California Legislature—2015–16 Regular Session

Assembly Bill No. 1335

Introduced by Assembly Member Atkins

(Principal coauthors: Assembly Members Chau, Chiu, and Gordon)

(Coauthors: Assembly Members Alejo, Bloom, Bonilla, Bonta, Cooper, Gonzalez, Lopez, Low, McCarty, Mullin, Rendon, Santiago, Mark Stone, Ting, and Weber)

February 27, 2015

An act to add Section 27388.1 to the Government Code, and to add Chapter 2.5 (commencing with Section 50470) to Part 2 of Division 31 of the Health and Safety Code, relating to housing, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

AB 1335, as introduced, Atkins. Building Homes and Jobs Act.

Under existing law, there are programs providing assistance for, among other things, emergency housing, multifamily housing, farmworker housing, home ownership for very low and low-income households, and downpayment assistance for first-time homebuyers. Existing law also authorizes the issuance of bonds in specified amounts pursuant to the State General Obligation Bond Law. Existing law requires that proceeds from the sale of these bonds be used to finance various existing housing programs, capital outlay related to infill development, brownfield cleanup that promotes infill development, and housing-related parks.

This bill would enact the Building Homes and Jobs Act. The bill would make legislative findings and declarations relating to the need for establishing permanent, ongoing sources of funding dedicated to affordable housing development. The bill would impose a fee, except as provided, of $75 to be paid at the time of the recording of every real estate instrument, paper, or notice required or permitted by law to be recorded. By imposing new duties on counties with respect to the imposition of the recording fee, the bill would create a state-mandated local program. The bill would require that revenues from this fee, after deduction of any actual and necessary administrative costs incurred by the county recorder, be sent quarterly to the Department of Housing and Community Development for deposit in the Building Homes and Jobs Fund, which the bill would create within the State Treasury. The bill would provide that moneys in the fund may be expended for supporting affordable housing, home ownership opportunities, and other housing-related program, as specified. The bill would impose certain auditing and reporting requirements.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

This act shall be known as the Building Homes
and Jobs Act.

SEC. 2.  

(a) The Legislature finds and declares that having a
healthy housing market that provides an adequate supply of homes
affordable to Californians at all income levels is critical to the
economic prosperity and quality of life in the state.

(b) The Legislature further finds and declares all of the
following:

(1) Funding approved by the state’s voters in 2002 and 2006,
as of June 2014, has financed the construction, rehabilitation, and
preservation of over 14,000 shelter spaces and 149,000 affordable
homes. These numbers include thousands of supportive homes for
people experiencing homelessness. In addition, these funds have
helped tens of thousands of families become or remain
homeowners. Nearly all of the voter-approved funding for
affordable housing was awarded by the beginning of 2015.

(2) The requirement in the Community Redevelopment Law
that redevelopment agencies set aside 20 percent of tax increment
for affordable housing generated roughly $1 billion per year. With
the elimination of redevelopment agencies, this funding stream
has disappeared.

(3) In 2014, the Legislature committed 10 percent of ongoing
cap-and-trade funds for affordable housing that reduces greenhouse
gas emissions and dedicated $100 million in one-time funding for
affordable multifamily and permanent supportive housing. In
addition, the people of California thoughtfully approved the
repurposing of $600 million in already committed bond funds for
the creation of affordable rental and permanent supportive housing
for veterans through the passage of Proposition 41.

(4) Despite these investments, the need in the state of California
greatly exceeds the available resources, considering 36.2 percent
of mortgaged homeowners and 47.7 percent of all renters are
spending more than 35 percent of their household incomes on
housing.

(5) California has 12 percent of the United States population,
but 20 percent of its homeless population. California has the highest
percentage of unsheltered homeless in the nation, with 63 percent
of homeless Californians not having shelter. California has 24
percent of the nation’s homeless veterans population and one-third
of the nations’ chronically homeless population. California also
has the largest populations of unaccompanied homeless children
and youth, with 30 percent of the national total.

(6) Furthermore, four of the top 10 metropolitan areas in the
country for homeless are in the following metropolitan areas in
California: San Jose-Sunnyvale-Santa Clara, Los Angeles-Long
Beach-Santa Ana, Fresno, and Stockton.

(7) California continues to have the second lowest
homeownership rate in the nation, and the Los Angeles
metropolitan area is now a majority renter area. In fact, five of the
eight lowest homeownership rates are in metropolitan areas in
California.

(8) Los Angeles and Orange Counties have been identified as
the epicenter of overcrowded housing, and numerous studies have
shown that children in crowded homes have poorer health, worse
scores on mathematics and reading tests, and higher rates of
depression and behavioral problems--even when poverty is taken
into account.

(9) Millions of Californians are affected by the state’s chronic
housing shortage, including seniors, veterans, people experiencing
chronic homelessness, working families, people with mental,
physical, or developmental disabilities, agricultural workers, people
exiting jails, prisons, and other state institutions, survivors of
domestic violence, and former foster and transition-aged youth.

(10) Eight of the top 10 hardest hit cities by the foreclosure
crisis in the nation were in California. They include the Cities of
Stockton, Modesto, Vallejo, Riverside, San Bernardino, Merced,
Bakersfield, and Sacramento.

