BILL ANALYSIS
AB 398
Page 1
ASSEMBLY THIRD READING
AB 398 (Migden)
As Amended May 28, 1999
Majority vote
HOUSING 7-4 APPROPRIATIONS 14-7
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|Ayes:|Lowenthal, Corbett, |Ayes:|Migden, Cedillo, Davis, |
| |Dutra, Knox, Cedillo, | |Hertzberg, Kuehl, Papan, |
| |Torlakson, Wildman | |Romero, Shelley, |
| | | |Steinberg, Thomson, |
| | | |Wesson, Wiggins, Wright, |
| | | |R., Aroner |
|-----+--------------------------+-----+--------------------------|
|Nays:|House, Battin, Olberg, |Nays:|Brewer, Ashburn, Battin, |
| |Runner | |Pescetti, Maldonado, |
| | | |Runner, Zettel |
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SUMMARY : Enacts the Housing Bond Act of 2000, which proposes a
$750 million general obligation bonds for state housing
programs. Specifically, this bill :
1)Renames the Housing Rehabilitation Loan Fund the Housing
Rehabilitation Loan Account.
2)Renames the Rental Housing Construction Fund the Rental
Housing Construction Account.
3)Allows federally recognized California Indian tribes to apply
for funding in the same manner as local governments.
4)Creates the Housing Finance Committee to govern the issuance
and sale of bonds. The committee will be composed of the
Controller, Treasurer, Director of the Department of Finance,
Director of the Department of Housing and Community
Development, and the Executive Director of the California
Housing Finance Agency.
5)Creates the Home Building and Rehabilitation Fund into which
the bonds proceeds will be deposited and allocated as follows:
a) $550 million - Rental Housing Program Fund
AB 398
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b) $150 million - Home Purchase Assistance Fund
c) $ 50 million - Farmworker Housing Grant Program
6)Creates a Rental Housing Program Fund that merges the Housing
Rehabilitation Loan Account and the Rental Housing
Construction Account. The funds are to be continuously
appropriated to the Department of Housing and Community
Development (HCD) for the purposes of new construction,
rehabilitation, preservation, and code enforcement.
7)Provides that notwithstanding the provisions of this act, no
fund shall be created, bonds issued or sold, or appropriation
made, nor shall any portion of the act be submitted to voters.
(This language makes the bill a 41 vote bill.)
FISCAL EFFECT : According to the Assembly Appropriation
Committee analysis this bill has a general fund debt services
cost of about $1.25 billion over 25 years, or about $50 million
per year, assuming the bonds are sold at an interest rate of
5.0%. (This is the cost prior to 5/28/98 amendment removing
appropriation.)
COMMENTS : In 1988 voters approved Propositions 77 and 84, and
in 1990 voters approve Proposition 107. These Propositions
authorized the issuance of $600 million in general obligation
bonds for state housing programs. The bonds served as the
primary funding source for the state's affordable housing
programs, but all funds have been committed.
State bonds would be one of many fund sources to build new
affordable rental housing, rehabilitate existing rental housing,
and preserve through acquisition units most at risk of
converting to market rate due to the expiration of federal
Section 8 contracts, build Farmworker housing and assist
first-time homebuyers. The bond cannot fully address the huge
need, but it can supplement the loss of substantial federal and
local funding.
Supporters point out that the state needs to build 300,000
housing units per year to keep pace with population growth in
California, but only 100,000 units are constructed annually.
Both homeowners and renters feel the growing impact of this
disparity: 41% of California households could afford the
median-priced home in 1998, compared to 56% nationwide, and the
number of apartments built annually in California has dropped
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from 100,000 in the mid-1980s to 12,000 in the mid-1990s. To
meet the current needs of low-income families in California, we
would have to build nearly five million apartments.
SB 510 (Alarcon) is set to be heard in the Senate Housing and
Community Development Committee on April 19, 1999. That
legislation would enact the Housing Bond Acts of 2000, 2002,
2004, and 2006 which, if adopted by the voters, would authorize,
for purposes of financing existing housing programs, the
issuance, pursuant to the State General Obligation Bond Law, of
bonds in the aggregate amount of $980,000,000.
Analysis Prepared by : Tia Boatman / H. & C.D. / (916)
319-2085
FN: 0001452