BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2441 (Thurmond) - Housing: Workforce Housing Pilot Program
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|Version: June 30, 2016 |Policy Vote: T. & H. 9 - 2 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 1, 2016 |Consultant: Mark McKenzie |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 2441 would establish the Workforce Housing Pilot
Program to provide grant funds to cities in "high-cost" counties
and unaffordable areas for rental housing projects affordable to
low- and moderate-income households, or downpayment assistance
for those households, as specified. The program is subject to
an appropriation of funds to the Department of Housing and
Community Development (HCD) for those purposes.
Fiscal
Impact:
General fund cost pressures in the hundreds of millions to
fund the Workforce Housing Pilot Program. The estimates noted
below assume a $200 million program, with $150 million
dedicated to rental housing projects and $50 million dedicated
to downpayment assistance. Actual program and administrative
costs would depend upon the amount of funding appropriated for
the program.
AB 2441 (Thurmond) Page 1 of
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HCD estimates administrative costs of approximately $1.19
million and 8 PY of staff for the rental housing component,
assuming 15 awards of $10 million each. (General Fund)
HCD estimates administrative costs of $875,000 annually and 6
PY of staff for four years for the downpayment assistance
component, assuming 20 awards of $50,000 each year. (General
Fund)
HCD estimates annual ongoing oversight and monitoring costs of
approximately $345,000 and 2.4 PY of staff time. (General
Fund)
Unknown Department of Finance (DOF) costs, potentially
exceeding $100,000 annually for several years, to establish
criteria for evaluating hardship requests and process
requests. (General Fund)
Background: Existing law establishes a number of affordable housing
programs, including the following:
1) Housing Enabled by Local Partnerships (HELP) Program,
administered by the California Housing Finance Agency, which
provides deferred housing loans to local agencies to determine
the specific housing activity and use of the funds in
providing for the acquisition, development, rehabilitation, or
preservation of affordable rental or ownership housing. This
program funds up to 120% area median income (AMI) for
homeownership and at or below 80% AMI for rental housing
activities. This program is not currently funded.
2) Local Housing Trust Fund Matching Grant Program,
administered by HCD, which offers competitive grants or loans
to local housing trust funds that develop, own, lend, or
invest in affordable housing and are used to create pilot
programs to demonstrate innovative, cost-saving approaches to
creating or preserving affordable housing. This program is
not currently funded.
3) Multifamily Housing Program, administered by HCD, which
assists the new construction, rehabilitation, and preservation
of permanent and transitional rental housing for lower income
households at or below 80% AMI through deferred payment loans.
AB 2441 (Thurmond) Page 2 of
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This program is not currently funded.
4) CalHome program, administered by HCD, which provides: grants
to local public agencies or nonprofit corporations for
first-time homebuyer downpayment assistance, home
rehabilitation, including manufactured homes not on permanent
foundations, acquisition and rehabilitation, homebuyer
counseling, self-help mortgage assistance programs, or
technical assistance for self-help homeownership; loans for
real property acquisition, site development, predevelopment,
construction period expenses of homeownership development
projects, or permanent financing for mutual housing and
cooperative developments; and assistance to individual
households, in the form of deferred-payment loans, payable on
sale or transfer of the homes, or when they cease to be
owner-occupied, or at maturity. This program is not currently
funded.
Proposed Law:
AB 2441 would establish the Workforce Housing Pilot
Program. Specifically, this bill would:
Define "eligible recipient" as a city within a specified
"high-cost" county, a city that is not within a high-cost
county but that has experienced rising home and rental prices
that prevent low- and moderate-income households from living
where they work, or a specified nonprofit that applies jointly
with a city described above.
Defines "persons or families of low or moderate income" to
mean a person or household with an income that does not exceed
120% of the AMI, as specified.
Require HCD, subject to an appropriation of funds, to award
grant funds to eligible recipients, and require an eligible
recipient to do all of the following:
o Use the grant funds for predevelopment costs,
acquisition, construction, or rehabilitation of rental
housing projects or units within rental housing projects
that serve persons and families of low or moderate
income. The affordability shall be restricted to at
least 55 years.
o Hold a specified public hearing to discuss and
describe the proposed project.
o File periodic reports with HCD regarding the use of
grant funds.
AB 2441 (Thurmond) Page 3 of
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Authorize an eligible recipient to use the grant funds to
provide downpayment assistance to persons or families of low
or moderate income, and require HCD to set limits on the
amounts of awards to maximize the use of grant funds.
Require a dollar-for-dollar match for all grants, but provide
an exemption from the matching requirements for an eligible
recipient demonstrating to DOF that it is suffering a
hardship.
Require DOF to determine whether the eligible recipient is
suffering a hardship, and require the eligible recipient to
provide any information requested by DOF to make that
determination.
Require HCD to provide a report to the Legislature by December
31 of any year funds are awarded that specifies the number of
grants awarded, a description of projects funded, the number
of units funded, and the amount of matching funds received.
Require HCD, upon the depletion of awarded funds and the
termination of the pilot program, to submit a report to the
Senate and Assembly Appropriations Committees that evaluates
the need for housing of persons and families of low or
moderate income in areas that received grants, and recommends
whether the program should continue.
Staff
Comments: This program is similar to a proposal that was
included in the $1.3 billion Assembly Democratic Caucus budget
proposal for affordable housing purposes. Specifically, the
budget request included a proposal to provide $200 million for
the Local Funding Grants for Workforce Housing, which would
provide funding to local governments for downpayment assistance,
homeownership assistance, rental housing, and to address the
displacement of individuals and families. The proposal was
intended to provide assistance to families that make up to 120%
of AMI. This proposal was not included as part of the enacted
2016-17 Budget.
While the program established by this bill has features that are
similar to existing housing assistance programs administered by
HCD, it is specifically designed to provide rental housing and
assistance for low- and moderate-income individuals and
households living in high-cost areas. Specifically, the bill
directs funding to cities in certain designated "high-cost"
counties and those in an area experiencing rising home and
rental prices that HCD determines are unaffordable for low- and
AB 2441 (Thurmond) Page 4 of
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moderate-income households, as specified. The following
counties are identified as "high-cost:" Alameda, Contra Costa,
Los Angeles, Marin, Orange, San Benito, San Francisco, San
Mateo, Santa Barbara, Santa Clara, and Santa Cruz.
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