BILL ANALYSIS
AB 269
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Date of Hearing: August 26, 2004
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Alan Lowenthal, Chair
AB 269 (Mullin) - As Amended: July 13, 2004
SUBJECT : Redevelopment: San Mateo County
SUMMARY : Allows any redevelopment agency within San Mateo
County to participate in a joint powers authority for the
purpose of pooling low- and moderate-income housing funds for
affordable housing. Specifically, this bill :
Eligibility to Participate
1)Requires the host jurisdiction of the agency have a housing
element that is current and that has been certified by the
Department of Housing and Community Development (HCD).
2)Requires the host jurisdiction to have met 40% of its regional
housing need for low and very low-income households in the
current or previous housing element cycle.
3)Requires that the agency must not owe money to its Low and
Moderate Income Housing Fund (L&M).
4)Requires the agency to have met its replacement housing
obligation or contractually committed funds to meet those
obligations.
Transfer of Funds
1)Provides that no more than 25% of the agency's L&M Funds may
be transferred to the joint powers authority (JPA).
2)Requires each participating agency must hold a public hearing
at least 45 days prior to the transfer of L&M funds to the
JPA.
Expenditure of Funds by the JPA
1)Requires funds be used within the territorial jurisdiction of
a participating agency in San Mateo County on property within
one-half mile of the San Mateo County Transit District, the
San Mateo County Transportation Authority or the Peninsula
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Corridor Joint Powers Authority right-of-way.
2)Requires funds be used for the direct costs of constructing,
substantially rehabilitating, or preserving the affordability
of low and very low income housing.
3)Prohibits funds from being used for planning and
administrative costs, offsite improvements, or fees or
exactions levied solely on funded project.
4)Prohibits funds from being used to construct a development in
a census tract that has more than 50% of its population
comprised of racial minorities or low-income families.
5)Requires HCD verify each proposed use of funds to ensure
compliance with the provisions of this bill.
6)Requires that the JPA expend or encumber and transferred
within two years. If not, the funds are returned to the donor
agency and deemed excess surplus.
7)Requires that the JPA submit an annual report to HCD
documenting funds received and funds allocated or expended.
8)Requires that the JPA is subject to the replacement housing
requirements, relocation requirements, and all other
provisions that would otherwise apply to the use of L&M funds
by the agency directly.
9)Provides that no new JPA may be created nor additional funds
received by an existing JPA after January 2009. The bill
sunsets on January 1, 2010.
EXISTING LAW :
1)Requires redevelopment agencies to set aside 20% of their
property tax increment revenues for "increasing, improving,
and preserving" affordable housing.
[Health and Safety Code Section 33334.2 (a)]
2)Requires the 20% "set aside" to be deposited into a L&M Fund.
(Health and Safety Code Section 33334.3)
3)Provides that tax increment, which accrues to a redevelopment
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agency, must be used to pay indebtedness to finance the
"redevelopment project."
(Article XVI, Section 16 of the California Constitution)
4)Allows contiguous redevelopment agencies, located within a
single Metropolitan Statistical Area (MSA), to establish a JPA
for the purpose of pooling L&M Fund.
(Health and Safety Code Section 33334.25)
5)Provides the following list of conditions on the expenditure
of JPA funds on a particular development:
a) No funds shall be transferred to JPA from a
participating agency that has fulfilled less than 50
percent of its share of the regional housing need for very
low and low-income households;
b) The cities of the participating agencies shall have
up-to-date housing elements determined by HCD to be in
compliance with housing element law; and,
c) JPA shall make a finding that the proposed use of pooled
funds will not exacerbate racial or economic segregation.
6)Provides that HCD shall review each proposed use of pooled
funds and determine that the use is in compliance with this
bill.
7)Provides that in considering whether or not the use will
exacerbate racial and economic segregation, HCD shall consider
the following:
a) The record of the participating cities in meeting their
very low and low-income housing needs;
b) The distance of the proposed use from a redevelopment
area from which pooled funds originated;
c) The income and ethnicity of residents of the
redevelopment project area from which pooled funds
originated and of the census tract where the new housing
will be built;
d) The housing need and availability of sufficient sites
for housing within jurisdictions from which pooled funds
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originated.
(Health and Safety Code Section 33334.25)
8)Provides specific authority for the Contra Costa County
Redevelopment Agency to spend its L&M Fund in the City of
Walnut Creek at sites contiguous to the Pleasant Hill BART
Station Area Redevelopment Project Area. (Health and
Safety Code Section 33334.2)
9)Allows the Orange County Redevelopment Agency (OCRA) to spend
funds, set aside for low- and moderate-income households,
within the city limits of cities located within the county.
(Health and Safety Code Section 33334.2a)
FISCAL EFFECT : Unknown.
COMMENTS : Redevelopment agencies' L&M Funds are one of the
largest sources of affordable housing money in California.
Redevelopment agencies are required by California state law to
deposit 20% of their annual tax increment revenues into a L&M
Fund, and spend the money to increase, improve and preserve the
community's supply of low- and moderate-income housing.
Statewide, in 2000-01, this set-aside requirement resulted in
the deposit of $225 million in property tax increment revenues
into the agencies' L&M Funds. An additional $337 million came
from accrued interest, transfers, and bond proceeds.
Redevelopment officials spend their L&M Funds for a variety of
housing activities, including land acquisition, financing for
the acquisition, rehabilitation, or new construction of
multifamily housing developments, on- or off-site improvements,
first-time homebuyer assistance, and home rehabilitation loans.
Except as noted below, redevelopment agencies do not have
authority to spend monies, including L&M Funds, outside the
community which established the agency. Since some agencies do
not want to assist low- and moderate-income housing and others
would welcome increased revenues to do so, and because neither
the housing nor the job market is restricted by community
boundaries, it has been suggested that agencies should be
authorized to transfer monies from their L&M Fund to nearby
communities or agencies that are willing to use them.
State law specifically allows for L&M Funds to be spent inside
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or outside a project area, but within the territorial
jurisdiction of the agency, upon a finding that the use will be
of benefit to the project area.
According to the author, the vision for building along the
CalTrain right-of-way is transit oriented, smart growth in-fill
development. The purpose of this legislation is to authorize
redevelopment agencies within San Mateo County to pool L&M Funds
for the purpose of directing those funds outside of the specific
project area from which they were derived, to be used for low-
and very low-income housing development along the CalTrain
transit corridor. This bill, according to the author, builds on
the recognition that unlike other communities, San Mateo County
has a unique level of countywide cooperation and collaboration
in planning efforts.
According to the author, the cost and availability of land,
geophysical and environmental limitations, community patterns,
and the lack of financing make the availability of affordable
housing more difficult in San Mateo County.
Drafting error
If this bill is enacted, the author may wish to consider
"clean-up legislation" next year to fix a minor drafting error.
Within the findings and declarations, page 2, line 7 the bill
states that funds are to be used within one-third of a mile of
the Peninsula Corridor Joint Powers Authority right of way.
Elsewhere the bill specifies that funds shall be used within
one-half mile.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Hubert Bower / H. & C.D. / (916)
319-2085
AB 269
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