Agenda Summary - Housing Opportunity Committee
Marriott Hotel
Anaheim, California
January 25, 2006
3:30 – 5:00 PMPresiding:
Nancy Troxell, Chair
Greg Galli, Vice Chair
Cynthia Wood, Vice Chair
Heidi Rickerd-Rizzo, Committee Liaison
C.A.R. Staff:
Ron Kingston
Matthew Roberts
Natalie Cardenas
III. Committee Member Feedback.  On January 2, 2006 the chair sent an email to the committee members.There were six issues that were posed to the committee that will be discussed: examples of local or regional housing programs that may be used in other areas of the state; creation of successful housing programs; coalition teams that have brought about change; creative alternatives to traditional housing; financial pledges from committee members to support CAR’s Housing Affordability Fund and; other ideas the committee may wish to address. IV.  2006 CAR Sponsored Bills A.  SB ____ (Hollingsworth) Density Bonus. The bill will seek to repeal a long standing law allowing local governments to inspect the financial records of developers that want to utilize the state density bonus law when proposing to construct a housing development.B.  AB ____ (Jones) Written and Objective Local Government Housing Development Standards. For years local governments have been able to change the rules of the game during the housing development review process because the development standards suchas a zoning code is not objective or comprehensively written. This measure will seek to provide more certainty during the development review process requiring zoning laws to be objective and written.C.  SB ____ (Dunn) Attorneys Fees. Three housing laws have been recently adopted requiring attorney fees to be paid to the prevailing plaintiff. They will be made to be consistent and will propose to allow the prevailing plaintiff that successfully challenges a local government housing element to be awarded attorney fees and costs.V.  2006 Legislation CAR May Sponsor*. An issues briefing paper was written on this issue.VI.  AB 1259 (Daucher) Local Government Housing Element Self Certification and Impact on Rent Control and Inclusionary Zoning.  Members of the legislature that have a strong alliance with local government have periodically tried to extricate local government from allowing the state to review and comment on the local governments housing element. Last year, Assembly Member Daucher authored a bill that would have allowed cities and counties to adopt a housing element without state governments involvement as long as the local government met its’ share of the regional housing needs assessment. This could have easily encouraged locals to adopt rent control and inclusionary zoning requirements in order to comply with the terms of AB 1259. CAR was strongly opposed to the bill the proposed to create price controls on real property. This year the author is to make another attempt at the issue. The bill must clear the house of origin on or before January 31, 2006. The content of the revised version of the bill is not known as of the time the agenda summary was written.VII.  Holding a State Housing Summit vs. Placing Housingas a Priority During the 2006 Statewide Election. At the June CAR board of directors meeting the members approved a motion to explore if a statewide housing conference should be held during 2006 if certain factors were in alignment including a commitmentof the Governor to be the keynote speaker. Due to a number of factors, the HOC leadership will present an effective alternative to the concept which is to primarily focus on getting those individuals that are expected to run for the Assembly, Senate and constitutional offices to acknowledge change is necessary to expand the housing needs of Californians.VIII.  AB ____ (Jones) Redevelopment: Increasing the Low and Moderate Income Funds. Mr. Jones is expected to introduce a bill that will propose to change the percentage of tax increment money that must be dedicated and used for low and moderate income households that have been displaced due to redevelopment project areas.IX.  League of CA Cities 2006 Sponsored BillsA.  Establishing Tax Increment Zones. The League will sponsor a bill that will create a hybrid tax increment zone for cities and counties to construct affordable housing paid for by tax increment money. The local agency will not be authorized to condemn real property. Property that is purchased must be zoned with a minimum capacity of 40 units per acre. Only 100 tax increment zones would be authorized to be created pursuant to this legislation. This concept would be in addition to local government redevelopment law and state law that authorizes the creation of Enterprise Zones.B.  Self Certifying Local Government Housing Elements. For years cities and counties have wanted to extricate themselves from the state Dept. of HCD housing element review. The League has unsuccessfullysponsored bills in this arena. The latest attempt will authorize local government to be exempt from HCD review of the housing element if the parcels that are identified to fully meet the assigned regional housing need assessment (RHNA) have a minimum capacity of 30 units per acre.C.  Housing Trust Funds. Cities have long awaited an elimination of the state using ERAF funds. The latest proposal is to allow cities to create a local government housing trust fund.  The trust fund would be paid, inlarge part, by local and state government. For every dollar the city or county contributes to the fund the state would be required to match the local contribution up to the amount of money the local government is loosing through ERAF.D.  Amending theDensity Bonus Law. To say many local governments do not like the state density bonus law would be an understatement. The proposal would allow cities and counties to evade the density bonus law for those parcels that are zoned 30 units or more per acre. Apparently the bill will state that downzoning would not be permitted.E.  Regional Housing Needs. The League will seek a number of changes in law. Some of the elements the League has promised to include: create a state level panel of experts that is “neutral” in nature to review the assignment of the regional housing needs assessments; allow adjacent local governments to more easily transfer RHNA assignments; and more precisely define the real demographic needs in each region of the state.F.  General Plan Updates: 10 Year Intervals (Currently 5 Year Intervals). This is the least well developed bill of the League. Current law only requires the housing element to be updated every 5 years. The bill will seek to state that the 9 mandatoryelements must be updated every 10 years.X.  California Special License Plates: Housing Logo. In order to raise money for affordable housing projects, the committee may wish to consider exploring the notion that a special vehicle license plate to bestatutorily authorized that will have a logo of a “home”. The money would be dedicated for specific affordable housing needs.XI.  A Progress Report by Bill Jansen, Chair of CAR’s Eminent Domain Task Force. Bill Jansen will give a progress report on the CAR Task Force. He will focus on emerging CAR policy on redevelopment and eminent domain law.XII.  Federal IssuesA. American Veterans Homeownership Act
On June 16, 2005, Representative Paul Ryan (R-WI) introduced H.R. 2952,the American Veterans Homeownership Act.  This legislation would:• Revise the definition of a qualified veteran for purposes of the veterans’ mortgage bond program to include all veterans who served on active duty, regardless of dateof service.
