BILL ANALYSIS Ó
AB 1951
Page 1
ASSEMBLY THIRD READING
AB 1951 (Atkins)
As Amended April 16, 2012
Majority vote
HOUSING 5-1 APPROPRIATIONS 12-5
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|Ayes:|Torres, Atkins, Bradford, |Ayes:|Fuentes, Blumenfield, |
| |Fong, Hueso | |Bradford, Charles |
| | | |Calderon, Campos, Davis, |
| | | |Gatto, Ammiano, Hill, |
| | | |Lara, Mitchell, Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Beth Gaines |Nays:|Harkey, Donnelly, |
| | | |Nielsen, Norby, Wagner |
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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.
FISCAL EFFECT : According to the Assembly Appropriations
AB 1951
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Committee, redirects $30 million in voter-approved bond funds.
COMMENTS : 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 two-third
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
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 Notice of Funding Availability (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 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.
AB 1951
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Proposition 1C authorized the creation of the Affordable Housing
Innovation Fund but required the Legislature 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.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085
FN: 0003804