Amended in Senate June 17, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1793

Introduced by Assembly Member Chau

February 18, 2014

An act to begin delete add Section 34176.7 to end delete begin insert amend Section 34176.1 of end insert the Health and Safety Code, relating to begin delete community development. end delete begin insert redevelopment. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1793, as amended, Chau. begin delete Community development: affordable housing. end delete begin insert Redevelopment housing successor: report. end insert

begin insert

Existing law dissolved redevelopment agencies and community development agencies, and provides for the designation of successor agencies that are required to wind down the affairs of the dissolved redevelopment agencies and to, among other things, make payments due for enforceable obligations, as defined.

end insert begin insert

Existing law provides that the city, county, or city and county that authorized the creation of a redevelopment agency may elect to retain the housing assets and functions previously performed by the redevelopment agency. Existing law requires that any funds transferred to the city, county, or city and county or the entity assuming the housing functions of the former redevelopment agency, together with any funds generated from housing assets, to be maintained in a separate Low and Moderate Income Housing Asset Fund to be used in accordance with applicable housing-related provisions of the Community Redevelopment Law, except as specified. Existing law requires the housing successor annually to provide an independent financial audit of the fund to its governing body, and to post on its Internet Web site specified information.

end insert begin insert

This bill would require that posted information to also include, as specified, an inventory of homeownership units assisted by the former redevelopment agency or the housing successor that are subject to covenants or restrictions or to an adopted program that protects the former redevelopment agency’s investment of moneys from the Low and Moderate Income Housing Fund.

end insert begin delete

Existing law dissolved redevelopment agencies and community development agencies, as of February 1, 2012, and provides for the designation of successor agencies as defined. Existing law authorizes the city, county, or city and county that authorized the creation of a redevelopment agency to retain the housing assets, functions, and powers previously performed by the redevelopment agency, excluding amounts on deposit in the Low and Moderate Income Housing Fund.

end delete begin delete

This bill would require the California Housing Finance Agency, on or before July 1, 2015, to conduct a request for proposals to identify up to 6 nonprofit organizations as being eligible to accept responsibility, for enforcing the affordability deed restrictions on homeownership units of a former redevelopment agency, from a city, county, city and county, or housing authority. The bill would authorize a city, county, city and county, or housing authority that has elected to retain the housing assets and function previously performed by the redevelopment agency to transfer responsibility associated with enforcing the affordable deed restrictions on homeownership units to one of the qualified nonprofit organizations identified by the agency, as specified. The bill would additionally require the nonprofit organization to provide an annual audit of below market rate units to the donating city, county, city and county, or housing authority, and would require the city, county, city and county, or housing authority to publish the audit on its Internet Web site.

end delete

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 34176.1 of the end insert begin insert Health and Safety Code end insert
begin insert is amended to read: end insert

34176.1.  

Funds in the Low and Moderate Income Housing
Asset Fund described in subdivision (d) of Section 34176 shall be
subject to the provisions of the Community Redevelopment Law
(Part 1 (commencing with Section 33000)) relating to the Low and
Moderate Income Housing Fund, except as follows:

(a) Subdivision (d) of Section 33334.3 and subdivision (a) of
Section 33334.4 shall not apply. Instead, funds received from the
successor agency for items listed on the Recognized Obligation
Payment Schedule shall be expended to meet the enforceable
obligations, and the housing successor shall expend all other funds
in the Low and Moderate Income Housing Asset Fund as follows:

(1) For the purpose of monitoring and preserving the long-term
affordability of units subject to affordability restrictions or
covenants entered into by the redevelopment agency or the housing
successor and for the purpose of administering the activities
described in paragraphs (2) and (3), a housing successor may
expend per fiscal year up to an amount equal to 2 percent of the
statutory value of real property owned by the housing successor
and of loans and grants receivable, including real property and
loans and grants transferred to the housing successor pursuant to
Section 34176 and real property purchased and loans and grants
made by the housing successor. If this amount is less than two
hundred thousand dollars ($200,000) for any given fiscal year, the
housing successor may expend up to two hundred thousand dollars
($200,000) in that fiscal year for these purposes. The Department
of Housing and Community Development shall annually publish
on its Internet Web site an adjustment to this amount to reflect any
change in the Consumer Price Index for All Urban Consumers
published by the federal Department of Labor for the preceding
calendar year. For purposes of this paragraph, “statutory value of
real property” means the value of properties formerly held by the
former redevelopment agency as listed on the housing asset transfer
form approved by the Department of Finance pursuant to paragraph
(2) of subdivision (a) of Section 34176, the value of the properties
transferred to the housing successor pursuant to subdivision (f) of
Section 34181, and the purchase price of properties purchased by
the housing successor.

