Amended in Assembly April 5, 2016

Amended in Assembly March 17, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2734

Introduced by Assembly Member Atkins

February 19, 2016

An act to add Chapter 10 (commencing with Section 34191.10) to Part 1.85 of Division 24 of the Health and Safety Code, relating to housing.

LEGISLATIVE COUNSEL’S DIGEST

AB 2734, as amended, Atkins. Local Control Affordable Housing Act.

Existing law, effective February 1, 2012, dissolved all redevelopment agencies and community development agencies and provides for the designation of successor agencies, as specified. Existing law requires successor agencies to service the enforceable obligations of the dissolved agencies and otherwise wind down the affairs of the dissolved agencies.

This bill would establish the Local Control Affordable Housing Act to require the Department of Finance, on or before ____ and on or before the same date each year thereafter, to determine the state General Fund savings for the fiscal year as a result of the dissolution of redevelopment agencies. The bill would provide that, upon appropriation, 50% of that amount or $1,000,000,000, whichever is begin delete greater, end delete begin insert less, end insert be allocated to the Department of Housing and Community begin delete Development to provide funding end delete begin insert Development. The bill would require the department to retain end insert begin insert 1⁄2 end insert begin insert of these funds for state level programs and to provide the other end insert begin insert 1⁄2 end insert to local agencies for housing purposes, except as specified. The bill would require the Department of Housing and Community Development to create an equitable funding begin delete formula, end delete begin insert formula for funding distributed to local agencies, end insert which begin delete shall end delete begin insert the bill would require to end insert be geographically balanced and begin delete shall end delete take into account factors of need including, but not limited to, poverty rates and lack of supply of affordable housing for persons of low and moderate incomes in local jurisdictions. The bill would also specify the housing purposes for which those funds may be used.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

SECTION 1.  

(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 2016.

(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, with recent data showing
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 veteran’s 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, inclusive, 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.

SEC. 2.  

Chapter 10 (commencing with Section 34191.10) is
added to Part 1.85 of Division 24 of the Health and Safety Code,
to read:

 

Chapter  10. Local Control Affordable Housing Act

 

34191.10.  

(a) On or before ____, and on or before the same
date each year thereafter, the Department of Finance shall
determine the amount of General Fund savings for the fiscal year
as a result of the dissolution of redevelopment agencies pursuant
to this part.

(b) (1) Upon appropriation, 50 percent of the savings computed
pursuant to subdivision (a) or one billion dollars ($1,000,000,000),
whichever is begin delete greater, end delete begin insert less, end insert in each fiscal year shall be allocated to
the Department of Housing and Community begin delete Development to
provide funding end delete begin insert Development. One-half of these funds shall be
retained by the department for state level programs and one-half
shall be provided end insert to local agencies for housing purposes pursuant
to subdivision (c).

(2) An appropriation described in paragraph (1) shall be
suspended for any fiscal year in which the transfer of General Fund
revenues to the Budget Stabilization Account is suspended or
reduced or funds are returned to the General Fund from the Budget
Stabilization Account pursuant to Section 22 of Article XVI of the
California Constitution.

(c) The Department of Housing and Community Development
shall create an equitable funding begin delete formula, end delete begin insert formula for funding
distributed to local agencies, end insert which shall be geographically
balanced and shall take into account factors of need including, but
not limited to, poverty rates and lack of supply of affordable
housing for persons of low and moderate incomes in local
jurisdictions.

(d) (1) A local agency that has received funds pursuant to this
chapter shall only use the funds for any of the following purposes:

(A) The development, acquisition, rehabilitation, and
preservation or provision of rental housing and homeownership
opportunities that are affordable to extremely low, very low, low-,
and moderate-income households, including necessary capitalized
reserves for operating and rental subsidies and resident services.

(B) Capitalized reserves for capitalized operating costs, rental
subsidies, and resident 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.

(C) Modifications to homes to increase accessibility and
visitability, in conjunction with the construction, acquisition, and
rehabilitation or preservation of homes affordable to lower income
households.

(D) The acquisition and rehabilitation and reuse of foreclosed
and vacant homes.

(E) Infrastructure related to affordable infill housing
development and other related infill development infrastructure.

(F) The acquisition of land necessary for the development of
affordable housing as part of an overall development strategy.

(G) Rapid rehousing of homeless individuals and families.

(2) At least 25 percent of the expenditures shall be directed
towards housing for persons of extremely low income and at least
50 percent of the expenditures shall be directed towards housing
for persons of very low income.

(3) Any housing built with funds received pursuant to this
chapter shall require, by recorded covenants or restrictions, that
housing units built shall remain available at affordable housing
costs to, and occupied by, persons and families of very low, low-,
or moderate-income households for the longest feasible time, but
for not less than 55 years for rental units and 45 years for
owner-occupied units.

(4) Any local agency that will receive funds pursuant to this
chapter shall provide the Department of Housing and Community
Development a plan for a no net loss of housing as a result of
destruction of any affordable housing units.

(5) No more than 5 percent of funds received pursuant to begin delete these
provisions end delete begin insert this chapter end insert may be used for administrative costs.

(6) Any local agency that receives funds pursuant to begin delete these
provisions end delete begin insert this chapter end insert shall provide an annual report to the
Department of Housing and Community Development on the
expenditures of the funds.

(e) If a local agency that receives funds does not expend those
funds in full within five years, the local agency shall return those
begin insert unexpended end insert funds to the Department of Housing and Community
Development, and the department begin delete may end delete begin insert shall end insert award those funds to
another qualifying local agency.

(f) For the purposes of this chapter the following terms have
the following meanings:

(1) “Extremely low income households” has the same meaning
as used in Section 50106.

(2) “Low-income households” has the same meaning as the
term “lower income households” as defined in Section 50079.5.

(3) “Moderate-income households” has the same meaning as
the term “persons and families of moderate income” as defined in
Section 50093.

(4) “Very low income households” has the same meaning as
used in Section 50105.