BILL ANALYSIS
AB 1129
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Date of Hearing: January 16, 2008
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Lori Saldana, Chair
AB 1129 (Arambula) - As Amended: January 7, 2008
SUBJECT : San Joaquin Valley Affordable Housing Trust
SUMMARY : Allows for the creation of the San Joaquin Valley
Regional Affordable Housing Trust. Specifically, this bill :
1)Provides findings and declarations with regard to the
projected substantial population growth and the need for
affordable housing in the San Joaquin Valley.
2)Provides that it is the intent of the Legislature to establish
the San Joaquin Valley Regional Affordable Housing Trust to
assist communities in securing and distributing affordable
housing funds.
3)Establishes the San Joaquin Valley Rural Regional Affordable
Housing Trust (Trust) for the purposes of administering
federal, state, local and private resources for the
development of affordable housing. Additionally, the Trust
seeks to foster regional collaboration among local
governments, developers, financial and community organizations
to meet area affordable housing needs.
4)Requires the Trust do all of the following:
a) Establish a governing board which may include, but is
not limited to one member from each participating council
of government in the San Joaquin Valley (the San Joaquin
Valley include the Counties of Kern, Kings, Tulare, Fresno,
Madera, Merced, Stanislaus, and San Joaquin), three from
the California Partnership for the San Joaquin Valley, one
affordable housing advocacy organization, one nonprofit
affordable housing developer, and one housing industry
representative.
b) Develop a region-wide strategy consistent with the
Regional Blueprint;
c) Raise funds from federal, state, local and private
organizations;
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d) Establish a revolving loan account for funding
affordable housing in the jurisdictions of the trust
members. Make loans to entities seeking to build
affordable housing. Require loans to be contingent on
showing that the project is consistent with: housing
element; San Joaquin Regional Blueprint; all environmental
clearances; development permits; and local financial
commitment;
e) Develop criteria for project selection to include:
density, mixed income, infill, fair share allocation,
transit oriented development, proximity to employment;
f) Require local contributions;
g) Establish loan repayment terms;
h) Develop performance standards;
i) Provide technical assistance to members;
j) Assist in forming partnerships for affordable housing
demonstration projects;
aa) Prepare any required reports or other documentation;
bb) Develop a regional education campaign that promotes
higher density, mixed use, transit oriented development;
cc) Make recommendations to the Legislature and Governor to
eliminate obstacles to affordable housing; and
dd) Report to the Business, Transportation and Housing
Agency as well as the Department of Housing and Community
Development (HCD) on the activities of the Trust.
5)Requires the governing board to adopt a set of bylaws.
6)Prohibits the use of federal or state funds to be used for
administrative expenses.
7)Provides the governing board with authority to approve grant
applications as well as loan conditions.
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EXISTING LAW :
Allocates $35 million of the $100 million Affordable Housing
Innovation Fund from Proposition 1C to the Local Housing Trust
matching grant program. Requires that half of the funds are to
be made available for newly established housing trusts.
Requires HCD to grant preference to trust funds that agree to
expend more than 65% of the state funds for downpayment
assistance to first time homebuyers, and requires HCD, when
making grants to newly established trust funds, to set aside
funding for 36 months from the date the funds are first made
available for newly established trust funds in counties of less
than 425,000 persons.
FISCAL EFFECT : Unknown.
COMMENTS :
Background
In 2002, California voters approved Proposition 46, the $2.1
billion Housing and Emergency Shelter Trust Fund Act.
Proposition 46 provided funding for the following programs:
Multifamily Housing Program; Emergency Housing Assistance
Program; Supportive Housing; Farmworker Housing Grant Program;
CalHome Program; Local Housing Trusts; Code Enforcement Program;
California Homebuyer Downpayment Assistance Program; and Jobs
Housing Improvement Account.
Funds provided under Proposition 46 were mostly exhausted by the
end of 2006.
In November 2006, California voters approved Proposition 1C, the
Housing and Emergency Trust Fund Act of 2006. Proposition 1C
maintains funding provided under Proposition 46 for most, but
not all, of the programs noted above. One of the programs not
included in Proposition 1C was funding for local housing trusts.
Proposition 1C did include however, $100 million for the
Affordable Housing Innovation Fund to be used for "competitive
grants or loans to sponsoring entities that develop, own, lend,
or invest in affordable housing and used to create pilot
programs to demonstrate innovative, cost-saving approaches to
creating or preserving affordable housing."
In 2007, the case was successfully made that local housing
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trusts are inherently innovative, that is local housing leaders
can design individualized local programs to address affordable
housing needs in their communities. Therefore, $35 million was
made available for local housing trusts to apply for grants.
One half of the $35 million is to be made available strictly for
new trusts. Additionally, when awarding grants to new trusts,
HCD is required to set aside funding for a period of 36 months
for trusts in counties with a population of less than 425,000.
This bill seeks to create the framework for a regional
affordable housing trust made up of the local governments within
the San Joaquin Valley.
Need for the bill
According to the author, approximately 50% of San Joaquin Valley
residents cannot afford a median priced two bedroom rental unit.
The author asserts that rural communities frequently do not have
the resources and sophistication to compete for federal, state
and private funds to support the construction of affordable
housing. Small rural communities lack the staff and experience
to plan for and manage affordable housing grant writing and
project administration.
The nature of rural areas prevents regional collaboration to
pool resources to create more affordable housing. Vast expanses
of farm land separates communities and Valley land use decisions
have historically been made on a community-by-community basis.
Existing law allows local agencies to enter into joint powers
agreements, which allows for the creation of affordable housing
trusts. In California there are 35 housing trusts, all of which
are county- or city- specific. However, asserts the author,
there is no mechanism to establish regional affordable housing
trusts that will promote state housing and community development
policies.
According to the author AB 1129 will reflect state housing goals
and policies. AB 1129 will require the San Joaquin Valley Trust
to prioritize funding based on: 1) increased housing densities;
2) mixed income development; 3) infill development; 4) fair
share allocation; 5) transit oriented development; 6) proximity
to employment. Additionally AB 1129 seeks to encourage
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communities to collaborate.
The creation of the trust in statute, argues the author, gives
the trust more institutional stability which should give local
agencies more flexibility to join or exit the trust without the
need to reconstitute joint powers agreements.
Suggested Technical Amendments
Page five, line 23 change "environmental clearances" to
"environmental approvals".
Page five line 24 after "local" add "public", to clarify that
the local financial commitment is from the local public agency.
Page 5 line 28 add "Increased" before "housing densities" to
clarify that the criteria for project funding shall include
strategies to increase housing densities.
Page 6 lines 36 and 37, with regard to administrative costs,
committee staff suggests redrafting to place a cap of five
percent on administrative fees which may be paid from trust
assets.
REGISTERED SUPPORT / OPPOSITION :
Support
City of Clovis
City of Fowler
City of Huron
City of Mendota
City of San Joaquin
Council of Fresno County Governments
Habitat for Humanity-Golden Empire, Bakersfield
Housing Authority of the County of Kern
Housing California
Kings Canyon Unified School District
Self-Help Enterprises, Visalia
Sequoia Community Health Centers, Fresno
Tulare County Association of Governments
Opposition
None on file.
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Analysis Prepared by : Hubert Bower / H. & C.D. / (916)
319-2085