BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2007-2008 Regular Session
AB 725 A
Assembly Members Lieber and DeVore B
As Amended April 28, 2008
Hearing Date: June 10, 2008 7
Health and Safety Code 2
BCP:rm 5
SUBJECT
Universal Rental Housing Application
DESCRIPTION
This bill would require the Department of Housing and
Community Development to create, and affordable rental
housing providers to use, a universal rental housing
application. That application, developed in coordination
with other state agencies, would be required to include
various information, including information contained in
third party rental application forms.
(This analysis reflects author's amendments to be offered
in committee.)
BACKGROUND
The Department of Housing and Community Development (HCD)
is the state's principal housing agency. HCD administers
over 15 different state housing programs, including several
that support the provision of affordable rental housing.
Other programs run by California state agencies include the
California Tax Credit Allocation Committee (TCAC), which
administers the federal and state Low Income Housing Tax
Credit Programs, the California Debt Limit Allocation
Committee (CDLAC), which allocates tax-exempt, private
activity bonds for various purposes, the California Housing
Finance Agency (CalHFA), which provides below market rate
mortgage financing to meet the housing needs of low to
moderate income families, including rental housing.
(more)
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With respect to the availability of affordable housing in
California, a report commissioned by the Corporation for
Supportive Housing and Housing California, found that
"[t]he time from waiting list sign-up to being housed can
take from a low of one year, to a high of 6-8 years." Due
to that demand for affordable housing, housing providers
that receive assistance pursuant to the above programs may
have very long waiting lists for their housing units.
Faced with those waiting lists, prospective tenants
simultaneously apply to multiple housing providers at the
same time.
To streamline the process of filling out a rental
application for these affordable housing providers, this
bill would require the Department of Housing and Community
Development to create, and require affordable rental
housing providers to use, a universal rental housing
application. That application, developed in coordination
with other state agencies, would be required to include
various information, including information contained in
third party rental application forms.
This bill was approved by the Senate Transportation and
Housing Committee on March 12, 2008.
CHANGES TO EXISTING LAW
Existing law requires a California Statewide Housing Plan
to be developed in cooperation with the private housing
industry as well as regional and local housing and planning
agencies and other agencies of the state. (Health & Safety
Code 50450.)
This bill would require for HCD, no later than August 1,
2009, to develop and adopt a universal rental housing
application in coordination with the Tax Credit Allocation
Committee, the Debt Limit Allocation Committee, and the
California Housing Finance Agency. In addition to the
standard format, the application must be developed: (1) in
plain English with large font; and (2) in plain English
with large font and colored illustrations. Upon request
by HCD, this bill would require the State Council on
Developmental Disabilities to advise and assist HCD in
developing those formats. The application would be
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required to include a statement that the additional formats
are available upon request and downloadable on HCD's
website. This bill would require HCD to make the
application available for public review and comment 45 days
prior to adopting the application.
This bill would require the information on the application
form to include the name, age, and student status of each
person who will live in the household, and certain
specified information about the applicant, including
information on current assets and on any asset that was
disposed for less than fair market value within the past
two years. This bill would also require the form to
include the information required on the rental applications
forms of the California Apartment Association, California
Association of Realtor's and Apartment Association,
Southern California Cities'.
This bill would require rental housing providers, on or
after November 1, 2009, to use and make available to
prospective tenants, not-for-profit housing assistance
organizations, public agencies, and others upon request,
the universal rental housing application. Rental housing
providers would not be prevented from requesting additional
information from prospective tenants. This bill would
require a rental housing provider to require a rental agent
or property manager to make the application available upon
request, and to post on the leasing agent's or property
manager's Internet Web site, if any, a link to the
departments Web site containing the information and
accessible formats.
This bill would apply the above requirements to rental
housing providers that have received any of the following
and whose rental housing units are still subject to the
rent restrictions pursuant thereto: (1) a loan from HCD or
CalHFA; (2) state or federal tax credits by the Tax Credit
Allocation Committee; or (3) tax-exempt bond authority
allocated by the Debt Limit Allocation Committee.
This bill would require HCD to post the application form
and the assessable formats on its Web site. This bill
would require HCD, the Tax Credit Allocation Committee, the
Debt Limit Allocation Committee, and the California Housing
Finance Agency to notify rental housing providers of the
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bill's requirements after initial publication and any
revision to the form; and notify rental housing providers
who receive the funds, tax credits, or bond authority of
the requirements of this bill at the time of receipt.
