BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 90|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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THIRD READING
Bill No: AB 90
Author: Chau (D) and Atkins (D)
Amended: 4/22/15 in Assembly
Vote: 21
SENATE TRANS. & HOUSING COMMITTEE: 11-0, 6/30/15
AYES: Beall, Cannella, Allen, Bates, Gaines, Galgiani, Leyva,
McGuire, Mendoza, Roth, Wieckowski
SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/27/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
ASSEMBLY FLOOR: 80-0, 6/4/15 - See last page for vote
SUBJECT: Federal Housing Trust Fund
SOURCE: Author
DIGEST: This bill designates the California Department of
Housing and Community Development (HCD) as the agency
responsible for administering the federal Housing Trust Fund
(HTF), pursuant to the federal Housing and Economic Recovery Act
of 2008.
ANALYSIS:
Existing law:
1)Creates the federal HTF as part of the Housing and Economic
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Recovery Act of 2008 (HERA). This program will allocate funds
to state and state-designated entities on a formula basis for
the production or preservation of affordable housing. Federal
regulations, released in January 2015, specify how states must
use these funds.
2)Defines extremely low-income (ELI) households as households
with incomes between zero and 30% of area median income and
very low-income (VLI) families' incomes as between 30% and 50%
of area median income.
3)Requires HCD to report on or before December 31 of each year
to the Governor and both houses of the Legislature on the
operations and accomplishments during the prior fiscal year of
the housing programs administered by it.
This bill:
1)Designates HCD as the agency responsible for administering the
federal HTF pursuant to HERA.
2)Requires HCD to administer the funds through programs that
produce, preserve, rehabilitate, and support the operation of
rental housing for ELI and VLI households.
3)Allows up to 10% of funding to be used to support
homeownership for ELI and VLI households.
4)Requires any rental project funded by the federal HTF to be
affordable for 55 years.
5)Requires any homeownership program funded from the federal HTF
to be affordable for 30 years.
6)Requires HCD to collaborate with the California Housing
Finance Agency (CalHFA) to develop an allocation plan to
demonstrate how the federal funds shall be distributed based
upon the priority housing needs identified in the state
consolidated plan. The allocation plan shall give priority to
projects based on:
a) Geographic diversity;
b) The extent to which rents are affordable, especially to
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ELI households;
c) The merits of a project;
d) Applicants' readiness; and
e) The extent to which projects will use nonfederal funds.
7)Requires HCD to submit the allocation plan to the Assembly
Committee on Housing and Community Development and the Senate
Transportation and Housing Committee 30 days prior to
receiving the HTF funds.
8)Requires HCD and CalHFA to convene a stakeholder process to
inform the development of the allocation plan. Stakeholders
shall include, but not be limited to, organizations that
provide rental housing for ELI households and VLI households
or assist ELI households and VLI households to become
homeowners.
9)Requires HCD to add to a yearly report, due to the Governor
and both houses of the Legislature on or before December 31 of
each year, an evaluation of the program established by HCD to
meet the federal HTF program guidelines.
Comments
Purpose of this bill. According to the authors, our state is
facing an affordable housing crisis. The funding sources to
support construction of affordable housing have drastically
diminished over the last five years. The dissolution of
redevelopment agencies eliminated up to $1 billion in funding
that was available for affordable housing construction. The
last statewide housing bond was approved in 2008 and the
proceeds of those bonds have been exhausted. This bill is part
of a larger package of bills to address the growing affordable
housing crisis. This bill designates HCD as the state entity
responsible for administering the federal HTF. It also requires
HCD to develop an allocation plan for how to spend the funds and
to provide that plan to the Senate Transportation and Housing
Committee and the Assembly Housing and Community Development
Committee. The allocation plan will be developed through a
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stakeholder process. HCD is required to report back to the
Legislature on how HTF funds are spent.
Lack of funding for affordable housing. The U.S. Department of
Housing and Urban Development defines "affordable" as housing
that costs no more than 30% of a household's monthly income.
That means rent and utilities in an apartment or the monthly
mortgage payment and housing expenses for a homeowner should be
less than 30% of a household's monthly income to be considered
affordable. According to the national Center for Housing
Policy, 34% of working renters in California spend half or more
of their income on housing. Among all 50 states, California has
the highest fraction of working renters who spend half or more
of their income on housing. In recent years, the funding for
the construction of affordable housing has dramatically
decreased with the loss of redevelopment funds and the
expenditure of funding from the last state-wide housing bond.
