BILL ANALYSIS �
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 391
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: Desaulnier
VERSION: 4/2/13
Analysis by: Mark Stivers FISCAL: yes
Hearing date: April 9, 2013
SUBJECT:
California Homes and Jobs Act of 2013
DESCRIPTION:
This bill imposes a fee of $75 on the recording of each real
estate-related document, except for those documents recorded in
connection with a transfer subject to a documentary transfer
tax, and directs the money to the California Homes and Jobs
Trust Fund. The Legislature may then appropriate these funds
for the development, acquisition, rehabilitation, and
preservation of homes affordable to low- and moderate-income
households, including emergency shelters, transitional and
permanent rental housing, foreclosure mitigation, and
homeownership opportunities.
ANALYSIS:
Current law establishes a number of programs at the Department
of Housing and Community Development (HCD) and the California
Housing Finance Agency (CalHFA) to make housing more affordable
to California families and individuals, including the following
main programs:
Multifamily Housing Program, which funds the new construction,
rehabilitation, and preservation of permanent and transitional
rental homes for lower income households through loans to
local governments, non-profit developers, and for-profit
developers.
Joe Serna, Jr., Farmworker Housing Program, which funds the
development of ownership or rental homes for agricultural
workers through grants to local governments and non-profit
organizations.
Emergency Housing Assistance Program, which funds emergency
shelters and transitional homes for homeless individuals and
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families through grants to counties and non-profit entities
for rehabilitation, renovation, expansion, site acquisition,
and equipment.
CalHome Program, which funds downpayment assistance, home
rehabilitation, counseling, self-help mortgage assistance
programs, and technical assistance for self-help and shared
housing through grants and loans.
California Homebuyer Downpayment Assistance Program, which
aids first-time homebuyers with down payment and/or closing
costs.
Historically, the state has funded these programs through the
sale of general obligations bonds. Most recently, the voters
approved a $2.1 billion bond through Proposition 46 in 2002 and
then a $2.85 billion bond through Proposition 1C in 2006. These
funds financed the construction, rehabilitation, and
preservation of 57,220 affordable apartments, including 2,500
supportive homes for people experiencing homelessness, and over
11,600 shelter spaces. In addition, these funds have helped
57,290 families become or remain homeowners. HCD has awarded
almost all of the funds made available under these propositions,
particularly in these main programs.
Until 2011, the Community Redevelopment Law required
redevelopment agencies to set aside 20% of all tax increment
revenue to increase, improve, and preserve the community's
supply of low- and moderate-income housing available at an
affordable housing cost. In fiscal year 2009-10,
redevelopment agencies deposited $1.075 billion of property tax
increment revenues into their Low- and Moderate-Income Housing
Funds. With the elimination of redevelopment agencies, this
source of funding for affordable housing is no longer available.
This bill imposes a fee of $75 on the recording of each real
estate-related document, except for those documents recorded in
connection with a transfer subject to a documentary transfer
tax, and directs the money to the California Homes and Jobs
Trust Fund. The Legislature may then appropriate these funds
for the development, acquisition, rehabilitation, and
preservation of homes affordable to low- and moderate-income
households, including emergency shelters, transitional and
permanent rental housing, foreclosure mitigation, and
homeownership opportunities. The Legislature may also
appropriate up to 5% of the funds for administering housing
SB 391 (DESAULNIER) Page 3
programs that receive an appropriation from the fund. The bill
further requires HCD to report annually to the Legislature on
the expenditure of these funds and the Bureau of State Audits to
conduct periodic audits to ensure that state agencies award
appropriated funds in a timely fashion consistent with legal
requirements.
COMMENTS:
1.Purpose of the bill . According to the author, everyone in
California needs a safe and affordable place to call home.
For U.S. military veterans, former foster youth, families with
children, people with disabilities, seniors on fixed incomes,
and other vulnerable Californians, however, the housing crisis
isn't over. Millions of Californians are caught in the
"perfect storm" - mortgages remain out of reach, credit
standards have tightened, and the foreclosure crisis has
pushed more people into a rental market already suffering from
decades of short supply - leading to record-setting rent
increases. The most vulnerable, who struggled to make rent
before the foreclosure crisis, face even more uncertainty in
today's rental housing market. They risk joining the more
than 130,000 Californians who are homeless on any given night.
Moreover, rents and mortgages within the reach of working
families are critical to maintaining California's business
competitiveness. Numerous business groups say California
needs to increase the supply of housing options affordable to
workers so companies can compete for the talent that drives
California's economy.
At the same time, California's investment in affordable homes
has dried up. State agencies have awarded nearly all of the
voter-approved bond funding for affordable housing. Likewise,
the elimination of redevelopment agencies has cut off funding
from the low- and moderate-income housing set aside.
