Convention Center
8:00 a.m. - 11:30 a.m.
Thursday, June 10, 2010
Sacramento, CA

Mission Statement
The Housing Committee is a Policy Committee. Its mission is to develop C.A.R.'s housing policy.  It has original jurisdiction to evaluate housing legislation and regulation in the following issue areas: Common Interest Developments; Fair Housing/Equal Opportunity; Housing Policy; Manufactured Housing; Multifamily Housing; Property Management; and Real Estate Finance.

Presiding:
LeFrancis Arnold, Chair
John Torres, Vice Chair

Issue Chairs
Diane Conaway, Manufactured Housing
Winnie Davis, Real Estate Finance
Miguel Garcia, Fair Housing/ Equal Opportunity
Rana Linka, Common Interest Development
Tica O'Neill, Property Management
Georgia Richardson, Housing Policy
Mike Riley, Multifamily Housing

Committee Liaison
Kevin Brown

NAR Representatives
Larry Black
Sandy Darling
Jeannette Way

Staff Coordinators:
Dave Milton
Matt Roberts

I. Welcome and Opening Remarks - LeFrancis Arnold, Chair

II. Common Interest Development - Rana Linka, Issues Chair
A. AB 1927 (Knight) C.A.R.-Sponsored Right-to-Rent Legislation for 2010 - Over the last few years, C.A.R. members noticed a trend among some homeowner associations to adopt restrictions that limit the ability of unit owners to rent their dwellings in common interest developments (CID’s). In 2008 C.A.R. sponsored AB 2259 (Mullin) to address this issue. The bill passed the legislature nearly unanimously, with only 1 "no" vote in the Senate and none in the Assembly, but was vetoed by the Governor. The Veto Message stated that owners of a unit in a CID agreed, when they purchased their unit, to abide by rules of the HOA and understood that any decision to change those rules would be governed by the HOA voting process. C.A.R. is sponsoring AB 1927 to re-visit this right-to-rent issue and address concerns raised by the Governor in his AB 2259 veto message. AB 1927 requires two-thirds of the unit owners in a CID to approve, by written ballot, any amendment of the governing documents that would prohibit owners from renting or leasing their unit. Governance provisions with different written ballot voting requirements in place as of AB 1927’s date of introduction (2-17-2010) would be “grandfathered” by this legislation. Status: Senate Transportation and Housing Committee

B. State
AB 1726 (Swanson) HOA Board or Member Voting Quorums - Existing law provides for votes on CID Home Owners Association issues to be held by secret ballot and requires the ballots to be sent, with 2 preaddressed envelopes, to each member of the association, in accordance with the model used by California counties for ensuring confidentiality of "vote by mail" ballots. AB 1726 clarifies that the ballots are to be mailed in accordance with the model used by California counties for ensuring confidentiality of "voter absentee" ballots, and specifies that each ballot be placed in an inner envelope that is sealed and then placed into an outside mailing envelope addressed to the inspector for the election. AB 1726 also provides that, except for associations whose governing documents provide for a reduced quorum, the quorum required for purposes of a subsequent members' meeting scheduled for that particular election only would require a quorum of 33% of the association membership entitled to vote. These provisions must be disclosed in the members' election materials mailed to the members. Position: Watch   Status: Senate Rules Committee

AB 1793 (Saldana) CIDs and Artificial Turf - Proposes to provide that any provision of governing documents of a common interest development would be void and unenforceable if it prohibits the use of artificial turf or any other synthetic surface that resembles grass. This prohibition would not prohibit an association from applying landscape rules and regulations established in governing documents that contain design standards and quality standards for the installation of artificial turf, or any other synthetic surface that resembles grass, to the extent the rules and regulations do not actually prohibit such installation. Position: Watch   Status: Senate Transportation and Housing Committee

AB 2016 (Torres) CIDs and Notices of Default- Sponsored by the Community Associations Institute (CAI), this bill seeks to clarify the intent of SB 1511 (Chapter 527, Stats. of 2008), which permitted a homeowners association (HOA) to record a request, in the event of a foreclosure on a separate interest within the HOA, that the lender or trustee mail to the HOA a copy of the trustee's deed upon sale. The purpose of this 2008 bill: To ensure that the HOA knows the name and address of the successor in interest as soon as possible when a separate interest in the HOA is foreclosed upon and the property is subsequently sold. Although the purpose of SB 1511 was to permit an HOA to record a single request for all of its separate interests, some county recorders rejected HOA filings on the grounds that other provisions of existing law require a separate request for each separate property. This bill seeks to clarify that an association's single recorded request applies to all of the separate interests within the association, and the request when filed only needs to include the name of the association. Position: Watch   Status: Senate Judiciary Committee