Federal Housing Trust Fund. HTF is an affordable-housing
production program that will complement existing federal, state,
and local efforts to increase and preserve the supply of decent,
safe, and sanitary affordable housing for ELI and VLI
households, including homeless families. The HTF was created
under the HERA of 2008. HERA directed Fannie Mae and Freddie
Mac to set aside .042% of new mortgage purchases in the federal
HTF. Sixty-five percent was directed to the federal HTF and 35%
to the Capitol Magnet Fund. Unfortunately, before the funds
could be directed to the HTF, the banking and mortgage crisis
hit and funding for the program was put on hold. In December of
2014, the Federal Housing Finance Agency lifted the suspension
of funding and directed Fannie Mae and Freddie Mac to set aside
funds for the HTF beginning on January 1, 2015. These funds may
be allocated as soon as the summer of 2016 on a formula basis.
States and state-designated entities are eligible grantees for
the HTF. HTF funds may be used for the production or
preservation of affordable housing through the acquisition, new
construction, reconstruction, and/or rehabilitation of
non-luxury housing with suitable amenities. All HTF-assisted
units will be required to have a minimum affordability period of
30 years. Federal law also requires money to be distributed to
states by formula. This formula is based upon shortage of
rental properties affordable and available to ELI and VLI
households and number of ELI and VLI renter households paying
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more than 50% of their income for rent and utilities. Priority
will be given to ELI households.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
One-time HCD costs of approximately $589,000 in FY 2015-16 for
4.5 PY of staff time to develop a program for distribution of
federal HTF funds (General Fund). It is likely that these
funds could be reimbursed from the initial distribution of
federal funds, which is expected in 2016-17.
Ongoing HCD costs in the range of $1 million in 2016-17 for 9
PY of staff time for program evaluation, development, and
administration (federal funds). HCD's ongoing administrative
costs would be adjusted annually, based upon expected
allocations of federal HTF funds. All costs are expected to
be below the 10 percent allowance for administrative costs
that may be retained by HCD from federal HTF allocations.
Ongoing HCD local assistance expenditures of approximately $40
million, beginning in 2016-17 (federal funds). Amounts of HTF
funds available for expenditure are dependent upon federal
formulas and the aggregate amount of mortgages funded through
specified federal entities.
SUPPORT: (Verified8/28/15)
A Community of Friends
AARP, California
Abode Communities
Access to Independence
Bridge Housing
Building Industry Association of Southern California's Los
Angeles/Ventura Chapter
California Catholic Conference of Bishops
California Building Industry Association
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California Catholic Conference
California Chamber of Commerce
California Community Foundation
Californians for Safety and Justice
California Housing Consortium
California Infill Builders Federation
California Rural Legal Assistance Foundation
California State Council of the Service Employees International
Union
City and County of San Francisco
City of Los Angeles
City of Morgan Hill
City of San Jose
City of Santa Monica
City of Torrance
City of West Hollywood
Coalition for Economic Survival
Community Corporation of Santa Monica
Department of Housing and Community Development of Los Angeles
East LA Community Corporation
Enterprise Community Partners
Habitat for Humanity
Highridge Costa Housing Partners
Highridge Costa Investors
Housing Authority of the City of Los Angeles
Housing California
Hunger Advocacy Network
Inquilinos Unidos
Jewish Family Services of San Diego
Leading Age California
League of California Cities
LINC Housing
Los Angeles Business Council
Mayor, City of Long Beach
Mayor, City of Los Angeles
Mayor, City of Oakland
Mayor, City of Sacramento
Mayor, City of San Francisco
Mayor, City of San Jose
Mayor, City of Santa Ana
Mercy Housing California
National Association of Social Workers, California Chapter
Non- Profit Housing Association of Northern California
PATH
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Public Counsel
Related California
San Diego and Imperial Counties Labor Council
San Diego County Apartment Association
Santa Clara County Board of Supervisors
SEIU California
Southern California Association of Nonprofit Housing
Skid Row Housing Trust
United Way of Greater Los Angeles
Western Center on Law and Poverty
West Hollywood Community Housing Corporation
WORKS
OPPOSITION: (Verified8/28/15)
None received
ASSEMBLY FLOOR: 80-0, 6/4/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,
Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen,
Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
Prepared by:Alison Dinmore / T. & H. / (916) 651-4121
8/31/15 8:32:55
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