BILL ANALYSIS �
SCR 6
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Date of Hearing: July 13, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SCR 6 (Lowenthal) - As Introduced: January 31, 2011
Policy Committee: Housing and
Community Development Vote: 6-1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This resolution encourages state and local multifamily housing
lending agencies to align their policies on the provision of
free internet access with those of the state 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.
FISCAL EFFECT
This resolution will not have a significant fiscal effect.
COMMENTS
1.Purpose . According to the author, persons without internet
access and training find it difficult to compete in the
technology-driven economy. The author points out that
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,
SCR 6
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California has recognized the importance of internet service
for low-income residents of affordable housing through TCAC
policy. This resolution seeks to enhance the educational and
economic opportunities of low-income households, by
encouraging state and local multifamily housing lending
agencies to align their internet policies with TCAC's
policies.
2.Background . 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 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. 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.
3.Costs of internet service. 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 may
help achieve other important public policy goals, such as
closing the digital divide and improving educational and job
opportunities for low-income residents.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081