BILL ANALYSIS
AB 1129
Page 1
GOVERNOR'S VETO
AB 1129 (Arambula)
As Amended July 1, 2008
2/3 vote
-----------------------------------------------------------------
|ASSEMBLY: | |(January 24, |SENATE: |36-3 |(August 7, |
| | |2008) | | |2008) |
-----------------------------------------------------------------
(vote not relevant)
------------------------------------------------------------------------
|COMMITTEE VOTE: |4-1 |(August 13, 2008) |RECOMMENDATION: |concur |
| | | | | |
------------------------------------------------------------------------
-----------------------------------------------------------------
|ASSEMBLY: |47-28|(August 14, | | | |
| | |2008) | | | |
-----------------------------------------------------------------
Original Committee Reference: H. & C.D.
SUMMARY : Reduces the minimum grant a newly established housing
trust fund representing a county with a population of less than
425,000 people can receive from $1 million to $500,000.
The Senate amendments delete the Assembly version of the bill,
and instead:
1)Reduce the minimum grant amount a newly established housing
trust fund that represents a county with a population of less
than 425,000 can receive from the Local Housing Trust Fund
Matching Grant Program (Program), administered by the
Department of Housing & Community Development (HCD), from $1
million to $500,000.
2)Require newly established trust funds to provide adequate
documentation as determined by HCD that the trust will provide
matching funds on approval of its application.
AB 1129
Page 2
3)Provide that in determining whether or not a county has a
population of less than 425,000, HCD must use the United
States Census for 2000.
EXISTING LAW allocates $35 million of the $100 million
Affordable Housing Innovation Fund from Proposition 1C to the
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.
AS PASSED BY THE ASSEMBLY , this bill allowed for the creation of
the San Joaquin Valley Regional Affordable Housing Trust
(Trust). Specifically, this bill :
1)Provided findings and declarations with regard to the
projected substantial population growth and the need for
affordable housing in the San Joaquin Valley.
2)Provided that it is the intent of the Legislature to establish
the Trust to assist communities in securing and distributing
affordable housing funds.
3)Established the 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)Required 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
AB 1129
Page 3
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 San
Joaquin Regional Blueprint (Regional Blueprint);
c) Raise funds from federal, state, local and private
organizations;
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; Regional Blueprint; all environmental approvals;
development permits; and, local financial commitment;
e) Develop criteria for project selection to include:
increased density; mixed income; infill; fair share
allocation; transit oriented development; and, proximity to
employment;
f) Require local public 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;
AB 1129
Page 4
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 HCD on the activities of the Trust.
5)Required the governing board to adopt a set of bylaws.
6)Allowed up to 5% of trust assets to be used for administrative
costs.
7)Provided the governing board with authority to approve grant
applications as well as loan conditions.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : 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
AB 1129
Page 5
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 allow smaller, rural county housing trusts to
better compete for state housings trust fund grants by lowering
the minimum grant amount for newly established small county
trusts.
Need for the bill: According to the author, in order to take
advantage of the funding for housing trusts funds authorized in
Proposition IC, the San Joaquin Valley Housing Trust (SJV
Housing Trust) was established in 2008, with membership from
counties and cities throughout the eight county regions. A
number of those counties are small, rural areas with fewer local
resources for planning and developing affordable housing.
Several of those counties plan to establish their own housing
trusts. According to the author, housing trusts that may be
established in smaller rural counties such as those that are
members of the SJV Housing Trust face disadvantages in winning
state grants. Those disadvantages include difficulties in
raising local funding to match grants, dollar for dollar, and
obtaining those local funds prior to the award of a state grant.
As passed by the Senate, this bill lowers the minimum grant
amount for newly established small county trusts in counties
with less than 425,000 people and changes the way those trusts
identify the commitment of local matching funds. The bill also
specifies the population benchmark for defining a small county
trust at less than 425,000 people.
GOVERNOR'S VETO MESSAGE :
"I am supportive of providing additional flexibility for small
rural jurisdictions to participate in the Local Housing Trust
AB 1129
Page 6
Fund program by reducing the minimum participation level and
allowing flexibility for local governments to provide dedicated
fee revenue in lieu of a one-time match. However, the bill is
silent on when local governments may expend state funds that are
on deposit awaiting local matching funds. Allowing local
governments to expend state funds without the accompanying local
matching funds undermines the purpose of a matching grant
program."
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085
FN: 0007840