BILL ANALYSIS Ó
AB 2734
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Date of Hearing: April 13, 2016
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Susan Talamantes Eggman, Chair
AB 2734
(Atkins) - As Amended April 5, 2016
SUBJECT: Local Control Affordable Housing Act.
SUMMARY: Enacts the Local Control Affordable Housing Act to use
state savings realized from the dissolution of redevelopment
agencies. Specifically, this bill:
1)Requires the Department of Finance (DOF) to determine the
amount of General Fund savings for the fiscal year as a result
of the dissolution of redevelopment agencies (RDAs), on or
before an unspecified date, and on or before the same date
each year thereafter.
2)Requires, upon appropriation, 50% of the savings computed
pursuant to 1), above, or $1 billion, whichever is less, in
each fiscal year, to be allocated to the Department of Housing
and Community Development (HCD) for the following:
a) One-half of these funds to be retained by HCD for state
level programs;
b) One-half to be provided to local agencies for housing
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purposes, pursuant to 3), below.
3)Requires HCD to create an equitable funding formula for
funding distributed to local agencies, 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.
4)Requires an appropriation pursuant to 2), above, to 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 the Section of the
California Constitution dealing with the Governor's
proclamation declaring a budget emergency, as specified.
5)Requires a local agency that has received funds to 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;
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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; and,
g) Rapid rehousing of homeless individuals and families.
6)Specifies that at least 25% of the expenditures shall be
directed towards housing for persons of extremely low income
and at least 50% of the expenditures shall be directed towards
housing for persons of very low income.
7)Requires any housing built with funds to 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.
8)Requires any local agency that receives funds to provide to
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HCD a plan for a no net loss of housing as a result of
destruction of any affordable housing units.
9)Prohibits more than 5% of the funds from being used for
administrative costs.
10)Requires any local agency that receives funds to provide an
annual report to HCD on the expenditure of the funds.
11)Specifies that a local agency shall return unexpended funds
to HCD, if a local agency that receives funds and does not
expend the funds in full within five years, and requires HCD
to award those funds to another qualifying local agency.
12)Defines the terms "extremely low income households,"
"low-income households," "moderate-income households," and
"very-low income households."
13)Makes a number of findings and declarations.
EXISTING LAW:
1)Dissolved all redevelopment agencies and community development
agencies, effective February 1, 2012.
2)Provides for the designation of successor agencies, as
specified.
3)Establishes a number of programs at HCD and California Housing
Finance Agency (CalHFA) to make housing more affordable to
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California families and individuals, including the following
main programs:
a) The Multifamily Housing Program, to fund the new
construction, rehabilitation, and preservation of permanent
and transitional rental homes for lower-income households
through loans to local governments, non-profit developers,
and for-profit developers;
b) The Joe Serna, Jr., Farmworker Housing Program, to fund
the development of ownership or rental homes for
agricultural workers through grants to local governments
and non-profit organizations;
c) The Emergency Housing and Assistance Program, to fund
emergency shelters and transitional homes for homeless
individuals and families through grants to counties and
non-profit entities for rehabilitation, renovation,
expansion, site acquisition, and equipment;
d) The CalHome Program, to fund down payment assistance,
home rehabilitation, counseling, self-help mortgage
assistance, and technical assistance for self-help and
shared housing through grants and loans; and,
e) The California Homebuyer Downpayment Assistance Program,
to aid first-time homebuyers with downpayments and/or
closing costs.
FISCAL EFFECT: This bill is keyed fiscal.
COMMENTS:
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1)Bill Summary. This bill enacts the Local Control Affordable
Housing Act to use state savings realized from the dissolution
of RDAs. Each year, DOF would determine the amount of General
Fund savings as a result of the dissolution of RDAs, and, upon
appropriation, allocate 50% of the savings to HCD for both
state-level programs and for the creation of a local housing
program. For the local program, the bill specifies that HCD
will create an equitable funding formula for funding to be
distributed to local agencies, which should be geographically
balanced and take into account specified factors of need. The
bill places a number of other parameters on the local funding
piece, including a required annual report to HCD on how the
funds are being spent by the locality.
This bill is an author-sponsored measure.
2)Author's Statement. According to the author: "Increasing the
construction and availability of affordable housing is good
for our economy, the state budget, job creation, and families.
Affordable housing saves money - on average, a single
homeless Californian incurs $2,897 per month in county costs
for emergency room visits and in-patient hospital stays as
well as the costs of arrests and incarceration. Roughly 79%
of these costs are cut when that person has an affordable
home. Development creates jobs - an estimated 29,000 jobs are
created for every $500 million spent on affordable housing.
Affordable housing alleviates poverty - California households
with the lowest 25% of incomes spend 67% of their income on
housing, leaving little left over for other essential needs."
3)Arguments in Support. Supporters argue that this bill is an
effort to help the state and local governments accelerate the
production of affordable housing and would enable thousands of
new affordable homes to be developed.
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4)Arguments in Opposition. None on file.
5)Double-Referral. This bill was heard by the Housing and
Community Development Committee on March 30, 2016, where it
passed with a 6-1 vote.
REGISTERED SUPPORT / OPPOSITION:
Support
American Planning Association, California Chapter
Association of Regional Center Agencies
California Apartment Association
California Building Industry Association
California Housing Consortium
Cities of Glendale and Santa Monica
Housing California
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League of California Cities
National Association of Social Workers, California Chapter
Orange County Business Council
San Diego Housing Federation
Opposition
None on file
Analysis Prepared by:Debbie Michel / L. GOV. / (916) 319-3958