BILL ANALYSIS �
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THIRD READING
Bill No: AB 1672
Author: Torres (D)
Amended: 6/19/12 in Senate
Vote: 21
SENATE TRANSPORTATION & HOUSING COMM. : 6-3, 6/26/12
AYES: DeSaulnier, Kehoe, Lowenthal, Pavley, Rubio,
Simitian
NOES: Gaines, Harman, Wyland
SENATE APPROPRIATIONS COMMITTEE : 6-1, 8/6/12
AYES: Kehoe, Alquist, Dutton, Lieu, Price, Steinberg
NOES: Walters
ASSEMBLY FLOOR : 50-26, 5/14/12 - See last page for vote
SUBJECT : Housing-Related Parks Program
SOURCE : Author
DIGEST : This bill makes a number of changes to the
Housing-Related Parks Program (HRPP).
ANALYSIS : In November 2006, California voters approved
Proposition 1C, the $2.85 billion Housing and Emergency
Shelter Trust Fund Act of 2006. Among other things,
Proposition 1C included $200 million for "housing-related
parks grants in urban, suburban, and rural areas, subject
to the conditions and criteria that the Legislature may
provide in statute."
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AB 2494 (Caballero), Chapter 641, Statutes of 2008, created
the program for the expenditure of these funds, named it
the Housing-Related Parks Program, and assigned
administration of the program to the Department of Housing
and Community Development (HCD) in conjunction with the
Department of Parks and Recreation. The purpose of the
HRPP is to reward cities and counties that have permitted
new housing units affordable to very low- or low-income
households on which construction has started with grants
for the creation, development, or rehabilitation of park
and recreation facilities, including land acquisition. To
be eligible for an HRPP grant, a city and county must meet
all of the following conditions:
1. Have an HCD-approved housing element and have submitted
its annual housing element progress report within the
previous 12 months.
2. Document a housing start within the program year for a
housing unit that is affordable to very low- or
low-income households. Qualifying rental units must be
subject to covenants ensuring affordability for 55
years. Qualifying ownership units must be affordable at
initial sale and, if subsidized with public funds,
subject to affordability restrictions established by HCD
that, at a minimum, require that public funds be
returned and reused for a period of at least 20 years.
Existing law further requires that HCD establish base
awards on a per-bedroom basis for each affordable unit,
with the grant for very-low income units being greater than
the grant for low-income units. HCD has set the base award
at $500 per bedroom for a low-income unit and $750 per
bedroom for a very low-income unit. Existing law further
requires HCD to award bonus funds to cities and counties
for all of the following, with the amount HCD awards in
parentheses:
1. Units affordable to extremely low-income households.
($250 per bedroom)
2. Units in infill projects. ($250 per bedroom)
3. The city or county has exceeded overall housing
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production thresholds established by HCD. ($50 per
low-income bedroom, $75 per very-low income bedroom)
4. The city or county commits to spending the funds in an
area that meets the definition of a park deficient
community. ($100 per bedroom)
5. The city or county commits to spending the funds on a
new or improved park or community recreational facility
that serves a disadvantaged community. ($100 per
bedroom)
6. The city or county commits to spending the funds on a
facility that supports infill development. ($100 per
bedroom)
7. The city or county has conformed its general plan to the
regional blueprint. ($100 per bedroom)
HRPP is not a competitive program. It is more like an
entitlement. Cities and counties that meet the criteria
are guaranteed a funding award. If more jurisdictions
qualify for grants than there are funds available, HCD
pro-rates the grant awards. While HCD awards funds based
on housing starts, existing law requires that it disburse
funds only upon documentation of a city or county
certificate of occupancy or final inspection after
construction is complete. In order to avoid small grants,
a city or county must qualify for at least $75,000 worth of
funding in order to receive a grant. If a city or county
does not meet that threshold, it may count its housing
starts from that program's years towards the next year's
application.
To date, HCD has made awards for housing units started in
the 2010 calendar year and expects to make awards for
housing units started in the 2011 calendar year very soon.
HCD and the Legislature anticipated that HCD would make
roughly $25 million in awards per year. Largely due to the
slowdown in housing construction generally and the decrease
in funding available to finance affordable housing
development specifically, however, awards have
significantly lagged this expectation. In HRPP's first
year, HCD awarded only $8.8 million. HCD is likely to
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award $11.3 million for calendar year 2011.
This bill makes a number of changes to the HRPP, as
follows:
1. Allows cities and counties also to obtain awards for
acquired, substantially rehabilitated, and preserved
affordable housing units for which the city or county
has committed financial assistance, as those terms are
defined in housing element law, except that the city or
county may have committed assistance at any time during
the housing element period.
2. Grants awards for new housing based on building permits
issued rather than housing starts.
