BILL ANALYSIS Ó
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ASSEMBLY THIRD READING
AB
2441 (Thurmond)
As Amended May 31, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Housing |6-1 |Chiu, Steinorth, |Beth Gaines |
| | |Burke, Chau, Lopez, | |
| | |Mullin | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |14-2 |Gonzalez, Bloom, |Bigelow, Obernolte |
| | |Bonilla, Bonta, | |
| | |Calderon, Daly, | |
| | |Eggman, Eduardo | |
| | |Garcia, Roger | |
| | |Hernández, Holden, | |
| | |Quirk, Santiago, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Establishes the Workforce Housing Pilot Program
administered by the Department of Housing and Community
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Development (HCD). Specifically, this bill:
1)States the intent of the Legislature in enacting this bill
that funds allocated to cities and administered by HCD be of
maximum benefit in meeting the needs of persons and families
of low- or moderate-income.
2)Defines "eligible city or city and county" to mean a city that
resides within a county that is defined by the United State
Department of Housing Urban Development (HUD) as a high-cost
county.
3)Defines a "notice of funding available" (NOFA) to mean a
public announcement that an estimated amount of funding will
be awarded by a department program according to a specified
criteria and schedules.
4)Defines "persons and families of low or moderate income" to
mean persons and families whose income does not exceed 120% of
area median income (AMI), adjusted for family size.
5)Requires HCD, subject to availability, to award grant funding
to eligible cities and counties that apply for financing.
6)Requires HCD to determine the appropriate amount of the grant
for purposes of accomplishing the intent of the Legislature.
7)Requires an eligible city or city and county to do all of the
following:
a) Use the grant funds awarded to it for the predevelopment
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costs, acquisition, construction, or rehabilitation of
rental housing projects or units within rental housing
projects restricted to affordable levels for 55 years;
b) Hold a public hearing pursuant to the Ralph M. Brown Act
to discuss and describe the project that will be financed;
and
c) File periodic reports with HCD regarding the use of
funds.
1)Allows an eligible city or city and county to use the funds to
provide down payment assistance to low- or moderate income
persons or families.
2)Requires HCD to set limits on the amount of downpayment that
may be provide a low or moderate income individual or family
in order to maximize the funds.
3)Requires an eligible city or a city and county to provide a
match.
4)Exempts a city that is suffering a hardship from providing
matching funds.
5)Require on or before December 31 of each year in which funds
are awarded, HCD must provide a report to the Legislature
regarding the number of grants awarded, a description of the
projects funded, the number of units funded and the amount of
matching funds received.
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6)Requires HCD, once all funds are appropriated and the pilot
program is terminated, to provide a report to the Assembly and
Senate Committees on Appropriations that evaluates the need
for housing of persons and families of low and moderate income
in cities or cities and counties that receive funds from this
program. Requires the report to include a recommendation on
whether or not the pilot program should continue.
7)Makes the requirement to submit a report inoperative four
years after the report becomes due.
FISCAL EFFECT: According to the Assembly Committee on
Appropriations, implementation is contingent upon the
appropriation of funds by the Legislature.
COMMENTS:
This bill creates the Workforce Housing Pilot Program to provide
grants to cities in high cost counties, as defined by HUD, for
predevelopment costs, acquisition, construction, or
rehabilitation of rental housing projects or units within rental
housing projects restricted to affordable levels for 55 years.
The bill limits the program to high cost counties as defined by
HUD. For purposes of setting national loan limits for Federal
Housing Administration insured loans, HUD identifies the
following California counties as high-cost: Alameda, Contra
Costa, Los Angeles, Marin, Orange, San Benito, San Francisco,
San Mateo, Santa Barbara, Santa Clara, and Santa Cruz.
The program created by this bill has features of the CalHOME
program and the Local Housing Trust Fund program, both operated
by HCD. The CalHOME program provides grants and loans to local
governments and nonprofit organizations for rehabilitation of
existing homes, mortgage assistance, real property acquisition,
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site development, predevelopment, and construction period
expenses of homeownership development projects, or permanent
financing for mutual housing and cooperative developments. The
Local Housing Trust Fund program provides matching grants to
cities, counties, and qualified non-profit organizations for
loans for construction of rental housing projects with units
restricted for at least 55 years to households earning less than
60% of AMI and for downpayment assistance to qualified
first-time homebuyers. This bill creates a new, but similar,
program that allows funding to be used for projects that serve
up to 120% of AMI.
Purpose of this bill: According to the author, "A divergence
between median rents and median income has led to greater
housing unaffordability in such high-cost areas. To illustrate,
this year alone the average rental price in Oakland has risen
13.7% to $2,806 per month. Such a high rent has come to put
pressure on individuals who historically fall outside of
state-subsidy. All state funds that subsidize the development of
multi-family housing are capped at 60% AMI. In high-cost
metropolitan areas, the free market does not naturally provide
housing for many above that income designation. In sum,
existing programs are not flexible to provide housing that meets
the needs of a diverse and complex housing crisis. The result
of programs with such gaps in coverage has been the displacement
of workers from their communities. The displacement of workers
is not only a detriment to communities themselves, but also to
California as a whole, as economically diverse communities are
undermined. As residents are displaced away from their jobs,
commutes will increase as well as traffic in California's
highways effectively undermining California's goals to reduce
carbon emissions. Notwithstanding the strain of long commutes
on family life, the importance of neighborhood and environment
in preparing children from working families for success and
social mobility cannot be understated. And for those who brave
such steep rental housing costs, have their capacity to save
income and move towards homeownership undercut.
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Analysis Prepared by:
Lisa Engel / H. & C.D. / (916) 319-2085 FN:
0003249