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