BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 1220|
|Office of Senate Floor Analyses | |
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|327-4478 | |
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THIRD READING
Bill No: SB 1220
Author: DeSaulnier (D), et al.
Amended: 5/25/12
Vote: 27
SENATE TRANSPORTATION & HOUSING COMM. : 6-2, 4/24/12
AYES: DeSaulnier, Kehoe, Lowenthal, Pavley, Rubio,
Simitian
NOES: Gaines, Harman
NO VOTE RECORDED: Wyland
SENATE GOVERNANCE & FINANCE COMMITTEE : 5-2, 4/25/12
AYES: Wolk, DeSaulnier, Hancock, Hernandez, Kehoe
NOES: Dutton, La Malfa
NO VOTE RECORDED: Fuller, Liu
SENATE APPROPRIATIONS COMMITTEE : 5-2, 5/24/12
AYES: Kehoe, Alquist, Lieu, Price, Steinberg
NOES: Walters, Dutton
SUBJECT : Housing Opportunity and Market Stabilization
Trust Fund
SOURCE : California Housing Consortium
Housing California
DIGEST : This bill imposes a fee of $75 on the recording
of each real-estate related document, except for those
documents recorded in connection with a transfer subject to
a documentary transfer tax, and directs the money to the
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Housing Opportunity and Market Stabilization (HOMeS) Trust
Fund. The Legislature may then appropriate these funds for
the development, acquisition, rehabilitation, and
preservation of homes affordable to low- and
moderate-income households, including emergency shelters,
transitional and permanent rental housing, foreclosure
mitigation, and homeownership opportunities.
ANALYSIS : Existing law establishes a number of programs
at the Department of Housing and Community Development
(HCD) and the California Housing Finance Agency (CalHFA) to
make housing more affordable to California families and
individuals, including the following mainline programs:
1. Multifamily Housing Program, which funds the new
construction, rehabilitation, and preservation of
permanent and transitional rental homes for lower income
households through loans to local governments,
non-profit developers, and for-profit developers.
2. Joe Serna, Jr. Farmworker Housing Program, which funds
the development of ownership or rental homes for
agricultural workers through grants to local governments
and non-profit organizations.
3. Emergency Housing Assistance Program, which funds
emergency shelters and transitional homes for homeless
individuals and families through grants to counties and
non-profit entities for rehabilitation, renovation,
expansion, site acquisition, and equipment.
4. CalHome Program, which funds downpayment assistance,
home rehabilitation, counseling, self-help mortgage
assistance programs, and technical assistance for
self-help and shared housing through grants and loans.
5. California Homebuyer Downpayment Assistance Program,
which aids first-time homebuyers with down payment
and/or closing costs.
Historically, the state has funded these programs through
the sale of general obligations bonds. Most recently, the
voters approved a $2.1 billion bond through Proposition 46
in 2002 and then $2.85 billion through Proposition 1C in
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2006. HCD has awarded almost all of the funds made
available under these propositions, particularly in these
mainline programs.
Until 2011, the Community Redevelopment Law required
redevelopment agencies to set aside 20% of all tax
increment revenue to increase, improve, and preserve the
community's supply of low and moderate income housing
available at an affordable housing cost. In fiscal year
2009/10, redevelopment agencies deposited $1.075 billion of
property tax increment revenues into their Low and
Moderate-Income Housing Funds. With the elimination of
redevelopment agencies, this source of funding for
affordable housing is no longer available.
This bill:
1. Enacts the HOMeS Trust Fund Act of 2012, which creates
the HOMeS Stabilization Fund (Fund) in the State
Treasury. The Legislature may appropriate moneys in the
Fund as follows:
Supporting the development, acquisition,
rehabilitation, and preservation of low and moderate
income households, including emergency shelters,
transitional and permanent rental housing, including
necessary service and operating subsidies, foreclosure
mitigation, and homeownership opportunities.
Administering housing programs that receive an
appropriation from the Fund, not to exceed 5%.
The cost of periodic audits.
2. Imposes a fee of $75 whenever a person records a real
estate instrument, paper, or notice required or
permitted by law to be recorded, including:
Deeds, grant deeds, trustee deeds, or deeds of
trust
Reconveyance and quit claim deeds
Fictitious deeds of trust
Assignment of deed of trust
Request for notice, and notice of default
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Abstract of judgment
Subordination agreement
Declaration or abandonment of homestead
Release or discharge of lien or easement
Notice of trustee sale
Notice of completion
UCC financing statement
Mechanics' lien
Maps
Covenants, conditions, and restrictions
3. Excludes from the fee any document recorded in
connection with a transfer subject to a documentary
transfer tax, essentially exempting property transfers.
4. Provides that the fees shall be sent quarterly with the
HCD for deposit in the Fund. Counties must pay interest
at the legal rate for any funds not paid within 30 days
of the end of the quarter.
5. Requires the Bureau of State Audits to conduct periodic
audits to ensure that the annual allocation to
individual programs is awarded in a timely fashion
beginning two years from the bill's effective date. HCD
must include in its currently required annual report how
funds raised by the fee spent, and post the report on
its Web site.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Unknown fee revenue gains ranging from $300 million to
$720 million per year (HOMeS Fund), depending on the
volume of recorded documents.
