BILL ANALYSIS Ó AB 1084 Page 1 ASSEMBLY THIRD READING AB 1084 (Davis) As Introduced February 18, 2011 Majority Vote VETERANS AFFAIRS 7-0 APPROPRIATIONS 15-1 ----------------------------------------------------------------- |Ayes:|Cook, Pan, Atkins, Block, |Ayes:|Fuentes, Harkey, | | | | |Blumenfield, Bradford, | | |V. Manuel Pérez, | |Charles Calderon, Campos, | | |Williams, Yamada | |Davis, Gatto, Hall, Hill, | | | | |Lara, Mitchell, Nielsen, | | | | |Norby, Solorio | | | | | | |-----+--------------------------+-----+--------------------------| | | |Nays:|Wagner | | | | | | ----------------------------------------------------------------- SUMMARY : Expands, in the context of the California Veteran Home Loan Program (CALVET), the definition of "cooperative housing corporation" to include a shared equity cooperative. FISCAL EFFECT : Minor additional cost pressure to CalVet funding. Funding for the CalVet program comes primarily from general obligation bonds that are repaid through monthly mortgage payments. The program has no General Fund costs. Voters have passed 23 veterans bonds since 1943 to provide funding for CalVet. The last veterans' bond to pass was Proposition 12 in 2008, which authorized $9 million in bonds for the program. COMMENTS : The California Department of Veterans' Affairs administers CALVET pursuant to statutory authority. The stated objective of CALVET is to provide veterans with the opportunity to acquire farms and homes. When CALVET was created in 1943, California was a different place in terms of farming and homeownership, as well as the rural/urban boundaries. In 1943, there were approximately 8.5 million people living in California, according to the U.S. Census. In 2009, there were approximately 37 million residents. It is reasonable to conclude that, with changes like these, the housing needs of the population, including veterans, have also changed. Co-op housing is a form of home ownership in which a corporation owns residential property, typically a condominium style property. Owners purchase a share in the corporation which gives them an AB 1084 Page 2 exclusive right to occupy a particular unit owned by the corporation. A shared equity co-op is similar to a regular co-op except that a portion of the corporation is owned by a non-profit who "shares" the unit with the buyer/homeowner. Purchase of the shared equity units is limited to defined low-income buyers, seniors, families, veterans, etc. When the homeowner sells, a portion of the equity gain is shared with the non-profit partner and shared equity co-ops provide low-income individuals and families the opportunity to become homeowners. Existing law currently allows veterans to buy into a traditional co-op but not into a shared equity co-op. According to the sponsor, the California Association of Veteran Service Agencies, that expanding CALVET to shared equity co-ops will provide a way for low-income veterans and their families to become homeowners and expand the pool of safe, affordable low-income housing. Analysis Prepared by : John Spangler / V. A. / (916) 319-3550 FN: 0000629