This bill would require HCD to release a request for
proposal for the development of the accessible formats
required by this bill, including, but not limited to, at
least one test with a focus group of persons with diverse
disabilities. The department is prohibited from accepting
a bid that is for more than $5,000.
This bill would provide that HCD's adoption of the
universal rental housing application and compliance with
this bill shall not be subject to the Administrative
Procedure Act and state that nothing in the bill shall
authorize HCD to adopt or amend any regulation.
COMMENT
1. Stated need for the bill
According to the author:
Because there is such an acute shortage of
affordable housing in California, low-income renters
seeking subsidized housing often must apply to many
developments at once in order to put their names on
lengthy waiting lists. It can be challenging to
determine whether vacancies exist or to even locate
an application. When there are vacancies,
applicants must fill out a different application for
each development, even though nearly identical
information is requested for each unit.
This lack of uniformity increases the amount of time
and inconvenience that prospective low-income
renters face, and can be a serious obstacle for
persons with disabilities, those who have limited
English, and seniors. A standardized universal
housing application is needed to streamline the
bureaucratized process of finding affordable homes.
2. Information that HCD must include on the universal
rental housing application
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Pursuant to this bill, the universal rental housing
application shall include, at minimum, a specified list
of information. In addition to standard background
information about the applicant, that information must
also include assets disposed of by the applicant within
the past two years and the contents of specified third
party rental housing forms.
a) Relevancy of information required to be contained
in the universal application
In addition to standard background information, the
universal rental housing application is required to
include information about not only the applicant's
current assets, but any asset that was disposed of
within the past two years for less than fair market
value. While the current assets of an applicant would
be a relevant factor in evaluating their ability to
pay the required rent, the fact that an applicant has
disposed of any asset for less than fair market value
appears to be of questionable relevance (unless it is
required for tenant certification). That category
would essentially require applicants to disclose any
gift that they had given within the past two years - a
disclosure that at best would indicate that an
applicant disposed of an asset in order to qualify for
affordable housing, and at worst could trigger
unnecessary suspicions by the housing provider that
the applicant will give away their assets listed on
the application.
The author's office notes that this information is
currently being requested on the California Tax Credit
Allocation Committee's (TCAC) Tenant Income
Certification Questionnaire, and that TCAC requests
the information to meet certain IRS requirements.
HUD's guidelines similarly provide that ". . . tenants
must declare whether an asset has been disposed of for
less than fair market value at each certification and
recertification." (See also 12 CFR 5.603(b)(3).) In
light of those requirements, the author should explore
whether affordable housing providers affected by this
bill (beyond those receiving tax credits from TCAC)
require this disclosure on their rental housing
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applications, and if not, whether the requirement to
include that information should be deleted as
providers may always request additional information
directly from the tenant.
b) Third party forms with unknown future contents
would be required to be included within the universal
housing form
The universal housing application would also be
required to include specific information from the rent
application forms from three private entities - the
California Apartment Association, the California
Association of Realtors, and the Apartment
Association, Southern California Cities. Like every
other form, those forms will change over time to
include unknown variables that, by reason of this
bill, must be included in the universal housing
application. Aside from the cost of revising the
application each time one of those third parties
revises their rental form, this requirement would
allow each of those third parties to dictate
information that must be requested by the universal
housing form. Although the Legislature may authorize
the inclusion of the information currently in those
forms (the contents may be reviewed for legality and
germaneness), a private third party should not have
the authority to mandate the inclusion of whatever
information they deem relevant in a form required to
be produced by a state agency. To remove that
delegation of authority to those third parties, the
bill should be amended to, instead, require the
inclusion of information currently in those forms and
permit HCD to consider the inclusion of any changes
made to those forms in the future. Furthermore, to
ensure that the required list (which would at some
point include outdated forms) does not require
information in violation of future state or federal
laws, the bill should clarify that nothing in the
section shall be construed to require the inclusion of
information in violation of state or federal law.
Suggested amendments :
1) On page 4, line 18, after the comma
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insert:
revised 4/03,
2) On page 4, line 21, before the quote
insert:
revised 1/08
3) On page 4, after line 21, insert:
(g) The department shall consider but shall
not be required to
include subsequent changes to the forms specified in
(f)(2)(G)-(I).
Nothing in this section shall be construed to require
the department
to include information in violation of state or
federal law.