Estimated annual administrative costs of approximately
$5.4 million (HOMeS Fund) to fund up to 47 positions at
HCD.
Costs in the range of $250,000 to $350,000 (HOMeS Fund)
in 2015-16 to the Bureau of State Audits (BSA) to conduct
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an initial audit. Ongoing periodic audit costs in the
range of $150,000 to $250,000 (HOMeS Fund).
SUPPORT : (Verified 5/24/12)
California Housing Consortium (co-source)
Housing California (co-source)
8 past directors of the Department of Housing and Community
Development
AARP
A&B Painting
Abode Communities
A Community of Friends
Affirmed Housing Group
Affordable Housing Associates
Affordable Housing Network of Santa Clara County
Aging Services of California
Alameda County Developmental Disability Council
Alameda County Social Services Agency
Alliance for Regional Solutions
Alpha Construction Company
Amador-Tuolumne Community Action Agency
AMCAL Multi-Housing
American Planning Association
Amy Hiestad Consulting
Anderson and Associates
AnewAmerica Community Corporation
Asian Pacific Environmental Network
BAR Architects
Bay Area Regional Health Inequities Initiative
BAYC
Berkeley Food and Housing Project
Bernal Heights Neighborhood Center
Bonita House
Brayer Electric Company
BRIDGE Housing Corporation
BRC Advisors
Building Futures with Women and Children
Building Industry Association of San Diego County
Burbank Housing Corporation
Burbank Housing Development Corporation
Business Leaders Task Force
Cabrillo Economic Development Corporation
Cahill Contractors
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California Alliance for Retired Americans
California Apartment Association
California Association of Housing Authorities
California Association of Local Housing Finance Agencies
California Association of Realtors
California Association of Social Rehabilitation Agencies
California Building Industry Association
California Coalition for Rural Housing
California Coalition for Youth
California Council of Community Mental Health Agencies
California Housing Partnership Corporation
California Infill Builders Association
California Labor Federation
California Mental Health Planning Council
California Rural Legal Assistance Foundation
Calistoga Affordable Housing
Caritas Management Corporation
Catholic Charities of California
Center for Elders' Independence
Center for Sustainable Neighborhoods
Center on Policy Initiatives
Central City Association
Central Coast Residential Builders
Central Sierra Continuum of Care
Century Housing
Charities Housing
Christian Church Homes
CIM Enterprises
Cities of Alameda, Berkeley, Burbank, Davis, Dublin,
Oakland, Sacramento, San Diego, San Jose, San Leandro,
Santa Monica, and Ventura
City and County of San Francisco
City Heights Community Development Corporation
Clifford Beers Housing
CLUE-LA
Collaborative Project Consulting
Community Action to Fight Asthma
Community Economics
Community Corporation of Santa Monica
Community Housing Opportunities Corporation
Community Housing Partnership
Community Housing Works
Community Interfaith Services
Comprehensive Child Development
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Core Companies
Corporation for Supportive Housing
Dahlin Group Architecture Planning
Design Electric
EAH Housing
East Bay Asian Local Development Corporation
East Bay Housing Organizations
Economic and Planning Systems, Inc.
Eden Housing
Enterprise Community Partners
Equity Community Builders
Eugene Burger Management Corporation
EveryOne Home
First United Methodist Church of Los Angeles
Fred Finch Youth Center
Goldfarb Lipman Attorneys
Greenbelt Alliance
Habitat for Humanity California
Habitat for Humanity East Bay
Habitat for Humanity Greater Los Angeles
Habitat for Humanity Greater San Francisco
Hearth Homes
Heffernan Insurance Brokers
Homeless Health Care Los Angeles
House Farmworkers!
