BILL ANALYSIS
AB 1053
Page 1
(Without Reference to File)
ASSEMBLY THIRD READING
AB 1053 (Nunez)
As Amended June 6, 2007
Majority vote
HOUSING 5-0 APPROPRIATIONS 12-5
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|Ayes:|Saldana, Laird, Hancock, |Ayes:|Leno, Caballero, Davis, |
| |Mullin, Swanson | |DeSaulnier, Huffman, |
| | | |Karnette, Krekorian, |
| | | |Lieu, Ma, Nava, Solorio, |
| | | |Feuer |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Walters, Emmerson, La |
| | | |Malfa, Nakanishi, Sharon |
| | | |Runner |
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HOUSING 5-1
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|Ayes:|Saldana, Bass, Hancock, | | |
| |Mullin, Swanson | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Sharon Runner | | |
| | | | |
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SUMMARY : Provides allocation of the $850 million Affordable
Housing Innovation Fund contained in the Housing and Emergency
Shelter Act of 2006 (Proposition 1C). Specifically, this bill :
1)Provides that it is the intent of the Legislature to provide
innovative methods to encourage local governments to approve
higher density infill housing closer to jobs, transportation,
retail, and other amenities.
2)Provides that it is the intent of the Legislature to encourage
efficient development patterns that are consistent with regional
planning to meet local and state objectives in areas of new
growth and to measure reductions of vehicle miles traveled per
household or green house gas emission consistent with the Global
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Warming Solutions Act of 2006.
3)Provides $100 million to be transferred to the California
Pollution Control Financing Authority for the authority's
California Recycle Underutilized Sites (CalReUSE) program to be
expended for brownfield cleanup that promotes infill housing
development as well as for other related development.
4)Provides $100 million to be transferred to the State
Infrastructure and Economic Development Bank for a revolving
loan program to be used for infrastructure that is integral to
facilitating the development of mixed-income infill housing.
Loans shall be a maximum of $10 million. Requires the
legislative body of the project sponsor to make the following
findings prior to applying for funds:
a) The project is consistent with the general plan of the
relevant jurisdiction(s);
b) The proposed financing is appropriate for the specific
project;
c) The project facilitates effective and efficient use of
existing and future public resources to promote infill
housing and conservation of natural resources; and,
d) The project is consistent with the criteria, priorities,
and guidelines required of the Infrastructure Bank under
existing law.
5)Provides $450 million to be transferred to the Department of
Housing and Community Development (HCD) to establish and
administer a competitive grant program to allocate funds to
qualifying cities for infill projects in designated infill areas
to be used for infrastructure that is directly related to, or
integral to facilitating the development of, mixed-income infill
housing and:
a) Defines "infill project" as a residential or mixed-use
residential project located on a designated infill site
within an incorporated city.
b) Defines "designated infill" site as either:
i) A site that has been designated by a city that has
been previously developed and is located in an area where
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zoning allows for residential or mixed use; or,
ii) A vacant site where the adjoining parcels on at least
75% of the perimeter of the site are, or previously have
been developed for urban uses.
c) Provides that in order to be eligible for grant funding,
projects shall conform to all of the following:
i) Consistency with any land use plan applicable to the
subject site. The housing element of the general plan
shall be found by HCD to be in substantial compliance. A
notice of determination pursuant to the California
Environmental Quality Act (CEQA) shall have been completed
with respect to any local land use plan;
ii) Consistency with state planning priorities;
iii) At least 20% of the residential units in the proposed
infill project will be affordable to very low, low, or
moderate income residents. Residential units may be either
rental or for sale and shall be subject to regulatory
agreements to guarantee their continuing affordability;
iv) Both the infrastructure project and the housing
project shall be identified with sufficient specificity to
be considered and analyzed for the purposes of compliance
with CEQA;
v) Must be an integral part of the infrastructure needs
that are required to allow infill housing projects to
proceed; and,
vi) Requires a dollar for dollar match with non-state
funds. Allows HCD to waive the match requirement for
projects that exceed the affordability threshold.
d) Requires HCD to consider the following in rating
applications:
i) Number of housing units to be created;
ii) Depth and duration of affordability;
iii) Creation of housing in job-rich areas;
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iv) Proximity of housing to mass transit, parks, schools,
social services and other amenities;
v) Pedestrian and bicycle accessibility within, to, and
from the site; and,
vi) The extent to which the project design and location
incorporates sustainable building practices.
