BILL ANALYSIS Ó
AB 2447
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ASSEMBLY THIRD READING
AB 2447 (Skinner and John A. Pérez)
As Amended April 30, 2012
Majority vote
HOUSING 5-2 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, Jeffries |Nays:|Harkey, Donnelly, |
| | | |Nielsen, Norby, Wagner |
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SUMMARY : Establishes the California Neighborhood Revitalization
Partnership Act of 2012 (Act). Specifically, this bill :
1)Makes legislative findings.
2)Requires the California Housing Finance Agency (CalHFA) to
administer the Act in consultation with the Department of Housing
and Community Development (HCD) to finance affordable housing for
low- to moderate-income households and to revitalize neighborhoods
damaged by the foreclosure crisis.
3)Defines "agency" as CalHFA.
4)Defines "applicant" as a local government entity, housing
nonprofit organization, consortium of nonprofit entities or a
combination, and a for-profit developer that applies jointly with
a non-profit, local government, or consortium of nonprofit
entities.
5)Defines "executive director" as the executive director of CalHFA.
6)Defines a "foreclosed property" as a home or residential property
for which title has been acquired by the foreclosing entity at a
trustee sale.
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7)Defines "fund" as the California Neighborhood Revitalization Fund.
8)Gives CalHFA's executive director or his or her designee the
following duties and responsibilities:
a) Facilitate the interaction and negotiation between financial
institutions, private investors, local governments, and
nonprofits or a consortium of nonprofits to identify and
acquire foreclosed properties for resale, rental, or
lease-to-own for low- and moderate-income families;
b) Award grants or loans to applicants from the Fund;
c) Develop strategies with the California Energy Commission
(CEC) and the California Public Utilities Commission (PUC) to
leverage investments to improve energy efficiency in the
rehabilitation of foreclosed homes; and,
d) Maximize job and apprentice opportunities.
1)Establishes the Fund and deposits $25 million from the California
Homebuyer Downpayment Assistance Program (CHDAP) into the Fund.
2)Requires, for purposes of implementing the Act, that an unknown
amount of money be appropriated to CalHFA on a one-time basis and
specifies that any further expenditures will be subject to
appropriation by the Legislature.
3)Limits the administrative costs of CalHFA to 5% of the program's
costs.
4)Permits CalHFA to accept and receive gifts, grants, or donations
from any agency of the United States, any agency of the state, or
any municipality, county, or other political subdivision of the
state.
5)Requires funding to be awarded in the form of grants or loans on a
competitive basis.
6)Provides that the eligible uses for the funds include, but are not
limited to, the following:
a) Establishing financing mechanisms for the purchase and
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rehabilitation of foreclosed homes and residential properties;
b) Creation of land banks for foreclosed homes;
c) Demolition of blighted structures; and,
d) Redevelopment of demolished or vacant properties.
1)Requires CalHFA to develop guidelines by March 14, 2013, in
consultation with HCD,
CEC, PUC, and others that must include, but not be limited to, the
following:
a) An application process for the funds;
b) A requirement of leveraged funds from other sources;
c) Project selection criteria;
d) Require affordability covenants of at least 55 years for
rental units;
e) Accountability and auditing requirements; and,
f) Ranges for grant and loan amounts.
1)Requires CalHFA to hold not less than one public hearing prior to
adopting the guidelines.
2)Requires the guidelines to be adopted at a public hearing but
specifies that they are not subject to the Administrative
Procedures Act.
FISCAL EFFECT : According to the Assembly Appropriations Committee,
redirects $25 million in bonds approved by Proposition 1C, the
Housing and Emergency Trust Fund Act of 2006, specifically from the
$200 million authorized for the California Homebuyers Downpayment
Assistance Program.
COMMENTS : According to the author, "the state lacks a centralized
entity to facilitate the interaction and negotiation between
financial institutions, private investors, local governments and
non-profits in the identification and acquisition of foreclosed
properties for re-sell, rental, or lease-to-own structures for
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low-and moderate-income families. The state does not have a program
in place to assist local governments who are struggling with the
unique and intensive needs of repairing foreclosed properties and
reintegrating them into the housing market."
Proposition 1C authorized $200 million for the California Homebuyers
Downpayment Assistance Program (CHDAP). CHDAP, administered by
CalHFA, provides low- and moderate-income first-time home buyers
loans to purchase homes. The loans are in the form of a deferred-
payment, low-interest loan to reduce the principal and interest
payments and make the purchase affordable. Downpayment assistance
is limited to 3% of the purchase price. Mortgage financing is
provided by participating lenders. Of the $200 million authorized
under Proposition 1C for CHDAP, $111 million remains. CalHFA reports
receiving approximately 400 applications for CHDAP per month and
funding approximately 287 loans at a maximum of $7,000 per loan. At
that rate, all remaining funds could be expended within four to five
years.
Neighborhood Stabilization Program (NSP): The federal Housing and
Economic Recovery Act of 2008 created the Neighborhood Stabilization
Program (NSP), which provided emergency assistance to state and
local governments to acquire and redevelop foreclosed properties
that might otherwise become sources of abandonment and blight within
their communities. The program provided grants to every state and
certain local communities to purchase foreclosed or abandoned homes
and to rehabilitate, resell, or redevelop these homes in order to
stabilize neighborhoods and stem the decline in value of neighboring
homes. NSP had three rounds of funding. California received funding
in two of the three rounds. The eligible uses that this bill
provides for this program are the same as those allowed under NSP.
Restrictions on Affordability: The goal of the program is to
assist local governments and nonprofits in acquiring foreclosed
properties for resale, rental, or lease-to-own for low- and
moderate-income families. In order to garner the most return for
the investment of voter-approved bonds, the bill requires that
rental units created through this program remain affordable by
attaching 55-year affordability covenants to the units. This is
consistent with requirements under the state's primary rental
housing funding program, the Multifamily Housing Program.
Targeting Limited Funds: The program, as described, is intended to
finance affordable housing for low- to moderate-income households
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and to revitalize neighborhoods damaged by the foreclosure crisis.
The bill does not identify how funding will be targeted. One option
is to target funding to areas with high rental costs to assist local
governments and/or non-profits in increasing the stock of affordable
units in those areas. Another option is to require homes to be on
the market for a certain period of time before they are eligible for
the program. This would likely lead to the purchase of homes that
are less desirable to private investors and more likely to remain a
blight on the community.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085 FN:
0003805