over assistance to individuals and families at risk of homelessness.

(d) An administrative entity that is allocated funds under the program for eligible activities described in subdivision (a) that provide permanent housing shall incorporate the core components of Housing First, as provided in subdivision (b) of § 8255 of the Welfare and Institutions Code.

(e) An administrative entity shall provide all eligible activities in a manner consistent with the Housing First practices described in paragraphs (1) to (6), inclusive, of subdivision (b) of Section 8409 of Title 25 of the California Code of Regulations.

(f) An administrative entity shall not use more than 40 percent of any funds allocated pursuant to subdivision (a) of Section 50490.2 in a fiscal year for operating support for emergency housing interventions as described in paragraph (4) of subdivision (a).

(Amended by Stats. 2019, Ch. 497, Sec. 169. (AB 991) Effective January 1, 2020.)