e) Requires HCD to give additional consideration to projects
located in jurisdictions that have adopted the following
policies:
i) To reduce barriers to, encourage, or require
construction of, mixed-income housing development;
ii) To encourage collaboration with school districts to
promote joint use facilities, pedestrian friendly
connections or safe school routes between infill housing
development, schools and recreational facilities; and,
iii) To encourage efficient land use, including but not
limited to general plan updates that balance population
growth and distribution, urban expansion, land development
and resource preservation regionally to achieve reduction
of greenhouse gas emission.
f) Requires a reasonable geographic distribution of funds;
and,
g) Requires HCD provide an annual report to the Legislature
by April 1 of each year on its activities relating to this
program.
6)Provides $100 million to be transferred to the Multifamily
Housing Program (MHP) administered by HCD with priority to
public housing authorities that seek major rehabilitation, new
construction and other physical improvements to severely
distressed public housing units.
7)Provides $100 million to be allocated to HCD to be used for the
Workforce Housing Rewards Program (Rewards Program) with
priority funding to local entities that have done all of the
following:
a) Adopted policies to reduce barriers to, encourage, or
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require construction of mixed-income housing developments;
b) Provided community outreach efforts on the benefits of
providing housing for all income levels; and,
c) Approved new housing that incorporates either sustainable
building practices or Leadership in Energy and Environmental
Design (LEED) or Neighborhood Development principals likely
to achieve reduction of greenhouse gas emissions consistent
with the California Global Warming Solutions Act of 2006.
8)Requires HCD to provide a report to the Legislature on its
activities relating to the Rewards Program for each fiscal year
that awards given.
9)Requires the legislative body of a local entity submitting an
application for funding to approve the application by
resolution.
EXISTING LAW :
1)Establishes the Housing Bond to allocate $2.85 billion for the
benefit of housing related programs (Health and Safety Code
Section 53545).
2)Provides that $850 million from the Housing Bond is to be
allocated to the Regional Planning, Housing, and Infill
Incentive Account (a new program) to be used, upon appropriation
by the Legislature, for the following purposes:
a) Incentive grants related to infill housing development
which may include:
i) Not more than $200 million for urban parks;
ii) Water, sewer, or other infrastructure associated with
infill;
iii) Transportation improvements; or,
iv) Traffic mitigation.
b)Brownfield cleanup that promotes infill housing development.
[Health and Safety Code Section 53545 (b)]
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FISCAL EFFECT : According to the Assembly Appropriations
Committee, this bill allocates the bond funds as described. Any
administrative costs to HCD would come from a portion of the bond
funds.
COMMENTS :
In November 2006, California voters approved Proposition 1C, the
2.85 billion Housing and Emergency Shelter Trust Fund Act of 2006.
The Bond Act includes an $850 million Regional Planning, Housing,
and Infill Incentive Account that is subject to appropriation and
further statutory implementation by the Legislature. Proposition
1C further provides that the funds are available for infill
incentive grants for capital outlay related to infill housing and
housing-related development as well as for brownfield cleanup that
promotes infill housing and housing-related development that is
consistent with regional and local plans.
The author notes that the Regional Planning, Housing and Infill
Incentive Fund of Proposition 1C offers an opportunity to shape
state-directed land-use with $850 million to encourage infill
development within existing urbanized areas. AB 1053 as proposed
to be amended would allocate $850 million from the Regional
Planning Housing and Infill Incentive Account as follows:
$100 million to CalReUse , for Brownfield clean up that promotes
infill housing development. Cal ReUSE is administered by private
partnerships and since its inception in 2003,Cal ReUSE has
assisted brownfield revitalization projects resulting in nearly
2,500 projected housing units. These projects represent vital
progress in the economic development of at-risk urban communities
through the beneficial reuse of blighted properties and removal of
the magnets for crime which those properties represent.
$100 million to the State Infrastructure Bank (I-Bank) for
infrastructure that is integral to facilitating higher density
mixed-income infill housing. Modeled after its existing
infrastructure loan program, I-Bank would administer this
allocation and leverage funds 3 to 1. Eligible applicants would
include any local governmental agency, including cities, counties,
redevelopment agencies, special districts, assessment districts,
joint powers authorities and non-profit corporations formed on
behalf of a local government. Eligible projects would include
city streets, county highways, state highways, drainage, water
supply and flood control, educational facilities, environmental
mitigation measures, parks and recreational facilities, port
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facilities and public transit projects. Since June 30, 2000, the
I-Bank's board of directors have approved seventy-seven loans
totaling $333 million. Of these approved loans about half have
gone to rural areas with the other half going to urban
communities.
