BILL ANALYSIS Ó
AB 1672
Page 1
Date of Hearing: April 24, 2012
ASSEMBLY COMMITTEE ON WATER, PARKS AND WILDLIFE
Jared Huffman, Chair
AB 1672 (Torres) - As Amended: April 17, 2012
SUBJECT : Housing-Related Parks Program
SUMMARY : Amends the application process and eligibility
requirements for housing-related park grants financed with bonds
made available through Proposition 1C of 2006. Specifically,
this bill :
1)Revises the criteria that cities and counties are required to
meet to receive a base park grant amount by requiring that the
city or county document the issuance of building permits for
new housing units that are affordable to very low or
low-income households.
2)Deletes the requirement that funds be dispersed upon
documentation of a certificate of occupancy, final inspection,
or other comparable local approval.
3)Requires that substantial bonus funds be awarded to projects
in jurisdictions that demonstrate grant funds will be spent to
improve existing or create new parks or recreational
facilities that serve disadvantaged communities, and
jurisdictions that are park deficient.
EXISTING LAW :
1)Establishes the Housing-Related Parks Program, administered by
the Department of Housing and Community Development (HCD), to
provide grants for the creation, development or rehabilitation
of park and recreation facilities to cities and counties based
on the issuance of housing starts for newly constructed
affordable housing units. Proposition 1C, the Housing and
Emergency Shelter Trust Fund Act of 2006 made $200 million
available for housing-related park grants. AB 2492
(Caballero), Chapter 641, Statutes of 2008, enacted the
specific parameters of the program.
2)Requires HCD to determine a base grant amount to be provided
to any city or county that meets specified criteria, including
documentation of housing starts for newly constructed
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affordable housing units. Requires HCD, for each year that
funds are available to issue a notice of funding availability
for housing starts issued during the designated time period.
Requires that grant amounts be based on a per-bedroom
incentive for each unit restricted for very low and low-income
households. If eligibility for funding exceeds the amount of
funding available, requires HCD to reduce all grants
proportionally.
3)Requires HCD to award bonus funds for applicants that meet
certain criteria, including units that are affordable to
extremely low income households, infill projects that are
available to very low and low-income households, jurisdictions
that meet or exceed housing production thresholds,
jurisdictions that demonstrate grant funds will be used to
improve or create facilities that will serve disadvantaged
communities, jurisdictions that are defined as park deficient
communities, and jurisdictions that demonstrate the funds will
be spent to support infill development or development within a
jurisdiction that has conformed its general plan to the
regional blueprint.
FISCAL EFFECT : Unknown
COMMENTS : The author introduced this bill to simplify the
application process for the Housing-Related Parks Program which
makes park grants available to local cities and counties that
approve affordable housing units, and to enable jurisdictions to
receive their grant funds sooner. The current Housing-Related
Parks program ties park grants to the number of affordable
housing starts in a community in a given year. A housing start
is defined as a unit for which a completed foundation inspection
has been issued. A jurisdiction cannot actually receive the
grant funds awarded until construction of the unit is complete.
The original intent of the law was to encourage communities to
approve and construct affordable housing units by awarding them
with park grants for the community. With the economic downturn,
applications for approval of affordable housing projects, and
completion of construction of housing units, have slowed. The
author and supporters of this bill believe that this has had the
effect of delaying delivery of park funds to communities that
have approved building permits for affordable housing projects,
based on a construction timeline they have no ability to
control. According to the author, the definition of "housing
starts" has also created confusion as to eligibility since not
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all types of construction involve foundation inspections, and
there is little consistency in the documentation of foundation
inspections among jurisdictions.
This bill seeks to address these issues by deleting the
reference to housing starts and the requirement for completion
of construction and occupancy, and instead bases eligibility for
award of a base grant on the approval of building permits for
low and very low income housing units.
Questions have been raised regarding why so little of the bond
funds originally authorized for this program have been awarded.
The grant program may have got off to a slow start due in part
to the temporary freezing of bond expenditures. After the first
notice of funding availability in 2011, only $8.8 million of the
$25 million made available was awarded to 23 jurisdictions.
This year the notice of funding availability for the balance of
the $25 million available this year closed on March 31, 2012.
HCD is still reviewing the applications received but based on
preliminary reviews believes that with the eligible applications
received, and the award of bonus funds, the balance of the $25
million will be awarded. That leaves approximately $160 million
of the funds originally authorized still unspent.