AB 2502 (Brownley) HOA Assessment Delinquencies - The Davis-Stirling Common Interest Development Act (Davis-Stirling Act) allows the homeowners’ association (HOA) that is managing a Common Interest Development to levy assessments to fulfill the associations’ obligations. It also provides that should a unit owner fail to pay the assessment and work out an agreement or payment plan with the board, the homeowners’ association cannot, for a delinquency amount less than $1800, collect that delinquency through foreclosure. As introduced, AB 2502 would have increased the amount of delinquency required before an association could foreclose to $3,600. It would also have required the discussion of such delinquencies to be in a public Board meeting if the homeowner so requested. C.A.R. opposed AB 2502 as introduced, for it would have made it more difficult for HOA’s to collect delinquent assessments that are needed for service and maintenance and would have imposed additional costs on the remaining homeowners as a result. C.A.R. and other opponents succeeded in convincing the author to remove the objectionable provisions from the bill. As amended, AB 2502 would have prohibited homeowners from waiving the rights and protections provided to them in the Davis-Stirling Act. The sponsor, CA Alliance for Retired Americans, moved to an "oppose" position when the bill was amended to its current status and the Author withdrew the bill from consideration by the Judiciary Committee.
Position: Watch File   Status: Assembly Judiciary Committee (Dead for this year)

C. Federal
FHA Condominium Approval Process - On November 6, 2009, HUD issued new procedures for condominiums to receive approval for FHA loans, including the elimination of the spot loan approval process.  In its place, condos could be approved by a HUD review and approval process (HRAP), or a direct endorsement lender review and approval process (DELRAP).  Both of these, under the best of circumstances, can add an additional 30 days to a FHA escrow if the condo is not already FHA approved. At C.A.R.’s winter business meetings in Indian Wells, the Housing Committee took the position “That C.A.R., in conjunction with NAR, ‘SUPPORT’ the reinstatement of the ‘spot approval’ process for FHA loans.” In April, C.A.R. Leadership met with FHA Commissioner Dave Stevens to discuss FHA and its role in California, including the elimination of the spot loan approval and its impact on California.  While FHA is reluctant to bring back the spot loan approval because of poor performance by these loans, they are open to ideas on how the approval process may be expedited and have asked C.A.R. ideas.

The Chair of the Housing Committee will appoint a Working Group to formulate recommendations for FHA Commissioner Dave Stevens regarding expediting the approval process.

D. Questions or Motions from Committee Members on Reported Items

III. Property Management - Tica O'Neill, Issues Chair
A. State
AB 331(Hall) Residential Rental Property and Foreclosure Notices - AB 331 would require property owners and landlords, prior to the execution of a rental agreement for a one to four unit dwelling, to disclose to a prospective tenant if the property is subject to an outstanding Notice of Default (NOD), or any pending foreclosure, declaration of forfeiture, or proceeding to foreclose a tax lien. C.A.R. supports AB 331 because it will assist potential tenants in making an informed decision about whether to rent the property in question. Position: Support   Status: Senate Judiciary Committee

AB 1800 (Ma) Unlawful Rentals of Residential Dwellings - Under existing law it is a misdemeanor for anyone to claim ownership, or take possession, of a residence with the intention of renting or leasing the residence to another person, without the owner’s or owner representative’s permission. C.A.R. supports AB 1800 which would instead make that crime a felony.  Position: Support  Status: Senate Public Safety Committee

AB 2337 (Ammiano) Pension Fund Investments and Rent Control Jurisdictions - AB 2337 would prohibit CalPERS and CalSTRS from investing in business operations that result in the displacement of renters living in rent controlled housing either through significant rent increases, or the destruction or replacement of the housing units. The bill also requires CalPERS and CalSTRS to develop a rent control housing compliance policy by January 2, 2012 that analyzes the compliance of investments and offers suggestions to mitigate any negative impact on rent controlled housing. C.A.R. opposes AB 2337 because it discourages investment in rent controlled housing and further argues that rent control restrictions do not provide adequate financial incentives for businesses to build or improve housing in rent controlled communities. Position: Oppose  Status: Assembly Appropriations Committee

SB 183 (Lowenthal) Carbon Monoxide Detectors Retrofit Mandate (Chapter 19, 2010 Stats.) - Starting January 1, 2011, the Real Estate Transfer Disclosure Statement (TDS) will be amended to streamline the disclosure of home safety devices.  First, the TDS will include a new disclosure of whether the seller has a carbon monoxide detector.  This disclosure addresses a new law enacted by SB 183 that requires California homeowners to install or plug in a carbon monoxide device in an existing single-family residence by July 1, 2011 (next year), and other existing dwelling units by January 1, 2013.  The new TDS will specifically state that installation of a carbon monoxide detector, among other appliances and devices, is not a precondition of sale or transfer of the dwelling. Second, the TDS will be amended to incorporate a seller's certification that, by close of escrow, the seller will be in compliance with existing requirements for smoke detector and water heater bracing.  Effective January 1, 2011, the new TDS will eliminate the need for a separate standard form Water Heater and Smoke Detector Statement of Compliance (C.A.R. Form WHSD) for applicable transactions.

