Tuesday, October 17, 2023

California's Experts on Affordable

Housing Finance, Advocacy & Policy

Governor Signs Nine Partnership-Sponsored Bills

Governor Newsom has now taken action on all bills that reached his desk from the 2023 legislative season. While there were big disappointments, including fiscal-related vetoes of SB 18 (McGuire) to create a Tribal Housing Grant Program and AB 1085 (Maienschein) which would have created a Medi-Cal benefit to cover housing support services for individuals experiencing or at risk of homelessness, it was a better than expected year for affordable housing overall.

Reflecting the Partnership’s focus on achieving the Roadmap Home 2030 goals and principles, the nine Partnership-sponsored bills the Governor signed advance the Roadmap Home’s core values of Investing in Our Values, Reimagining Growth, and Creating Efficiency & Accountability.

The Partnership thanks state legislators and the Governor for their leadership in authoring and signing into law the following bills we sponsored:

o  AB 84 (Ward) improves access to the state welfare property tax exemption. Specifically, the bill makes low-income affordable housing developments financed with 501(c)(3) bonds eligible for the exemption. The bill also allows owners of properties to keep the exemption when a low-income tenant’s income rises up to 100% Area Median Income (AMI) if they did not use Low Income Housing Tax Credits (“Housing Credits”). Current law already allows owners to keep the exemption until a tenant’s income exceeds 140% AMI.

o  AB 346 (Quirk-Silva) enhances the State's housing finance resources and apparatus in four ways: 1) Increasing the value of state Housing Credits by seven percent (7%) or approximately $42 million, by clarifying that investors may begin claiming them in the same year they claim federal Housing Credits. 2) Maximizing the number of new affordable homes that can be produced by allowing the Tax Credit Allocation Committee (TCAC) to leverage enhanced state Housing Credits (the $500M in additional annual Housing Credits that have been available since 2020) with either 9% or 4% federal Housing Credits, as conditions best dictate. 3) Granting TCAC flexibility to set deadlines for construction starts to account for market conditions and natural and human-made disasters. 4) Applying TCAC’s standards for adopting and amending program regulations to the California Debt Limit Allocation Committee so that changes that need to be made to both programs can be made on a similar time line.

o  AB 1307 (Wicks) ensures that noise generated by occupants of a residential development cannot be considered a significant effect on the environment under the California Environmental Quality Act (CEQA). This will protect affordable housing development against litigation based solely on stereotypes of low-income persons.

o  AB 1449 (Alvarez) creates a broader CEQA exemption for affordable housing, including the rezoning of land, when various environmental and labor conditions are met.

o  AB 1633 (Ting) clarifies the circumstances under which local government CEQA abuse becomes a Housing Accountability Act violation. Specifically, for developments meeting various environmental criteria, the bill makes it illegal for a local government to deny a CEQA exemption for which a development is eligible, based on substantial evidence in the record. The bill further makes it illegal for a local government to fail to adopt an adequately prepared negative declaration or environmental impact report without substantial evidence in the record that further environmental study is necessary.

o  SB 341 (Becker) removes pro-housing points from the Qualifying Infill Project (QIP) portion of the Infill Infrastructure Grant (IIG) Program. This ensures that private developers are not penalized for the inactions of a city or county over which they have no control.

o  SB 355 (Eggman) improves the Solar on Multifamily Affordable Housing (SOMAH) Program. Specifically, the bill expands SOMAH to properties in which at least 66% of the households are low-income and to properties owned by California Native American Tribes or public housing authorities. The bill further makes solar facilities in new construction eligible to the extent they exceed building code mandates.

o  SB 469 (Allen) exempts state funded affordable housing from Article 34 of the California Constitution by essentially clarifying that state financing does not constitute development per se. Article 34 of the state Constitution prohibits the development of a low-income affordable housing project with state or local public financing or assistance unless and until a majority of the voters of the jurisdiction has approved it.

o  SB 482 (Blakespear) increases access to capitalized operating reserves (COSRs) for supportive housing units under the Multifamily Housing Program. Given the lack of rental assistance vouchers that may be project-based, it is critical that HCD provide operating assistance to support rental homes serving the unhoused, who have little ability to pay rent that covers the development’s operating expenses.

The Partnership is also pleased to have supported the following major affordable housing bills signed into law which also advance the Roadmap Home’s principles, including Promoting Fairness in our tax and finance systems and Protecting People:

o  ACA 1 (Aguiar-Curry) places a measure before voters at the November 2024 election to lower to 55% the threshold for voters to approve local bonds and tax measures related to affordable housing and infrastructure. With numerous local revenue measures proposed for 2024, passage of this constitutional amendment will be key to our success.

o  SB 4 (Wiener) allows 100% affordable housing by-right, i.e., without local discretion and without risk of CEQA litigation, on lands owned by faith institutions and private, nonprofit colleges.

o  SB 326 (Eggman), upon approval by voters in March 2024, directs 30% of Mental Health Services Act, renamed the Behavioral Health Services Act, to housing solutions for unhoused persons with a behavioral health condition.

o  SB 410 (Becker) requires the California Public Utilities Commission (CPUC) to set reasonable average and maximum energization time periods in order to ensure the timely connection of new construction to the electric grid. The bill further requires electrical corporation to take remedial actions necessary to achieve the CPUC’s targets.

Overall, these bills will reduce the cost and time needed to bring new affordable homes online. In conjunction with the roughly $1 billion in resources available through this year’s budget for the development and preservation of affordable rental housing and an additional $1 billion for homeless assistance, these bills will help California continue and extend its recent progress in expanding the supply of affordable homes for low-income Californians, helping bring Roadmap Home 2030 closer to fruition.

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About the California Housing Partnership

The California Housing Partnership creates and preserves affordable and sustainable homes for Californians with low incomes by providing expert financial and policy solutions to nonprofit and public partners. Since 1988, the Partnership's on-the-ground technical assistance, applied research, and legislative leadership has leveraged over $30 billion in private and public financing to preserve and create more than 85,000 affordable homes. | chpc.net

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