BILL ANALYSIS
AB 1865
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Date of Hearing: April 14, 2010
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Norma Torres, Chair
AB 1865 (A. Strickland) - As Introduced: February 12, 2010
SUBJECT : Local Housing Trust Fund Matching Grant Program
SUMMARY : Reduces the amount of matching grant funds an
applicant for a newly formed local housing trust fund must raise
from a minimum of $1 million to $500,000.
EXISTING LAW
1)Allocates $35 million of the $100 million Affordable Housing
Innovation Fund from Proposition 1C to the Local Housing Trust
Fund program (Health and Safety Code Section 53545.9).
2)Requires that half of the funds available to the Local Housing
Trust Fund Program ($17.5 million) be made available for newly
established housing trusts (Health & Safety Code Section
53545.9).
3)Establishes the minimum allocation for newly formed trusts in
counties with populations of 425,000 persons or less at
$500,000 and the minimum allocation for all other newly formed
trusts at $1 million (Health & Safety Code Section 50843.5).
4)Requires the Department of Housing and Community Development
(HCD), when making grants to newly established trust funds, to
set aside funding for 36 months from the date the funds are
made available for newly established trust funds in counties
of less than 425,000 persons (Health & Safety Code Section
50843.5).
FISCAL EFFECT : Unknown
COMMENTS :
Background : 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;
AB 1865
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California Homebuyer Downpayment Assistance Program; and, Jobs
Housing Improvement Account. Funds provided under Proposition
46 were mostly exhausted by the end of 2006.
In November 2006, California voters approved Proposition 1C, the
Housing and Emergency Trust Fund Act of 2006. Proposition 1C
maintained funding provided under Proposition 46 for most, but
not all, of the programs noted above. One of the programs not
included in Proposition 1C was funding for local housing trusts.
Proposition 1C did include $100 million for the Affordable
Housing Innovation Fund to be used for "competitive grants or
loans to sponsoring entities that develop, own, lend, or invest
in affordable housing and are used to create pilot programs to
demonstrate innovative, cost-saving approaches to creating or
preserving affordable housing."
In 2007, the case was successfully made that local housing
trusts are inherently innovative, that is local housing leaders
can design individualized local programs to address affordable
housing needs in their communities. Therefore, $35 million was
made available for local housing trusts to apply for grants.
One-half of the $35 million is to be made available strictly for
new trusts. Additionally, when awarding grants to new trusts,
HCD is required to set aside funding for a period of 36 months
for trusts in counties with a population of less than 425,000
persons.
In October 2008, HCD issued a Notice of Funding Availability
(NOFA) for all of the existing trust fund money ($16.275
million) and roughly one-third ($5.4 million) of the new trust
fund money and has received applications for all of the funds
available to existing trust funds. Although HCD was unable to
make any awards before Department of Finance imposed the freeze
on awards, the applicants have indicated they are counting on
receiving those funds once the freeze is lifted.
AB 570 (Arambula), Chaptered 95, Statutes of 2009, reduced the
amount of matching funds a newly established housing trust fund
in smaller communities, those with populations of less than
425,000 persons, were required to raise from $1 million to
$500,000.
Purpose of the bill : This bill seeks to allow all newly formed
housing trusts to better compete for state housing trust fund
grants by lowering the minimum grant amount for all newly
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established trusts not just those in smaller cities or counties.
Newly formed trusts would be required to provide a match of
$500,000 rather than $1 million. Reducing the match amount
required from all newly formed trusts, regardless of whether
they are in a smaller city/county, will allow more local housing
trust funds to apply for the funds. According to the author
this change will not only support affordable housing producing
in the state, but also result in new construction jobs.
REGISTERED SUPPORT / OPPOSITION :
Support
Ventura County Housing Trust Fund (sponsor)
California Coalition for Rural Housing
California Housing Consortium
Housing California
San Joaquin Valley Housing Trust
Ventura County Board of Supervisors
Opposition
None on file.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085