BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 510|
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THIRD READING
Bill No: SB 510
Author: Alarcon (D), et al
Amended: 7/12/99
Vote: 21
SENATE HOUSING & COMM. DEV. COMMITTEE : 5-2, 4/19/99
AYES: Alarcon, Bowen, Costa, Escutia, Vasconcellos
NOES: Johannessen, Monteith
SENATE APPROPRIATIONS COMMITTEE : 8-4, 6/28/99
AYES: Johnston, Alpert, Bowen, Burton, Escutia, Karnette,
Perata, Vasconcellos NOES: Johnson, Kelley, Leslie,
Mountjoy
NOT VOTING: McPherson
SUBJECT : Housing: bonds
SOURCE : Author
DIGEST : This bill enacts the Housing Bond Acts of 2000,
2002, 2004 and 2006 which authorize $980 million ($245
million each) in general obligation bonds.
Senate Floor Amendments of 7/12/99 remove the urgency
clause and declare that the bill's provisions shall not be
operative and are for display purposes only.
ANALYSIS : State law specifies that a basic goal of state
government is to provide a decent home and suitable living
environment for every California family. Federal, state,
and local government housing programs provide resources to
CONTINUED
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achieve this goal. At the state level, three state
agencies administer various housing programs to encourage
the construction of affordable housing: California Housing
Finance Agency, Treasurer's Office, and Department of
Housing and Community Development.
Created in 1975, the California Housing Finance Agency
(CHFA) serves as the State's mortgage bank to provide below
market rate mortgage financing to meet the housing needs of
low to moderate income families. CHFA provides this lower
interest-rate capital through the sale of mortgage revenue
bonds, which generate funds for multifamily housing and to
provide loans through private lenders to low- and
moderate-income persons and households for purchasing
single family homes. CHFA administers numerous programs
for affordable single family homes and rental housing.
Located within the Treasurer's Office, the California Tax
Credit Allocation Committee (TCAC), administers the state's
low-income housing tax credit program. TCAC distributes
both the federal and state tax credits. The state's
program augments the federal tax credit program. Both
programs encourage private investment in rental housing for
low- and moderate-income persons and households.
In the late 1980s and early 1990s, the voters approved
Propositions 77, 84, and 107, which authorized the issuance
of $600 million in general obligation bonds for state
housing programs. The Department of Housing and Community
Development (HCD) administers various programs and
distributed the bond moneys to local governments and
developers for affordable housing. By the end of 1996,
these funds were all committed.
Affordable housing advocates say that federal and state
housing programs along with private capital have not been
able to meet the demand for affordable housing. Additional
funds are needed to encourage more affordable housing
construction.
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This bill creates the Housing Bond Acts of 2000, 2002,
2004, and 2006, which authorizes four $245 million ($980
million total) general obligation bond issues to be placed
on four statewide ballots. If approved by the voters, This
bill provides funds to help first-time home buyers purchase
single family homes; to build single family homes,
apartments, and farmworker housing; to preserve existing
housing; and code enforcement as follows:
1.$260 million ($65 million each) for first-time homebuyer
down payment assistance; 20% set aside for public safety
employees.
2.$20 million ($5 million each) for self-help ownership
housing.
3.$200 million ($50 million each) for senior and disabled
rental housing.
4.$140 million ($35 million each) for rental housing.
5.$60 million ($15 million each) for welfare to work
housing.
6.$200 million ($50 million each) for housing
rehabilitation, preservation, and code enforcement.
7.$100 million ($25 million each) for farmworker housing.
The bill specifies that its provisions shall not become
operative and are for display purposes only, unless this
provision is deleted or repealed.
Comments :
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1.Meeting the needs . California's population continues to
grow at a rapid rate and housing construction cannot keep
up with demand. State housing officials estimate that we
need to annually build 250,000 new homes to meet the
demand but only 126,000 new homes were built last year.
This year an estimated 156,000 new homes will be built,
which is still 100,000 units short. An estimated 1.45
million housing units need to be rehabilitated or
replaced. Also, an estimated two million households have
unaffordable housing costs, those paying excessive
proportions of their income for housing. These factors
all point to a need to encourage more affordable home
construction. This bill provides an additional funding
source to meet the state's affordable housing needs.