Housing Advisory Group
Housing Authority of the City of Alameda
Housing Consortium of the East Bay
Housing Leadership Council of San Mateo County
Housing Trust of Santa Clara County
Humboldt Association of Realtors
ICON Builders
Interfaith Committee for Worker Justice of San Diego County
Islamic Shura Council of Southern California
Ivy Group
Jacobs Center for Neighborhood Innovation
Jamboree Housing Corporation
John Burton Foundation for Children Without Homes
Koning Eizenberg Architecture
Larkin Street Youth Services
Law Foundation of Silicon Valley
League of Women Voters of California
League of Women Voters of Marin County
League of Women Voters of Palo Alto
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Leddy Maytum Stacy Architects
LifeLong Medical Care
LifeSTEPS
Local Initiatives Support Corporation Bay Area
Local Initiatives Support Corporation Los Angeles
Los Angeles Business Council
L.A Family Housing
Low Income Investment Fund
Many Mansions
Marin Environmental Housing Collaborative
Marin Partnership to End Homelessness
Marin Workforce Housing Trust
Mayans Development
Mental Health America of Los Angeles
Mercy Housing
MidPen Housing
Mikiten Architecture
Miller, Morton, Caillat, & Nevis
Mill Valley Affordable Housing Committee
Mogavero Notestine Associates
Morley Builders
Move LA
Napa Valley Community Housing
National Community Renaissance
National Equity Fund
National Housing Law Project
National Youth Law Center
Natural Resources Defense Council
Neighborhood Housing Services Silicon Valley
New Directions
New Image Emergency Shelter for the Homeless
Non-Profit Housing Association of Northern California
North County Lifeline
Opportunity Fund Northern California
Orange County Business Council
Palm Communities
Palo Alto Housing Corporation
Pasadena-Foothills Association of Realtors
Permacity
Project Sentinel
Pyatok Architects
Public Advocates
DRA Infill Coalition
Regional Asthma Management and Prevention
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Related California
Resources for Community Development
Roberts-Obayashi Corporation
Rural Community Assistance Corporation
Sacramento Housing Alliance
Sacramento Yolo Mutual Housing Association
St. Anne's
St. Anthony Foundation
St. Ignatius Parish, San Francisco
St. John the Baptist Catholic Church of Baldwin Park
San Diego and Imperial Counties Labor Council
San Diego Building Trades Council Family Housing
Corporation
San Diego City Councilman Todd Gloria
San Diego County Building & Construction Trades Council
San Diego Housing Commission
San Diego Housing Federation
San Diego LGBT Community Center
San Diego Organizing Project
San Gabriel Valley Housing and Homeless Coordinating
Council
San Luis Obispo County Housing Trust Fund
San Mateo County Association of Realtors
San Mateo County Central Labor Council
San Mateo County Community College District
Satellite Housing
Self-Help Enterprises
Shelter, Inc.
Shelter Partnership
Sierra Business Council
Silicon Valley Leadership Group
Sonoma County Task Force for the Homeless
South Bay Community Services
South County Housing
Southern California Association of Non-Profit Housing
Southern California Housing Collaborative
Southwest Riverside County Association of Realtors
Stand Up for Neighborly Novato
State Building and Construction Trades Council of
California
Stocktonians Taking Action to Neutralize Drugs
Sun Country Builders
Sunseri Construction
Tenderloin Neighborhood Development Corporation
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The Arc
Treasure Island Homeless Development Initiative
Tuolumne County
Ubuntu Green
United Cerebral Palsy in California
United Homeless Healthcare Partners
Urban Habitat
USA Properties
Ventura County Supervisor John Zaragoza
Veterans Association of North County
Walk San Diego
Walton Construction Services
West Bay Housing Corporation
Western Center on Law and Poverty
Westport Construction
Yolo Community Care Continuum
OPPOSITION : (Verified 5/24/12)
California Bankers Association
California Land Title Association
California Mortgage Bankers Association
California Taxpayers Association
County Recorders Association of California
Howard Jarvis Taxpayers Association
ARGUMENTS IN SUPPORT : According to the author's office,
having a healthy housing market that provides an adequate
supply of homes affordable to families and individuals at
all income levels is critical to the economic prosperity
and quality of life in California. The decline in housing
production has played a significant role in creating and
prolonging the Great Recession. The lack of sufficient,
affordable homes near jobs impedes economic growth and
development by making it difficult for California employers
to attract and retain employees. Moreover, continued
affordability gaps mean that California has the second
lowest homeownership rate in the nation, that minimum wage
earners have to work 120 hours per week to afford the
average two bedroom rental apartment, and that California
has the largest population of homeless persons in the
nation.
The exhaustion of bond funds and the elimination of
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redevelopment agencies means that millions of Californians
affected by the state's chronic housing shortage, including
seniors, veterans, people experiencing chronic
homelessness, working families, people with mental,
physical, or developmental disabilities, agricultural
workers, people exiting jails, prisons, and other state
institutions, survivors of domestic violence, and former
foster and transition-aged youth, will remain unhoused or
living in substandard and unaffordable conditions.
California desperately needs a permanent, ongoing source or
sources of funding dedicated to affordable housing
development. Such investment will create consistency and
predictability in the affordable housing market, leverage
billions of dollars in private investment, lessen demands
on law enforcement and dwindling health care resources as
fewer people are forced to live on the streets or in
dangerous substandard buildings, and increase businesses'
ability to attract and retain skilled workers. In
addition, a dedicated revenue source will allow a "pay as
you go" approach, as opposed to issuing bonds that require
additional interest costs.
ARGUMENTS IN OPPOSITION : The California Taxpayers
Association argues that the fee is unreasonable and that
funding for low-income housing should not be placed on the
backs of people trying to record documents. The Howard
Jarvis Taxpayers Association believes that this is the
wrong time to increase taxes against struggling California
families already suffering through the highest foreclosure
rates in 70 years. It cites research ranking California as
14th among the states in combined state and local per
capita property taxes and believes that existing taxes on
property are already excessive. The County Recorders
Association of California writes that the new fee places
additional financial burdens at the expense of ordinary
Californians and will result in significant increases in
staff time to collect fees and address unsatisfied
customers.
JJA:mw 5/25/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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