The new requirement to install or plug in a carbon monoxide detector will apply to dwelling units with a fossil fuel burning heater or appliance, fireplace, or attached garage.  "Fossil fuel" means fuel gases, wood, oil, coal, kerosene, or other petroleum or hydrocarbon products that emit carbon monoxide as a combustion byproduct.  Special rules apply to residential landlords. C.A.R. will update our standard form TDS in the November 2010 forms release to reflect these changes.

SB 782 (Yee) Residential Tenancies and Domestic Violence - This bill would prohibit a landlord from terminating a tenancy or failing to renew a tenancy based upon an act of domestic violence, sexual assault, or stalking against a tenant or a tenant's household member, when that act is documented pursuant to a court order and the perpetrator of that act is not a tenant of the same dwelling unit. It also proposes to authorize a tenant who is protected by a restraining order related to domestic violence acts to immediately change the locks on his or her dwelling unit without the landlord's permission, or to make a written request that the landlord change the locks of the dwelling within 48 hours of that request, when the restrained person is not a tenant of the same dwelling unit. The bill would also authorize the landlord to change the locks when the restrained person is a tenant of the same dwelling unit. In such a case, the bill specifically states that the landlord is not liable to a restrained person who is excluded from the dwelling unit if the landlord complies in good faith with that provision. The bill also states that a restrained person who has been excluded from a dwelling under the provisions of this bill remains liable under the lease with all other tenants of the dwelling unit for rent as provided in the lease. Position: Not Favor  Status: Assembly Judiciary Committee

SB 1149 (Corbett) Residential Tenancies and Required Notices re Foreclosure Status of Property - This bill requires a form cover sheet to be attached to any eviction notice provided to tenants whenever the notice is served within one year after a foreclosure sale.  The form cover sheet would be titled "Notice to Any Renters Living At [street address of the unit]" and must be in at least 12-point type.  Among other things, the sheet would state that the tenants should respond to any court papers, even if they are not named in them. The cover sheet must also state that tenants generally have the right to stay in the rental unit for 90 days and may have the right to stay longer if they have a lease, as well as provide information regarding legal assistance.  Position: Watch   Status: Assembly Desk

Rent Withholding Requirements for Out-of-State Rental Property Owners- A "Refresher" - The requirement to withhold taxes for non-residents has been the law since 1954; it is just that in these tight budget times the State, through the Franchise Tax Board (FTB) has decided to actively enforce the requirement.  Unfortunately, for practitioners such as REALTOR® Property Managers, they are the one's to do the withholding and tax collecting for the State of California (and the IRS for that matter),  just as such practitioners must file 1099 forms for their clients for independent contractor vendors with whom they do business. This discussion is intended to be a helpful reminder of the requirements and the opportunities for the non-resident owners who dutifully pay their taxes to the FTB and how to be exempt from the withholding requirements and/or reduced withholding (some clients of our Property Managers have qualified both ways).  The withholding requirement is there, whether or not the property is self-managed or not.  ANY income derived WITHIN the State of California for ANYTHING is subject to the same withholding and/or tax liabilities!!

B. Federal
EPA Lead-Based Paint Renovation Rule; An Update - The U.S. Environmental Protection Agency's Lead Renovation, Repair and Painting Rule, governing the work of professional remodelers in certain homes where there is lead-based paint, became fully effective on Earth Day, April 22, 2010. The rule addresses remodeling and renovation projects disturbing more than six square feet of potentially contaminated painted surfaces for all residential and multifamily structures built prior to 1978 that are inhabited or frequented by pregnant women and children under the age of six. It requires a cleaning inspection after the work is completed and grants the remodeler flexibility in determining the size of the work area, which can reduce the size of the area subject to containment.

More information may be found at C.A.R.’s legal summary. The EPA pamphlet, "Renovate Right: Important Lead Hazard Information for Families, Child Care Providers and Schools," can be found at http://www.epa.gov/lead/pubs/renovaterightbrochure.pdf.

C. State Initiative for November Election
PROPOSITION NUMBER PENDING: Regulate, Control and Tax Cannabis Act of 2010. Initiative Statute (See attached IBP)- This ballot measure permits individuals that are 21 years of age or older to possess and transport up to one ounce of marijuana for personal use. Cities and counties would be permitted to restrict the sale of marijuana within its boundary; however, the citizens would still maintain the right to posses and consume marijuana. The proposition permits the cultivation of marijuana on private property in an area not to exceed 25 square feet per residence or parcel and requires the property owner’s approval for cultivation on leased and rented properties. Cities and counties would be permitted to alter the above provisions by increasing the amount of marijuana that may either be possessed by an individual or cultivated in a residence or on a parcel. Local governments would also be permitted to license and regulate the sale and cultivation of marijuana by placing limits on zoning, location, size, and hours of operation. Additionally, cities and counties would be permitted to tax the commercial production and sale of marijuana in order to recoup any direct or indirect costs associated with this activity. The Legislative Analyst estimates that state and local governments may save tens of millions of dollars annually on the costs of incarcerating marijuana offenders. There are unknown, but potentially major tax revenues to state and local government related to the production and sale of marijuana products.

