BILL ANALYSIS                                                                                                                                                                                                    



                                                                    SB 1413


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          Date of Hearing:  June 15, 2016


               ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT


                                  David Chiu, Chair


          SB  
          1413 (Leno) - As Amended May 10, 2016


          SENATE VOTE:  29-7


          SUBJECT:  School districts:  employee housing


          SUMMARY:  Establishes the Teacher Housing Act of 2016 to  
          facilitate the acquisition, constriction, rehabilitation, and  
          preservation of affordable housing restricted to teachers or  
          school district employees.  Specifically, this bill: 


          1)Includes the following legislative findings: 


            California places a high value on our public education system,  
            and the stability of housing for school employees is critical  
            to the overall success and stability of each school in  
            California.





            The supply of new preschool through grade 12 teachers in  
            California has hit a 12-year low, and enrollment in educator  








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            preparation programs has dropped by more than 70 percent over  
            the last decade, and this shortage most impacts schools  
            serving more low-income and minority students.





            Demand for teachers and staff is projected to grow further as  
            school districts continue to recover from the recession and  
            seek to replace previously eliminated programs and positions.  
            Districts are also coping with attrition, which averages about  
            8 percent of all teachers annually. This attrition includes  
            inevitable retirements, as fully one-third of California  
            teachers are over 50 years of age and 10 percent are over 60  
            years of age, but most attrition is due to younger teachers  
            leaving.





            A growing trend driving teacher turnover is the steadily  
            increasing cost of housing in certain markets. In addition to  
            the negative emotional and developmental impacts teacher  
            turnover has on students, the costs borne by school districts  
            to recruit, hire, and train new teachers each summer is  
            immense. In San Francisco alone, during the summer of 2015,  
            the school district had to recruit, hire, and train 700 new  
            teachers. Many cited housing costs as the reason why the  
            teacher was leaving the school district.





            Students and the community at large are benefited by teachers  
            living in the community in which they practice their  
            profession. It ensures stability, community involvement, and  








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            stronger ties between teachers, their students, and their  
            families.





            By creating affordable housing options for teachers near or on  
            school sites, it also reduces vehicle miles traveled and time  
            away from teachers' homes, thereby reducing or eliminating  
            commute time.





          2)Defines "affordable rental housing" to mean a rental housing  
            development where a majority of the rents are restricted to  
            levels affordable to low- and moderate income residents, no  
            more than 120% of area median income (AMI), and are not  
            limited to projects with five or more units. 


          3)Defines "teacher or school district employee" to mean any  
            person employed by a unified school district maintaining  
            prekindergarten, transitional kindergarten, and grades 1 to  
            12, elementary school district maintaining prekindergarten,  
            transitional kindergarten, and grades 1 to 8 or a high school  
            district maintaining grants 9 to 12 but not limited to  
            certified and classified staff.


          4)Authorizes a school district to establish and implement  
            programs that address the housing needs of teachers and school  
            district employees who face challenges in securing affordable  
            housing. 


          5)Allows a school district, to the extent feasible, to establish  








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


             a)   Leverage federal, state, and local public, private,  
               nonprofit and fiscal resources available to housing  
               developers;


             b)   Promote public and private partnerships; and


             c)   Foster innovated financing opportunities.  


          1)Creates a specific state policy supporting housing for  
            teachers and school district employees, as described in  
            Section 42(g) (9) (B) of the Internal Revenue Code, and  
            further permits school districts and developers in receipt of  
            local or state funds or tax credits designated for affordable  
            rental housing to restrict occupancy to teachers and school  
            district employees on land owned by school districts so loans  
            as the housing does not violate any other applicable laws. 


          EXISTING LAW:   


          1)Federal law 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  








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            specified group. 

          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. 



          3)Establishes various housing programs, such as the Multifamily  
            Housing Program and Joe Serna Jr. Farmworker 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. 



          4)Declares it unlawful, pursuant to Fair Employment and Housing  
            Act, for any housing accommodation owner to inquire about;  
            make known any preference or limitation as to; discriminate;  
            or harass a person based on the person's race, color,  
            religion, sex, gender, gender identity, gender expression,  
            sexual orientation, marital status, national origin, ancestry,  
            familial status, source of income, disability, or genetic  
            information (Government Code Section 12955).



          5)Prohibits, under the Unruh Civil Rights Act, business  
            establishments from discriminating on the basis of sex  
            (including gender), race, color, religion, ancestry, national  
            origin, disability, medical condition, genetic information,  
            marital status, or sexual orientation, and provides civil  
            remedies for violations of its provisions  (Civil Code Section  








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            51 et seq.).
          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, to the extent this bill results in additional  
          affordable housing projects targeting teachers and school  
          personnel, greater demand would be placed on limited existing  
          housing resources leading to greater competition for receiving  
          certain financial benefits such as state low-income housing tax  
          credits.  According to the State Treasurer's Office, state  
          credits are oversubscribed by roughly a 2 to 1 ratio.





          COMMENTS:  


           Background:   According to the author, at least two school  
          districts have successfully built affordable rental housing on  
          district owned property to house teachers employed in the  
          district. However, the districts only provide an occupancy  
          preference to teachers and cannot limit the housing to teachers  
          only.  This bill would allow school districts to establish and  
          implement programs to address the housing needs of teachers and  
          school district employees.  In addition the bill creates a state  
          policy supporting housing for teachers and school employees, and  
          permits school districts and developers who receive local or  
          state funds or tax credits to support the construction of  
          affordable rental housing, to restrict the occupancy to teachers  
          and school district employees on land owned by school districts.  
              


          Generally under federal IRS rules, 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 is not eligible for federal LIHTC.   However,  
          federal IRS law also states that a qualified LIHTC project does  
          not fail to meet the general public use requirement solely  








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          because of occupancy restrictions or preferences that favor  
          tenants (1) with special needs, (2) who are members of a  
          specified group under a federal program or state program or  
          policy that supports housing for such a specified group, or (3)  
          who are involved in artistic or literary activities. This bill  
          creates a specific state policy that supports housing for  
          teachers and school district employees with the intent of making  
          it clear that those projects can receive LIHTC.  


           Purpose of this bill  : 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 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  








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          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."





           Double-referred:  SB 1413 was also referred to the Committee on  
          Education, where it will be heard should it pass out of this  
          committee.


           Technical amendment: 


           


          On page 3, line 38, delete "42(g)(9)(B)" and replace it with  
          "42(g)(9)"


          


          REGISTERED SUPPORT / OPPOSITION:




          Support


          City of San Francisco (Sponsor)










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          Aim High


          Brightline Defense


          California Apartment Association


          California Association of Realtors


          California Federation of Teachers


          California School Employees Association


          California Teachers Association


          City of Los Angeles


          Contra Costa County Superintendent's Coalition


          June Jordan School for Equity


          Metro College Success Program


          Mission High School


          Non-Profit Housing of Northern California










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          Peer Resources


          San Francisco Teachers Residency


          San Francisco Unified School District


          Sunset Neighborhood Beacon Center


          The Jamestown Community Center


          University of San Francisco




          Opposition


          None on File




          Analysis Prepared by:  Lisa Engel / H. & C.D. / (961)  
          319-2085

















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