BILL ANALYSIS Ó
AB 1951
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Date of Hearing: April 25, 2012
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Norma Torres, Chair
AB 1951 (Atkins) - As Amended: April 16, 2012
SUBJECT : Housing bonds
SUMMARY : Deletes two programs, the Practitioner Fund and the
Construction Liability Insurance Reform Pilot Program, that are
part of the Affordable Housing Innovation Fund created by
Proposition 1C: Housing and Emergency Shelter Trust Fund Act of
2006 (Proposition 1C). Specifically, this bill :
1)Deletes the Practitioner Fund administered by the Department
of Housing and Community Development (HCD) and the $25 million
appropriated to that fund.
2)Deletes the Construction Liability Insurance Reform Pilot
Program administered by HCD and the $5 million appropriated to
that program.
3)Requires HCD to make $30 million available from the Affordable
Housing Innovation Fund for the Multifamily Housing Program
(MHP).
4)Deletes the requirement that HCD provide a comparison of the
cost of creating or preserving units funded by the
Practitioner Fund and the Affordable Housing Revolving
Development and Acquisition Program in its annual report that
is due to the Legislature on or before December 31, 2013.
EXISTING LAW
1)Establishes the Affordable Housing Revolving Development and
Acquisition Program for the purpose of funding the acquisition
of property to develop or preserve affordable housing. The
program is comprised of a Loan Fund and a Practitioner Fund
(Health and Safety Code Section 50705).
2)Requires HCD to issue a request for qualification from
non-profit entities to borrow the monies from the Practitioner
Fund to purchase real property for the development or
preservation of housing affordable to low- and moderate-income
households (Health and Safety Code Section 50707).
AB 1951
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3)Provides that of the $100 million available to the Affordable
Housing Innovation Fund the amounts shall be allocated as
follows:
a) $50 million for the Affordable Housing Revolving
Development and Acquisition Program;
b) $25 million for the Loan Fund;
c) $25 million for the Practitioner Fund;
d) $5 million for the Construction Liability Insurance
Reform Pilot Program; and
e) $35 million for the Local Housing Trust Fund Matching
Grant Program.
(Health and Safety Code Section 53545.9)
1)Authorizes $195 million for MHP to be used for supportive
housing for individual and households moving from emergency
shelters or transitional housing or those at risk of
homelessness (Health and Safety Code Section 53545).
2)Provides that the Legislature may, from time to time, amend
the provisions of law relating to programs for which funds
are, or have been, allocated by Proposition 1C to improve the
efficiency and effectiveness of the program, or to further the
purpose of the program (Health and Safety Code Section 53545).
FISCAL EFFECT : Unknown.
COMMENTS :
Proposition 1C: Housing and Emergency Shelter Trust Fund Act of
2006 (Proposition 1C), authorized the creation of the Affordable
Housing Innovation Fund and transferred $100 million to the
Fund. The bond required the funds to be expended for
competitive grants or loans to sponsoring entities that develop,
own, lend, or invest in affordable housing through pilot
programs that demonstrate innovate, cost-savings approaches to
creating or preserving affordable housing. The bond required
that these programs be created statutorily through 2/3 vote
bills. Any funds that were not spent within 30 months of being
offered through the programs would revert to the Self-Help
Housing Fund.
In 2007, SB 586 (Dutton), Chapter 652, created several new
programs funded by the Affordable Housing Innovation Fund
AB 1951
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including the Practitioner Fund and the Construction Liability
Insurance Reform Pilot Program. The Practitioner Fund required
HCD to make loans to non-profit entities to purchase land for
affordable housing developments. Practitioners selected for the
program were required to have experience as a lender to
affordable housing developers and would have five years to spend
the funds. They would also be required to leverage the
Practitioner funds from non-state resources on a three to one
basis. HCD developed draft guidelines for this program but they
were not formalized and a NOFA was not issued for the program.
The Construction Liability Insurance Reform Pilot Program was
created to promote best practices for residential construction,
quality control in affordable housing projects that receive
loans from the California Housing Finance Agency (CalHFA). HCD
has not developed guidelines for this program yet.
Proposition 1C also authorized $195 million of for the MHP
program which funds the production or rehabilitation of
affordable rental housing. MHP is the most popular program
offered by HCD and has been significantly oversubscribed in past
years. There is no money left in MHP.
Purpose of this bill: AB 1951 would collapse the Practitioner
Fund ($30 million) and the Construction Liability Insurance
Reform Pilot Program ($5) and roll the combined $30 million
available to these two programs into MHP.
Proposition 1C authorized the creation of the Affordable Housing
Innovation Fund but required the Legislature to develop programs
to spend the funds with some parameters. Bond funds are close
to exhausted and the likelihood of another bond measure to
replenish the coffers is limited. In addition, the dissolution
of redevelopment agencies eliminated the Low- and
Moderate-Income Housing Fund as a source of funding for
affordable housing. Unlike most other programs authorized by
Proposition 1C, the Affordable Housing Innovation Fund, required
legislative action to develop programs that met the parameters
outlined in the bond for this pot of money. With limited
resources available, the author supports moving funds into MHP
where they can make a greater impact in solving California's
ongoing housing crisis, while retaining the intent of the
voters.
REGISTERED SUPPORT / OPPOSITION :
AB 1951
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Support
California Association of Veteran Services Agencies
California Housing Consortium
Corporation for Supportive Housing
Housing California
Non-Profit Housing Association of Northern California
Opposition
None on file.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085