3. Requires a city or county to have submitted its annual
housing element progress report for the preceding
calendar year, as opposed a report within the preceding
12 months.
4. Repeals the prohibition on HCD disbursing funds prior to
receiving documentation of a city or county certificate
of occupancy or final inspection.
5. Requires HCD to grant a "substantial" bonus for the
following:
A. New affordable housing units.
B. The city or county committing to spending the
funds in an area that meets the definition of a
park-deficient community.
C. The city or county committing to spending the
funds on a new or improved park or community
recreational facility that serves a disadvantaged
community.
6. Requires HCD to grant a regular bonus for the following:
A. Units affordable to extremely low-income
households.
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B. Units in infill projects.
C. The city or county has exceeded overall housing
production thresholds established by HCD.
D. The city or county committing to spending the
funds on a facility that supports infill development.
E. The city or county conforming its general plan to
the regional blueprint.
Comments
Purpose of this bill . The author introduced this bill to
simplify the application process for HRPP, to enable
jurisdictions to receive their grant funds sooner, to allow
awards for the acquisition, rehabilitation, and
preservation of affordable housing, as opposed to just new
construction, and to increase incentives for local
governments to spend award funds in park-deficient and
disadvantaged neighborhoods.
Under existing law, HCD makes HRPP awards based on the
number of housing starts in a city or county in a given
year. The HRPP statute defines a housing start to mean
that the local government has issued a completed foundation
inspection. Unfortunately, there is little consistency in
documenting foundation inspections across jurisdictions,
which has left some jurisdictions unsure how to document
their eligibility or confused as to whether they even are
eligible for HRPP funds. In addition, some types of
construction, such as podium structures, do not involve a
foundation inspection. This bill replaces housing starts
with building permits, which all cities and counties
already issue and track, as the way to document HRPP
eligibility.
This bill also eliminates a requirement that HCD not
disburse funds to local governments until they issue
certificates of occupancy for the units that qualified them
for the HRPP award. Generally an 18-month lag occurs
between the time a city or county issues a building permit
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and the time units are completed, which means that local
governments must wait a substantial amount of time between
receiving an award and actually getting the money. While
the intent of the requirement is to ensure that the units
that qualify a jurisdiction for an award actually get
built, it is extremely rare for an affordable housing
project not to proceed through the construction process
once the city or county has issued building permits. In
addition, given that the HRPP is intended to reward local
governments for approving affordable housing, it does not
necessarily make sense to rescind an award in the event
that a project fails to proceed despite having received all
necessary local approvals.
The author is also concerned that HRPP park grants have not
necessarily gone to those communities that are most in need
of park facilities. Although the law allows for HCD to
award bonus funds to cities and counties that meet the
definition of park deficiency, HCD has given that criterion
the lowest amount of bonus funds. In an effort to steer
more of the funding to disadvantaged and park-deficient
communities, this bill requires that HCD award substantial
bonus funds to cities and counties that commit to spending
the funds in a park-deficient or disadvantaged
neighborhood.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Potential acceleration of bond sales, which could result
in increased debt service payments in the short term if
demand exceeds original expectations of expenditure
(Housing Urban-Suburban-and-Rural Parks Account -
Proposition 1C bond funds).
Minor costs to HCD to revise program guidelines (Housing
Urban-Suburban-and-Rural Parks Account).
SUPPORT : (Verified 8/8/12)
AFSCME
Cities of Emeryville, Salinas, and Ventura
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Housing California
League of California Cities
League of California Cities, Los Angeles County Division
ASSEMBLY FLOOR : 50-26, 5/14/12
AYES: Alejo, Allen, Ammiano, Beall, Block, Blumenfield,
Bonilla, Bradford, Brownley, Buchanan, Butler, Charles
Calderon, Campos, Carter, Cedillo, Chesbro, Davis,
Dickinson, Eng, Feuer, Fong, Fuentes, Furutani, Galgiani,
Gatto, Gordon, Hall, Hayashi, Roger Hern�ndez, Hill,
Huber, Hueso, Huffman, Lara, Bonnie Lowenthal, Ma,
Mendoza, Mitchell, Monning, Pan, V. Manuel P�rez,
Portantino, Skinner, Solorio, Swanson, Torres,
Wieckowski, Williams, Yamada, John A. P�rez
NOES: Achadjian, Bill Berryhill, Conway, Cook, Donnelly,
Beth Gaines, Garrick, Gorell, Grove, Hagman, Halderman,
Harkey, Jeffries, Jones, Knight, Logue, Mansoor, Miller,
Morrell, Nestande, Nielsen, Norby, Olsen, Silva, Smyth,
Wagner
NO VOTE RECORDED: Atkins, Fletcher, Perea, Valadao
JJA:k 8/8/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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