D. Questions or Motions from Committee Members on Reported Items

IV. Real Estate Finance - Winnie Davis, Issues Chair
A. C.A.R. Sponsored Bills
AB 1796 (Knight) Appraisal Management Companies and OREA Oversight - Appraisal Management Companies (AMCs) have grown enormously over the last few years, driven primarily by the Home Valuation Code of Conduct adopted by Fannie Mae and Freddie Mac. In 2009, C.A.R. supported SB 237 (Calderon), which was signed into law, and subjects AMCs to registration and review by the Office of Real Estate Appraisers (OREA). C.A.R. is sponsoring AB 1796 to clarify and enhance OREAs oversight of Appraisal Management Companies specifically in connection with conflicts of interest, “out of area” appraisers, timeliness and accuracy of work product and to ensure compliance with other requirements of law applicable to licensed appraisers.
Status: Assembly Business, Professions & Consumer Protection Committee (Held in Committee; no vote taken. The Chair of the Committee,  Asm. Hayashi, intends to have her Committee conduct an "Oversight Hearing" on all of the appraisal issues raised by AB 1796 in the Fall. A letter to this effect was sent to Assembly Member Hall by Assembly Member Hayashi on May 14, 2010.)

SB 206 (Dutton) Tax Credit for Purchase of REO Properties as Principal Residence - C.A.R. is sponsoring SB 206, which as introduced, would have, like federal law, created a first-time homebuyer's tax credit equal to 10% of the sale price of a home (not to exceed $8,000) for homes purchased as the principal residence of the taxpayer. Due to the state's fiscal crisis, C.A.R.'s Board of Directors at its June 2009 meeting decided to limit this proposed tax credit to REO properties purchased as a principal residence by homebuyers whose individual income does not exceed $95,000, and married couples whose combined income does not exceed $170,000. The bill will be effective for one year from the date of its enactment. SB 206 was amended to utilize a funding source from federal stimulus funds instead of the state general fund. Unfortunately, this source proved to be unavailable for tax credit purposes. Efforts are continuing to locate a federal funding source for this tax credit that does not burden the state's general fund during these tight fiscal times. Status: Senate Revenue and Taxation Committee

B. State
AB 183 (Caballero & Ashburn) Tax Credit for First-time Homebuyers - AB 183 provides $200 million for homebuyer tax credits for new AND existing homes. The bill allocates $100 million for qualified first time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. These tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011. Additionally, these tax credits are available for taxpayers who purchase a qualified principal residence on or after December 31, 2010, and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010.  The purchase date is defined as the date escrow closes. These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over 3 successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased. (Note: C.A.R. also supported AB 5 of the Sixth Extraordinary Session (Caballero) SB 3 of the Sixth Extraordinary Session (Calderon), SB 4 of the Sixth Extraordinary Session (Ashburn), and SB 913 (R. Calderon) which also contained housing tax credits similar to AB 183. Because AB 183 was approved by the legislature and subsequently enacted, these measures are no longer being pursued by their respective authors.). Position: Support   Status: Signed into Law by the Governor on March 25, 2010 (Chapter 12, Statutes of 2010)

AB 2043 (Torrico) Redevelopment Funds and Mortgage Assistance to Troubled Borrowers - Creates a five-year program to allow a redevelopment agency (RDA) to issue subordinate loans using the non-Low- & Moderate-Income Housing (L&M) Funds for qualified homeowners to prevent foreclosure inside or outside a project area. It permits an RDA to issue subordinate loans to qualified homeowners of no more than 15% to reduce the principal balance of a primary loan if all of the following requirements are met:
1)   The lender agrees to modify an existing home mortgage to reduce the principal balance of the primary loan so that the loan-to-value is equal to or less than 110%;
2)   The RDA would be subordinating the loan of qualified homeowners who live inside or outside the project area;
3)   The RDA adopts a resolution establishing that the use of the funds outside the project area will benefit the project area; and,
4)   The subordination is limited to loans to low- and moderate-income borrowers and to owner-occupied homes.
The bill also provides that the subordinate loan, plus any fees or interest charges as determined by the RDA, shall be repaid to the agency upon sale or refinance of the home. Position: Watch   Status: Assembly Appropriations Committee

AB 2651 (Knight) Creation of Veterans Bonds Payment Fund - This bill establishes a Veterans Bond Payment Fund for deposit of monies from the Veterans' Home Building Fund of 1943 in sufficient amounts and for the exclusive purpose of making periodic debt service payments on CalVet general obligation bonds. The CalVet loan program, administered by the Department of Veterans Affairs (DVA), was established after World War I to assist California war veterans in purchasing farms and homes. Since 1922, the Legislature has passed, and the voters have approved, 27 CalVet bond issues totaling $9.3 billion. The most recent bond measure totaled $900 million and was approved in November 2008. Although these are general obligation bonds backed by the full faith and credit of the State of California, the CalVet program is fully self-supporting, with principal and interest on the bonds and the administrative costs repaid from interest charged to the veteran loan holders. AB 2651 is intended to dedicate moneys derived from the 1943 Fund to pay debt service and allow the rating agencies to take into account the assets of the 1943 Fund when determining the likelihood of payment of CalVet general obligation bonds, as they do when rating CalVet revenue bonds.  The result should be a higher bond  ratings, lower interest costs, and savings on debt service of up to several hundred million dollars over the life of the bonds.  Ultimately this will lower costs to veterans participating in the CalVet program. Position: Watch   Status: Senate Rules Committee

