BILL ANALYSIS
AB 1865
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Date of Hearing: April 28, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1865 (Strickland) - As Introduced: February 12, 2010
Policy Committee: Housing and
Community Development Vote: 9 - 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill reduces the amount of matching funds an applicant for
a newly formed Local Housing Trust Fund (LHTF) Matching Grant
Program grant must raise, from a minimum of $1 million to
$500,000.
FISCAL EFFECT
1)$16.275 million in Proposition 1C is currently set aside for
newly established local trusts. In October 2008, HCD issued a
Notice of Funding Availability (NOFA) for roughly one-third
($5.4 million) of the new trust fund money. However, before
any funding could be awarded, the Department of Finance (DOF)
imposed a freeze on all awards. Prior to that freeze, the
Department of Housing and Community Development (HCD) had not
received any applications for new local trusts. Absent this
legislation, it is unlikely that HCD will be able to award all
of the funding.
2)Costs of incorporating this change into the next notice of
funding availability (NOFA) for LHTF would be minor and
absorbable within HCD's resources.
COMMENTS
1)Rationale . This bill seeks to allow all newly formed housing
trusts to better compete for state housing trust fund grants
by lowering the minimum grant amount for all newly established
trusts, not just those in smaller cities or counties. Newly
formed trusts would be required to provide a match of $500,000
rather than $1 million. Reducing the match amount required
AB 1865
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from all newly formed trusts, regardless of whether they are
in a smaller city/county, will allow more local housing trust
funds to apply for the funds. According to the author, this
change will not only support affordable housing production in
the state, but also result in new construction jobs.
2)Background . In November 2006, California voters approved
Proposition 1C, the $2.85 billion Housing and Emergency
Shelter Trust Fund Act of 2006. The bond act included $100
million for the affordable housing innovation fund and
required that the Legislature program the specific uses and
eligibility requirements for these funds. SB 586 (Dutton:
Chapter 652, Statutes of 2007) allocated these funds to four
separate programs, including $35 million for the LHTF program,
administered by HCD.
The LHTF program matches contributions to local housing trust
funds. The grant from HCD matches the local contributions on a
dollar-for-dollar basis from a minimum of $1 million to a
maximum of $2 million. The local housing trusts may use
program funds to support emergency shelters, rental housing,
and for-sale housing affordable to households ranging from
extremely low-income to moderate-income.
Under SB 586, half of the $35 million allocated to this
program by Proposition 1C is reserved for newly established
housing trust funds. Within this allocation is a set-aside
for an amount to be determined by HCD for trust funds in
counties with a population of less than 425,000 persons.
3)Related Legislation . AB 570 (Arambula; Chaptered 95, Statutes
of 2009) reduced the amount of matching funds newly
established housing trust funds in smaller communities (those
with populations of less than 425,000 persons) were required
to raise, from $1 million to $500,000.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081