2.Renew the commitment . Over the past decade, the state's
affordable housing programs received $600 million from
three general obligation bonds: Propositions 77, 84, and
107. The funds have been all committed. For the last
several years, the state has approved only small General
Fund appropriations through the Budget Act to fund
housing programs. The Legislature has not approved a
permanent funding source to replace the previous bond
acts and the demand for affordable housing continues to
increase. This bill renews the state's commitment to
affordable housing.
3.Who's responsible for housing ? During the 1930s, the
federal government established public housing programs to
expand homeownership and provide subsidies to the poor.
The federal government's goal was to provide every
American with decent housing. Federal policies provided
subsidies to local public housing authorities and private
developers for low-income and moderate-income housing.
But since the 1980s, the federal government has been
reducing its role in housing assistance. With fewer
federal resources, state and local governments are being
pressured to do more.
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4.Private funding sources not adequate . In California,
housing advocates say that conventional apartment
builders don't build enough rental units for the lower
income individuals and families. Conventional financing
costs, high land costs, developer fees, lengthy permit
review processes, architectural design requirements, and
project management costs make it difficult to keep rents
affordable to lower income households. Higher rents are
necessary to cover the project costs. The cost of
producing new housing units with private capital results
in fewer units for lower income households and they have
to rely on existing housing stock for a place to live.
In high cost areas, property owners are rehabilitating
older rental units and charging higher rents making if
difficult for lower income tenants to find a place to
live.
5.Jobs to housing . Business representatives and builders
say that housing conditions can influence the state's
economic climate. Housing costs and availability can
affect the ability of businesses to hire and retain
workers, and their decision to locate in California. In
some parts of the state, housing shortages have created
problems for employees because they can't find affordable
housing close to work. They have to commute long
distances. This bill will provide opportunities for
housing that is closer to work.
6.Related bill . AB 398 (Migden) enacts the Housing Bond
Act of 2000, which authorizes $750 million in general
obligation bond funds if approved by the voters. AB 398
is currently in the Senate Housing and Community
Development Committee.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
Fiscal Impact (in thousands)
Major Provisions 1999-2000 2000-01
2001-02 Fund
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G.O. Bond authorization ----- $14.5
million*----- Bond
*Principal and interest to total $14.5 million annually for
EACH bond. After each bond has been passed, annual
principal and interest payments will be $55 million based
on an interest rate of 5% and a term of 30 years.
SUPPORT : (Verified 7/12/99)
AFL-CIO Housing Investment Trust
A Community of Friends, Los Angeles
ASIAN Incorporated, San Francisco
Barbara Sanders Associates, Oakland
Bonita House, Inc., Oakland
Bowman Grove Community Service Planning, Davis
Burbank Housing Development Corporation, Santa Rosa
Cabrillo Economic Development Corporation, Saticoy
Caduceus Outreach Services, San Francisco
California Apartment Association
California Association of Homes and Services for the Aging
/CAHSA
California Building Industry Association
California Church Impact
California Food Policy Advocates, San Francisco
California Immigrant Welfare Collaborative, San Francisco
California Legislative Council for Older Americans
California Reinvestment Committee, San Francisco
California Rural Legal Assistance Foundation
Catholic Charities of the Diocese of Santa Rosa
Central Valley Coalition For Affordable Housing, Merced
Chico Homeless Task Force
Chinatown Community Development Center, San Francisco
Christian Church Homes, Oakland
City of Carlsbad Housing & Redevelopment Department
City of Chico/ Homeless Task Force
City of East Palo Alto, Rent Stabilization Program
Civic Center Barrio Housing Corporation, Santa Ana
Coachella Valley Housing Coalition, Indio
Community Economics, Inc., Oakland
Community Housing Development Corporation of Santa Rosa
Community Housing Development Council, Davis
Community Housing Partnership
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Conference of Social Justice Coordinators, Los Angeles