The California Homes and Jobs Act begins to restore
California's historic investments in affordable homes by
creating an ongoing, pay-as-you-go source of funding dedicated
to affordable housing development. The act will:
Create 29,000 jobs annually, primarily in the
beleaguered construction sector.
Help businesses attract and retain the talent that fuels
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California's economy.
Leverage an additional $2.78 billion in federal and
local funding and bank loans to build affordable homes and
create jobs.
Deploy these dollars in California communities through a
successful private/public partnership model.
Get California building again to create affordable home
options for all Californians.
1.Exempts documents related to sale transactions . In order to
promote homeownership opportunities, this bill exempts
documents made in connection with the sale of real property
from the new fee. This will ensure that transaction costs do
not increase for homebuyers.
2.Revenue projections . Based on recording data from a variety
of past years, it is estimated that this bill will generate an
average of $525 million per year for the Homes and Jobs Trust
Fund, ranging from $300 million per year in low-volume years
to $750 million per year in high-volume years.
3.Allocation to be determined . This bill requires that monies
in the Homes and Jobs Trust Fund go for the development,
acquisition, rehabilitation, and preservation of homes
affordable to low- and moderate-income households, including
emergency shelters, transitional and permanent rental housing,
foreclosure mitigation, and homeownership opportunities.
Aside from these general parameters, however, this bill does
not allocate funds to particular programs or uses. Instead,
it leaves the decision on allocation to the Legislature. This
provides less certainty but ensures that funds can address
priority housing needs as they change through the years.
Nonetheless, it is the author's intent that these monies fund
a variety of housing needs, ranging from homeless shelters and
permanent supportive housing to rental housing to
homeownership, and, where possible, use established and
well-understood programs.
4.Types of documents covered . This bill applies the $75 fee to
the recording of all real estate-related documents except
those recorded in connection with a transfer subject to the
imposition of a documentary transfer tax and those expressly
exempted from payment of recording fees. There are many types
of documents that fall under the proposed fee, including, but
not limited to:
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Deeds and grant deeds
Trustees' deeds and deeds of trust
Amendments of deeds of trust
Quit claim deeds
Fictitious deeds of trust
Assignments of deeds of trust
Construction trust deeds
Reconveyances
Easements
Maps
Lot line adjustments
Covenants, conditions, and restrictions
Affidavits
Abstracts of judgment
Subordination agreements
Declarations and abandonments of homestead
Requests for notice of default
Notices of default
Notices of trustee sale
Substitution of trustee
Trustee's deed upon sale
Notices of completion
Notice of rescission of declaration of default
Liens
Releases or discharges
Leases and assignments of leases
Assignments of rents
Uniform Commercial Code amendment, assignment,
continuation, statement, or termination
1.Two-thirds vote required . Legislative Counsel has determined
that this bill would result in a change in state taxes for the
purpose of increasing state revenues within the meaning of
Section 3 of Article XIIIA of the California Constitution and
thus requires a 2/3 vote for passage.
2.Arguments in opposition . The Orange County Board of
Supervisors states that the proposed fee has no relation to
affordable housing and places additional financial burdens on
ordinary Californians. The County Recorders Association of
California and its members point out that some recordings or
transactions involve more than one document, in which case the
per-document fee will add to the already substantial cost of
recording. In addition, county recorders will encounter
significant increases in staff time to collect fees and
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address unsatisfied customers.
3.Double referral . The Rules Committee has referred this bill
to both this committee and the Governance and Finance
Committee.
PRIOR LEGISLATION
SB 1220 (DeSaulnier) of 2012 was substantively identical to this
bill. SB 1220 received 25 votes on the Senate Floor but needed
27 for passage.
POSITIONS: (Communicated to the committee before noon on
Wednesday, April 3,
2013.)
