BILL ANALYSIS Ó
AB 1672
Page 1
Date of Hearing: April 11, 2012
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Norma Torres, Chair
AB 1672 (Torres) - As Introduced: February 14, 2012
SUBJECT : Housing-Related Parks Program.
SUMMARY : Makes changes to the Housing-Related Parks Program
(HRP), administered by the Department of Housing and Community
Development (HCD). Specifically, this bill :
1)Specifies that HCD will award grants to cities and counties
under HRP based upon the issuance of building permits for new
housing units that are affordable to low- or very low-income
households.
2)Deletes the requirement that funds be disbursed upon
documentation of a certificate of occupancy, final inspection,
or other comparable local approval.
3)Authorizes HCD to award bonus funds for qualifying units
located within the boundaries of a catalyst project and when a
jurisdiction can demonstrate that grant funds will be spent to
create or improve a park or community recreation facility
located within the boundaries of a catalyst project.
4)Defines "catalyst project" to mean a project designated as a
gold, silver, or bronze project under HCD's Catalyst Projects
for California Sustainable Strategies Pilot Program.
EXISTING LAW
1)Establishes the Housing-Related Parks Program, administered by
HCD, to provide grants for the creation, development, or
rehabilitation of park and recreation facilities to cities,
counties, and cities and counties for housing starts for newly
constructed units that are affordable to very low- or
low-income households (Health and Safety Code Section 50701).
2)Provides $200,000,000 for housing-related parks grants in
urban, suburban, and rural areas (Health and Safety Code
Section 53545).
3)Gives HCD the authority to determine a base grant amount to be
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provided to any city, county, or city and county that meets
all of the following criteria:
a) The jurisdiction has adopted a housing element that
HCD has found to be in substantial compliance with the
requirements of Housing Element Law;
b) The jurisdiction has submitted to HCD the required
annual progress report on the housing element for the
preceding 12 months; and
c) The jurisdiction can document housing starts for
newly constructed units that are affordable to very low-
or low-income households within the designated time
period.
(Health and Safety Code Section 50702)
4)Requires HCD to issue a Notice of Funding Availability (NOFA)
each year for housing starts issued during the designated time
period (Health and Safety Code Section 50702).
5)Specifies that grant amounts shall be based on a per-bedroom
incentive for each unit restricted for very low- and
low-income households (Health and Safety Code Section 50702).
6)Requires HCD to reduce all grants proportionally if
eligibility for funds exceeds the amount of funding available
for the program (Health and Safety Code Section 50702).
7)Specifies that funds awarded shall be disbursed upon
documentation of a certificate of occupancy, final inspection,
or other comparable local approval (Health and Safety Code
Section 50702).
8)Requires HCD to award bonus funds in addition to the base
grant award for any of the following:
a) Qualifying units that are affordable to extremely
low income households;
b) Qualifying units that are affordable to very low-
and low-income households and are developed in infill
projects;
c) Jurisdictions that have met or exceeded housing
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production thresholds established by HCD, in consultation
with the Department of Finance;
d) Jurisdictions that demonstrate that grant funds will
be spent to improve a park or community recreational
facility that will serve a disadvantaged community, as
defined in subdivision (a) of Section 50700;
e) Jurisdictions that demonstrate that grant funds will
be spent to create a new park or community recreational
facility that will serve a disadvantaged community, as
defined in subdivision (a) of Section 50700;
f) Jurisdictions that meet the definition of a park
deficient community, as defined in subdivision (b) of
Section 50700; and
g) Jurisdictions that can demonstrate that grant funds
will be spent to create or improve a park or community
recreational facility to support infill development, or
development within a jurisdiction that has conformed its
general plan to the regional blueprint, as determined by
the council of governments.
(Health and Safety Code Section 50703)
9)Establishes a minimum grant amount of $75,000 (Health and
Safety Code Section 50704).
10)Allows a jurisdiction to delay application and combine
qualifying units from multiple NOFA periods in order to meet
the minimum grant amount (Health and Safety Code Section
50704).
11)Requires grants awarded under HRP to be used for the costs of
park and recreation facility creation, development, or
rehabilitation, including, but not limited to, the acquisition
of land for the purposes of those activities (Health and
Safety Code Section 50704).
12)Requires that funds awarded under HRP supplement, not
supplant, other available funding (Health and Safety Code
Section 50704).
FISCAL EFFECT : Unknown
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COMMENTS :
The Housing-Related Parks Program (HRP) provides grants to local
governments for park and recreation facilities. Grant awards are
based on the number of affordable housing units that are started
in community in a given year. The program is not competitive;
grants are awarded to all local governments that apply that meet
the program's requirements in a given year. Awards are
calculated on a per-bedroom basis. The current program
regulations establish a base award of $500 per bedroom for
low-income units and $750 per bedroom for very low-income units.
Various bonus categories raise the potential maximum per-bedroom
award to $1100 for low-income units and $1625 for very
low-income units.
Proposition 1C, the Housing and Emergency Trust Fund Act of
2006, provided $200 million in funding for housing-related
parks. HRP was modeled on HCD's popular Workforce Housing
Rewards Program, which was funded through the prior housing bond
(Proposition 46 of 2002) but not under Proposition 1C. Under
that program, local governments received flexible funding for a
variety of community facilities and improvements when they
approved affordable housing. The idea behind Workforce Housing
Rewards, and subsequently HRP, was to provide local governments
with an incentive to approve needed affordable housing by
providing guaranteed funding for community amenities.
Under current law, HRP awards are based on the number of housing
starts in a community in a given year. The HRP statute defines a
housing start to mean that the local government has issued a
completed foundation inspection. Unfortunately, this has proven
problematic. There is little consistency in documenting
foundation inspections across jurisdictions, which has left some
jurisdictions unsure how to document their eligibility or
confused as to whether they even are eligible for HRP funds even
though they approved affordable units. In addition, some types
of construction, such as podium structures, do not involve a
foundation inspection.
AB 1672 replaces housing starts with building permits as the way
to document HRP eligibility. All local governments already
issue and track building permits for housing projects. This
small change will simplify the HRP application process and
ensure that local governments receive awards under HRP for all
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affordable housing projects that they approve, enabling them to
receive needed park funding.
AB 1672 also eliminates a requirement that funds not be
disbursed to local governments until they issue a certificate of
occupancy for the units that qualified them for the HRP award.
It takes an average of 18 months between the time a building
permit is issued and the time units are completed. Depending on
when HCD awards funds each year, local governments may have to
wait a substantial amount of time between receiving an award and
actually getting the money. While the intent of the requirement
is to ensure that units that qualify a jurisdiction for an award
actually get built, it is extremely rare for an affordable
housing project to not proceed through the construction process
once building permits have been issued. Thus, the requirement
serves mostly to delay the delivery of needed park funds to
local governments. In addition, given that the program is
intended to reward local governments for approving affordable
housing, it does not necessarily make sense to rescind an award
in the event that a project fails to proceed despite having
received all necessary local approvals.
Double referred
This bill was also referred to the Water, Parks and Wildlife
Committee, where it is scheduled to be heard on April 24, 2012,
should it pass out of this committee.
REGISTERED SUPPORT / OPPOSITION :
Support
League of California Cities
Opposition
None on file
Analysis Prepared by : Anya Lawler / H. & C.D. / (916)
319-2085