(11) California’s workforce continues to experience longer
commute times as persons in the workforce seek affordable housing
outside the areas in which they work. If California is unable to
support the construction of affordable housing in these areas,
congestion problems will strain the state’s transportation system
and exacerbate greenhouse gas emissions.

(12) Many economists agree that the state’s higher than average
unemployment rate is due in large part to massive shrinkage in the
construction industry from 2005 to 2009, including losses of nearly
700,000 construction-related jobs, a 60-percent decline in
construction spending, and an 83-percent reduction in residential
permits. Restoration of a healthy construction sector will
significantly reduce the state’s unemployment rate.

(13) The lack of sufficient housing impedes economic growth
and development by making it difficult for California employers
to attract and retain employees.

(14) To keep pace with continuing demand, the state should
identify and establish a permanent, ongoing source or sources of
funding dedicated to affordable housing development. Without a
reliable source of funding for housing affordable to the state’s
workforce and most vulnerable residents, the state and its local
and private housing development partners will not be able to
continue increasing the supply of housing after existing housing
bond resources are depleted.

(15) The investment will leverage billions of dollars in private
investment, lessen demands on law enforcement and dwindling
health care resources as fewer people are forced to live on the
streets or in dangerous substandard buildings, and increase
businesses’ ability to attract and retain skilled workers.

(16) In order to promote housing and homeownership
opportunities, the recording fee imposed by this act shall not be
applied to any recording made in connection with a sale of real
property. Purchasing a home is likely the largest purchase made
by Californians, and it is the intent of this act to not increase
transaction costs associated with these transfers.

SEC. 3.  

Section 27388.1 is added to the Government Code, to
read:

27388.1.  

(a) (1) Commencing January 1, 2016, and except as
provided in paragraphs (2) and (3), in addition to any other
recording fees specified in this code, a fee of seventy-five dollars
($75) shall be paid at the time of recording of every real estate
instrument, paper, or notice required or permitted by law to be
recorded except those expressly exempted from payment of
recording fees. “Real estate instrument, paper, or notice” means a
document relating to real property, including, but not limited to,
the following: deed, grant deed, trustee’s deed, deed of trust,
reconveyance, quit claim deed, fictitious deed of trust, assignment
of deed of trust, request for notice of default, abstract of judgment,
subordination agreement, declaration of homestead, abandonment
of homestead, notice of default, release or discharge, easement,
notice of trustee sale, notice of completion, UCC financing
statement, mechanic’s lien, maps, and covenants, conditions, and
restrictions.

(2) The fee described in paragraph (1) shall not be imposed on
any real estate instrument, paper, or notice recorded in connection
with a transfer subject to the imposition of a documentary transfer
tax as defined in Section 11911 of the Revenue and Taxation Code
or on any real estate instrument, paper, or notice recorded in
connection with a transfer of real property that is a residential
dwelling to an owner-occupier.

(3) The fee described in paragraph (1) shall be reduced so that
the fee, together with any charges or recording fees that are in
effect on or before the effective date of the act adding this section,
shall not exceed a per parcel maximum charge of two hundred
twenty-five dollars ($225).

(b) The fees, after deduction of any actual and necessary
administrative costs incurred by the county recorder in carrying
out this section, shall be remitted quarterly, on or before the last
day of the month next succeeding each calendar quarterly period,
to the Department of Housing and Community Development for
deposit in the California Homes and Jobs Trust Fund established
by Section 50470 of the Health and Safety Code, to be expended
for the purposes set forth in that section. In addition, the county
shall pay to the Department of Housing and Community
Development interest, at the legal rate, on any funds not paid to
the Controller before the last day of the month next succeeding
each quarterly period.

SEC. 4.  

Chapter 2.5 (commencing with Section 50470) is added
to Part 2 of Division 31 of the Health and Safety Code, to read:

 

Chapter  2.5. Building Homes and Jobs Act

 

Article 1.  General Provisions

 

50470.  

(a) (1) There is hereby created in the State Treasury
the Building Homes and Jobs Trust Fund. All interest or other
increments resulting from the investment of moneys in the fund
shall be deposited in the fund, notwithstanding Section 16305.7
of the Government Code.

(2) Moneys in the Building Homes and Jobs Trust Fund shall
not be subject to transfer to any other fund pursuant to any
provision of Part 2 (commencing with Section 16300) of Division
4 of Title 2 of the Government Code, except to the Surplus Money
Investment Fund. Upon appropriation by the Legislature, moneys
in the fund may be expended for the following purposes:

(A) The development, acquisition, rehabilitation, and
preservation of rental housing that is affordable to extremely low,
very low, low- and moderate-income households, including
necessary operating subsidies.

(B) Affordable rental and ownership housing that meets the
needs of a growing workforce up to 120 percent of area median
income.

(C) Matching portions of funds placed into local or regional
housing trust funds.

(D) Matching portions of funds available through the Low and
Moderate Income Housing Asset Fund pursuant to subdivision (d)
of Section 34176 of the Health and Safety Code.

