BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
                              Senator Jim Beall, Chair
                                2015 - 2016  Regular 

          Bill No:          SB 1413           Hearing Date:    4/26/2016
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          |Author:   |Leno                                                  |
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          |Version:  |4/19/2016                                             |
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          |Urgency:  |No                     |Fiscal:      |No              |
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          |Consultant|Alison Dinmore                                        |
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          SUBJECT:  Teacher housing


            DIGEST:  This bill establishes the Teacher Housing Act of 2016  
          and provides that a school district may establish and implement  
          programs that address the housing needs of teachers and school  
          district employees who face challenges in securing affordable  
          housing. 
            
           ANALYSIS:
          
          Existing federal law:

          1)Requires low-income housing tax credits (LIHTCs) to be  
            utilized for residential units that are for use by the  
            "general public."  If a residential unit is provided only for  
            a member of a social organization or provided by an employer  
            for its employees, the unit is not for use by the general  
            public and not eligible for federal LIHTCs, and by extension,  
            state LIHTCs.  A qualified low-income project does not fail to  
            meet the general-public use requirement solely because of  
            occupancy restrictions or preferences that favor, among other  
            things: members of a specified group under a federal program  
            or state program or policy that supports housing for a  
            specified group. 

          Existing state law:
          
          1)  Establishes various housing programs, such as the  
            Multifamily Housing Program and Joe Serna Jr. Farmworker  







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            Housing Grant Program administered by the Department of  
            Housing and Community Development (HCD) and the Low-Income  
            Housing Tax Credit (LIHTC) Program administered by the Tax  
            Credit Allocation Committee (TCAC) within the State  
            Treasurer's Office, to help low-income families and other  
            specified groups. 

          2)  Defines "rental housing development" as a structure or set  
            of structures with common financing, ownership, and  
            management, and which collectively contain five or more  
            dwelling units, including efficiency units.  No more than one  
            of the dwelling units may be occupied as a primary residence  
            by a person or household who is the owner of the structure or  
            structures. 

          This bill:

          1)  Establishes the Teacher Housing Act of 2016 to facilitate  
            the acquisition, construction, rehabilitation, and  
            preservation of affordable rental housing for teachers, school  
            district employees, and their families to allow teachers or  
            school district employees to access and maintain housing  
            stability.  

          2)  Defines "affordable rental housing" as a rental housing  
            development with rents restricted to levels that are  
            affordable to persons and families of low or moderate income,  
            but neither definition is restrictive to only projects with  
            five or more units as required under existing law. 

          3)  Defines "teacher or school district employee" as any person  
            employed by:
             a)   A unified school district maintaining pre-kindergarten,  
               transitional kindergarten, and grades 1 to 12;
             b)   A elementary school district maintaining  
               pre-kindergarten, transitional kindergarten, and grades 1  
               to 8; or
             c)   A high school district maintaining grades 9 to 12,  
               inclusive, but not limited to, certificated and classified  
               staff. 

          4)  Provides that a school district may establish and implement  
            programs that address the housing needs of teachers and school  
            district employees who face challenges in securing affordable  
            housing.  To the extent feasible, the school district may  








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            establish and implement programs that, among other things, do  
            the following: 

             a)   Leverage federal, state, and local public, private, and  
               nonprofit programs and fiscal resources
             b)   Promote public and private partnerships
             c)   Foster innovative financing opportunities
             d)   Dedicate school district-owned land to the development  
               of affordable rental housing and restrict occupancy to  
               teachers and school district employees 

          5)  Specifically creates a state policy supporting housing for  
            teachers and school district employees, pursuant to the IRS  
            code, andpermits school districts and developers in receipt of  
            local or state funds designated for affordable rental housing  
            to restrict occupancy to teachers and school district  
            employees on land owned by school districts, so long as that  
            housing does not violate any other applicable laws. 

          COMMENTS:

          1)  Purpose.  According to the author, California places a high  
            value on its public education system, and the stability of  
            housing for school employees is critical to the overall  
            success and stability of each school in California.  Students  
            and the community at large are benefitted by teachers living  
            in the community in which they practice their profession.  It  
            ensures stability, community involvement, and stronger ties  
            between teachers, and their students and families.  Lack of  
            affordable housing creates barriers to effective teaching and  
            teacher retention and the combination of teacher and housing  
            shortages demands innovative solutions.  Twenty-five percent  
            of teachers nationwide point to housing incentives as an  
            important factor in their decision to return to teaching.  

            While there are programs in many communities to help people  
            find and attain affordable housing, middle-class earners like  
            teachers do not always qualify for them.  This bill  
            underscores the critical role that teachers and other  
            education professionals play in the long-term success of our  
            state by allowing for the development of specific housing to  
            keep these hard-working professionals in our communities and  
            our schools.  This bill provides clear authorization to school  
            districts to develop housing on district-owned property, which  
            will enable the districts facing the most acute teacher  








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            shortages to directly address the lack of affordable housing  
            that is forcing teachers out of our communities and out of a  
            vital profession.  Investors require clear state law before  
            getting on board with new and innovative projects, especially  
            in an area as expensive as San Francisco.  Unlike the higher  
            education code, which covers faculty housing in detail, K-12's  
            silence on this issue is a cause for great concern for  
            financial markets when facing a decision of whether to embark  
            upon multi-billion dollar housing projects.

          2)  Necessary state authority.  According to the sponsor, Mayor  
            Ed Lee of the City and County of San Francisco, express state  
            statutory authority is necessary to permit school districts to  
            construct teacher-only housing on their property.  Developers  
            are not permitted to use federal LIHTCs for these projects  
            because these projects are not available to the general  
            public.  Because state credits can only be awarded to projects  
            that receive federal credits, state LIHTCs also cannot be used  
            to fund teacher-only housing. 

            By declaring a state policy supporting housing for  
            teachers/school district employees, these housing projects  
            could qualify under federal law as general public housing and  
            therefore be eligible for both federal and state LIHTCs.  

          Related Legislation:
          
          AB 2200 (Thurmond) - Requires California Housing Finance Agency  
          to administer a grant program to provide development financing  
          assistance to qualified school districts for the creation of  
          affordable rental housing for school district employees,  
          including teachers.  This bill passed out of the Assembly  
          Housing and Community Development Committee with a 5-1 vote and  
          is currently pending in the Assembly Education Committee. 

          FISCAL EFFECT:  Appropriation:  No    Fiscal Com.:  No    Local:  
           No


            POSITIONS:  (Communicated to the committee before noon on  
          Wednesday,
                          April 20, 2016.)
          
            SUPPORT:  









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          Ed Lee, Mayor, City and County of San Francisco (sponsor)
          California Apartment Association
          California Federation of Teachers
          California Teachers Association
          Non-Profit Housing Association of Northern California

          OPPOSITION:

          None received. 


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