As noted below, even if HCD does not include
information contained in the subsequent versions of
the above third party forms, applicants would still
benefit from not having to repeatedly fill out their
standard background information. (See Comment 2(c).)
c) Ability for rental housing providers to request
other information not contained in the application
form from prospective tenants
As mentioned below, HCD, in opposition, argues that
since the bill allows a rental housing provider to
request additional information from an applicant, the
bill would not accomplish its purpose of having a
universal application. Despite that allowance, the
bill would still benefit applicants by allowing them
to submit their universal application and
supplementing that application with any additional
needed information (avoiding the repetition of filling
out the same standard background information on every
application). Thus, even when additional information
is required, the universal form serves the purpose of
streamlining the application process.
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The ability to request additional information also
diminishes the need to include the future contents of
the above third party rental applications as
affordable rental housing providers would have the
option of requesting any omitted information from the
housing applicant. (See Comment 2(b).)
3. The bill states that rental housing providers shall
require a rental agent or property manager to make the
universal application available
Once a vacancy opens up requiring a prospective tenant to
fill out a rental application, the author maintains that
it can be challenging for applicants to even locate that
application. To make the form more accessible, this bill
requires HCD to post the application on its Internet Web
site, and states that rental housing providers "shall
require a rental agent or property manager" to make the
application available upon request and to post a link to
the application on their Web site.
Although rental agents and property managers for
affordable housing providers should comply with a request
to take those actions, it is unclear how the housing
provider will actually require them to do so (aside from
placing it in their contract with the agent or manager).
The authors should consider whether this provision should
be clarified or amended to directly require the rental
agent or property manger to take those steps upon
receiving a request from a qualified rental housing
provider.
4. Opposition by the Department of Housing and Community
Development (HCD), the California Housing Finance Agency
(CalHFA), and the Howard Jarvis Taxpayers Association
HCD, the department required to implement the universal
rental housing application, and CalHFA, one of the
agencies required to work with HCD in the formulation of
that application oppose the bill for various reasons.
Specifically, HCD expresses concern about the ability to
incorporate "such a wide range of information into one
single rental application," and argues that the bill
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subverts its goal of a universal form by allowing housing
providers to require additional information other than
that required by this bill. HCD also expresses fiscal
concerns about this bill - an issue within the
jurisdiction of the Senate Appropriations Committee.
CalHFA further contends that most owners of their
buildings follow the suggested Department of Housing and
Urban Development (HUD) guidelines (one of the sources of
information that must be included in the universal
application), and that as information is updated
periodically they do not believe the specific revision of
those guidelines should be specified in statute. Similar
to not specifying a date for the third party rental
application forms that are to be incorporated, not
specifying the revision of HUD guidelines would require
additions of unknown information to the form. CalHFA
also questions the need for the bill and argues that
"[t]he bigger problem really appears to be that some
individuals have difficulty finding subsidized
apartments," and that this bill "would create more
bureaucracy with no tangible benefit."
The Howard Jarvis Taxpayers Association, in opposition,
additionally contends that this bill would provide
additional reasons for private homeowners to stay out of
the government assisted housing market.
From a public policy perspective, any steps that
streamline the application process for low-income
individuals would serve the public's interest in ensuring
that artificial barriers have not been enacted to the
attainment of affordable rental housing. If approved by
this committee, the fiscal implications raised by the
opposition will be considered by the Senate
Appropriations Committee.
5. Exemption from the Administrative Procedures Act
This bill would also provide that the HCD's adoption of
the universal rental housing application and compliance
with the requirements of this bill are not subject to the
Administrative Procedures Act. Consistent with that
exemption, the bill states that nothing shall authorize
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HCD to adopt or amend any regulation.
6. Authors amendments to be offered in Committee
The authors offer the following amendments to be offered
in Committee.
a) On page 2, line 9, after "from" insert: "lawfully"
b) On page 2, line 9, strike "reasonable"
c) On page 4, line 10, strike out "five" and insert
"two"
d) On page 4, strike out line 20 and insert:
(I) The information required on the Apartment
Association, Southern California Cities form,
Support: Aging Services of California; California Alliance
for Retired Americans; California Apartment
Association; California Foundation for Independent
Living Centers; California Rural Legal Assistance
Foundation; League of California Cities; Silicon
Valley Leadership Group; Western Center on Law and
Poverty; Housing California
Opposition: Department of Housing and Community
Development; California Housing Finance Agency;
Department of Finance; Howard Jarvis Taxpayers
Association
HISTORY
Source: Author
Related Pending Legislation: None Known
Prior Legislation: None Known
Prior Vote: Asm. Housing & Cmmty. Development Committee
(Ayes 6, Noes 0)
Asm. Appropriations Committee (Ayes 11, Noes 5)
Asm. Floor (Ayes 52, Noes 20)
Senate Transportation & Housing (Ayes 7, Noes 4)
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