BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: AB 927
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: salda?a
VERSION: 06/11/07
Analysis by: Carolina Urueta Salazar
FISCAL:yes
Hearing date: June 19, 2007
SUBJECT:
Senior developments within the Multifamily Housing Program
DESCRIPTION:
This bill would require that the proportion of Multifamily
Housing Program (MHP) funds expended to senior citizen housing
units be proportional to the percentage of lower income renter
households in the state that are lower income elderly renter
households.
ANALYSIS:
Under current law MHP is administered by the Department of
Housing and Community Development (HCD), to provide funding for
the new construction, rehabilitation, and preservation of
permanent and transitional rental housing for low income
households. Eligible applicants include local public entities,
for profit or nonprofit corporations, limited equity housing
cooperatives, individuals, Indian reservations and rancheries,
and limited partnerships. In addition applicants must have
developed at least one affordable housing development. Funds are
made available as a deferred payment loans. In exchange for
state funds, the developer must agree to maintain the units as
affordable for 55 years.
In 2002, California voters approved Proposition 46, the $2.1
billion Housing and Emergency Shelter Trust Fund Act of 2002.
Proposition 46 provided funding for various programs including
MHP. Funds provided under Proposition 46 were for the most part
exhausted at the end of 2006. In November 2006, California
voters approved Proposition 1C, the Housing and Emergency Trust
Fund Act of 2006. Proposition 1C provided $590 million to the
AB 927 (SALDA?A) Page 2
Multifamily Housing Program, including set asides of $50 million
for housing for homeless youth and $195 million for supportive
housing.
This bill requires that the percentage of MHP funds that is
expended for units restricted by age shall be proportional to
the percentage of lower income renter households in the state
that are lower income elderly renter households as reported by
the federal Department of Housing and Urban Development (HUD)
based on the most recent decennial census conducted by the
United States Census Bureau. The share excludes assistance
provided to "housing for homeless youth" and "supportive
housing." However in order to meet the obligations of the bill,
the share of senior housing may not fall more than 1% below the
proportional share. Projects still must meet the minimum
threshold requirements established under the MHP.
COMMENTS:
1. Purpose of the bill. According to the sponsors of the bill,
California is facing an affordable senior housing shortage.
There are more seniors who need affordable housing than there
are units available. The sponsors also believe that senior
housing projects are not competitive under the current
program structure. By requiring that MHP funding be allocated
to senior developments in the same proportion as the number
of lower income senior renters represents the total number of
lower income renter seniors, the sponsors believe that senior
housing would be assured fair access.
2. Senior housing shortage. The shortage in senior housing is
especially severe in rental housing. Approximately 55
percent of senior renters over the age of 62 earn an income
of less than $20,000 a year. The monthly rent for a person
earning $20,000 a year should not exceed $500. In California,
the monthly market rate for a one bedroom apartment is $972,
two times what these low-income seniors can afford.
3. Baby Boomers. California demographics show that the senior
population (60 and over) is on the rise. Between 1950 and
2000, the senior population increased from 1.6 million to 4.7
million. This trend will continue. By 2050 the senior
population will reach 12.8 million. The largest growth rate
will occur during the next 30 years as the Baby Boomers, born
between 1946 and 1964, reach age 60. By 2010, nearly 16
percent of Californians will be age 60 or older.
AB 927 (SALDA?A) Page 3
4. MHP senior developments. Under the funding provided in Prop
46 for MHP, 11 percent of the total units built were
restricted to occupancy by seniors. Based on current census
statistics this bill would require approximately 15 percent
of MHP funds to be expended for senior units.
5. Arguments in opposition. HCD does not believe this bill is
necessary. HCD believes that low-income seniors already
receive a fair share of housing funds under the MHP program.
In addition, they believe that establishing a set-aside
within MHP will reduce the program's ability to respond to
market fluctuations and applicant funding needs. Recently,
HCD surveyed its project sponsors asking about senior
occupancy in buildings without age restrictions, and the
sponsors estimated that 14.6 percent of all assisted units
were occupied by households that included seniors.
Therefore, HCD believes that seniors are receiving their fair
share of housing.
6. Timeline. The author may want to consider including the time
frame which HCD has to meet the proportional requirement.
Such a time frame would give HCD the opportunity to monitor
its progress in meeting the requirement.
7. Technical amendments.
On page 2. line 10 delete "expended" and
insert "awarded"
On page 2. Line 11 delete "by age pursuant to"
and insert "to senior citizens, as defined in"
On page 2. Line 19 delete "expended" and
insert "awarded"
Assembly Votes:
Floor: 43 - 29
Appr: 10 - 5
H&CD: 4 - 0
POSITIONS: (Communicated to the Committee before noon on
Wednesday, June 13,
2007)
SUPPORT: Aging Services of California (co-sponsor)
California American Association of Retired
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Persons (co-sponsor)
California Commission on Aging (co-sponsor)
Congress of California Seniors (co-sponsor)
Housing California (co-sponsor)
Alameda County Board of Supervisors
California Senior Legislature
Eden Housing
El Dorado County Commission on Aging
Golden State Manufactured-Home Owners League,
Inc.
Lewis Operating Companies
PEP Housing
Retirement Housing Foundation (Long Beach)
San Diego Housing Federation
Triple A Council of California, Inc.
United Seniors of Alameda County
OPPOSED: Department of Housing and Community Development