BILL ANALYSIS
AB 767
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Date of Hearing: April 29, 2009
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Norma Torres, Chair
AB 767 (Ammiano) - As Amended: April 20, 2009
SUBJECT : Housing and Emergency Shelter Trust Fund of 2006:
reversion of funds
SUMMARY : Provides a three-year extension for the Homeless
Youth Program and the Building Equity and Growth in
Neighborhoods (BEGIN) program authorized by the Proposition 1C:
Housing and Emergency Shelter Trust Fund Bond Act of 2006.
Specifically, this bill :
1)Extends funding authorized by Proposition 1C for the Homeless
Youth Program to July 31, 2012 after which all unencumbered
funds shall revert to general use for the Multifamily Housing
Program (MHP).
2)Extends funding authorized for the BEGIN program to August 17,
2012 after which all unencumbered funds shall revert to the
CalHome Program.
3)Allows the Department of Housing and Community Development
(HCD) to determine if funds should revert sooner for either
program due to diminished demand.
EXISTING LAW (Health & Safety Code Section 53545):
1)Establishes the Housing and Emergency Shelter Trust Fund of
2006 (Proposition 1C) in the State Treasury to be used to fund
the housing-related projects described in the bond.
2)Allocate $50 million from Proposition 1C to be expended under
the MHP program for housing for homeless youth.
3)Provides if the funds authorized for housing for homeless
youth are not encumbered within 30 months of the funds
becoming available, the funds revert back to MHP.
4)Allocate $125 million from Proposition 1C to be transferred to
the BEGIN program.
5)Provides any funds not encumbered for the BEGIN program within
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30 months of availability revert to MHP.
FISCAL EFFECT : Unknown
COMMENTS :
Background : Proposition 1C appropriated $50 million for the
development of housing for homeless youth under MHP, and $125
million for downpayment assistance for homebuyers in communities
that reduce regulatory barriers to housing production under the
BEGIN program.
For both of these appropriations, Proposition 1C specified that
any funds not committed to projects within 30 months of
availability were to revert to other, related HCD programs.
Demand under both MHP - Homeless Youth and BEGIN has been
substantial, but not sufficient to use all of the available
funds. In addition, the current freeze on application and
commitment activity for bond-funded programs is effectively
truncating the 30 month period, and the turmoil in the financial
markets is slowing development activity in general. As a
result, approximately $24 million of the MHP - Homeless Youth
funding is scheduled to revert to the general component of MHP
on July 31, 2009. Similarly, $40 million is schedule to revert
from BEGIN to CalHome on August 17, 2009.
The homeless youth population is generally recognized as both
extremely needy and well served by housing combined with
services targeted to its unique needs. There is very little of
this housing available. Developing new units is challenging, in
part due to the limited funding available for necessary
supportive services, so demand for development funding,
including the MHP - Homeless Youth funds, is limited. HCD's
staff is in conversation now with developers who would like to
submit new applications, and the experience of the program thus
far suggests a slow and but relatively steady stream of such
applications, if funding were to remain available.
BEGIN is the only single-family loan program at HCD that assists
moderate- income homebuyers (80% to 120% of median income). The
BEGIN program is also the only HCD program that ties funding
specifically to local actions to reduce regulatory constraints
that impede the development of affordable housing. AB 382
(Housing and Community Development Committee) Chapter 596,
Statutes of 2008, increased the BEGIN loan limit from $30,000 to
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a maximum of 20% of purchase price, which has made this a very
attractive program to local government and developers seeking to
provide housing opportunities to a wide range of low- and
moderate-income borrowers. HCD staff has indicated that they are
in contact with many cities, counties and developers interested
in submitting applications. The full $80 million authorized in
FY 07/08 and 08/09 ($40 million per year) have been fully
utilized, and there are $7.5 million of pending applications
that cannot be funded at this time. HCD anticipates that based
on demand the remaining $40 million could be awarded in FY
09/10. A three-year extension however takes into consideration
the potential that demand could be negatively affected by
negative economic conditions. HCD would have discretion to
reallocate funds earlier if demand unexpectedly dried up.
Committee amendments :
The author has requested that the following amendments be
adopted in committee:
1)Add an urgency clause, in order to accomplish the extension of
the Homeless Youth Program and BEGIN program prior to the 30
month deadline.
2)Reduce the extension of the Homeless Youth Program and BEGIN
program from three to two years.
3)Change the month upon which the BEGIN program funds roll back
into CalHOME from August to November.
REGISTERED SUPPORT / OPPOSITION :
Support
Bill Wilson Center, Santa Clara
City of East Palo Alto
Corporation for Supportive Housing
David & Margaret Youth and Family Services, La Verne
Department of Housing and Community Development (HCD)
East Palo Alto Community Alliance and Neighborhood Development
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Organization
Housing Leadership Council of San Mateo County
Koreatown Youth and Community Center, Los Angeles
Opposition
None on file.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085