BILL ANALYSIS THIRD READING SB 131 Roberti (D), et al 6/21/93 27 - Urgency SUBJECT: Housing programs: Housing and Jobs Bond Act of 1994 SOURCE: Author ____________________________________________________________________________ DIGEST: This bill creates the Housing and Jobs Bond Act of 1994, which šauthorizes a $280 million general obligation bond issue to be placed on the šJune 7, 1994 ballot. Proceeds will be allocated to various housing programs šdesigned to serve lower income families and individuals. This bill is a companion measure to SB 132 (Roberti), which deals with the šprogrammatic requirements of this bond measure. Senate Floor Amendments of 6/21/93: 1. Reduce the amount of the bond issue from $425 million to $280 million. 2. Specify that the use by the Department of Housing and Community Development of the proceeds of bonds allocated by this bill shall be subject to annual appropriation in the Budget Act. 3. Double-join the bill with SB 132 (Roberti). ANALYSIS: The Department of Housing and Community Development and the šCalifornia Housing and Finance Agency administers the following bond-funded šhousing programs: SB 131 Page 2 1. California Housing Rehabilitation Program-Owner Component (CHRP-O) - Provides three percent, deferred payment loans for housing rehabilitation of substandard homes owned and occupied by lower-income households. 2. California Housing Rehabilitation Program-Rental Component (CHRP-R) - Provides three percent, deferred payment loans (20 & 30+ years) for preservation and rehabilitation of unreinforced masonry, multifamily units to increase their ability to withstand earthquakes; and rehabilitation or acquisition and rehabilitation of substandard low- income rental housing. 3. Rental Housing Construction Program (RHCP) - Provides three percent, 40+ year loans with deferred payment of principal, for construction and permanent financing of new rental housing units for lower-income households. The number of assisted units in each project must be at least 30 percent of the units and at least two-thirds of these units must be for very-low-income households. 4. Family Housing Demonstration Program (FHDP) - Provides three percent, deferred-payment loans to local agencies and nonprofit housing development organizations to construct, rehabilitate, or acquire and rehabilitate congregate or community housing for lower-income households. 5. Emergency Shelter Program (ESP) - Provides grants to local governments and nonprofit agencies for the purchase, lease, renovation, repair, or operation of emergency shelters for the homeless. 6. Security Deposit Guarantee Program - Provides grants to local government agencies and nonprofit corporations to provide landlords with rental deposit contractual guarantees for homeless households transitioning to permanent rental housing. 7. Rural & Urban Predevelopment Loan Program (PLP) - Provides predevelopment loan for starting low-income housing projects. 8. Office of Migrant Services (OMS) - Provides grants to local government agencies, housing authorities, nonprofit corporation, school districts, and health agencies for the construction, expansion, rehabilitation and operation of migrant centers. 9. Farmworker Housing Grant Program (FWHG) - Provides up to a 50 percent matching grant to local agencies, nonprofit corporations, and federally recognized Indian tribes for the construction and rehabilitation of owner-occupied and rental housing for lower-income, year-round farmworkers. 10. Mobilehome Park Purchase Fund - Provides three percent, three-year loans to residential organizations to fund mobilehome park conversion costs; and three percent, 30-year loans to low-income households to CONTINUED SB 131 Page 3 assist resident purchase and ownership of individual mobilehomes. 11. California Housing Finance Agency (CHFA) - Issues tax-exempt revenue bonds, the proceeds of which are used to make direct loans to developers of multifamily housing or to provide loans through private lenders to low- and moderate-income persons and households for the purchase or rehabilitation of single-family housing. CHFA also provides bond and mortgage insurance through the California Housing Insurance Program (CHIF). 