BILL ANALYSIS
AB 1865
Page 1
ASSEMBLY THIRD READING
AB 1865 (Audra Strickland)
As Introduced February 12, 2010
Majority vote
HOUSING 9-0 APPROPRIATIONS 17-0
-----------------------------------------------------------------
|Ayes:|Torres, Arambula, |Ayes:|Fuentes, Conway, Ammiano, |
| |Bradford, Eng, Gilmore, | |Bradford, Charles |
| |Knight, Saldana, | |Calderon, Coto, Davis, |
| |Torlakson, Tran | |Monning, Ruskin, Harkey, |
| | | |Miller, Nielsen, Norby, |
| | | |Skinner, Solorio, |
| | | |Torlakson, Torrico |
| | | | |
-----------------------------------------------------------------
SUMMARY : Reduces the amount of matching grant funds an
applicant for a newly formed local housing trust fund must raise
from $1 million to $500,000 to qualify for the Local Housing
Trust Fund (LHTF) program funded by Proposition 1C: the Housing
and Emergency Trust Fund Act of 2006.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, costs of incorporating this change into the next
notice of funding availability (NOFA) for LHTF would be minor
and absorbable within the Department of Housing & Community
Development's (HCD) resources.
COMMENTS : 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 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.
AB 1865
Page 2
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.
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
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.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085
AB 1865
Page 3
FN: 0004574