BILL ANALYSIS
SB 251
Page 1
Date of Hearing: July 8, 2009
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Norma Torres, Chair
SB 251 (Committee on Transportation and Housing) - As Amended:
June 11, 2009
SENATE VOTE : 37-0
SUBJECT : Housing and community development: housing omnibus
bill.
SUMMARY : Makes technical and non-controversial changes to
various sections of the law dealing with housing. Specifically,
this bill :
1)Clarifies the timeline for the Department of Housing and
Community Development (HCD) to review a council of
government's (COG's) regional housing needs allocation (RHNA)
plan. COGs allocate the RHNA among cities and counties within
their respective regions. Under existing law, HCD has 60 days
from the date of adoption by a COG to review a RHNA plan.
However, the law does not require COGs to submit their adopted
plans in a timely manner. On a number of occasions, HCD has
received a plan for review very close to the end of the 60-day
period, leaving very little time for a thorough review to be
conducted within the statutory timeframe. This bill requires
a COG to transmit its RHNA plan to HCD within 3 days of
adoption and gives HCD 60 days from the date an adopted RHNA
plan is received from a COG to review the plan for consistency
with applicable law.
2)Revises a Subdivision Map Act exemption relating to the
conversion of community apartments and stock cooperatives.
The Subdivision Map Act currently contains exemptions for
certain conversions of community apartments and cooperatives
to condominiums. Under these exemptions, at least 75 percent
of the units in a community apartment project must have been
occupied by record owners of the project on March 31, 1982,
and at least 51 percent of the units in a stock cooperative
must have been occupied by stockholders of the corporation on
January 1, 1981. It can be very difficult to prove owner
occupancy from that long ago, and at times it is impossible
because the records are simply no longer available. This bill
alters the exemptions by replacing the requirements to show
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owner occupancy with requirements to show that no single owner
controlled more than 49% of the units on the relevant date.
The bill also makes technical changes to the statute.
3)Corrects a drafting error relating to the strapping of water
heaters in manufactured housing. AB 2050 (Garcia) of 2008
requires that all fuel-gas-burning water heaters in
mobilehomes and manufactured homes be seismically braced,
anchored, or strapped. The language of the bill assumes that
each owner will "complete the work" when, in fact, subsequent
owners will rely on work done previously if proper. This bill
clarifies that a subsequent owner may rely on a previous
homeowner's or contractor's signed declaration that the water
heater is secured as required.
4)Allows the direct sale of manufactured homes to non-profit
affordable housing developers. Current law permits a
manufactured housing factory to sell manufactured homes
directly to developers only if they are general contractors
purchasing more than five homes in a calendar year and if the
homes are delivered directly to a building site for foundation
installation within a single subdivision of five or more
parcels. The restriction to a single "subdivision" prevents
nonprofit corporations who have experience doing self-help
housing and other housing in rural areas, but not necessarily
in subdivisions, from realizing the cost savings associated
with direct sales. Similarly, more urban nonprofits seeking
to do infill projects on four our fewer lots also cannot
directly purchase and install homes. In order to encourage
additional uses of manufactured housing and reduce the cost of
affordable housing while maintaining consumer protections,
this bill allows a non-profit community housing development
organization to directly purchase five or more manufactured
homes even if they are installed outside of a subdivision,
provided that the homes are installed as part of an affordable
housing project funded by a public entity.
5)Corrects a cross-reference in redevelopment law. The
Community Redevelopment Law [Health and Safety Code
33334.3(f)] requires a redevelopment agency to ensure the
long-term affordability of housing units that receive
assistance from the agency's Low- and Moderate-Income Housing
Fund or that are counted towards the agency's replacement or
production requirements. A separate section of the law
[Health and Safety Code 33334.14(a)] allows redevelopment
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agencies to subordinate their affordability covenants or
restrictions under certain circumstances. In referring to the
requirement for the agency to record affordability covenants,
this latter section cross-references Health and Safety Code
33334.3(e) rather than (f). The proposed amendment would
correct this cross-reference to refer to 33334.3(f).
6)Revises timelines related to the Local Housing Trust Fund
(LHTF) Program. Under the LHTF Program, HCD matches, up to a
certain level, contributions of non-housing funds to a housing
trust fund created by a local government or non-profit
organization. Proposition 1C allocated $100 million to the
Affordable Housing Innovation Fund (AHIF), and SB 586
(Dutton), Chapter 652, Statutes of 2007, later allocated $35
million of AHIF funds to the LHTF Program. SB 586 further
required that HCD set aside some level of funding for a period
of 36 months from the date funds are first made available for
newly established housing trust funds in counties with
populations of less than 425,000 persons. The bond itself,
however, required that any funds in the AHIF not encumbered
within 30 months roll over to the department's CalHome
Program, making it legally impossible for HCD to meet the
36-month set-aside requirement for small counties. This bill
allows HCD to encumber funds set aside for newly established
housing trust funds up to 42 months from availability and to
make disbursements of such funds up to 48 months from
availability. Thereafter, unused funds would revert to the
CalHome Program. The 42-month expenditure period gives HCD
six months to review applications, issue award letters, and
prepare contracts after the final date for accepting
applications. Assuming an LHTF were given an award letter at
the end of the proposed 42 month encumbrance deadline, the 48-
month liquidation deadline would give an award recipient six
months to confirm projects for which HCD would issue warrants
for the funds.
7)Corrects a drafting error related to Chapter 8 tax sales.
Current law allows for the direct sale of a non-owner occupied
tax delinquent property to a non-profit organization for the
purpose of providing affordable housing to low-income
families. The law requires that the housing thereafter be
affordable for at least 30 years or subject to a subsidy
recapture and equity sharing restriction. The law defines the
subsidy to be recaptured as the fair market value minus the
sale price to the low-income family but mistakenly refers to
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the fair market value of the home at the time it was purchased
by the non-profit, as opposed to the time it was purchased by
the low-income owner occupant. This bill corrects this
mistake by referring to the fair market value at the time of
sale to the low-income owner occupant.
8)Corrects a cross reference relating to low-income housing tax
credits. SB 585 (Lowenthal) of 2008 allows for the
bifurcation of state and federal low-income housing tax
credits. SB 1247 (Lowenthal) of 2008 moves the farmworker
housing tax credit program into the low-income housing tax
credit program as a farmworker set-aside. Because farmworker
credits, unlike standard state low-income housing credits, are
not necessarily coupled with federal low-income housing
credits, language was inserted into both bills that prohibits
the bifurcation of farmworker credits unless they are coupled
with federal low-income housing credits. This prohibition is
in the Revenue and Taxation Code, but where the language
cross-references the farmworker set-aside, it fails to
recognize that the set-aside is in the Health and Safety Code.
This bill correctly refers to the farmworker set-aside in the
Health and Safety Code.
EXISTING LAW includes numerous provisions related to housing.
FISCAL EFFECT : None
COMMENTS :
The Senate Committee on Transportation and Housing is authoring
this year's housing omnibus bill as a cost-effective way of
making a number of minor, non-controversial changes to statute
at one time. There is no known opposition to any of the items
in the bill. If issues arise that cannot be resolved, the
provision of concern will be deleted from the bill.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
SB 251
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Analysis Prepared by : Anya Lawler / H. & C.D. / (916)
319-2085