BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                       SB 1413|
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                                UNFINISHED BUSINESS 


          Bill No:  SB 1413
          Author:   Leno (D), et al.
          Amended:  6/16/16  
          Vote:     21 

           SENATE TRANS. & HOUSING COMMITTEE:  9-0, 4/26/16
           AYES:  Beall, Allen, Gaines, Galgiani, Leyva, McGuire, Mendoza,  
            Roth, Wieckowski
           NO VOTE RECORDED:  Cannella, Bates

           SENATE APPROPRIATIONS COMMITTEE:  5-2, 5/27/16
           AYES:  Lara, Beall, Hill, McGuire, Mendoza
           NOES:  Bates, Nielsen

           SENATE FLOOR:  29-7, 5/31/16
           AYES:  Allen, Beall, Block, Cannella, De León, Gaines,  
            Galgiani, Glazer, Hall, Hancock, Hernandez, Hertzberg, Hill,  
            Hueso, Jackson, Lara, Leno, Leyva, Liu, McGuire, Mendoza,  
            Mitchell, Monning, Nguyen, Pan, Pavley, Roth, Wieckowski, Wolk
           NOES:  Anderson, Bates, Berryhill, Huff, Morrell, Stone, Vidak
           NO VOTE RECORDED:  Fuller, Moorlach, Nielsen, Runner

           ASSEMBLY FLOOR:  62-18, 8/24/16 - See last page for vote

           SUBJECT:   School districts:  employee housing


          SOURCE:    Mayor Ed Lee, City and County of San Francisco


          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.








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          Assembly Amendments make technical changes, including a code  
          reference correction. 


          
          ANALYSIS:   Existing 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  
          specified group. 
          
          Existing state law:
          
          1)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 and the LIHTC Program administered by  
            the Tax Credit Allocation Committee 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 and school district  








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            employees to allow teachers or school district employees to  
            access and maintain housing stability.  

          2)Defines "affordable rental housing" as a rental housing  
            development with a majority of its 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)   An elementary school district maintaining  
               pre-kindergarten, transitional kindergarten, and grades 1  
               to 8


             c)   A high school district maintaining grades 9 to 12,  
               inclusive of, 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  
            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.










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             d)   Dedicate school district-owned land to the development  
               of affordable rental housing and restrict occupancy to  
               teachers and school district employees.

          5)Creates, specifically, a state policy supporting housing for  
            teachers and school district employees, pursuant to the IRS  
            code, and permits 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  
            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  








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            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 source, 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.


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


          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




          SUPPORT:   (Verified8/24/16)


          Mayor Ed Lee, City and County of San Francisco (source)








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          American Federation of State, County and Municipal Employees
          California Apartment Association
          California Federation of Teachers
          California Teachers Association
          Non-Profit Housing Association of Northern California
          San Francisco Unified School District


          OPPOSITION:   (Verified8/24/16)


          None received



          ASSEMBLY FLOOR:  62-18, 8/24/16
          AYES:  Achadjian, Alejo, Arambula, Atkins, Baker, Bloom,  
            Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau,  
            Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman,  
            Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,  
            Gomez, Gonzalez, Gordon, Gray, Hadley, Roger Hernández,  
            Holden, Irwin, Jones-Sawyer, Lackey, Levine, Linder, Lopez,  
            Low, Maienschein, McCarty, Medina, Mullin, Nazarian,  
            O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,  
            Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Weber,  
            Williams, Wood, Rendon  
          NOES:  Travis Allen, Bigelow, Brough, Chávez, Dahle, Beth  
            Gaines, Gallagher, Grove, Harper, Jones, Kim, Mathis, Mayes,  
            Melendez, Obernolte, Wagner, Waldron, Wilk  


          Prepared by:Alison Dinmore / T. & H. / (916) 651-4121
          8/25/16 17:37:23


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