BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 944 (Committee on Transportation and Housing) - Housing
omnibus
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|Version: March 28, 2016 |Policy Vote: T. & H. 10 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 2, 2016 |Consultant: Mark McKenzie |
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This bill does not meet the criteria for referral to the
Suspense File.
Bill
Summary: SB 944 would make numerous non-controversial changes
to state housing laws. Among these changes, this bill would
expand the allowable uses of loans under the Mobilehome Park
Rehabilitation and Resident Ownership Program (MPRROP) by
authorizing loans for replacement of mobilehomes.
Fiscal
Impact:
Unknown cost pressures related to the expansion of allowable
uses for MPRROP funds. (Mobilehome Park Rehabilitation and
Purchase Fund [MPRPF]). Authorizing loans for replacement of
a low-income homeowners mobilehome is not likely to have a
significant impact on available funding. See staff comments.
Minor costs to the Department of Housing and Community
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Development (HCD) to revise MPRROP regulations to provide for
mobilehome replacement loans.
The remaining provisions are not expected to have a
significant state fiscal impact.
Background: Existing law establishes the Mobilehome Park Rehabilitation
and Park Resident Ownership Program (MPROP), which allows HCD to
make loans to mobilehome park resident organizations, individual
low-income residents of mobilehome parks, qualified nonprofit
housing sponsors, and local public entities to finance
mobilehome park conversions to resident ownership or ownership
by a nonprofit corporation, and reduce monthly housing costs for
low-income residents. Loans under certain provisions are for a
maximum term of three years, and for a term of up to 40 years
under other provisions, as specified, and interest rates must be
three percent per annum. HCD may reduce the interest rate and
establish flexible repayment terms for certain loans if the
terms are necessary to reduce the monthly housing costs for
low-income residents to an affordable level, and the rate and
terms do not jeopardize the security of the MPRPF.
After years of low demand for the program, AB 225 (Chau, 2014)
revised provisions of the program to provide for more flexible
loan terms and expanded the use of the funds to allow loans to
park resident organizations and qualified nonprofit housing
sponsors to assist individual homeowners with repairs and
accessibility-related upgrades to their mobilehomes. HCD issued
a $15 million Notice of Funding Availability on January 6, 2016,
and will be accepting applications for funding until March 2,
2017. The maximum amount available to each eligible project is
$3.5 million.
Proposed Law:
SB 944 makes numerous non-controversial changes to sections of
law related to housing. Specifically, this bill would:
Make two minor changes to provisions regarding disposal
of abandoned mobilehomes to provide program flexibility.
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Make clarifying and technical changes to provisions
relating to common interest developments.
Clarify that state notice law protections apply to
tenants in properties financed with mortgage revenue bonds
prior to 1986, as specified.
Delete unnecessary requirements for the Building
Standards Commission to submit an Initial Statement of
Reasons to the Office of Administrative Law related to
building standards regulations.
Clarify that tribally-designated housing entities are
eligible housing sponsors for purposes of participation in
HCD housing programs.
Authorizes loans under the MPRROP to assist individual
lower income homeowners to replace their mobilehomes.
Makes several technical changes.
Staff
Comments: As noted in the background above, resident
organizations and qualified nonprofit sponsors can access loans
through MPRROP to assist individual lower income homeowners to
make needed repairs or accessibility-related upgrades to their
mobilehomes. SB 944 would expand the purposes for which loans
may be made for individual homeowner assistance to also allow
for the replacement of a mobilehome. Although no loans have
been made to date since the program was revised to allow
assistance to individual homeowners, HCD received stakeholder
feedback indicating that some mobilehome repair needs are so
extensive that replacement may be a more cost-effective option
in some cases. HCD indicates that loans for mobilehome
purchases are intended to be used only when repairing the
mobilehome is not cost-effective, although the bill does not
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include an explicit requirement that replacement only be used as
an option in those circumstances. Expanding the allowable use
of the funds is not expected to result in a significant increase
in the demand for MPRROP funds. Staff notes that the MPRPF
currently has a balance of nearly $38.5 million.
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