(2) Notwithstanding Section 33334.2, if the housing successor
has fulfilled all obligations pursuant to Sections 33413 and 33418,
the housing successor may expend up to two hundred fifty thousand
dollars ($250,000) per fiscal year for homeless prevention and
rapid rehousing services for individuals and families who are
homeless or would be homeless but for this assistance, including
the provision of short-term or medium-term rental assistance,
housing relocation and stabilization services including housing
search, mediation, or outreach to property owners, credit repair,
security or utility deposits, utility payments, rental assistance for
a final month at a location, moving cost assistance, and case
management, or other appropriate activities for homelessness
prevention and rapid rehousing of persons who have become
homeless.

(3) (A) The housing successor shall expend all funds remaining
in the Low and Moderate Income Housing Asset Fund after the
expenditures allowed pursuant to paragraphs (1) and (2) for the
development of housing affordable to and occupied by households
earning 80 percent or less of the area median income, with at least
30 percent of these remaining funds expended for the development
of rental housing affordable to and occupied by households earning
30 percent or less of the area median income and no more than 20
percent of these remaining funds expended for the development
of housing affordable to and occupied by households earning
between 60 percent and 80 percent of the area median income. A
housing successor shall demonstrate in the annual report described
in subdivision (f), for 2019, and every five years thereafter, that
the housing successor’s expenditures from January 1, 2014, through
the end of the latest fiscal year covered in the report comply with
the requirements of this subparagraph.

(B) If the housing successor fails to comply with the extremely
low income requirement in any five-year report, then the housing
successor shall ensure that at least 50 percent of these remaining
funds expended in each fiscal year following the latest fiscal year
following the report are expended for the development of rental
housing affordable to, and occupied by, households earning 30
percent or less of the area median income until the housing
successor demonstrates compliance with the extremely low income
requirement in an annual report described in subdivision (f).

(C) If the housing successor exceeds the expenditure limit for
households earning between 60 percent and 80 percent of the area
median income in any five-year report, the housing successor shall
not expend any of the remaining funds for households earning
between 60 percent and 80 percent of the area median income until
the housing successor demonstrates compliance with this limit in
an annual report described in subdivision (f).

(D) For purposes of this subdivision, “development” means new
construction, acquisition and rehabilitation, substantial
rehabilitation as defined in Section 33413, the acquisition of
long-term affordability covenants on multifamily units as described
in Section 33413, or the preservation of an assisted housing
development that is eligible for prepayment or termination or for
which within the expiration of rental restrictions is scheduled to
occur within five years as those terms are defined in Section
65863.10 of the Government Code. Units described in this
subparagraph may be counted towards any outstanding obligations
pursuant to Section 33413, provided that the units meet the
requirements of that section and are counted as provided in that
section.

(b) Subdivision (b) of Section 33334.4 shall not apply. Instead,
if the aggregate number of units of deed-restricted rental housing
restricted to seniors and assisted individually or jointly by the
housing successor, its former redevelopment agency, and its host
jurisdiction within the previous 10 years exceeds 50 percent of the
aggregate number of units of deed-restricted rental housing assisted
individually or jointly by the housing successor, its former
redevelopment agency, and its host jurisdiction within the same
time period, then the housing successor shall not expend these
funds to assist additional senior housing units until the housing
successor or its host jurisdiction assists, and construction has
commenced, a number of units available to all persons, regardless
of age, that is equal to 50 percent of the aggregate number of units
of deed-restricted rental housing units assisted individually or
jointly by the housing successor, its former redevelopment agency,
and its host jurisdiction within the time period described above.

(c) (1) Program income a housing successor receives shall not
be associated with a project area and, notwithstanding subdivision
(g) of Section 33334.2, may be expended anywhere within the
jurisdiction of the housing successor or transferred pursuant to
paragraph (2) without a finding of benefit to a project area. For
purposes of this paragraph, “program income” means the sources
described in paragraphs (3), (4), and (5) of subdivision (e) of
Section 34176 and interest earned on deposits in the account.

