BILL ANALYSIS
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UNFINISHED BUSINESS
Bill No: SB 251
Author: Senate Transportation and Housing Committee
Amended: 6/11/09
Vote: 21
SENATE TRANSPORTATION & HOUSING COMM : 10-0, 4/14/09
AYES: Lowenthal, Huff, Ashburn, DeSaulnier, Harman,
Hollingsworth, Kehoe, Pavley, Simitian, Wolk
NO VOTE RECORDED: Oropeza
SENATE FLOOR : 37-0, 4/23/09
AYES: Aanestad, Alquist, Ashburn, Benoit, Calderon,
Cedillo, Cogdill, Corbett, Correa, Cox, Denham,
DeSaulnier, Dutton, Florez, Hancock, Hollingsworth, Huff,
Kehoe, Leno, Liu, Lowenthal, Maldonado, Negrete McLeod,
Oropeza, Padilla, Pavley, Romero, Runner, Simitian,
Steinberg, Strickland, Walters, Wiggins, Wolk, Wright,
Wyland, Yee
NO VOTE RECORDED: Ducheny, Harman
ASSEMBLY FLOOR : Not available
SUBJECT : 2009 housing omnibus bill
SOURCE : Author
DIGEST : This bill makes non-controversial changes to
sections of law relating to housing.
Assembly Amendments change the time frame for which a
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council of government must transmit its regional housing
needs assessment plan to the Department of Housing and
Community Development to three day rather than
"immediately," and add a new section to the bill relative
to the direct sale of manufactured homes to non-profit
affordable housing developers.
ANALYSIS : This bill makes the following provisions:
1.Clarifies the timeline for the Department of Housing and
Community Development (HCD) to review a council of
government's (COGs) 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
three 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 owner occupancy with
requirements to show that no single owner controlled more
than 49 percent of the units on the relevant date. The
bill also makes technical changes to the statute.
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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 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 allows redevelopment agencies
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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 Section 33334.3(e) rather than (f). The
proposed amendment would correct this cross-reference to
refer to Section 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
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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 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.
Comments
The Senate Transportation and Housing Committee is
authoring this bill as a means of combining multiple,
non-controversial changes to statutes into one bill, so
that the Legislature can make minor amendments in a
cost-effective manner. There is no known opposition to any
item in the bill, and if concerns arise that cannot be
resolved, the provision of concern will be deleted from the
bill.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
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JA:nl 7/16/09 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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