BILL ANALYSIS �
AB 692
Page 1
ASSEMBLY THIRD READING
AB 692 (Torres)
As Amended April 29, 2013
2/3 vote
HOUSING 5-2 APPROPRIATIONS 12-5
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|Ayes:|Torres, Atkins, Brown, |Ayes:|Gatto, Bocanegra, |
| |Chau, Mullin | |Bradford, |
| | | |Ian Calderon, Campos, |
| | | |Eggman, Gomez, Hall, |
| | | |Rendon, Pan, Quirk, Weber |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Beth Gaines, Maienschein |Nays:|Harkey, Bigelow, |
| | | |Donnelly, Linder, Wagner |
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SUMMARY : Expands the existing Mobilehome Park Resident
Ownership Program (MPROP) to allow loans for the purchase and
rehabilitation of mobilehome parks that have substantial health
and safety issues. Specifically, this bill :
1)Allows the Department of Housing and Community Development
(HCD) to make loans under MPROP to a qualified nonprofit
housing sponsor or a local government entity to purchase and
rehabilitate a mobilehome park for the purpose of bringing the
park into compliance with all applicable health and safety
standards and maintaining affordable rents for low-income
residents.
2)Establishes the following terms for park purchase and
rehabilitation loans:
a) Requires that loans have a term of no more than 30 years
and sets the interest rate at 3%, unless HCD finds that a
lower interest rate is necessary and will not jeopardize
the financial stability of the program;
b) Allows HCD to establish flexible repayment terms if the
terms are necessary to reduce rents for low-income
residents to an affordable level and do not represent an
unacceptable risk to the security of the fund;
AB 692
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c) Limits loans to the minimum amount necessary to bring
the park into compliance with all applicable health and
safety standards and maintain rents for low-income
residents at an affordable level;
d) Prohibits the use of loans to reduce rents for residents
who are not of low income, reduce rents for low-income
residents to less than 30% of their monthly income, or
facilitate the purchase of a park by a qualified nonprofit
from a local public entity that had acquired the park prior
to the commitment of the loan from the program; and
e) Authorizes the use of loans to finance the cost of
relocating a mobilehome park to a more suitable site within
the same jurisdiction, if HCD determines that the cost of
the relocation, including any and all relocation costs for
affected households, is a more prudent expenditure than the
costs of needed or repetitive repairs to the existing park.
3)Requires HCD to take into consideration the following factors
in determining eligibility for and amount of park purchase and
rehabilitation loans:
a) The current health and safety conditions in the park and
the likelihood that unsafe conditions would be remedied
without a change in ownership;
b) The percent of spaces in the park that are currently
occupied by low-income residents, which must be at least
30% to be eligible for a loan;
c) The reasonableness of the costs relating to the purchase
of the park, repairs, rehabilitation, construction, or
other costs;
d) Any administrative and security factors affecting HCD's
program operation and administration;
e) Whether or not the project complements the
implementation of a local housing program to preserve or
increase the supply of housing for persons and families of
low or moderate income; and
AB 692
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f) Whether or not state funds are utilized in the most
efficient and effective manner.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, this bill would have a negligible fiscal impact.
COMMENTS : The Mobilehome Park Resident Ownership Program
(MPROP) was created in 1984 to provide low-interest loans to
finance the conversion of mobilehome parks to resident ownership
and ensure that low-income residents' housing costs remained at
an affordable level after conversion. The program is funded
through a $5 fee that certain mobilehome owners pay along with
their annual registration fee, as well as through loan
repayment. There is currently about $23 million in the MPROP
fund. New loan activity under MPROP has been slow in recent
years, with only a handful of loans made since 2007. The
program had no successful applications in either 2010 or 2012
and only one in 2011. HCD points to the increasing cost and
complexity of park conversions as two of the primary reasons for
the reduction in the number of successful applications.
This bill expands the MPROP program to allow loans to
non-profits and local governments to purchase and rehabilitate
mobilehome parks that have substantial health and safety issues,
such as substandard infrastructure, while maintaining affordable
space rents. The bill provides an additional way to use MPROP
funds to benefit the mobilehome owners who fund the program that
is consistent with MPROP's original purpose of preserving
mobilehome parks as a crucial source of affordable housing.
Analysis Prepared by : Anya Lawler / H. & C.D. / (916)
319-2085
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