(2) Two or more housing successors within a county, within a
single metropolitan statistical area, within 15 miles of each other,
or that are in contiguous jurisdictions may enter into an agreement
to transfer funds among their respective Low and Moderate Income
Housing Asset Funds for the sole purpose of developing transit
priority projects as defined in subdivisions (a) and (b) of Section
21155 of the Public Resources Code, permanent supportive housing
as defined in paragraph (2) of subdivision (b) of Section 50675.14,
housing for agricultural employees as defined in subdivision (g)
of Section 50517.5, or special needs housing as defined in federal
or state law or regulation if all of the following conditions are met:

(A) Each participating housing successor has made a finding
based on substantial evidence, after a public hearing, that the
agreement to transfer funds will not cause or exacerbate racial,
ethnic, or economic segregation.

(B) The development to be funded shall not be located in a
census tract where more than 50 percent of its population is very
low income, unless the development is within one-half mile of a
major transit stop or high-quality transit corridor as defined in
paragraph (3) of subdivision (b) of Section 21155 of the Public
Resources Code.

(C) The completed development shall not result in a reduction
in the number of housing units or a reduction in the affordability
of housing units on the site where the development is to be built.

(D) A transferring housing successor shall not have any
outstanding obligations pursuant to Section 33413.

(E) No housing successor may transfer more than one million
dollars ($1,000,000) per fiscal year.

(F) The jurisdictions of the transferring and receiving housing
successors each have an adopted housing element that the
Department of Housing and Community Development has found
pursuant to Section 65585 of the Government Code to be in
substantial compliance with the requirements of Article 10.6
(commencing with Section 65580) of Chapter 3 of Division 1 of
Title 7 of the Government Code and have submitted to the
Department of Housing and Community Development the annual
progress report required by Section 65400 of the Government Code
within the preceding 12 months.

(G) Transferred funds shall only assist rental units affordable
to, and occupied by, households earning 60 percent or less of the
area median income.

(H) Transferred funds not encumbered within two years shall
be transferred to the Department of Housing and Community
Development for expenditure pursuant to the Multifamily Housing
Program or the Joe Serna, Jr. Farmworker Housing Grant Program.

(d) Sections 33334.10 and 33334.12 shall not apply. Instead, if
a housing successor has an excess surplus, the housing successor
shall encumber the excess surplus for the purposes described in
paragraph (3) of subdivision (a) or transfer the funds pursuant to
paragraph (2) of subdivision (c) within three fiscal years. If the
housing successor fails to comply with this subdivision, the housing
successor, within 90 days of the end of the third fiscal year, shall
transfer any excess surplus to the Department of Housing and
Community Development for expenditure pursuant to the
Multifamily Housing Program or the Joe Serna, Jr. Farmworker
Housing Grant Program. For purposes of this subdivision, “excess
surplus” shall mean an unencumbered amount in the account that
exceeds the greater of one million dollars ($1,000,000) or the
aggregate amount deposited into the account during the housing
successor’s preceding four fiscal years, whichever is greater.

(e) Section 33334.16 shall not apply to interests in real property
acquired on or after February 1, 2012. With respect to interests in
real property acquired by the former redevelopment agency prior
to February 1, 2012, the time periods described in Section 33334.16
shall be deemed to have commenced on the date that the
Department of Finance approved the property as a housing asset.

(f) Section 33080.1 of this code and Section 12463.3 of the
Government Code shall not apply. Instead, the housing successor
shall conduct, and shall provide to its governing body, an
independent financial audit of the Low and Moderate Income
Housing Asset Fund within six months after the end of each fiscal
year, which may be included in the independent financial audit of
the host jurisdiction. If the housing successor is a city or county,
it shall also include in its report pursuant to Section 65400 of the
Government Code and post on its Internet Web site all of the
following information for the previous fiscal year. If the housing
successor is not a city or county, it shall also provide to its
governing body and post on its Internet Web site all of the
following information for the previous fiscal year:

(1) The amount deposited to the Low and Moderate Income
Housing Asset Fund, distinguishing any amounts deposited for
items listed on the Recognized Obligation Payment Schedule from
other amounts deposited.

(2) A statement of the balance in the fund as of the close of the
fiscal year, distinguishing any amounts held for items listed on the
Recognized Obligation Payment Schedule from other amounts.

