Amended in Assembly June 3, 2015

Amended in Assembly May 14, 2015

Amended in Assembly April 30, 2015

Amended in Assembly April 20, 2015

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)

(Coauthor: Senator Hill)

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 amended, Atkins. Building Homes and Jobs Act.

Under existing law, there are programs providing assistance for, among other things, emergency housing, multifamily housing, farmworker housing, begin delete home ownership end delete begin insert homeownership end insert 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, per each single transaction per single parcel of real property, not to exceed $225. 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, upon appropriation by the Legislature, require that 20% of the moneys in the fund be expended for affordable owner-occupied workforce begin delete housing end delete begin insert housing, 10% of the moneys for housing purposes related to agricultural workers and their families, end insert and begin insert would end insert authorize the remainder of the moneys in the fund to be expended to support affordable housing, begin delete home ownership end delete begin insert homeownership end insert opportunities, and other housing-related programs, begin delete and administrative costs, end delete as specified. The bill would impose certain auditing and reporting requirements and would establish the Building Homes and Jobs Trust Fund Governing Board that would, among other things, review and approve recommendations made by the Department of Housing and Community Development for the distribution of moneys from the fund.

This bill would state the intent of the Legislature to enact legislation that would create the Secretary of Housing within state government to oversee all activities related to housing in the state.

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 with the highest rate of homelessness 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 paragraph (2), 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, per each
single transaction per parcel of real property. The fee imposed by
this section shall not exceed two hundred twenty-five dollars
($225). “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.

(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:

(A) Twenty percent of moneys in the fund shall be expended
for affordable owner-occupied workforce housing.

begin insert

(B) Ten percent of the moneys in the fund shall be expended to
address affordable homeownership and rental housing
opportunities for agricultural workers and their families.

end insert begin delete

(B)

end delete

begin insert (C) end insert  The remainder of the moneys in the fund may be expended
for the following purposes:

(i) 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.

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

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

(iv) 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.

(v) 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.

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

(vii) Accessibility modifications.

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

begin delete

(xi)

end delete

begin insert (ix) end insert  Homeownership opportunities, including, but not limited
to, down payment assistance.

begin delete

(xii) To the department for the administration of housing
programs that receive an appropriation from the fund. Moneys
expended for this purpose shall not exceed 5 percent of the moneys
in the fund.

end delete begin insert

(3) A state or local entity that receives an appropriation or
allocation pursuant to this chapter shall use no more than 5 percent
of that appropriation or allocation for costs related to the
administration of the housing program for which the appropriation
or allocation was made.

end insert

(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.

begin insert

(c) If a local government does not expend the moneys allocated
to it, pursuant to this chapter, within five years of that allocation,
those moneys shall revert to and be paid and deposited in, the
fund.

end insert

50470.5.  

For purposes of this chapter:

(a) “Department” means the Department of Housing and
Community Development.

(b) “Governing Board” means the Building Homes and Jobs
Trust Fund Governing Board.

50470.7.  

(a) The Building Homes and Jobs Trust Fund
Governing Board is hereby established. The governing board shall
include one representative from the department, one representative
from the California Housing Finance Agency, and one
representative from the Office of the Treasurer. The governing
board shall consist also include no fewer than two real estate
licensees, one from northern California and one from southern
California, each with not less than 10 years of real estate experience
and membership in a real estate trade organization with not less
than 20,000 licensees. The governing board shall include a local
government official from northern and southern California, and a
representative from the northern and southern California home
building industry, all of whom shall be appointed by the Governor.

(b) (1) The governing board also shall include six public
members. Two of the public members must be representative of
nonprofit affordable housing development, one appointed by the
Speaker of the Assembly and one appointed by the President pro
Tempore of the Senate. Two of the public members must be
representative of for-profit affordable housing development, one
appointed by the Speaker of the Assembly and one appointed by
the President pro Tempore of the Senate. The Speaker of the
Assembly and the President pro Tempore of the Senate shall each
appoint one additional public member who shall be representative
of, or have experience in, one or more of the following areas:

(A) Private sector lending.

(B) For-profit affordable housing development.

(C) Nonprofit affordable housing development.

(D) Working with special needs populations, including persons
experiencing homelessness.

(E) Architecture.

(F) Housing development consultation.

(G) Housing issues related academia.

(2) Overall public membership shall contribute to a balance
among geographic areas and between rural and urban interests.

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 governing
board shall review and advise the department regarding the
investment strategy prior to its submission 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)  begin delete Promote end delete begin insert (A) end insert begin insert   end insert begin insert Provide for end insert a geographically balanced
distribution of begin delete funds end delete begin insert funds, end insert including begin delete consideration of end delete a begin insert 50 percent end insert
direct allocation of funds to local governments.

begin insert

(B)  In order to receive an allocation a local government shall:

end insert begin insert

(1) Submit a plan to the department detailing how allocated
funds will be used by the local government in manner consistent
with paragraph (2) of subdivision (a) of Section 50470.

end insert begin insert

(2) Have a compliant housing element with the state, submit
annual reports pursuant to Section 65400 of the Government Code,
and submit an annual report to the department that provides
ongoing tracking of the uses and expenditures of any allocated
funds.

end insert

(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, the 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) 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 Trust Fund shall be
appropriated through the annual Budget Act.

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

(e) The governing board shall have the authority to review and
approve department recommendations for all funds distributed
from the Building Homes and Jobs Trust Fund.

 

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.  

(a) The Legislature finds and declares that the housing
market plays a critical role in the functioning of the California
economy.

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

(1) The need for housing is something every Californian
encounters.

(2) Adequate and stable housing is a crucial component of all
Californians’ quality of life.

(3) The expenditure for housing is one of the largest expenses
all Californians undertake in their day-to-day lives.

(4) Housing and housing-related activities are of such significant
importance to the state that it warrants a clear and unified voice
in state government.

(c) It is the intent of the Legislature to enact legislation that
would create a Secretary of Housing within state government to
oversee all activities related to housing in the state. In creating this
position, it is the intent of the Legislature that all professional
entities that play a role in the housing market would be authorized
to be incorporated in order to have a clearer and more unified
approach to housing in California.

SEC. 6.  

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. 7.  

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.