BILL ANALYSIS
AB 720
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 720 (Caballero)
As Amended July 14, 2009
Majority vote
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|ASSEMBLY: |78-0 |(May 26, 2009) |SENATE: |36-0 |(July 16, |
| | | | | |2009) |
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Original Committee Reference: L. GOV.
SUMMARY : Expands the timeline for a local government to provide
committed assistance for the rehabilitation of affordable
housing units.
The Senate amendments :
1)Extend the time limitation, from two years to the period from
the beginning of the projection period until the end of the
second year of the planning period, for when a city or county
would have to enter into a legally enforceable contract in
order to provide assistance.
2)Allow a jurisdiction, in their annual report, to claim credit
in their annual report for any units rehabbed, preserved, or
acquired that meet the statutory requirements, regardless of
whether their housing element included a program to address
the alternative adequate sites requirement.
3)Add double-jointing language to avoid chaptering out issues
with SB 575 (Steinberg).
EXISTING LAW :
1)Provides that the housing element shall consist of an
identification and analysis of existing and projected housing
needs and a statement of goals, policies, quantified
objectives, financial resources, and scheduled programs for
the preservation, improvement and development of housing.
2)Allows local jurisdictions to fulfill up to 25% of the
regional housing need through substantial rehabilitation of
units, pursuant to specified conditions, and those units will
be made available through the provision of committed
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assistance during the planning period covered by the housing
element.
3)Provides that those rehabilitated units shall have long-term
affordability covenants and restriction that require the unit
to be available to, and occupied by a person of low- or very
low-income at affordable housing costs for at least 20 years.
4)Defines "committed assistance" as legally enforceable
agreements entered into by the city or county during the first
two years of the housing element planning period that
obligates sufficient available funds to provide the assistance
necessary to make the identified units affordable and that
requires that the units be made available for occupancy within
two years of execution of the agreement.
5)Specifies that "committed assistance" does not include
tenant-based rental assistance.
6)Provides that a written report is due to the legislative body
and the Department of Housing and Community Development on
July 1 of the third year of the housing element planning
period.
7)Specifies that the report must identify the specific units to
which committed assistance has been provided.
8)Provides, if by the third year of the planning period that the
local government has not provided committed assistance to all
units identified in its housing element program, that the
local government must adopt an amended housing element by July
1 of the fourth year of the planning period.
AS PASSED BY THE ASSEMBLY , this bill:
1)Provided that a city, county, or city and county may include
weatherization and energy efficiency improvements as part of
its efforts to substantially rehabilitate a unit.
2)Specified that weatherization and energy efficiency
improvements may include measures that encompass the building
envelope, its heating and cooling systems, and its electrical
system.
3)Revised timing requirements for local governments to provide
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"committed assistance," which would allow for the city or
county to enter into a legally enforceable agreement during
the first five years of the housing element planning period in
order to provide the assistance necessary to make the
identified units affordable, and aligns reporting requirements
to this five-year window.
FISCAL EFFECT : None
COMMENTS : This bill expands the timeline for a local government
to provide committed assistance for the rehabilitation of
affordable housing units. Current law gives a two-year window
in which the city or county can enter into a legally enforceable
contract in order to provide committed assistance. This bill
extends the time limitation, from two years to the period from
the beginning of the projection period until the end of the
second year of the planning period (about four years total), for
when a city or county would have to enter into a legally
enforceable contract in order to provide assistance. The bill
also will allow a jurisdiction, in their annual report, to
claim credit in their annual report pursuant to Government Code
Section 65400 (up to 25%) for any units rehabbed, preserved, or
acquired that meet the statutory requirements, regardless of
whether their housing element included a program to address the
alternative adequate sites requirement. This would allow
jurisdictions to claim credit for actual units made affordable
that meet the alternative sites requirements even where the
adopted element didn't include a program or the program
projected lower numbers. In addition, units reported in this
manner would reduce a city's zoning obligation for the purposes
of no net loss.
Additionally, this bill contains provisions that authorize a
city or county to include weatherization and energy efficiency
improvements as part of the local government's efforts to
substantially rehabilitate a unit. The bill encourages active
rehabilitation and preservation of housing units, which is
extremely important in many jurisdictions that have little to no
capacity to grow.
AB 438 (Torlakson), Chapter 796, Statutes of 1998, added to the
Government Code provisions that allow local jurisdictions to
fulfill a portion of their region's affordable housing needs by
providing substantially rehabilitated units whose long-term
affordability is assured through covenants and restrictions,
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through the provision of "committed assistance" as provided by
the city or county. This bill builds on these provisions of law
by amending the definition of "committed assistance" to ensure
that local agencies have an adequate amount of time to secure
public funding for these rehabilitation projects.
Current law allows jurisdictions, under certain conditions, to
meet up to 25% of their land obligation for each income category
with preserved, substantially rehabilitated or converted
multi-family units. One of the requirements for counting units
within this 25% cap is that the units have received "committed
assistance" from the local jurisdiction. The definition for
"committed assistance" requires that a city or county enter into
a legally enforceable agreement during the first two years of
the housing element planning period that obligates sufficient
available funds to provide the assistance necessary to make the
identified units affordable. The author notes that the issue
with localities being limited in timeframe on top of the 25%
threshold is that it essentially disincentivizes rehabilitation
and preservation projects.
Last year, SB 375 (Steinberg), Chapter 728, Statutes of 2998,
extended the Regional Housing Needs Assessment (RHNA) planning
period from five to eight years. Given this change, the author
believes that cities and counties should be provided with more
of an opportunity to offer financial assistance to
rehabilitation projects.
The League of California Cities, in their support letter,
writes: "Local agencies that do not create a new unit within
the constrained two-year window do not get credit for the unit -
in the current planning or in the next planning period. Under
SB 375, most local agencies will have two years to count
rehabilitated units, and six years when they don't count. That
does not make sense. The system should allow local agencies to
count every new livable unit they create. Moreover, this bill
is timely. California's building industry is at historic lows.
According to the California Building Industry Association,
approximately 65,000 building permits were issued in 2008,
almost a 70 percent reduction from the number issued in 2005.
And if current trends hold, the number of permits in 2009 will
be less than 50,000. Accordingly, California should take every
opportunity to encourage local agencies to rehabilitate units to
create more livable units - an outcome that is more likely when
local agencies know they will get full credit for their
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efforts."
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958
FN: 0001918