(3) A description of expenditures from the fund by category,
including, but not limited to, expenditures (A) for monitoring and
preserving the long-term affordability of units subject to
affordability restrictions or covenants entered into by the
redevelopment agency or the housing successor and administering
the activities described in paragraphs (2) and (3) of subdivision
(a), (B) for homeless prevention and rapid rehousing services for
the development of housing described in paragraph (2) of
subdivision (a), and (C) for the development of housing pursuant
to paragraph (3) of subdivision (a).

(4) As described in paragraph (1) of subdivision (a), the statutory
value of real property owned by the housing successor, the value
of loans and grants receivable, and the sum of these two amounts.

(5) A description of any transfers made pursuant to paragraph
(2) of subdivision (c) in the previous fiscal year and, if still
unencumbered, in earlier fiscal years and a description of and status
update on any project for which transferred funds have been or
will be expended if that project has not yet been placed in service.

(6) A description of any project for which the housing successor
receives or holds property tax revenue pursuant to the Recognized
Obligation Payment Schedule and the status of that project.

(7) For interests in real property acquired by the former
redevelopment agency prior to February 1, 2012, a status update
on compliance with Section 33334.16. For interests in real property
acquired on or after February 1, 2012, a status update on the
project.

(8) A description of any outstanding obligations pursuant to
Section 33413 that remained to transfer to the housing successor
on February 1, 2012, of the housing successor’s progress in meeting
those obligations, and of the housing successor’s plans to meet
unmet obligations. In addition, the housing successor shall include
in the report posted on its Internet Web site the implementation
plans of the former redevelopment agency.

(9) The information required by subparagraph (B) of paragraph
(3) of subdivision (a).

(10) The percentage of units of deed-restricted rental housing
restricted to seniors and assisted individually or jointly by the
housing successor, its former redevelopment agency, and its host
jurisdiction within the previous 10 years in relation to the aggregate
number of units of deed-restricted rental housing assisted
individually or jointly by the housing successor, its former
redevelopment agency, and its host jurisdiction within the same
time period.

(11) The amount of any excess surplus, the amount of time that
the successor agency has had excess surplus, and the housing
successor’s plan for eliminating the excess surplus.

begin insert

(12) An inventory of homeownership units assisted by the former
redevelopment agency or the housing successor that are subject
to covenants or restrictions or to an adopted program that protects
the former redevelopment agency’s investment of moneys from the
Low and Moderate Income Housing Fund pursuant to subdivision
(f) of Section 33334.3. This inventory shall include all of the
following information:

end insert begin insert

(A) The number of those units.

end insert begin insert

(B) In the first report pursuant to this subdivision, the number
of units lost to the portfolio after February 1, 2012, and the reason
or reasons for those losses. For all subsequent reports, the number
of the units lost to the portfolio in the last fiscal year and the reason
for those losses.

end insert begin insert

(C) Any funds returned to the housing successor as part of an
adopted program that protects the former redevelopment agency’s
investment of moneys from the Low and Moderate Income Housing
Fund.

end insert begin insert

(D) Whether the housing successor has contracted with any
outside entity for the management of the units and, if so, the identity
of the entity.

end insert

begin delete

SECTION 1.  

Section 34176.7 is added to the Health and Safety
Code, to read:

34176.7.  

(a) On or before July 1, 2015, the California Housing
Finance Agency shall conduct a request for proposals to identify
up to six nonprofit organizations as being qualified to accept
responsibility for enforcing the affordability deed restrictions on
homeownership units of a former redevelopment agency.

(b) Upon identification of the qualified nonprofit organizations
pursuant to subdivision (a), a city, county, city and county, or
housing authority that elected to retain the housing assets and
functions previously performed by the redevelopment agency,
may, by ordinance or resolution adopted at a noticed public
meeting, transfer responsibility associated with enforcing the
affordable deed restrictions on homeownership units to one of the
qualified nonprofit organizations identified by the agency.

(c) A qualified nonprofit organization that has received
responsibility associated with enforcing the affordability deed
restrictions on homeownership units from a city, county, city and
county, or housing authority, shall, on or before January 1 of each
year, provide an audit of the below market rate units to the donating
city, county, city and county, or housing authority. The audit shall
include the number of units that have been sold to new owners,
and any return on equity sharing. The city, county, city and county,
or housing entity shall publish the audit on its Internet Web site.

end delete