BILL ANALYSIS �
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: ab 1793
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: chau
VERSION: 6/17/14
Analysis by: Mark Stivers FISCAL: yes
Hearing date: June 24, 2014
SUBJECT:
Housing successors: reporting requirements
DESCRIPTION:
This bill requires a housing successor to include in its annual
report an inventory of homeownership units assisted by the
former redevelopment agency or the housing successor.
ANALYSIS:
Historically, the Community Redevelopment Law allowed a local
government to establish a redevelopment area and capture all of
the increase in property taxes generated within the area
(referred to as "tax increment") over a period of decades. The
law requires redevelopment agencies to deposit 20% of tax
increment into a Low and Moderate Income Housing Fund (L&M Fund)
to be used to increase, improve, and preserve the community's
supply of low- and moderate-income housing available at an
affordable housing cost.
Many agencies used a portion of these funds to support
homeownership, for which the law generally requires that the
units remain available at an affordable housing cost to, and
occupied by, low- or moderate-income households for 45 years.
Alternatively, an agency was allowed to permit sales of
ownership units at market prices prior to 45 years if it adopted
a program, such as equity sharing, which ensured that the
agency's initial investment would return to assist other
households.
In 2011, the Legislature enacted two bills, AB 26X (Blumenfield)
and AB 27X (Blumenfield), Chapters 5 and 6, respectively, of the
First Extraordinary Session. AB 26X eliminated redevelopment
agencies and established procedures for winding down the
agencies, paying off enforceable obligations, and disposing of
agency assets. AB 26X included provisions allowing the host
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city or county of a dissolving redevelopment agency to retain
the housing assets and functions previously performed by the
agency, except for funds on deposit in the agency's L&M Fund,
and thus become a housing successor. If the host city or county
chooses not to become the housing successor, a local housing
authority or the state's Department of Housing and Community
Development (HCD) takes on that responsibility.
AB 27X allowed redevelopment agencies to avoid elimination if
they made payments to schools in the current budget year and in
future years. In December 2011, the California Supreme Court in
California Redevelopment Association v. Matosantos upheld AB 26X
and overturned
AB 27X. As a result, all of the state's roughly 400
redevelopment agencies dissolved on February 1, 2012, and
housing successors assumed the former redevelopment agencies'
housing assets and functions, including the interest in
homeownership deed restrictions.
SB 341 (DeSaulnier), Chapter 796, Statutes of 2013, updated
redevelopment laws to revise the rules governing the activities
and expenditures of housing successors to reflect the new
situation. Among other things, that bill required housing
successors to report various items of information annually.
This bill additionally requires a housing successor to include
in its annual report an inventory of homeownership units
assisted by the former redevelopment agency or the housing
successor that includes the following:
The number of such units.
In the first report pursuant to this subsection, the number of
such units lost to the portfolio since February 1, 2012 and
the reason or reasons for these losses. For all subsequent
reports, the number of such units lost to the portfolio in the
last fiscal year and the reason or reasons for these losses.
Any funds returned to the housing successor as part of an
equity sharing or similar program.
Whether the housing successor has contracted with any entity
for the management of such units and, if so, the name of the
entity.
COMMENTS:
Purpose of the bill . According to the author, redevelopment
agencies assisted tens of thousands of below market-rate
homeownership units that are subject to deed restrictions or
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equity-sharing agreements that must be monitored and enforced to
recapture or retain affordability. Due to the fact that most
housing successors now have either no income or limited and
sporadic income, they are struggling to enforce these
restrictions, putting at jeopardy the long-term affordability of
the units.
According to a recent survey of housing successors, a majority
of responding agencies lost a significant amount of their
designated funding for managing these units and have laid off
over half of their staff responsible for managing or monitoring
affordable housing programs. One-third of responding agencies
have seen affordable housing lost to foreclosure since the
elimination of RDAs, and two-thirds expect it to happen.
This bill seeks to gather better data on the problem so that the
Legislature and stakeholders can develop effective responses.
Assembly Votes:
Floor: 77-0
Appr: 17-0
L Gov: 9-0
H&CD: 7-0
POSITIONS: (Communicated to the committee before noon on
Wednesday, June 18,
2014.)
SUPPORT: None received.
OPPOSED: None received.