BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2200


                                                                    Page  1





          Date of Hearing:  May 18, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          2200 (Thurmond) - As Amended April 14, 2016


           ----------------------------------------------------------------- 
          |Policy       |Housing and Community          |Vote:|5 - 1        |
          |Committee:   |Development                    |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |-------------+-------------------------------+-----+-------------|
          |             |Education                      |     |5 - 0        |
          |             |                               |     |             |
          |             |                               |     |             |
           ----------------------------------------------------------------- 


          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill requires California Housing Finance Agency (CalHFA) to  
          administer a program to provide financing assistance to  
          qualified school districts and qualified developers for the  
          creation of affordable rental housing for school districts  
          employees, including teachers. Only school districts with a high  
          average cost for recruiting teachers, a low retention rate, and  
          with 60% of their students participating in the National School  
          Lunch Program would be eligible. This bill appropriates $100  








                                                                    AB 2200


                                                                    Page  2





          million from the General Fund to fund the program and allows for  
          reimbursements to affected agencies and departments.


          FISCAL EFFECT:


          1)This bill appropriates $100 million (GF) to the newly created  
            School Employee Housing Assistance Fund. 


          2)This bill requires money in the Fund to be continuously  
            appropriated to CalHFA for the following purposes:


             a)   to reimburse the agency for administrative costs, not to  
               exceed 5% of the total appropriation ($5 million); 


             b)   to reimburse the State Department of Education for the  
               costs of certifying qualified school districts, not to  
               exceed and unspecified percent of the total appropriation;  
               and


             c)   to make predevelopment grants to qualified school  
               districts, not to exceed 5% of the total appropriation ($5  
               million). Because the original source of the grants would  
               be the General Fund, any predevelopment grants awarded to  
               qualified school districts likely would count toward the  
               Proposition 98 minimum school funding guarantee.  
               Accordingly, funding for ongoing Proposition 98 programs  
               would be reduced by an amount equal to predevelopment  
               grants awarded to school districts.


          COMMENTS:










                                                                    AB 2200


                                                                    Page  3





          1)Purpose.  According to the author, "There is no existing  
            program that allows financially-strained school districts to  
            receive funding for the development of school employee  
            housing. Some school districts in California have begun to  
            increase teacher retention by providing housing to teachers.  
            School districts in Los Angeles and Santa Clara, with San  
            Francisco considering such a plan, have teachers in  
            district-sponsored housing. However, for financially-strapped  
            districts in high-cost areas, such a proven solution is not an  
            option for attracting new teachers into the district. And  
            while the Extra Credit Teacher Home Purchase Program does  
            incentivize homeownership for school employees, for many new  
            teachers beginning their career, rental housing is the first  
            step prior to homeownership-a step that those in high-cost  
            areas cannot take. AB 2200 seeks to close the achievement gap  
            by allowing school employees, including teachers, to remain in  
            the cities where they work."
          


          2)Background. California has seen a drastic decline in funding  
            to support the construction of affordable housing for very  
            low-, low- and moderate-income families.  Historically, the  
            state has invested in low- and moderate-income housing  
            primarily by providing funding for construction. Because of  
            the high cost of land and construction and the subsidy needed  
            to keep housing affordable to residents, affordable housing is  
            expensive to build. Developers typically use multiple sources  
            of financing, including voter-approved housing bonds, state  
            and federal low-income housing tax credits, private bank  
            financing, and local matching dollars. 
            CalHFA, the state's affordable housing bank, provides down  
            payment assistance to qualified low- and moderate-income  
            buyers through a loan secured on the property that is repaid  
            when a home sells. In addition, CalHFA provides loans to  
            multifamily housing developers to construct housing affordable  
            housing.  CalHFA does not receive funding from the General  
            Fund and pays for its programs by issuing bonds which are then  
            repaid from loan proceeds.  Developments financed using  








                                                                    AB 2200


                                                                    Page  4





            CalHFA's multi-family loans agree to provide the housing for a  
            term of 55 years.   


          


          Analysis Prepared by:Jennifer Swenson / APPR. / (916)  
          319-2081