BILL ANALYSIS                                                                                                                                                                                                    

                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 944 (Committee on Transportation and Housing) - Housing  
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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.

          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. 

           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.

          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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