12. Home Purchase Assistance Fund - Provides assistance to first-time home buyers with interest rate subsidies to reduce interest rates; deferred-payment, low interest, second-mortgage loans to reduce the principal and interest payments; and down payment assistance to make financing affordable to first-time home buyers. This bill creates the Housing and Jobs Bond Act of 1994 and authorizes a š$280 million general obligation (GO) bond issue to be placed on the June 7, š1994 ballot with the proceeds allocated to various housing programs šdesigned to serve lower income families and individuals administered by the šDepartment of Housing and Community Development (HCD) and the California šHousing Finance Agency (CHFA). The proceeds would be allocated to the šfollowing programs: 1. Rental Housing Construction $ 80.0(a) 2. Housing Rehabilitation $ 65.0 3. Single Family Housing: Home Purchase Assistance $ 38.0 Single Family Mortgage Insurance $ 12.0 4. Emergency Shelter and Transitional Housing $ 20.0(b)(c)(d) 5. Farmworker Housing Grant $ 40.0 6. Multifamily Insurance $ 10.0 7. Predevelopment Loans: Urban PDL $ 5.0 Rural PDL $ 5.0 8. Mobilehome Park Purchase $ 5.0 ---------------------------------------------------------- TOTAL $280.0 million (a) Up to $10 million may be expended for the Family Housing Demonstration šProgram. (b) Up to $8 million may be expended for transitional housing. CONTINUED SB 131 Page 4 (c) Up to $8 million may be expended for emergency shelter and transitional šhousing for veterans and their families. (d) Up to $250,000 may be expended for rental deposit guarantees. The bill specifies that the use by the HCD of the proceeds of the bonds šshall be subject to annual appropriation in the Budget Act. This bill is double-joined with SB 132 (Roberti), which deals with the šprogrammatic requirements. Comment The 1990 California Statewide Housing Plan Update indicates an average of š210,000 housing units need to be built annually through 1995; over 1.3 šmillion housing units need to be rehabilitated or replaced; over 2.25 million households pay more šthan 25 percent of their income for housing; and over 720,000 households šlive in overcrowded housing. The number of new housing units constructed šover the past three years is far below what is needed to meet the housing šplan objective. In addition, the plan indicates that severe housing affordability problems šexist for many households. The most serious problems exist for those with šno shelter, the homeless. The estimated number of homeless in the state is šbetween 100,000 and 250,000, with the fastest growing segment being šfamilies with children. Most of the $600 million in GO bond proceeds approved in Propositions 77, š84 and 107 for various housing programs have been committed. Additional šbond monies will be needed to provide additional housing and meet the šobjectives of the housing plan. In testimony provided to the Committee on December 15, 1992, the HCD šDirector indicated that the $550 million administered by HCD will result in šconstruction or rehabilitation of over 14,000 living units, leverage šanother $700 million in investment and provide about 5.8 million shelter šdays. The California Housing Finance Agency indicated that the $50 million šadministered by CHFA resulted in 1,900 second loans averaging about š$25,000, combined with about $150 million in first mortgage financing. FISCAL EFFECT: Appropriation: Yes Fiscal Committee: Yes Local: No According to the Senate Appropriations Committee analysis (as of prior šamendments): Fiscal Impact (in thousands) Major Provisions 1993-94 1994-95 1995-96 Fund Bond authorization ------------$425,000---------- Bond* CONTINUED SB 131 Page 5 *Principal & interest totaling $797 million over 30 years. Average annual cost of $27 million based on a 5.64% interest rate. COMMENTS: Previously approved bonds authorized $450 million in 1988 and š$125 million in 1989. In November of 1990, voters rejected a housing bond šwhich would have provided $325 million in new and reauthorized bonds. Committee staff notes that previous analyses of existing programs by the šDepartment of Finance (DOF), the Legislative Analyst's Office (LAO) and the šTax Credit Allocation Committee indicate that subdividing large sums of šmoney into numerous housing programs causes excessive administrative costs šand reduces funds available for the programs themselves. DOF and the LAO šalso have expressed concerns that the number of funds and programs šadministered by HCD have become unwieldy. In addition, HCD has been unable što provide documentation on the success of some of the programs funded šunder this bond act, including the Emergency Housing Assistance and the šMigrant Farmworker Housing programs. Moreover, this bill provides no šlimits on how much HCD spends on administrative expenses. SUPPORT: (Verified 6/17/93) A.C.L.C., Stockton Affordable Housing Advocates, Santa Cruz Affordable Housing Alliance, San Francisco Affordable Housing Network, San Jose Alliance for the Mentally Ill of Clearlake Oaks, San Rafael, Marin Amador-Tuolumne Community Action Agency, Jackson American Association of University