BILL ANALYSIS
AB 767
Page 1
ASSEMBLY THIRD READING
AB 767 (Ammiano and Bass)
As Amended April 30, 2009
2/3 vote. Urgency
HOUSING 7-0 APPROPRIATIONS 17-0
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|Ayes:|Torres, Harkey, Eng, |Ayes:|De Leon, Nielsen, |
| |Fletcher, Ma, Saldana, | |Ammiano, |
| |Swanson | |Charles Calderon, Davis, |
| | | |Duvall, Fuentes, Hall, |
| | | |Harkey, Miller, |
| | | |John A. Perez, Price, |
| | | |Skinner, Solorio, Audra |
| | | |Strickland, Torlakson, |
| | | |Krekorian |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Provides a two-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 (Proposition 1C).
Specifically, this bill :
1)Extends funding authorized by Proposition 1C for the Homeless
Youth Program to July 31, 2011, 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 November
17, 2011, 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.
4)Includes an urgency clause.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, a three-year extension for unspent bond funds
authorized for the Homeless Youth ($24 million) and the BEGIN
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($40 million) programs, which under existing law would revert to
accounts used for more general housing-related purposes.
COMMENTS : Proposition 1C appropriated $50 million for the
development of housing for homeless youth under MHP, and $125
million for down payment 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 the 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 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 November 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 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
a maximum of 20% of purchase price, which has made this a very
attractive program to local government and developers seeking to
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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 fiscal year (FY) 2007/2008 and 2008/2009 ($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 2009/2010. 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.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085
FN: 0001151