C. Federal
1. HUD Proposed Rule on Seller Financing - In December 2009, HUD issued their proposed rule for how states should implement the SAFE Mortgage Licensing Act.  Included in the proposed rule was an exclusion where “an individual seller provides financing to a buyer pursuant to the sale of the seller’s own residence.”  This limited exception to the proposed rule would mean property owners who wish to do seller financing on second homes, vacation properties and income properties may be subject to the SAFE Act’s licensing requirements.

C.A.R. and NAR have both submitted comment letters asking for all seller financing to be excluded from the SAFE Act requirements.  HUD has yet to issue their final rule. 
C.A.R. Comment Letter  NAR Comment Letter

2. National Flood Insurance Policy - On March 28, the National Flood Insurance Program (NFIP) expired, and was left in "limbo" for several weeks due to the House and Senate's failure to agree on how to pay for reauthorization of the NFIP along with an extension of several other programs. An All-Member Call for Action was issued urging REALTORS® to contact their Representatives and Senators. The program was then extended to May 31. As of the date of the posting of this agenda, Congress had still not passed another extension of the NFIP beyond the May 31 deadline. For some time now, the Congress has been approving a series of short-term extensions of the NFIP while discussions continue over comprehensive reforms to improve the program's actuarial and financial foundations. While debate has centered on how to pay for 2005 hurricane season debt, Congress is also expected to revisit issues of expanding coverage to wind and business damage and, possibly, a phase-in of "full-risk" premiums for those primary homes selling over $600,000. Since September 2008, there have been 7 short-term flood extensions.

Without the NFIP, property owners in federally designated "flood zones" across nearly 20,000 communities nationwide could not obtain a mortgage with flood insurance to protect their properties.

3. VA Loan Requirements and Closing Costs - During NAR’s May business meetings, C.A.R.’s Leadership and members met with the Director of the VA home loan program to discuss the unlevel playing field in the housing market which veterans who wish to utilize VA financing are facing.  These include the veterans’ inability to negotiate closing fees and a pest certification requirement.  C.A.R. and NAR will continue to work with the VA to address these and other issues.

4. GSE Updates

a. GSE PACE Program - In an effort to address the high upfront costs associated with energy efficient upgrades for properties, the White House has developed the Property Assessed Clean Energy initiative (PACE).  PACE allows property owners to take out a 15 to 20 year loan to make energy efficient retrofits to their properties.  The loans are funded by local governments that finance the loans through a municipal bond program.  To ensure repayment, a special assessment is added to owners’ property-tax bill. Recently, this program has come under fire from Fannie Mae and Freddie Mac.  Often times, PACE loans are placed as a senior lien on the property, which would give it priority over a Fannie or Freddie first-mortgage lien.  Under Fannie and Freddie guidelines, they must be the senior lien on all the properties’ whose mortgages they purchase or guarantee. 

b. Waiting Period after Short Sale or Deed-In-Lieu - On April 14, Fannie Mae announced changes to their policy on how long a homebuyer has to wait to qualify for a Fannie Mae loan following a “pre-foreclosure event” (short sale, deed-in-lieu or a pre-foreclosure sale).  The two charts below show the changes for regular distressed transactions and those where there were extenuating circumstances such as unemployment.  The FNMA announcement also addresses the requirements for re-establishment of credit and is only 3 pages long:  https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2010/sel1005.pdf

 Deed-in-Lieu of                  4 years                                 2 years – 80 maximum
Foreclosure                         Additional requirements         LTV ratios
                                           apply after 4 years up to  
                                           7 years
_________________________________________     4 years – 90%• maximum 
                                                                                       LTV ratios 

Pre-foreclosure Sale           No exceptions are
                                          permitted to the 2-year         7 years – LTV ratios per 
                                          waiting period                       the Eligibility Matrix
_________________________________________
 
Short Sale                          No policy currently exitsts
                                          specific to short sales
               
                         
                   Exceptions to Waiting Period for Extenuating Circumstances

 Deed-in-Lieu of                  2 years
Foreclosure 
                                           Additional requirements
                                           apply after 2 years up to 7        2 years - 90%
                                           years
___________________________________________

Pre-foreclosure Sale           No exceptions are permitted
                                          to the 2-year waiting period
___________________________________________

Short Sale                          No policy currently exists
                                          specific to short sales

c. Fannie Mae First Look Program - The Fannie Mae First Look Program requires brokers who sell Fannie Mae REOs to only accept offers from buyers who intend to occupy the home as their principal residence for the first 15 days the property is listed.  The purpose of this program is to promote homeownership under the policy that communities are better off with higher rates of homeownership. There is discussion of extending this program from 15 days to 30 days. This is in response to increasing incidents of offers not being received or responded to for two weeks or more.