Women, Interbranch Community/Homeless šWomen & Children, San Jose American Institute of Architects, California Council Angela Center, Santa Rosa Asian Law Alliance, San Jose Bay Area Homelessness Program Benica Housing Authority Berkeley Community Law Center Berkeley Tenants Union Beyond Shelter, Los Angeles Best, Best & Krieger, Riverside Biblioteca de los Compesino, La Quinta Burbank Housing Development Corporation, Santa Rosa Calaveras Women's Crisis Line, San Andreas California Association of Homes for the Aging California Council of Churches California Homeless and Housing Coalition California Housing Partnership Corporation, Oakland California Rural Legal Assistance Foundation California State Council of Carpenters California/Nevada Community Action Association California Labor Federation, AFL-CIO California Legislative Council for Older Americans California Pacific Medical Center, San Francisco CONTINUED SB 131 Page 6 California Corporation for Caring Communities, San Diego C.A.N.A., Oceanside Capitol of California Council of Law Retirees Catholic Charities Immigration & Resettlement Program, Santa Rosa Catholic Social Service of Sacramento Centro de Asuntos Migratorios, San Diego Chicano Federation, San Diego Christian Service, St. Margaret Mary Church, Lomita Civic Center Barrio Housing Corporation, Santa Ana Coachella Valley Housing Coalition, Indio Coalition for Low Income Housing, San Francisco Community Action Board, Santa Cruz Community Asset Builders, San Francisco Community Development Commission, Monterey Park Community Economics, Inc., Oakland Community Housing Developers, Inc., San Jose Community Resources for the Disabled, Santa Cruz Community Support Network, Santa Rosa Community Economics, Inc., Oakland Conrad House, Inc. San Francisco Contra Costa Network of Mental Health Clients Corporate Fund for Housing, Irvine Council for the Spanish Speaking, Stockton David Paul Rosen & Associates, Oakland Desarrollo Latino-Americano Inc., Modesto Emergency Housing Consortium, San Jose Emergency Services Network of Alameda County Episcopal Community Services, San Diego Esperanza Community Housing Corporation, Los Angeles Fair Housing Congress of Southern California Fair Housing Council of SGV, Pasadena Fair Housing, Stockton Fair Housing Foundation, Long Beach Family Assistance Program, Los Angeles Federation of Retired Union Members, San Jose Friendship Center, Merced First Step Outreach Program, Fresno Food & Nutrition Services, Inc., Aptos Foundation of Resources for Equality and Employment of the Disabled, Grass šValley Fullerton Observer Golden Gate/Democratic League, San Francisco Golden State Mobilehome Owners League Goldfarb & Lipman, San Francisco Gramercy Place Shelter, Jewish Family Service, Los Angeles Gray Panthers of Berkeley, Redondo Beach, Santa Barbara, Santa Clara šCounty, South Bay, West Contra Costa County, Long Beach Gubb & Barshay, San Francisco Harbor Interfaith Shelter, San Pedro Haven Women's Center of Stanislaus, Modesto Help House the Homeless, San Jose Hermandad Mexicana Nacional, Santa Ana CONTINUED SB 131 Page 7 Hollywood Community Housing Corporation "Homes"/Rural Institute, Albion Housing Associates Development Consulting Housing Authority of the County of Contra Costa Housing Authority of the County of Monterey Housing Authority of the City of Napa Housing California, Sacramento Housing Corporation, Salinas Humboldt Women for Shelter, Eureka Inclusive Homes, Inc. West Hollywood Independent Living Resource Center, San Francisco Inglewood Neighbor Housing Services Inner City Law Center, Los Angeles Innovative Housing, San Rafael Inn Vision, San Jose Interfaith Committee for Affordable Housing, Saratoga Inyo Mono Advocates for Community Action, Bishop Jamboree Housing Corporation, Irvine KKB Consulting, Oakland Killefer Flammang Purtill Architects, Santa Monica Lassen County Council on Aging Laurin Associates, Citrus Heights Lawyers' Committee for Civil Rights, San Francisco Legal Aid Foundation of Los Angeles Legal Aid Foundation of Santa Barbara Legal Aid Society of San Diego Legal Services for Prisoners with Children, San Francisco Legal Services of Northern California, Inc., Redding Legal Services of Northern California, Inc., Sacramento Little Tokyo Service Center, Los Angeles Local Initiatives Support Corporaton, Los Angeles Los Angeles Community Design Center Los Angeles County Bar Association Homeless Project Los Angeles Family Housing Corporation Los Angeles House of Ruth CONTINUED SB 131 Page 8 Los Angeles NHS Los Amigos of Orange County Many Mansions, Inc., Non-Profit for Housing, Thousand Oaks Marathon Cooperative, Los Angeles Marin County Commission on Homelessness, San