BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



           ------------------------------------------------------------ 
          |SENATE RULES COMMITTEE            |                  AB 1865|
          |Office of Senate Floor Analyses   |                         |
          |1020 N Street, Suite 524          |                         |
          |(916) 651-1520         Fax: (916) |                         |
          |327-4478                          |                         |
           ------------------------------------------------------------ 
           
                                         
                                    CONSENT


          Bill No:  AB 1865
          Author:   Audra Strickland (R)
          Amended:  6/14/10 in Senate
          Vote:     21

           
           SENATE TRANSPORTATION & HOUSING COMMITTEE  :  6-0, 6/22/10
          AYES:  Lowenthal, Huff, DeSaulnier, Harman, Pavley,  
            Simitian
          NO VOTE RECORDED:  Ashburn, Kehoe, Oropeza
           
          SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           ASSEMBLY FLOOR  :  75-0, 6/2/10 - See last page for vote


           SUBJECT  :    Local Housing Trust Fund Matching Grant Program

           SOURCE :     Ventura County Housing Trust Fund


           DIGEST  :    This bill reduces the minimum grant amount under  
          the Local Housing Trust Fund Matching Grant program to  
          $500,000 for all new trust funds regardless of county size.  
            

           ANALYSIS  :    In November 2006, California voters approved  
          Proposition 1C, the $2.85 billion Housing and Emergency  
          Shelter Trust Fund Act of 2006.  The bond act included $100  
          million for the Affordable Housing Innovation Fund and  
          required that the Legislature program the specific uses and  
          eligibility requirements for these funds.  SB 586 (Dutton),  
          Chapter 652, Statutes of 2007, allocated these funds to  
                                                           CONTINUED





                                                               AB 1865
                                                                Page  
          2

          four separate programs, including $35 million for the Local  
          Housing Trust Fund Matching Grant (LHTF) program that the  
          Department of Housing and Community Development (HCD)  
          administers.  

          Under existing law, the LHTF program matches contributions  
          to local housing trust funds.  To be eligible for matching  
          funds, a local housing trust fund must receive  
          contributions from private or governmental sources that are  
          not otherwise restricted for housing programs.  The awardee  
          must also have an HCD-approved housing element and have  
          submitted its annual housing element progress report, or if  
          it is a nonprofit entity, it must fund projects located in  
          jurisdictions with approved housing elements and submitted  
          progress reports.  The local housing trusts may, in turn,  
          use LHTF program funds to support emergency shelters,  
          rental housing, and for-sale housing affordable to  
          households ranging from extremely low-income to  
          moderate-income.  If an awardee fails to continue funding  
          and operating the local housing trust fund for at least  
          five years, then the trust fund must repay HCD's award to  
          the extent the funds have not yet been legally encumbered  
          to specific projects.

          Under SB 586, half of the $35 million allocated to the LHTF  
          program from Proposition 1C is reserved for newly  
          established housing trust funds, as defined by HCD.  Within  
          this set-aside for newly established housing trust funds is  
          an additional 36-month set-aside of an amount to be  
          determined by HCD for trust funds in counties with a  
          population of less than 425,000 persons.

          As originally established, the LHTF grants matched the  
          local contributions on a dollar-for-dollar basis at a  
          minimum of $1 million and up to a maximum of $2 million.   
          In 2009, the Legislature enacted AB 570 (Arambula), Chapter  
          455, to reduce the minimum grant amount for new trust funds  
          in counties of less than 425,000 persons to $500,000.   
          Proponents of that bill argued that smaller communities  
          would unlikely be able to meet a $1 million minimum match  
          requirement and therefore be discouraged from creating a  
          trust at all.   

          This bill reduces the minimum grant amount under the LHTF  

                                                           CONTINUED





                                                               AB 1865
                                                                Page  
          3

          program to $500,000 for all new trust funds regardless of  
          county size.   

           Comments  

           Purpose of the bill  .  This bill seeks to allow newly formed  
          housing trusts in larger counties to better compete for  
          state housing trust fund grants by lowering the minimum  
          grant amount for all such applicants, not just those in  
          smaller counties.  The LHTF program creates a big incentive  
          for cities and counties to create new housing trusts.   
          Reducing the match requirement for all newly formed trusts  
          will encourage more cities and counties to dedicate new  
          resources to affordable housing, thereby growing the  
          affordable housing pie, supporting additional affordable  
          housing production, and resulting in new construction jobs.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  8/2/10)

          Ventura County Housing Trust Fund (source)
          California Coalition for Rural Housing
          California Housing Consortium 
          Housing California 
          San Joaquin Valley Housing Trust
          Ventura County Board of Supervisors


           ASSEMBLY FLOOR  : 
          AYES:  Adams, Ammiano, Anderson, Arambula, Bass, Beall,  
            Bill Berryhill, Blakeslee, Block, Blumenfield, Bradford,  
            Brownley, Buchanan, Caballero, Charles Calderon, Carter,  
            Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,  
            DeVore, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,  
            Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick,  
            Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,  
            Huber, Huffman, Jeffries, Jones, Knight, Logue, Bonnie  
            Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande,  
            Niello, Nielsen, V. Manuel Perez, Portantino, Ruskin,  
            Salas, Saldana, Silva, Skinner, Smyth, Solorio, Swanson,  
            Torlakson, Torres, Torrico, Tran, Villines, Yamada, John  
            A. Perez

                                                           CONTINUED





                                                               AB 1865
                                                                Page  
          4

          NO VOTE RECORDED:  Tom Berryhill, Lieu, Norby, Audra  
            Strickland, Vacancy


          JJA:mw  8/4/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

                                ****  END  ****




































                                                           CONTINUED