BILL ANALYSIS Ó
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Date of Hearing: May 9, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1951 (Atkins) - As Amended: April 16, 2012
Policy Committee: Housing and
Community Development Vote: 5-1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill eliminates programs that are part of the Affordable
Housing Innovation Fund created by Proposition 1C, the Housing
and Emergency Shelter Trust Fund Act of 2006, and reallocates
the funds. Specifically, this bill:
1)Repeals the practitioner fund administered by the Department
of Housing and Community Development (HCD) and eliminates the
$25 million appropriated to that fund.
2)Repeals the construction liability insurance reform pilot
program administered by HCD and eliminates the $5 million
appropriated to that program.
3)Requires HCD to make the $30 million available from the
eliminated programs within the Affordable Housing Innovation
Fund for the Multifamily Housing Program (MHP).
FISCAL EFFECT
Redirects $30 million in voter-approved bond funds.
COMMENTS
1)Purpose. The author notes 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. With limited resources available,
the author argues it is important to move funds into MHP where
they can make a greater impact in solving California's ongoing
housing crisis, while still retaining the intent of the
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voters. The author also argues that 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.
2)Background. Proposition 1C: Housing and Emergency Shelter
Trust Fund Act of 2006 authorized the creation of the
Affordable Housing Innovation Fund and transferred $100
million to the Fund. The bond act required funds be spent for
competitive grants or loans to sponsoring entities that
develop, own, lend or invest in affordable housing through
pilot programs that demonstrate innovate approaches to
creating or preserving affordable housing. The bond act
required 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.
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.
3)Existing programs . The practitioner fund and the construction
liability insurance reform pilot program have not proven to be
workable. The contraction in the housing market that began
accelerating shortly after the programs were established saw
developers turn their focus more on finding construction
funding than accessing the practitioner fund to purchase
property for future development. Similarly, the $5 million
allocated to the construction liability insurance reform pilot
program proved insufficient to fund a viable pilot program.
4)Previous legislation . SB 586 (Dutton), Chapter 652, Statutes
of 2007, created several new programs funded by the affordable
housing innovation fund including the practitioner fund and
the construction liability insurance reform pilot program.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081
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