BILL ANALYSIS Ó
AB 637
Page 1
ASSEMBLY THIRD READING
AB 637 (Atkins)
As Amended April 24, 2013
Majority vote
HOUSING 5-2
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|Ayes:|Torres, Atkins, Brown, | | |
| |Chau, Mullin | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Beth Gaines, Maienschein | | |
| | | | |
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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).
FISCAL EFFECT : None
COMMENTS : 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
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
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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
housing.
This bill would authorize CalHFA to issue loans for multifamily
residential developments in addition to its existing authority
to make loans available for for-sale residential structures. In
doing so, this bill 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 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 would still 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.
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 Legislature
may wish to consider that the existing program has not been
successful due to the limitation on for-sale homes. The change
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proposed by this bill could improve the effectiveness of the
program.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085
FN: 0000328