(E) Capitalized reserves for services connected to the creation
of new permanent supportive housing, including, but not limited
to, developments funded through the Veterans Housing and
Homelessness Prevention Program.

(F) Emergency shelters, transitional housing, and rapid
rehousing.

(G) Accessibility modifications.

(H) Efforts to acquire and rehabilitate foreclosed or vacant
homes.

(I) Homeownership opportunities, including, but not limited to,
down payment assistance.

(b) Both of the following shall be paid and deposited in the
fund:

(1) Any moneys appropriated and made available by the
Legislature for purposes of the fund.

(2) Any other moneys that may be made available to the
department for the purposes of the fund from any other source or
sources.

50471.  

(a) In order to maximize efficiency and address
comprehensive needs, the department, in consultation with the
California Housing Finance Agency, the California Tax Credit
Allocation Committee, and the California Debt Limit Allocation
Committee, shall develop and submit to the Legislature, at the time
of the Department of Finance’s adjustments to the proposed
2015-16 fiscal year budget pursuant to subdivision (e) of Section
13308 of the Government Code, the Building Homes and Jobs
Investment Strategy. Notwithstanding Section 10231.5 of the
Government Code, commencing with the 2020-21 fiscal year, and
every five years thereafter, concurrent with the release of the
Governor’s proposed budget, the department shall update the
investment strategy and submit it to the Legislature. The investment
strategy shall do all of the following:

(1) Identify the statewide needs, goals, objectives, and outcomes
for housing for a five-year time period. Goals should include targets
of the total number of affordable homes created and preserved
with the funds.

(2) Promote a geographically balanced distribution of funds
including consideration of a direct allocation of funds to local
governments.

(3) Emphasize investments that serve households that are at or
below 60 percent of area median income.

(4) Meet the following minimum objectives:

(A) Encourage economic development and job creation by
helping to meet the housing needs of a growing workforce up to
120 percent of area median income.

(B) Identify opportunities for coordination among state
departments and agencies to achieve greater efficiencies, increase
the amount of federal investment in production, services, and
operating costs of housing, and promote energy efficiency in
housing produced.

(C) Incentivize the use and coordination of nontraditional
funding sources including philanthropic funds, local realignment
funds, nonhousing tax increment, federal Patient Protection and
Affordable Care Act, and other resources.

(D) Incentivize innovative approaches that produce cost savings
to local and state services by reducing the instability of housing
for frequent, high-cost users of hospitals, jails, detoxification
facilities, psychiatric hospitals, and emergency shelters.

(b) Before submitting the Building Homes and Jobs Investment
Strategy to the Legislature, the department shall hold at least four
public workshops in different regions of the state to further inform
the development of the investment strategy.

(c) The department shall form an advisory body of experts and
stakeholders to help develop the Building Homes and Jobs
Investment Strategy, including, but not limited to, representatives
from the banking and financial sector, real estate sector, real estate
and housing developers, and homeless service providers.

(d) Expenditure requests contained in the Governor’s proposed
budget shall be consistent with the Building Homes and Jobs
Investment Strategy developed and submitted pursuant to this part.
Moneys in the Building Homes and Jobs Act Fund shall be
appropriated through the annual Budget Act.

(e) The Building Homes and Jobs Investment Strategy and
updates required by this section shall be submitted pursuant to
Section 9795 of the Government Code.

 

Article 2.  Audits and Reporting

 

50475.  

The California State Auditor’s Office shall conduct
periodic audits to ensure that the annual allocation to individual
programs is awarded by the department in a timely fashion
consistent with the requirements of this chapter. The first audit
shall be conducted no later than 24 months from the effective date
of this section.

50476.  

(a) In its annual report to the Legislature pursuant to
Section 50408, the department shall report how funds that were
made available pursuant to this chapter and allocated in the prior
year were expended, including efforts to promote a geographically
balanced distribution of funds. The report shall also assess the
impact of the investment on job creation and the economy. With
respect to any awards made specifically to house or support persons
who are homeless or at-risk of homelessness, the report shall
include an analysis of the effectiveness of the funding in allowing
these households to retain permanent housing. The department
shall make the report available to the public on its Internet Web
site.

(b) (1) In the report, the department shall make a determination
of whether any of the moneys derived from fees collected pursuant
to Section 27388.1 of the Government Code are being allocated
by the state for any purpose not authorized by Section 50470 and
shall share the information with the county recorders.

(2) If the department determines that any moneys derived from
fees collected pursuant to Section 27388.1 of the Government
Code are being allocated by the state for a purpose not authorized
by Section 50470, the county recorders shall, upon notice of the
determination, immediately cease collection of the fees imposed
by Section 27388.1 of the Government Code, and shall resume
collection of those fees only upon notice that the moneys derived
from fees collected pursuant to Section 23788.1 of the Government
Code are being allocated by the state only for a purpose authorized
by Section 50470.

SEC. 5.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
a local agency or school district has the authority to levy service
charges, fees, or assessments sufficient to pay for the program or
level of service mandated by this act, within the meaning of Section
17556 of the Government Code.

SEC. 6.  

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

In order to provide affordable housing opportunities at the earliest
possible time, it is necessary for this act to take effect immediately.