The program currently addresses two different societal
objectives - creating an incentive for meeting affordable
housing needs for low and very low income households, and
addressing the need for parks and other recreational facilities
in urban communities. Although outside the scope of this
committee, the need for affordable housing is generally well
recognized. The demand and unmet need for park facilities has
also been well demonstrated by other local park grant programs
which are oversubscribed. One such program is the Statewide
Parks Program administered by the Department of Parks &
Recreation (DPR). Bond funding for the Statewide Parks Program
was made available through Proposition 84, and the program
parameters were established by AB 31 (De Leon), Chapter 623,
Statutes of 2008. DPR received 900 applications requesting $3
billion for the $368 million in park bond funds available, which
was distributed through two rounds. The average grant awarded
was $2.9 million.
An argument has also been made that in the case of the
Housing-Related Parks Program, by basing awards of funds on the
affordable housing units approved, the park grants have not
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necessarily gone to those communities that are most in need of
park facilities. Although the law allows for bonus points to be
awarded to communities that meet the definition of park
deficiency, under the HCD's regulations that criteria is given
the lowest amount of bonus points. This bill, in an effort to
steer more of the funding to disadvantaged and park deficient
communities, would require that substantial bonus funds be
awarded to those communities. While this direction expresses
legislative intent that these proposals be given priority, it is
unclear what "substantial" bonus funds actually means. The
author may wish to consider instead requiring that the "highest
amount" of bonus funds be awarded to projects that would serve
disadvantaged or park deficient communities. Some have argued
that the grants should be required to be used in disadvantaged
or park deficient communities. However, others have noted that
this program was designed to meet two goals - to incentivize
approval of affordable housing units, and to meet park needs.
To remain true to the original intent of the program, this bill
attempts to balance these two objectives by providing a base
grant amount to any community that approves the affordable
housing, but encouraging more funds to be awarded to park
deficient communities through the award of bonus points.
To better insure that the grant awards go to build or improve
parks in the greatest areas of need, while also meeting the
housing-related objectives, the author may wish to consider
amendments requiring that the local government receiving the
funds use the funds for parks in park deficient or low-income
communities, or to support parks in the greatest areas of need
within the community. Some have also suggested that the current
cap on the grant awards may be too low to provide sufficient
funds for larger park projects, which may be a disincentive for
communities to apply, although this did not appear to be a major
reason raised in surveys conducted by the League of California
Cities. Currently, the amount of the grant awards is tied to
the number of housing starts. The base award is $500 per
bedroom for each unit affordable to low-income residents, and
$750 per bedroom for each unit affordable to very low income.
With bonus awards, the maximum amount which can be received is
$1,100 per bedroom for low-income units and $1,625 per bedroom
for very low income units. While the cities of Los Angeles and
San Jose received awards of over $1 million in the first round,
the average award was only $380,000. In comparison, the
average grant award under the Statewide Parks Program
administered by the Department of Parks and Recreation was $1.2
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million and the maximum award was $5 million. In order to
provide sufficient funds for significant park improvements, and
to provide a greater incentive for communities to apply,
consideration could be given to increasing the amount of funds
which communities may be awarded for each park grant.
Supporting Arguments : The League of California Cities
administered a survey to cities asking why they did not apply
for the grants. With over 100 cities responding, nearly 25%
indicated they did not issue a housing start or did not have
enough housing starts to qualify. Because of the decline in the
housing market, modifying the Housing-Related Parks Program so
that the requirements more closely match the reality of the
market should increase the number of grant recipients. The
League believes that the changes proposed in this bill keep the
intended purpose of the voter-approved grant intact, by
rewarding communities working to increase their affordable
housing while recognizing that once a permit is issued by a
local government, some projects are not completed for reasons
outside the local jurisdiction's control. The City of Ventura
similarly notes that due to the stagnant nature of the housing
market and the loss of development funds, there have been very
limited opportunities for new housing projects. They believe
that small changes to the Housing-Related Parks Program as
proposed by this bill could increase the number of eligible
applicants and increase the number of awards for the creation
and renovation of park facilities.
Opposition Arguments : None received.
REGISTERED SUPPORT / OPPOSITION :
Support
City of Ventura
League of California Cities
League of California Cities, Los Angeles Division
Opposition
None on file.
Analysis Prepared by : Diane Colborn / W., P. & W. / (916)
319-2096
AB 1672
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