BILL ANALYSIS Ó
AB 1793
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Date of Hearing: May 21, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1793 (Chau) - As Introduced: February 18, 2014
Policy Committee: Housing and
Community Development Vote: 7 - 0
Local Government 9 -
0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill authorizes housing successors to transfer the
responsibility of enforcing the affordability deed restrictions
of below market-rate (BMR) homeownership units of former
redevelopment agencies (RDAs) to qualified nonprofit
organizations. Specifically, this bill:
1) Provides housing successors with the authority, by
ordinance or resolution adopted at a noticed public
meeting, to transfer the responsibility of enforcing the
affordability deed restrictions of BMR homeownership units
to qualified nonprofit organizations.
2) Directs the California Housing Finance Agency (CalHFA)
to issue a request for proposal (RFP) on or before July 1,
2015, to identify up to six qualified nonprofit
organizations that would serve this role.
3) Requires all selected nonprofit organizations to conduct
a yearly audit of the BMR units, and to provide this
information to the donating housing successor, and requires
the audit to include the number of units that have been
sold to new owners, and any return on equity sharing.
4) Requires the donating housing successor to publish the
audit on its Web Site.
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FISCAL EFFECT
Minor costs, likely less than $50,000 to CalHFA to administer
the RFP process.
COMMENTS
1)Purpose . Housing successor agencies (cities, counties, cities
and counties, or housing authorities) to former RDAs are
tasked with enforcing the affordability deed restrictions on
BMR homeownership units. According to the author, in a recent
survey of housing successor agencies, "a majority of
responding agencies have lost a significant amount of their
designated funding for managing these units. One-third of
responding agencies have seen affordable housing lost to
foreclosure since the elimination of redevelopment agencies,
and two-thirds expect it to happen."
This bill gives housing successors the authority to transfer
the responsibility of enforcing the affordable deed
restrictions of BMR units to qualified nonprofits with the
intent of better preserving affordable housing units.
2)Background . When RDAs were dissolved, successor agencies were
established to wind up the RDAs' obligations. Successor
agencies were required to transfer an RDA's housing functions
and assets to a "housing successor." Cities and counties were
given the option of acting as housing successors and taking
over the housing assets of their jurisdiction's RDA. If they
did not wish to take on this role, the local housing authority
was required to act as housing successor. If there was no
local housing authority, the Department of Housing and
Community Development was required to act as housing
successor. RDAs produced, amongst other things, tens of
thousands of BMR homeownership units. BMR units are affordable
due to deed restrictions or equity-sharing agreements that
must be monitored and enforced to recapture or retain
affordability.
3)Support . Housing California, sponsor of the bill, argues
"stewardship of scattered site affordable homeownership units
is particularly challenging. Surveys have shown that the
affordability restrictions of affordable homeownership units
created by RDAs are currently being lost" and that "a number
of California nonprofits are in an excellent position to
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provide stewardship for the homes created by RDAs."
4)Concerns . The League of California Cities notes that existing
law does not preclude jurisdictions from contracting these
responsibilities with nonprofits now, and that this bill does
not solve the underlying problem of inadequate funding for
administering housing successor responsibilities.
Analysis Prepared by : Jennifer Swenson / APPR. / (916)
319-2081