Congress of California Seniors
Contra Costa County Homeless and Housing Service Providers
Corporation for Supportive Housing, Oakland
Council of Churches of Santa Clara County
East Bay Habitat for Humanity, Oakland
East Oakland Community Development Corporation
East Oakland Recovery Center
East Palo Alto Rent Stabilization
E.M. Schaffran and Company, El Cerrito
Ecumenical Assn for Housing, San Rafael
Eden Housing, Inc., Hayward
EPA Can Do, East Palo Alto
Episcopal Community Services, San Francisco
Esperanza Community Housing Corporation, Los Angeles
First Community Housing, San Jose
Friends of the Homeless, Santa Rosa
Graphic Communications Union Retirees, Oakland
Gubb & Barshay Attorneys, San Francisco
Home Base, San Francisco
Homes for Life Foundation, Los Angeles
Homeless Prenatal Program, San Francisco
Honorable Dan Albert, Mayor of Monterey
Housing Authority of the City of Santa Barbara
Housing California
Housing Consortium of the East Bay, Berkeley
Housing for Independent People, Inc., San Jose
Housing Rights Committee of San Francisco
Human Assistance Inc., Newport Beach
ICF Consulting Group, San Rafael
IFSN, Santa Rosa
Jamboree Housing Corporation, Irvine
Justice Office, Sisters Of St. Joseph, Los Angeles
Katrina Bergen Associates, Oakland
Lauterbach and Associates Architects, Camarillo
League of California Cities
Legal Aid Foundation of Santa Barbara
MACSA, Inc., San Jose
Marin City Community Development Corporation
Marin Continuum of Housing and Services
Marin Housing Council, San Rafael
Mary Erickson Community Housing, San Juan Capistrano
Mental Health Association of San Francisco
Mercy Charities Housing California, San Francisco
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Mid Peninsula Housing Coalition, Redwood City
Mountain View/Los Altos Advocates for Affordable Housing
Napa Valley Community Housing, Napa
Nevada County Housing and Community Services
Non-Profit Housing Association of Northern California
Oakland Community Housing, Inc..
Oakland Community Housing Corporation
Oakland Community Housing Management, Inc
Older Women's League of California
Orange County Homeless Issues Task Force
Pajara Valley Housing Corporation, Watsonville
Peace and Justice Center of Southern California, Los
Angeles
People's Self-Help Housing Corporation, San Luis Obispo
Planning for Elders in the Central City
Plowshares Peace and Justice Center, Ukiah
Public Interest Law Project, Oakland
Public Law Center, Santa Ana
Redwood City Planning and Redevelopment
Religious Witness with Homeless People, San Francisco
Renee Franken and Associates, Inc., Sacramento
Resources for Community Development, Berkeley
Richard Olmsted Architects, San Francisco
Rubicon Programs, Inc., Richmond
Rural California Housing Corporation, Sacramento
Saben Investments, Inc., Sepulveda
Sacramento Mutual Housing Association
Saint Joseph Health System, Orange
SAMCO, San Jose
San Bernardino Fair Housing Council
San Francisco Coalition on Homelessness
San Francisco Department of Pubic Health
San Francisco Department of Public Health Housing Services
San Joaquin County Housing Authority
San Joaquin Fair Housing, Stockton
Santa Clara County
Santa Clara County Board of Supervisors
Santa Clara County Collaborative, San Jose
Santa Monica Rent Control Board
Santa Monicans for Renter's Rights
Self-Help Enterprises, Visalia
Senior Action Network
Senior Housing Action Collaborative, San Francisco
Sentinel Fair Housing, Oakland
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Shelter, Inc., Concord
Shelter Partnership, Inc., Los Angeles
Sisters of the Holy Names, Los Gatos
Sisters of St. Joseph of Carondelet, Los Angeles
Sisters of Norte Dame de Namur of California, Saratoga
Skid Row Housing Trust, Costa Mesa
Sober Living Network, Santa Monica
Socialization Thru Empowering Peers (STEP), San Francisco
Society of St. Vincent de Paul, Council of L.A.
Sonoma County Golden State Mobile home Owners League
South County Housing, Gilroy
Southern California Association of Non-profit Housing
Southern California Mutual Housing Association
SRO Housing Corporation, Los Angeles
Tenderloin Housing Clinic, San Francisco
Tenderloin Neighborhood Development Corporation, San
Francisco
Thai Community Development Center, Los Angeles
The Agora Group, Goleta
The Jordan Apartments/JSCO
The Public Interest Law Project
Thomas Lauderbach
Transitional Living and Community Support, Sacramento
Venice Community Housing Corporation
West Sacramento Housing Development Corporation
West Side Fair Housing Council, Los Angeles
West Contra Costa Conservation League, El Cerrito
Western Center on Law and Poverty
WNC & Associates, Inc., Costa Mesa
NC:jk 7/13/99 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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