SUPPORT:
California Housing Consortium (sponsor)
Housing California (sponsor)
AARP
Abode Communities
A Community of Friends
Alameda County Developmental Disabilities Council
Alpha Construction Company
AMCAL Multi-Housing
American Baptist Homes of the West
Amstutz Associates
Angelus Plaza
Asian Pacific Environmental Network
Association of Regional Center Agencies
Asthma Coalition of Los Angeles County
Bay Area Business Roundtable
Bay Area Community Land Trust
Bay Area Council
BRIDGE Housing
Burbank Housing Development Corporation
Cabrillo Economic Development Corporation
Cahill Contractors
California Apartment Association
California Association of Housing Authorities
California Association of Local Housing Finance Agencies
California Building Industry Association
California Coalition for Rural Housing
California Coalition for Youth
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California Conference of Carpenters
California Council of Community Mental Health Agencies
California Disability Services Association
California Housing Partnership Corporation
California Partnership to End Domestic Violence
California Police Chiefs Association
California Reinvestment Coalition
California Rural Legal Assistance Foundation
Casa Major
Century Housing
Century Villages at Cabrillo
CHISPA
City of Emeryville
City of Lynwood
City of Oakland
City of Oxnard
City of Pasadena
City of San Joaquin
City of San Jose
City of Santa Barbara
City of Santa Monica
City of West Hollywood
Coachella Valley Housing Coalition
Community Corporation of Santa Monica
Community Health Improvement Partners
Community Housing Opportunities Corporation
Community Housing Works
Corporation for Supportive Housing
County of Alameda
County of Contra Costa
Curtom-Dunsmuir
Domus Development
EAH Housing
East Bay Developmental Disabilities Legislative Coalition
East Bay Housing Organizations
East LA Community Corporation
Eden Housing
Enterprise Community Partners
Environmental Health Coalition
Episcopal Community Services of San Francisco
First Place for Youth
Foundation for Affordable Housing
Gonzalez Goodale Architects
Habitat for Humanity California
Habitat for Humanity Greater San Francisco
Habitat for Humanity Inland Valley
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Habitat for Humanity Pomona Valley
Habitat for Humanity Riverside
Habitat for Humanity San Gabriel Valley
Habitat for Humanity San Luis Obispo County
Habitat for Humanity Santa Cruz County
Hamilton Family Center
Highridge Costa Housing Partners
Hollywood Community Housing Corporation
Home Builders Association of Tulare/Kings Counties
Home Start
Homes for Life Foundation
Housing Authority for the City of San Buenaventura
Housing Choices Coalition for People with Developmental
Disabilities
Housing Leadership Council of San Mateo County
ICON Builders
InnerCity Struggle
Interfaith Community Services
International Association for Women of Color Day
Jamboree Housing Corporation
John Stewart Company
Kennedy Commission
The KTGY Group
Larkin Street Youth Services
Laurin Associates
Lauterbach and Associates
LeSar Development Consultants
LifeSTEPS
LINC Housing
Loaves and Fishes
Local Initiatives Support Corporation
Los Angeles Area Chamber of Commerce
Los Angeles Business Council
Los Angeles Business Leaders Task Force on Homelessness
Los Angeles Community Action Network
L.A. Family Housing
LA Voice
Law Foundation of Silicon Valley
Leading Age California
League of Women Voters of California
Lutheran Office of Public Policy
Mammoth Lakes Housing
Marin Workforce Housing Trust
Mental Health America of Los Angeles
Mercy Housing
MidPen Housing Corporation
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Multicultural Communities for Mobility
Nancy Lewis Associates
National Community Renaissance
National Housing Law Project
Natural Resources Defense Council
Neighborhood Housing Services of Los Angeles County
Neighborhood Partnership Housing Services
NeighborWorks Orange County
Non-Profit Housing Association of Northern California
Northern Circle Indian Housing Authority
Northern California Community Loan Fund
Opportune Companies
Orange County Business Council
Orange County Housing Trust
Pacific Clinics
Palm Communities
Pasadena Public Health Department
Peninsula Interfaith Action
Penny Lane Centers
People Assisting the Homeless
Peoples' Self-Help Housing Corporation
PolicyLink
Public Advocates
Related California
Resources for Community Development
Ruiz Brothers Construction Co.
Rural Community Assistance Corporation
Rural Communities Housing Development Corporation
Sacramento Homeless Organizing Committee
Sacramento Housing Alliance
St. Joseph Center
St. Paul's Senior Home and Services
San Benito County Housing and Economic Development Department
San Gabriel Valley Consortium on Homelessness
San Luis Obispo County Housing Trust Fund
Self-Help Enterprises
Service Employees International Union (SEIU) California State
Council
Sierra Business Council
Sierra Club California
Silicon Valley Leadership Group
Skid Row Housing Trust
Sonoma County Task Force for the Homeless
Southeast Asian Community Alliance
Southern California Association of Non-Profit Housing
SPUR
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Stand Up for Neighborly Novato
State Treasurer Bill Lockyer
Step Up on Second
Sun Country Builders
Sunseri Construction
Tenderloin Neighborhood Development Corporation
Thai Community Development Center
Thomas Safran and Associates
Turning Point Community Programs
United Homeless Healthcare Partners
United States Veterans Initiative
United Ways of California
United Way of Fresno County
United Way of Greater Los Angeles
Valley Economic Development Center
Venice Community Housing Corporation
Visionary Home Builders
Wakeland Housing and Development Corporation
Walton Construction Services
Western Center on Law and Poverty
OPPOSED:
Butte County Clerk-Recorder
Calaveras County Clerk-Recorder
Colusa County Clerk Recorder
County Recorders' Association of California
County of Orange
El Dorado County Recorder-Clerk
Inyo County Clerk Recorder
Marin County Assessor-Recorder-Clerk
Nevada County Clerk-Recorder
Plumas County Clerk
San Bernardino County Recorder-Clerk
San Luis Obispo County Clerk-Recorder
Sonoma County Clerk-Recorder-Assessor
Stanislaus County Clerk-Recorder