Rafael Marin Housing Authority Mary's Mercy Center Mental Health Advocacy Project, San Jose Mercy Housing, Sacramento Mercy Family Housing, Burlingame Midpenninsula Citizens for Fair Housing, Palo Alto Midpenninsula Housing Coalition, Palo Alto Mission Community Legal Defense, Inc., San Francisco Napa County Council for Economic Opportunity Napa Valley Family Homes Neighborhood Reinvestment Corporation, Oakland Nevada County Housing Development Corporation North County Chaplaincy, Encinitas North County Housing Foundation, Escondido North Westwood Village Residents Association North Coast Opportunities, Ukiah Oakland Independence Support Center Office of Human Relations of Santa Clara County Orange County Renters' Association Overland Sober Lodging, Santa Monica Pacific Community Services, Inc., Pittsburg Pacific Beach Harbor, Inc., San Diego Pacific Unitarian Church, Social Concerns Committee, Palos Verdes Estates Pajaro Valley Affordable Housing Corporation, Watsonville Pena Referral Center Inc., Santa Ana Peoples' Self-Help Housing Corporation, San Luis Obispo Pomona-Inland Valley Council of Churches Property & Lease Management, Inc., Sacramento Public Interest Law Firm, San Jose Public Counsel, Los Angeles Redwood Legal Assistance, Ukiah Renee Franken & Associates Resource Development, Modesto Resources of Community Development Rural California Housing Corporation, Sacramento Rural Communities Housing, Ukiah Sacramento Mutual Housing Association Sacramento Housing Alliance Sacramento Housing & Redevelopment Agency Salvation Army, Los Angeles San Bernardino County Fair Housing San Francisco Tenants Union San Francisco Neighborhood Legal Assistance Foundation San Francisco Redevelopment Agency San Mateo County Housing & Community Development San Francisco Council of Community Housing Organizations San Rafael Housing Corporation Santa Barbara Community Housing Corporation CONTINUED SB 131 Page 9 Santa Cruz Community Housing Corporation Santa Cruz Community Counseling Center Santa Cruz County Board of Supervisors City of Santa Monica Housing Division Santa Monica Democratic Club South Bay Democratic Women, Rolling Hills Southern California Association of Non-Profit Housing, Los Angeles Sentinel Fair Housing, Oakland Shared Living Resource Center, Inc., Berkeley Shasta County Housing Authority Shelter Partnership, Inc. Los Angeles Shelter for the Homeless, Westminster Shelter Plus,, Salinas Skid Row Housing Trust, Los Angeles Social Justice Committee, St. Thomas Aquinas Parish, Palo Alto Sonoma County Mobilehome Owners Association South Bay Community Services, Chula Vista South Berkeley Neighborhood Development Corporation Southwest Community Center, Santa Ana Spanish Speaking Unity Council, Oakland S.R.O. Housing Corporation, Los Angeles St. Vincent de Paul Village, San Diego Step Up On Second, Santa Monica Stepping Stone Youth Crisis Shelter, Santa Monica Stockton Shelter for the Homeless Techo, Inc., Watsonville Tenant Alliance, Citrus Heights Tenderloin Housing Clinic, Inc., San Francisco The Del Rio Improvement Association, Inc., Madera The CoHousing Company, Berkeley The Fair Housing Council of Riverside County, Inc. The Job Center-for Homeless, Torrance Timothy House, Culver City Transitional Living and Community Support, Sacramento Turning Point of Central California, Inc., Visalia Twin Pines Cooperative Foundation, Davis U.S. Properties Fund, Inc., Pomona University of California, Davis, Department of Environmental Design Urban Ministry of Palo Alto Venice Community Housing Corporation, Los Angeles Volunteer Center of Riverside West Contra Costa Conservation League Western Center on Law & Poverty Women's Care Cottage, North Hollywood Woman, Inc., San Francisco Yolo County District 2 Yolo Housing Alliance YWCA in Santa Clara Valley, San Jose OPPOSITION: (Verified 6/17/93) Western Mobilehome Association (WMA) CONTINUED SB 131 Page 10 ARGUMENTS IN SUPPORT: The bill's findings state there is an urgent and šcontinuing need to provide affordable housing to meet the increasingly šunfulfilled housing needs of this state. Investment in housing stimulates šthe economy by providing jobs, increasing income, and expanding local and šstate revenues. ARGUMENTS IN OPPOSITION: WMA argues, "Not only does WMA contest the šnecessity of further assistance for park residents who are already afforded šmany special subsidies to purchase their parks, but WMA also contests the šmanner in which your bill proposes to fund this assistance -- bonds. In šthese days of fiscal austerity, the members of WMA believe it would be šimprudent to sell bonds in order to assist a single class of purchasers." NM:ctl 6/22/93 Senate Floor Analyses CONTINUED