BILL ANALYSIS Ó
AB 1797
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Date of Hearing: April 25, 2012
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Norma Torres, Chair
AB 1797 (Torres) - As Amended: April 19, 2012
SUBJECT : Mobilehome Park Resident Occupancy Program
SUMMARY : Makes changes to the Mobilehome Park Resident
Occupancy program (MPROP). Specifically, this bill :
1)Authorizes the Department of Housing and Community Development
(HCD) to offer an interest rate below 3% for MPROP loans if
necessary, as long as it will not jeopardize the financial
stability of the Mobilehome Park Purchase Fund.
2)Authorizes HCD to provide technical assistance to applicants
under MPROP and include the reasonable costs of the assistance
as part of the loan principal.
EXISTING LAW
1)Establishes the Mobilehome Park Purchase Fund (fund) in the
State Treasury (Health and Safety Code Section 50782).
2)Imposes an annual fee of $5 per transportable section of a
manufactured home or mobilehome that is subject to annual
registration, to be deposited in the fund (Health and Safety
Code Section 18114.1).
3)Authorizes HCD to make loans from the fund to resident
organizations for the purpose of financing mobilehome park
conversion costs for a term of no more than three years and at
an interest rate of 3% (Health and Safety Code Section 50783).
4)Specifies that loans provided to resident organizations for
the purpose of financing conversion costs shall be for the
minimum amount necessary to enable a resident organization to
acquire and convert the mobilehome park (Health and Safety
Code Section 50783).
5)Authorizes HCD to make loans from the fund to (1) individual
low-income residents of mobilehome parks that have converted
to resident ownership, (2) resident organizations that have
converted or plan to convert a mobilehome park to resident
AB 1797
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ownership, or (3) qualified nonprofit housing sponsors or
local public entities that plan to acquire a mobilehome park,
provided that no less than 30 percent of the spaces in the
park are for occupancy by manufactured homes owned by
low-income residents (Health and Safety Code Section 50784).
6)Specifies that the purpose of providing loans pursuant to this
Health and Safety Code Section 50784 is to reduce the monthly
housing costs for low-income residents to an affordable level
(Health and Safety Code Section 50784).
7)Specifies that loans provided pursuant to Health and Safety
Code Section 50784 shall be for a term of no more than 30
years at an interest rate of 3% (Health and Safety Code
Section 50784).
8)Authorizes HCD to establish flexible repayment terms, such as
graduated payment schedules with negative amortization, for
loans provided pursuant to Health and Safety Code Section
50784 if the terms are necessary to reduce the monthly housing
costs for low-income residents to an affordable level and do
not represent an unacceptable risk to the security of the fund
(Health and Safety Code Section 50784).
FISCAL EFFECT : Unknown
COMMENTS :
The Mobilehome Park Resident Occupancy Program was created in
1984 to provide low-interest loans to finance the conversion of
mobilehome parks to resident ownership. The program is funded
through a $5 fee that certain mobilehome owners pay along with
their annual registration fee, as well as through loan
repayment. There is currently $14 million available under MPROP.
Between 1985 and 2001, MPROP provided loans to assist with
conversion in 66 mobilehome parks around the state. Since 2002,
new loan activity under the program has slowed and activity
continues to decline. The program had no successful applications
in 2010 and only two in 2011. HCD indicates that the increasing
cost and complexity of park conversions are two of the primary
reasons for the reduction in the number of loan applications.
AB 1797 aims to increase utilization of MPROP by making changes
AB 1797
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to the program. The bill gives HCD the flexibility to offer a
lower interest rate on MPROP loans, provided that doing so would
not jeopardize the overall stability of the Mobilehome Park
Purchase Fund. HCD already has statutory authority to offer
flexible repayment terms, but is bound by the 3% interest rate
that is set in law. HCD has indicated that they have had
applications that could have been successful at a lower interest
rate, particularly applications for loans from individual
residents who need assistance in purchasing their space. In
addition, AB 1797 allows HCD to provide technical assistance to
loan applicants and include the costs as part of the loan
principal.
REGISTERED SUPPORT / OPPOSITION :
Support
Golden State Manufacture-Home Owners League (sponsor)
Opposition
None on file
Analysis Prepared by : Anya Lawler / H. & C.D. / (916)
319-2085