BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1951|
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THIRD READING
Bill No: AB 1951
Author: Atkins (D)
Amended: 8/21/12 in Senate
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 6-3, 6/26/12
AYES: DeSaulnier, Kehoe, Lowenthal, Pavley, Rubio,
Simitian
NOES: Gaines, Harman, Wyland
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/16/12
AYES: Kehoe, Alquist, Lieu, Price, Steinberg
NOES: Walters, Dutton
ASSEMBLY FLOOR : 52-26, 5/30/12 - See last page for vote
SUBJECT : Housing bonds
SOURCE : Author
DIGEST : This bill eliminates two programs included in
the Affordable Housing Innovation Fund, established by
Proposition 1C, and transfer $30 million in bond funds from
the Affordable Housing Innovation Fund to the Multifamily
Housing Program(MHP).
ANALYSIS : In November 2006, California voters approved
Proposition 1C, the $2.85 billion Housing and Emergency
Shelter Trust Fund Act of 2006. Among other things,
Proposition 1C included funds for the following programs:
CONTINUED
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$345 million for the MHP, under which the Department of
Housing and Community Development (HCD) funds the new
construction, rehabilitation, and preservation of
permanent and transitional rental homes for lower income
households through loans to local governments, non-profit
developers, and for-profit developers.
$100 million for the Affordable Housing Innovation
Program "to be expended for competitive grants or loans
to sponsoring entities that develop, own, lend, or invest
in affordable housing and used to create pilot programs
to demonstrate innovative, cost-saving approaches to
creating or preserving affordable housing." Proposition
1C directed the Legislature to establish in statute
specific criteria for use of these funds. Subsequently,
SB 586 (Dutton), Chapter 652, Statutes of 2007, allocates
these funds to a number of specific purposes, including:
$25 million for the Loan Fund component of the
Affordable Housing Revolving Development and
Acquisition Program, under which HCD chooses a private
sector entity to manage a leveraged loan program for
non-profits to acquire property for the development or
preservation of affordable housing.
$25 million for the Practitioner component of the
Affordable Housing Revolving Development and
Acquisition Program, under which HCD makes available
credit lines of up to $5 million directly to large,
established non-profits to acquire property for the
development or preservation of affordable housing.
$5 million for the Construction Liability Insurance
Reform Project, under which HCD provides grants to the
developers of affordable, attached for-sale housing to
improve the quality of construction and reduce
construction defect liability insurance premiums.
With respect to the Practitioner Fund, SB 586 provides that
funds which a practitioner has not used within 36 months
after availability to the practitioner shall be
disencumbered and transferred to the Loan Fund.
Proposition 1C itself provides that any funds which HCD has
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not encumbered for the subprograms of the Affordable
Housing Innovation Program as set forth in SB 586 within 30
months of availability to HCD shall revert to the CalHome
Program, under which HCD makes grants and loans to local
governments and non-profits for down-payment assistance,
home rehabilitation, counseling, self-help mortgage
assistance programs, and technical assistance for self-help
and shared housing.
To date, HCD has awarded all of the funds available for the
Multifamily Housing Program and the Loan Fund. With
respect to the Practitioner Fund, HCD developed a draft
program proposal and draft guidelines in 2009 and 2010 but,
after further evaluation, decided not to issue a Request
for Qualifications for the program. With respect to the
Construction Liability Insurance Reform Project, HCD made
these funds available in 2009 to developers seeking
assistance through the Building Equity and Growth in
Neighborhoods Program but made no awards for lack of
demand.
This bill:
1. Repeals both the Practitioner Fund component of the
Affordable Housing Revolving Development and Acquisition
Program and the Construction Liability Insurance Reform
Pilot Project and the associated bond fund allocations.
2. Transfers $30 million from the Affordable Housing
Innovation Fund to a subaccount in the Housing
Rehabilitation Loan Fund and continuously appropriates
those funds to HCD for the Multifamily Housing Program.
3. Requires HCD to issue a notice of funding availability
(NOFA), soliciting proposals for use of the funds.
Requires the NOFA specify that persons with
developmental disabilities, including those with autism
and homeless veterans, will be considered special needs
populations for purposes of granting bonus points to
developments serving those populations.
Comments
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According to the author's office, the funding that
Proposition 1C provides for the MHP has not adequately met
California's needs. Meanwhile, other funds available from
Proposition 1C remain unused. As a result, this bill seeks
to reprogram idle funds to where they can make the greatest
impact on solving California's on-going affordable housing
crisis.
MHP highly oversubscribed and out of funds . In 2011, HCD
completed its final round of funding awards for the MHP.
HCD received 27 applications requesting a total of $142
million in funding. HCD was only able to make eight awards
with the $50.5 million in available funding, an
oversubscription ratio of 2.8 to 1. Since then,
redevelopment and its associated 20 percent set aside for
affordable housing, which generates roughly $1 billion per
year, has disappeared, which is likely to increase demand
substantially for this program, which currently has no
funds remaining.
Within the realm of allowable uses . Proposition 1C
requires that the funds available for the Affordable
Housing Innovation Program "be expended for competitive
grants or loans to sponsoring entities that develop, own,
lend, or invest in affordable housing and used to create
pilot programs to demonstrate innovative, cost-saving
approaches to creating or preserving affordable housing."
Proposition 1C further directs the Legislature to establish
more specific criteria in statute. Because the MHP clearly
meets the first of the two eligible uses of making loans
for the development of affordable housing, this bill meets
the intent of the voters. Moreover, Proposition 1C left it
to the Legislature to define eligible uses, which this bill
does.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to Senate Appropriations Committee, diversion of
$30 million in general obligation bond funds from the
Affordable Housing Innovation Fund to the Housing
Rehabilitation Loan Fund and continuously appropriated to
HCD for expenditure under the MHP. Absent this bill, these
bond funds would otherwise revert for expenditure under the
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CalHome Program.
SUPPORT : (Verified 8/20/12)
Affordable Housing Associates
Burbank Housing Development Corporation
California Association of Veteran Services Agencies
California Coalition for Rural Housing
California Housing Consortium
California Housing Partnership Corporation
Charities Housing
Corporation for Supportive Housing
Habitat for Humanity
Housing California
MidPen Housing Corporation
Non-Profit Housing Association of Northern California
Opportunity Fund
Tenderloin Neighborhood Development Corporation
ASSEMBLY FLOOR : 52-26, 5/30/12
AYES: Alejo, Allen, Ammiano, Atkins, Beall, Block,
Blumenfield, Bonilla, Bradford, Brownley, Buchanan,
Butler, Charles Calderon, Campos, Carter, Cedillo,
Chesbro, Davis, Dickinson, Eng, Feuer, Fong, Fuentes,
Furutani, Galgiani, Gatto, Gordon, Hall, Hayashi, Roger
Hernández, Hill, Huber, Hueso, Huffman, Lara, Bonnie
Lowenthal, Ma, Mendoza, Mitchell, Monning, Pan, Perea, V.
Manuel Pérez, Portantino, Skinner, Solorio, Swanson,
Torres, Wieckowski, Williams, Yamada, John A. Pérez
NOES: Achadjian, Bill Berryhill, Conway, Cook, Donnelly,
Beth Gaines, Garrick, Gorell, Grove, Hagman, Halderman,
Harkey, Jeffries, Jones, Knight, Logue, Mansoor, Miller,
Morrell, Nestande, Nielsen, Norby, Olsen, Silva, Smyth,
Wagner
NO VOTE RECORDED: Fletcher, Valadao
JJA:d 8/21/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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