5. FHA Update
  a. H.R. 5072, FHA Legislation - The House Financial Services Committee favorably reported H.R. 5072, the "FHA Reform Act of 2010." This bill, sponsored by Reps. Waters (D-CA) and Capito (R-WV), will complete several changes FHA needs to insure the solvency of the mutual insurance fund. In October 2009, HUD released an audit that showed the FHA capital reserves had fallen below the Congressionally-mandated level of 2%. In response, FHA announced a number of changes to the program to strengthen its financial position. This bill includes authority for FHA to increase the annual premium. To date, FHA has increased the up-front premium, because they lacked authority to increase the annual. Once this law has passed, FHA plans to reduce the up-front premium and raise the annual premium instead. In addition, the bill includes a number of lender enforcement provisions.

  b. FHA Short Sale Program - If a client owns a home with a mortgage insured by the Federal Housing Administration (FHA), and he or she is finding it difficult to make their mortgage payments or is in default on their mortgage payment, they may be able to take advantage of the FHA Pre-Foreclosure Sale (PFS) Program to sell their home at its current value and avoid foreclosure, even if the sales proceeds will not be enough to pay off their mortgage debt in full. This allows them to transition to more affordable housing while avoiding a foreclosure. To participate in this program, homeowners must be willing to make a commitment to actively market their property for a period of 3 months, during which time their mortgage lender delays foreclosure action. Homeowners who successfully sell their property at or near the present fair market value within the required time may receive a cash payment from FHA of up to $1,000 to help the homeowner transition to more affordable housing arrangements. If the property does not sell, the homeowner can choose to deed the property to the mortgage lender (deed-in-lieu of foreclosure).

D. Questions or Motions from Committee Members on Reported Items

V. Fair Housing/Equal Opportunity - Miguel Garcia, Issues Chair
A. State
AB 702 (Salas) HCD and Homeless Veterans Programs - Requires HCD, in conjunction with the Department of Veterans Affairs, to use existing data to annually determine the percentage of veterans within the homeless population. It further requires HCD each fiscal year to allocate to sponsors of veterans-only projects a percentage of the funds set aside to cover program operational costs in an amount equal to the percentage of veterans in the homeless population. Position: Watch  Status: Senate Transportation & Housing Committee
         
AB 1569 (Veterans Affairs Committee) Creation of State Interagency Council on Veterans Affairs - Classifies military members stationed in California and their immediate families as California residents for the purposes of tuition and fees at California Universities. It would allow those children of military personnel who maintained continuous enrollment to retain resident status, even if a parent moved outside of California on military orders. Position: Watch   Status: Senate Veterans Affairs Committee

AB 2709 (Blumenfield) CalHFA and Federal Subsidies - Authorizes CalHFA to utilize federal subsidies available to it to issue loan guarantees provided by the United States Department of Housing and Urban Development, in addition to grants, for nonprofit housing sponsors and local public entities. It requires the loan guarantee assistance provided by the department be allocated by and in conjunction with the award of a tax credit for low-income rental housing by the California Tax Credit Allocation Committee. Position: Watch   Status: Assembly Housing & Community Development Committee

SB 1252 (Corbett) Housing Discrimination Guidelines and Federal Parity - Federal housing programs have renter eligibility criteria requiring that at least one member of the household be 62 years old or older. This type of requirement currently violates California law. Additionally, businesses may not discriminate in the sale or rental of housing accommodations based on age, with the exception of establishments which are designed to accommodate the unique social and physical needs of senior citizens. C.A.R. supports SB 1252 which would reconcile differences between federal law and state law by adding source of income to the list of protected classes in existing law. The bill would also clarify that admission preferences based on age, imposed in connection with a federally-approved housing program, do not constitute age discrimination in housing under state law.  Position: Support   Status: Senate Floor

B. Questions or Motions from Committee Members on Reported Items

VI. Housing Policy - Georgia Richardson, Issues Chair
A. State
AB 2207 (Fong) Utilities and Restrictions on Termination of Service - Requires utilities to allow a customer who is subject to termination of service for nonpayment of a delinquent bill to enter into a bill payment plan. Also requires a customer service representative to inform the customer that he or she has a right to arrange a bill payment plan extending the period for payment of the bill a minimum of 3 months, and possibly exceeding 12 months. The customer is held responsible for any charges that accrue to the service account after entering into a bill payment plan. The bill also permits a utility to file with the California Public Utilities Commission (CPUC) a Tier 1 advice letter to open a memorandum account to track any significant additional costs associated with complying with the requirement to offer a bill payment plan. Position: Watch Status: Senate Rules Committee         
        
