BILL ANALYSIS �
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Date of Hearing: June 29, 2011
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Norma Torres, Chair
SCR 6 (Lowenthal) - As Introduced: January 31, 2011
SENATE VOTE : 25-15
SUBJECT : Affordable housing: in-home Internet service
accessibility.
SUMMARY : Encourages state and local multifamily housing
lending agencies to align their policies on the provision of
free internet access with those of the Tax Credit Allocation
Committee (TCAC). Specifically, this bill :
1)Encourages all state and local affordable housing lenders who
administer competitive multifamily housing programs to follow
the TCAC policy on high-speed internet access by providing
competitive points for developments that will provide
high-speed internet service to each unit for a minimum of 10
years, free of charge to the tenants.
2)Encourages all state and local affordable housing lenders to
recognize both the costs for installing high-speed internet
network infrastructure as an eligible development cost and the
costs of ongoing internet service and network maintenance as
eligible operating costs.
EXISTING LAW :
1)Establishes TCAC to administer the federal and state
Low-Income Housing Tax Credit programs.
2)Establishes a number of grant and loan programs for the
development of affordable rental housing administered by the
Department of Housing and Community Development (HCD).
FISCAL EFFECT : Unknown
COMMENTS :
Through a highly competitive application process, TCAC awards
state and federal tax credits to the developers of affordable
rental housing. In turn, these developers take on investors as
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limited liability partners, who in exchange for the tax credits
provide funds in the form of equity for building the affordable
housing.
In 2003, TCAC amended its scoring regulations to encourage
affordable housing developers to provide broadband internet
access. The regulations provide two points within the site
amenity category for providing high-speed internet service to
each unit for at least 10 years, free of charge to tenants. As
a practical matter, TCAC considers the infrastructure design and
installation costs associated with the internet network as
eligible development costs that can be included when calculating
the amount of tax credits for which the development is eligible.
The ongoing costs of network maintenance and the internet
service itself are eligible operating costs.
HCD administers a number of programs that finance the
development of affordable rental housing, including the
Multifamily Housing Program and the Joe Serna, Jr. Farmworker
Housing Grant Program. HCD's regulations are not specific on the
issue of internet-related costs, but its practice is to allow
the costs of the design and installation as eligible development
costs but not to allow the ongoing costs of maintaining a
high-speed internet network and providing free internet service
to residents as an eligible operating cost.
Many counties and cities also provide financing for the
development of affordable rental housing. Counties and cities
primarily use redevelopment resources from the Low- and
Moderate-Income Housing Fund and federal funds from the HOME and
Community Development Block Grant programs for these purposes.
Counties and cities establish their own policies with respect to
allowing internet costs as eligible expenditures, and policies
vary widely.
SCR 6 encourages all state and local affordable housing lenders
that administer competitive multifamily housing programs to
follow the TCAC policy on internet access by providing
competitive points for the provision of free high-speed internet
service and recognizing the cost of installing high-speed
internet network infrastructure as an eligible development cost
and the cost of ongoing internet service and network maintenance
as eligible operating costs.
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According to the author, persons without internet access and
training will find it difficult to compete in the increasingly
technology-driven economy. Low-income households are
significantly less likely to have a computer, internet access,
or home broadband service and are therefore at risk of falling
further behind. Since 2003, California has recognized the
importance of internet service for low-income residents of
affordable housing through TCAC policy. As a result of this
policy, the nonprofit One Economy Corporation has helped 283
affordable housing developments in California design and install
data network infrastructure, and the residents of more than
19,000 affordable housing units have free in-home internet
service. Other state and many local public lenders do not
encourage the provision of free internet access in the same way,
if at all. In order to enhance the educational and economic
opportunities of low-income households, this resolution seeks to
encourage state and local multifamily housing lending agencies
to align their internet policies with TCAC's policies.
The costs of providing free internet access to residents of
affordable housing are minimal but not free. A typical one-time
cost to install a wireless network in an apartment complex is
$206 per unit. The typical costs of providing internet service
and maintaining the network run between $3 and $7 per unit per
month. At some point, these additional costs reduce the number
of affordable units that can be developed with existing
subsidies, but the units that are constructed with high-speed
internet access help achieve other important public policy
goals, such as closing the digital divide and improving
educational and job opportunities for low-income residents.
REGISTERED SUPPORT / OPPOSITION :
Support
One Economy Corporation (sponsor)
California Communities United Institute
Opposition
None on file
Analysis Prepared by : Anya Lawler / H. & C.D. / (916)
319-2085
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