BILL ANALYSIS Ó
AB 637
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Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Norma Torres, Chair
AB 637 (Atkins) - As Amended: April 24, 2013
SUBJECT : Housing assistance
SUMMARY : Adds housing developments of five units or more that
serve low- and moderate-income families or individuals to the
possible uses for funding from the Residential Development Loan
Program (RDLP) operated by the California Housing Finance Agency
(CalHFA).
EXISTING LAW
1)Allows CalHFA, at its discretion, to make up to $75 million
available from the California Homebuyer Downpayment Assistance
Program (CHDAP) for short-term loans to finance the
acquisition of land, construction, and development of for-sale
residential structures (Health and Safety Code Section 51504).
2)Specifies in the Housing and Emergency Shelter Trust Fund Act
of 2006 (Proposition 1C) that up to $100 million of the $200
million authorized for CHDAP can be expended for RDLP (Health
and Safety Code Section 53545).
3)Requires CalHFA to make downpayment assistance the priority
for funding available under CHDAP (Health and Safety Code
Section 51504).
4)Defines "housing development" as five or more existing or
newly constructed dwelling units that are built or
rehabilitated and are primarily made available to persons and
families of low or moderate income (Health and Safety Code
Section 50073.5).
FISCAL EFFECT : None
COMMENTS :
Background : In 2006, Proposition 1C authorized $2.85 billion in
voter-approved bonds for affordable housing. The bond included
$200 million in funding for the California Homebuyer Downpayment
Assistance Program (CHDAP) to provide downpayment assistance of
AB 637
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up to 3% for first-time low- and moderate-income homebuyers. Of
the $200 million for CHDAP, the bond language allows CalHFA to
expend up to $100 million for RDLP. The RDLP program was
created through AB 1512 (Garcia), Chapter 338, Statutes of 2005,
which authorized CalHFA to set aside CHDAP funds to make
short-term loans for land acquisition, construction, and
development of for-sale homes. RDLP provides low-interest loans
to cities, counties, housing authorities, redevelopment
agencies, and community development commissions for site
acquisition, predevelopment, and construction costs for infill
developments consisting of single family homes. Although the
bill authorized the set-aside, it required CalHFA to make
downpayment assistance the priority for funding under CHDAP.
CalHFA has made approximately $44 million available for RDLP
since 2006, of which $38.6 million was awarded to projects,
resulting in 604 for-sale units. As single-family construction
slowed in 2008 due to the recession, CalHFA suspended the
program and rolled the remaining amount back into CHDAP. Today
there is approximately $71 million remaining in bonding
authority for CHDAP that has not been expended. CHDAP is a
revolving loan fund. As homeowners sell their homes and repay
the downpayment assistance, the fund is replenished for future
buyers. In addition to the remaining bonding authority, there is
approximately $77 million in program funds that came from the
repayment of downpayment assistance available to the program.
Purpose of this bill:
The loss of redevelopment and diminished voter-approved housing
bond funds has significantly reduced funding available for the
construction of multifamily housing affordable to low- and
moderate- income families. Redevelopment generated as much as $1
billion each year to build and rehabilitate affordable housing.
In many cases, redevelopment funding was used to assist in
purchasing land for affordable housing development or
pre-construction costs to make infrastructure and other
improvements necessary to build the housing.
AB 637 would authorize CalHFA to issue loans for multifamily
residential developments in addition to its existing authority
to make loans for for-sale residential structures. In doing so,
AB 637 would make more money available for pre-development of
multifamily housing and could fill the gap for some projects
that was previously filled by redevelopment agencies. RDLP is a
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revolving loan fund so as projects repay the loans they are
available for new projects.
Although this bill would give CalHFA authority to expend CHDAP
funding for multifamily developments, it would be at the
discretion of the agency to make those funds available. In
addition, CalHFA still would be required to make downpayment
assistance the priority for CHDAP. CHDAP is continuously
appropriated, but CalHFA would be required to adopt a board
resolution authorizing funding for RDLP.
Staff comments : Proposition 1C specifies that the Legislature
may from time to time make changes to the provisions of law
related to programs that are authorized by the bond in order to
improve the efficiency and effectiveness of the program. The
committee may wish to consider that the existing program has not
been successful due to the limitation on for-sale homes. The
change proposed by this bill could improve the effectiveness of
the program.
REGISTERED SUPPORT / OPPOSITION :
Support
San Diego Housing Federation
Opposition
None on file.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085