AB 2406 (Blakeslee) Redevelopment Agencies and Pooled Housing Funds - Allows redevelopment agencies in adjoining cities to form a joint powers authority (JPA) for the purpose of pooling their Low- and Moderate-Income Housing (L&M) Funds to construct, rehabilitate and preserve extremely low-income affordable housing units. AB 2041 (Dutra), Chapter 552, Statutes of 2000, gave redevelopment agencies in contiguous cities authority to pool their L&M funds to build affordable housing in one of the city's redevelopment project areas. The redevelopment agencies could exercise this authority by creating a JPA, provided that the agencies had met specified standards. This authority "sunsetted" on January 1, 2010.This bill would reinstate the statute, allowing cities to pool L&M funds created by AB 2041.  The only significant change from 
the sunsetted statute is that pooled funds can only be spent to construct or substantially rehabilitate extremely-low income housing units versus very-low or low-income units. The author is pursuing this bill in order to assist two contiguous cities in his district (Arroyo Grande and Grover Beach). AB 2406 will allow these cities, as well as other similarly situated in the State, flexibility to pursue a qualified redevelopment project that will mutually benefit each community with many appropriate safeguards, including that each city is in compliance with their housing requirements as determined by HCD. Position: Watch   Status: Senate Rules Committee  

AB 2508 (Caballero) Housing Assistance Activities - Creates a process for local agencies to petition to the Department of Housing and Community Development (HCD) for a jurisdiction reclassification if the agency's classification under Housing Element Law jeopardizes its ability to meet threshold requirements for the Infill Incentives Grant (IIG) Program of 2007. The local agency is authorized to petition HCD for an exception to the jurisdiction's classification if the agency believes it is unable to meet the density requirements as specified in Housing Element  Law. Position: Watch   Status: Assembly Floor

SB 500 (Steinberg) Permanent Source of Funding for Affordable Housing - Sponsored by HCD, SB 500 establishes the Housing Market Stabilization Fund for the purpose of financing the construction, rehabilitation, and preservation of homes affordable to the state's workforce and those with special housing needs, to increase and preserve homeownership, and to assist and provide incentives for increasing the supply of safe, affordable, and sustainable homes. HCD conducted hearings throughout the State in 2008 seeking public input on potential permanent funding sources for the development of affordable housing on an ongoing basis. This legislation is intended to be the "vehicle" for enactment of such a program, if all "Stakeholders" can reach an accord as to how the program will be funded. In light of the State's current fiscal woes, and no consensus on the "source" of funds, the Author placed this bill "on hold" for this session of the Legislature. Position: NRF (Not rated until fully amended)   Status: Senate Transportation & Housing Committee

B. Questions or Motions from Committee Members on Reported Items

VII. Manufactured Housing - Diane Conaway, Issues Chair
A. State
AB 761 (Calderon) Vacancy de-controls for manufactured housing communities - California has had vacancy decontrol for apartments since 1995 under the Costa-Hawkins Rental Housing Act, which C.A.R. successfully co-sponsored. As introduced, AB 761 proposed to create a "Costa-Hawkins-Type Vacancy De-Control" for mobile home parks and manufactured housing communities. As with apartment vacancy decontrol, this bill did not prohibit rent control nor did it raise rents for existing tenants beyond that permitted by a local ordinance; it only permitted an owner of a mobile home park to raise space rent to market rates for a new resident when the space or mobile home unit was voluntarily vacated. As amended, AB 761 would instead permit mobile home park owners to raise space rent for new residents by a minimum of $100 or 20% of the previous tenant’s rent, whichever is greater. Owners would also be prohibited from increasing space rent more then once within a 36 month period, regardless of a change in tenancy. C.A.R. supports AB 761 because vacancy decontrol reforms remove some of the negative impacts caused by rent control which include discouraging investment in, and construction of, new manufactured housing communities. Position: Support  Status: Senate Judiciary Committee

AB 1803 (Nava) Mobile home Residency Law (MRL) Mediation Act - Proposed to create a dispute resolution program within the Attorney General's Office to resolve disputes related to the MRL. It would have created a mobile home dispute resolution program and required the Attorney General to administer the program in order to provide mobile home park management and homeowners with a cost-effective and time-efficient process to resolve disputes regarding alleged violations of the MRL. To fund the program, HCD would have been required to collect an annual fee of $10 per lot in a mobile home park, of which $5 would be charged to homeowners at the same time it collects each mobile home park's annual permit to operate fee. The bill further required that the program, including all of the duties of the Attorney General, be funded by the collection of fines, other penalties, and fees deposited into the MRL Mediation Fund. Duties of the Attorney General would have included production of educational materials regarding the MRL, creation of a notice in a format that management could post in a mobile home park that summarized how to file a complaint with the Attorney General (including a toll-free telephone number and Internet Web site address that management and homeowners could use to seek additional information and communicate complaints).
Position: Not Favor  Status: Failed Passage

AB 1823 (Torres) Park Relocation Costs and Mobile home Park Purchase Fund - Existing law authorizes the Department of Housing and Community Development (HCD) to make loans from the Mobile Home Park Purchase Fund to mobile home park residents or resident organizations to finance conversion of the parks to resident ownership. This bill specifies that the funds may be used to finance the costs of relocating a park to a different site within the same jurisdiction.  Position: Watch   Status: Assembly Housing & Community Development Committee

