BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1951
                                                                  Page  1

          CONCURRENCE IN SENATE AMENDMENTS
          AB 1951 (Atkins)
          As Amended  August 21, 2012
          Majority vote 
           
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          |ASSEMBLY:  |52-26|(May 30, 2012)  |SENATE: |24-12|(August 22,    |
          |           |     |                |        |     |2012)          |
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           Original Committee Reference:    H. & C.D.  

           SUMMARY  :  Transfers $30 million from the Affordable Housing 
          Innovation Fund to the Multifamily Housing Program (MHP).
           
          The Senate amendments:

           1)Appropriate the funds in the Housing Rehabilitation Loan Fund 
            for the MHP. 

          2)Require the Department of Housing and Community Development 
            (HCD) to issue a Notice of Funding Availability (NOFA) for 
            MHP.

          3)Requires the NOFA to specify that HCD shall consider persons 
            with development disabilities, including autism and homeless, 
            veterans, as special needs populations for the propose of 
            granting bonus points to affordable housing developments. 

           AS PASSED BY THE ASSEMBLY  , this bill deleted 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)Deleted the Practitioner Fund administered by the HCD and the 
            $25 million appropriated to that fund. 

          2)Deleted the Construction Liability Insurance Reform Pilot 
            Program administered by HCD and the $5 million appropriated to 
            that program.

          3)Required HCD to make $30 million available from the Affordable 
            Housing Innovation Fund for the MHP.  








                                                                  AB 1951
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          4)Deleted 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 
          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 








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          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 ($25 million) and the Construction Liability Insurance 
          Reform Pilot Program ($5 million) 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 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.         

          The Senate amendments require HCD to grant bonus points to 
          affordable housing developments that serve the autistic and 
          homeless veterans when awarding funding through from the $30 
          million appropriated by this bill to MHP. 


           Analysis Prepared by  :    Lisa Engel / H. & C.D. / (916) 319-2085 



          FN: 0005374