$450 million to Department of Housing and Community Development
for competitive grants to cities for infrastructure directly
related or integral to mixed income infill housing. There is a
local match requirement that HCD may waive if the residential
project that results from the infrastructure exceeds a 25%
affordability threshold for very low, low and moderate income
households. Bonus points are available to communities that
encourage coordinated land use policies to reduce the impact of
green house gas emissions, affordable housing, sustainable
building practices and pedestrian friendly neighborhoods.
$100 million to Multifamily Housing Program for the rehabilitation
or construction of infill rental housing with a priority given to
severely distressed public housing units.
$100 million to the Workforce Reward Program for financial
incentives to cities and counties that issue building permits for
new housing affordable to very low or low-income households.
Eligible uses of funds include the construction or acquisition of
capital assets such as traffic improvements, neighborhood parks,
bike paths, libraries, school facilities, play areas, community
centers, police or fire stations.
In 2002, California voters approved Proposition 46, the $2.1
billion Housing and Emergency Shelter Trust Fund Act. Proposition
46 provided funding for the following programs: Multifamily
Housing Program; Emergency Housing Assistance Program; Supportive
Housing; Farmworker Housing Grant Program; CalHome Program; Local
Housing Trusts; Code Enforcement Program; California Homebuyer
Downpayment Assistance Program; and Jobs Housing Improvement
Account.
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
maintains funding provided under Proposition 46 for most, but not
all, of the programs noted above. Additionally, Proposition 1C
establishes funding mechanisms for infrastructure related to
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housing development.
According to the authors, AB 1053 seeks to ensure that State
dollars invested in local infrastructure projects actually result
in an increase in housing supply available to a variety of income
levels, prioritize efficient land use and development patterns and
ensure a reasonable geographic distribution of infrastructure
resources throughout the State.
AB 1053 sets forth the intent of the Legislature that funds
derived under Proposition 1C be spent consistent with a long-term
plan for the State's growth and infrastructure needs and be
leveraged with alternative funding sources in order to reduce
demands on the State General Fund.
Health and Safety Code Section 53545 (created under Proposition
1C) provides that the infill fund is for "capital outlay related
to infill housing development . . . including, but not limited to
. . . park creation, development, or rehabilitation . . . water,
sewer, or other public infrastructure costs . . . transportation
improvements . . . traffic mitigation or brownfield cleanup that
promotes infill housing development."
There is disagreement about whether the funds should be used
solely for infrastructure projects related to housing or for
housing as well. The Administration's proposal does not allow for
the infill funds to be used for housing. SB 46 (Perata) allows
infill funds to be used for housing development, but it does not
specify whether the funds could be used for market-rate
developments, or solely for below-market rate. AB 1053 N??ez
strikes a balance by augmenting an allocation to the multifamily
housing program so that there is increased funding for the
construction of workforce infill housing but provides for
competitive grants and loans to finance infrastructure.
A recent report prepared by the California Center for Regional
Leadership, indicates that infrastructure grants are likely to
yield more housing than grants for below-market rate housing.
According to the author, HCD has put together a preliminary
projection of the number of housing units that will be developed
as a result of investment in infrastructure. HCD projects that
$850 million (minus 5% in administrative costs) will yield 31,960
units.
HCD estimates about $25,000 in infrastructure grant money per
housing unit. AB 1053 proposes $450 million in grants to be
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leverage on a dollar for dollar match resulting in $900 million in
funding for infrastructure. Additionally, AB 1053 proposes $100
million in revolving loans to be leveraged at 3 to 1 for an
additional $400 million in funding for infrastructure. Assuming a
range of $15,000 - $25,000 in infrastructure funding per housing
unit, AB 1053 could result in a range of 52,000 to 87,000 new
infill housing units. Additionally, based on HCD methodology for
calculating the number of units per dollar of housing bond spent,
a MHP funding increase of $100 million would increase the number
of units created by proposition 1C from 4,054 to 5,229.
Analysis Prepared by : Hubert Bower / H. & C.D. / (916) 319-2085
FN: 0001484