AB 2120 (Silva) Change to State Mandate of MRL Annual Distribution by Park Owners to Residents - Proposes to revise the annual MRL distribution requirement imposed by the State on mobile home park and manufactured housing community management by requiring that management do one of the following prior to February 1 of each year, if a significant legislative change was made in the MRL the previous year: 
  1) Provide all homeowners with a copy of the MRL; OR
  2) Provide written notice to all homeowners that there has been a change to the MRL and that they may obtain a copy of the text of the law from management at no charge.  Management must provide the copy within a reasonable time not to exceed 10 days upon written request. This is a change from current law that requires a copy of the text of the MRL to be attached as an exhibit to all rental agreements in mobile home parks and states that the MRL shall be incorporated into the rental agreement by reference (Health and Safety Code Section 798.15).
Management is also required to provide all homeowners with a copy of the MRL prior to February 1 of each year, if a significant change was made in the law by legislation enacted in the prior year. Position: Support  Status: Assembly Floor
           
AB 2439 (Nestande) Subletting of Mobilehome Park/Manufactured Housing Community Spaces - Existing law permits mobile home owners to rent or sublease their home in the event of a medical emergency. Current law also allows mobile home park management to require its approval of the prospective tenant, limits the term of the sublease to no more than 12 months and prohibits homeowners from charging more then an amount necessary to cover space rent, utilities and loan payments. AB 2439 would expand this rental provisions to allow a mobile home owners to rent or sublease their home for any reason. The bill also exempts subleased mobile homes from rent control. C.A.R. supports AB 2439 because it affords homeowners greater flexibility to rent their homes during difficult financial periods. Position: Support   Status: Assembly Housing & Community Development Committee

B. Questions or Motions from Committee Members on Reported Items

VIII. Multifamily Housing - Mike Riley, Issues Chair
A. State
AB 1867 (Harkey) Revision to Housing Element Criterion for Multi-family Housing - Makes minor changes to current law that allows a local government to meet up to 25 percent of its regional housing needs obligation through the conversion of existing market-rate units to low- and very low-income units. It allows the existing market-rate units to be either rental or ownership housing prior to conversion; reduces from four units to three units the minimum size of a multifamily complex that is eligible for conversion; and requires that converted units must be rental housing. Position: Watch Status: Senate Rules Committee

AB 1975 (Fong) Water Meter Installation Requirements for New Multi-unit Residential Complexes - Requires every water agency that provides water service to a multiunit residential structure or a mixed-use residential and commercial structure, for which the first occupancy permit for the newly constructed building is issued on or after January 1, 2012, to require the installation of meters or submeters on each individual dwelling unit as a condition of new water service to that property. It also requires the owner, or his or her agent, to charge occupants for water and sewer service based on the actual volume of water delivered as measured by the water meter or submeter.  Position: Watch   Status: Assembly Appropriations Committee
 
AB 2536 (J. Perez) Housing & Emergency Shelter Trust Fund Act and Supportive Housing - Allows Emergency Housing and Assistance Program (EHAP) funds approved by the voters in the Housing and Emergency Shelter Trust Fund Acts of 2002 and 2006 (Props. 1C and 46) to be used for supportive housing programs. It allows more flexibility for investment of this bond funding by allowing EHAP - Capitol Development funding (bricks and mortar funding for emergency housing shelters) to also be used for permanent multi-family low-income supportive housing projects.  The author argues this flexibility is necessary because efforts to combat homelessness have taken a significant shift away from providing temporary emergency  housing toward an effort to find long-term housing that is coupled with supportive services such as mental health counseling, workforce training, and alcohol and drug treatment. Position: Watch   Status: Assembly Appropriations Committee Suspense File

SB 958 (Lowenthal) Federal Housing Trust Fund and HCD's Multi-family Program - This bill dedicates funds that California receives from the National Housing Trust Fund primarily to the Department of Housing and Community Development's (HCD) Multifamily Housing Program (MFP), except that the Legislature may appropriate up to 10 percent of the funds to the CalHome Program. Current law establishes the MHP, administered by HCD, as California's omnibus rental housing finance program.  MHP provides long-term deferred loans to the developers of affordable rental housing to cover the gap between development costs and the amount of debt that can be supported by affordable rents. One of the goals of MHP is to target the lowest-income households, including extremely low-income households. Housing units assisted through MHP remain affordable for 55 years. Current state law also establishes the CalHome Program, administered by HCD, as the state's omnibus homeownership program. CalHome provides grants to local governments and non-profit organizations to help low-income families become or remain homeowners.  Recipients may use funds to provide home-buyer counseling, home rehabilitation loans, down payment assistance, self-help mortgage assistance, and technical assistance for self-help and shared housing.  Position: Watch   Status: Assembly Housing & Community Development Committee

B. Questions or Motions from Committee Members on Reported Items
 
IX. Other Business/General Questions

X. Adjournment