BILL ANALYSIS Ó
SB 879
Page 1
Date of Hearing: June 29, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 879
(Beall) - As Amended June 16, 2016
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|Policy |Housing and Community |Vote:|4 - 2 |
|Committee: |Development | | |
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Urgency: Yes State Mandated Local Program: NoReimbursable: No
SUMMARY: This bill enacts the Affordable Housing Bond Act of
2016, which authorizes the sale of $3 billion in general
obligation bonds, upon approval by voters at the November 8,
2016 statewide general election. The bill further creates the
Affordable Housing Bond Act Trust Fund of 2016 (Fund), and
states the Legislature's intent that all bond proceeds be
deposited in the Fund. The bill allocates funds from the Fund
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to the following accounts, when the bonds are issued and sold:
1)$1.5 billion to the existing Multifamily Housing Program (MHP)
to assist in the construction, rehabilitation, and
preservation of permanent and transitional rental housing for
persons with incomes of up to 60% of the area median income;
2)$600 million to the Transit-Oriented Development and Infill
Infrastructure Account, which the bill creates within the
Fund, and then allocates funds from the Account as follows:
a) $300 million to the Transit-Oriented Development
Implementation Fund pursuant to the existing
Transit-Oriented Development Implementation Program.
b) $300 million to the Infill Infrastructure Financing
Account, which the bill creates within the Account. These
moneys are available, upon appropriation by the
Legislature, for infill incentive grants to assist in the
new construction or rehabilitation of infrastructure that
supports high-density affordable and mixed-income housing
in locations designated as infill.
1)$600 million to the Special Populations Housing Account, which
the bill creates within the Fund, and then allocates funds
from the Account as follows:
a) $300 million continuously appropriated for transfer to
the existing Joe Serna, Jr. Farmworker Housing Grant Fund.
b) $300 million to the Local Housing Trust Fund Matching
Grant Program Account, which the bill creates. These moneys
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are available, upon appropriation by the Legislature, to
provide matching grants to local public agencies and
nonprofit organizations that raise money for affordable
housing, as specified by statute.
1)$300 million continuously appropriated for the existing
CalHome Program to provide direct, forgivable loans for
mortgage assistance.
Further, the bill authorizes the Legislature to amend the
programs to which funds are or have been allocated by this bond
act, to improve the efficiency and effectiveness or to further
the goals of the programs.
FISCAL EFFECT:
1)Bond costs. Total principal and interest costs of
approximately $4.89 billion to pay off the bonds ($3 billion
in principal and $1.89 billion in interest), with average
annual debt service payments of $163 million (GF), when all
bonds are sold, and assuming a 30-year maturity and an
interest rate of 3.5%. If interest rates increase to 5% in
the near future, annual debt service would be approximately
$195 million (GF) and total principal and interest costs over
the repayment period would be approximately $5.86 billion.
2)Administrative costs. The Department of Housing and Community
Development (HCD) and the California Housing Finance Agency
(CHFA) would incur increased staffing costs, likely in the
range of $100 to $150 million in total over multiple fiscal
years, to administer the various housing programs funded by
this Bond Act. These funds would represent a portion of the
bond funds allocated to HCD and CHFA to fund the specified
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programs (up to 5% of bond proceeds).
3)Ballot costs. One-time costs in the range of $414,000 to
$552,000 to the Secretary of State (SOS) for printing and
mailing costs to place the measure on the ballot in the
November, 2016 statewide election. (GF). SOS indicates that
printing and mailing costs associated with placing a measure
on the statewide ballot are approximately $69,000 per page,
depending on the length of the ballot. The fiscal estimates
noted above reflect the addition of 6-8 pages in the Voter
Information Guide. Actual costs would depend upon the length
of the title and summary, analysis by the Legislative
Analyst's Office, proponent and opponent arguments, and text
of the proposal. Staff notes that Proposition 1C took up 8
pages in the 2006 Voter Information Guide.
COMMENTS:
1)Purpose and Background. This measure creates the Affordable
Housing Bond Act Trust Fund of 2016, and states the
Legislature's intent that all bond proceeds be deposited in
the Fund. Existing law, as enacted by SB 1227 (Burton),
Chapter 26, Statutes of 2002, establishes the Housing and
Emergency Shelter Trust Fund Act of 2002, authorizing the sale
of $2.1 billion in general obligation bonds for various
affordable housing programs, upon approval by the voters.
Subsequently, the 2002 Act was approved by the voters as
Proposition 46 in the November 2002 general election.
According to HCD, Proposition 46 assisted in the construction
of 91,000 units of housing, including 10,000 shelter spaces.
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Existing law, as enacted by SB 1689 (Perata), Chapter 27,
Statutes of 2006, establishes the Housing and Emergency
Shelter Trust Fund Act of 2006, authorizing the sale of $2.85
billion in general obligation bonds for various affordable
housing programs, upon approval by the voters. Subsequently,
the 2006 Act was approved by the voters as Proposition 1C at
the November, 2006 general election. According to HCD, 92,000
housing units and 3,000 shelter spaces were constructed with
Proposition 1C bond funds, with $250 million remaining to be
spent.
Since the dissolution of redevelopment agencies, and its
associated dedicated funding for affordable housing, there is
a critical shortage of permanent funding for those purposes.
1)Related
Legislation.2) Senate pro Tempore De León and a bipartisan group of Senators
have proposed a $2 billion bond for permanent supportive
housing for the chronically homeless who suffer from mental
illness by reallocating funding generated by the surtax on
incomes over $1 million imposed by the Mental Health Services
Act (Proposition 63). (SB 1618, Senate Committee on Budget
and Fiscal Review.)
In addition, the Legislature and the Governor continue to
negotiate a "By Right" proposal tied to $400 million proposal
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for affordable housing efforts.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081