• Allow veterans to apply for financing under the bond program for up to 25 years after the end of their active duty.
• Revise volume limitations applicable to the issuance of such bonds in certain states.Thislegislation would amend the rules which govern how the Qualified Veterans Mortgage Bonds’ proceeds are distributed.  Under current law, mortgage loans made with these proceeds may only be used for veterans who served on active duty before 1977,and who applied for the financing within 30 years of release from active service.  These bonds are available in California, Alaska, Oregon, Texas and Wisconsin.  H.R. 2952 has been referred to the House Committee on Ways and Means, and has 38 cosponsors, including: Berman, Calvert, Capps, Costa, Davis, Farr, Filner, Herger, Hunter, Linda Sanchez, Schiff, Sherman, Tauscher and Waxman.B. Affordable Housing Tax Credit
In order to encourage the construction of affordable housing, proposed legislation has been introduced to create a tax credit for developers and investors.  Representative Thomas Reynolds (R-NY) and Senator Rick Santorum (R-PA) have introduced legislation designed to increase affordable housing.  H.R. 1549 and S. 859,the Renewing the Dream Tax Credit Act, would allow developers and investors who construct or substantially rehabilitate housing for low- and moderate-income families for purchase to claim up to 50% of the cost over a five year period.  H.R. 1549 has188 cosponsors and is currently in the House Committee on Ways and Means, and S. 859 has 15 cosponsors and is currently in the Senate Committee on Finance.  C.A.R. and NAR support these bills and have asked members of Congress to cosponsor this legislation. C. Housing America’s Workforce
On June 29, 2005, Senator Hillary Rodham Clinton (D-NY) introduced S. 1330, the Housing America’s Workforce Act.  On June 30, 2005, Representative Nydia Velazquez (D-NY) introduced companion legislation in the House, H.R. 3194.  Both bills would give employers a tax credit of up to 50% of $10,000 or 6% (whichever is less) of housing assistance provided to employees.  In addition, the housing assistance provided by the employer will be excluded from the employee’s taxable income.For the purchase of a home, the employee may use the money for:
• Settlement, financing, and/or closing costs;
• Interest rate buy down;
• Contributionsto low-interest loan programs accessible to eligible employees;
• Contributions to eligible employee savings plans, including Individual Development Accounts, designated exclusively for the purchase of a home; and
• Contributions to homebuyer education and homeownership counseling of eligible employees.For the employee to qualify, he/she must be a first-time homebuyer, which includes a person who did not own a principal residence two years prior to the purchase of the home.  Also qualifying as a first-time homebuyer for the purpose of this legislation is any person who did not own a principal residence located within 50 miles of the employer two years before the purchase of the home.  Additionally, the employee may not earn more than 120% of the median gross income of the area where the house is. Lastly, the home being purchased may not exceed 90% of the average area purchase price or 3.5 times the 120% income cap for the area, whichever is greater.  For example, if an area’s average home price was $100,000 and120% of the median gross income of the area was $30,000, the home purchase price would be capped at $105,000 ($30,000 x 3.5) because it is greater than $90,000 (90% of average home price).D.State and Local Housing Flexibility ActThe State and Local Housing Flexibility Act, S. 771 and H.R. 1999, was introduced in April of 2005 by Senator Wayne Allard (R-CO) and Representative Gary Miller (R-CA).  The proposed legislation would reform the Section 8 voucher program, including the creation of a block grant to be given to local public housing agencies (PHA).  This legislation stems from the Bush Administration’s continued attempt to reform the Section 8 program into a block grant. Also included in the bill is a provision for homeownership assistance for first-time homebuyers.  A potential homebuyer may qualify for a one-time grant of up to $10,000 if they are a first-time homebuyer, participate in homeownership counseling, and meet any other requirements established by the PHA.  The grant may only be applied to the downpayment and “reasonable and customary closing costs” for the purchase of a home.Lastly, the bill provides for a qualifying PHA to assistfamilies “in a Moving to Work” program. At the June 2004 business meetings, the Housing Opportunity Committee took the following position, “that C.A.R., in conjunction with NAR, oppose changes to the section 8 voucher program thatcreate block grants to Public Housing Authorities (PHA).”  The committee determined that allowing a PHA the flexibility to provide more assistance to families with higher incomes ran counter to the program’s entire purpose.  Additionally, C.A.R., in 2003, adopted policy opposing block grants to be administered by the states.S. 771 has no cosponsors and has been referred to the Senate Committee on Banking, Housing, & Urban Affairs.  H.R. 1999 has 6 cosponsors and has been referred to the House Committee on Financial Services.XIII.  OtherXIV.  Adjournment