Agenda Summary – Housing Opportunity CommitteeHyatt Regency Hotel Sacramento, California Regency Room C June 6, 2007 2:30 pm – 4:30 pmPresiding: Heidi Rickerd-Rizzo, Chair Le Francis Arnold, Vice Chair Lynn Rinker, Vice Chair David Barca, Committee Liaison John Wong, N.A.R RepresentativeC.A.R. Staff: Dave Milton Matthew Roberts Natalie CardenasI. Opening CommentsII. C.A.R Sponsored LegislationA. SB 343 (Negrete McLeod) Pre-Hearing Availability of Local Agency Staff Reports - Many local governments direct their staff to prepare reports concerning pending actions that may impact the citizens of the municipality. Current law, however, does not require that these reports be made available to an “applicant” or the public in advance of the hearing or meeting where the application or request for action is scheduled to be reviewed by the local legislative body. Existing law also requires agendas to be made available not less than 72 hours prior to the scheduled public meeting. SB 343 proposes to amend theBrown Act to provide that the agenda packet prepared by a local agency or local legislative body employee, which includes the reports, must be made available to the public no later than the date the agency posts the agenda for availability to the public.C.A.R. Position:Sponsor Status: Senate FloorB. AB 1366 (Portantino) Regional Housing Decisions and the Annual Housing Element Report - This bill is intended to help generate more attention on the regional implications of the housing-related decisions made by local jurisdictions. REALTORS® have reported numerous experiences with residential zoning,planning, and permit decisions that do not adequately examine regional considerations. The present annual Housing Element Report which local agencies must submit to the Department of Housing and Community Development does not require inclusion of information regarding the actions planned to meet regional housing needs. AB 1366 proposes to clearly enunciate such a requirement. It mandates that if regional housing needs have not been met, a “plan of action” with estimated completion dates must be included in the annual report. It is hoped that such increased focus on regional coordination will foster new programs of recognition, and reward mechanisms related to positive regional housing decision-making by local agencies throughout the state.C.A.R. Position:Sponsor Status: Assembly FloorIII.2007 Legislation of OthersA. General Housing IssuesAB 239 (DeSaulnier) Recording Fees- Contra Costa and San Mateo Counties-This bill can be called the “Son of 2006’s SB 521” (Torlakson), which proposed to allow Contra CostaCounty to increase real estate document recording fees by $1 per page to fund affordable housing development. This measure, sponsored by Contra Costa County, proposes to allow the Contra Costa County Board of Supervisors and the San Mateo County Board ofSupervisors to charge an additional $25 for each recorded real estate document in excess of one page. The funds raised by this assessment are required to be utilized to help finance the construction, rehabilitation, or purchase of housing affordable to extremely low-, very low-, low- and moderate- income households, and for any local matching contributions required by federal law.C.A.R. Position:Oppose Status: Assembly FloorAB 414 (Jones) Local Planning of Residential Development-Sponsored by the California Rural Legal Assistance Foundation, AB 414 addresses the use of double zoningin designating sites for affordable housing under the State Housing Element law. Unlike mixed-use zoning, double-zoning creates an “either or” situation, where the vacant parcel may be used for housing or commercial purposes. The majority of the time such parcels are developed for commercial purposes. The intent of this bill is to encourage cities and counties with an ample supply of vacant land to provide sites that are zoned exclusively for multi-family development. This is accomplished by limiting the practice of double-zoning by prohibiting a local jurisdiction from utilizing double-zoned sites to meet their low-income regional housing need allocation, and by giving cities and counties full credit for the housing component of a mixed use development.C.A.R. Position:Favor Status: Assembly FloorAB 641 (Torrico) Developer Fees-This measure is similar to a bill co-sponsored by C.A.R. and the CA Rural Legal Assistance Foundation (CRLA) in 2006 (AB 2526); it is sponsored in 2007 by CRLA. AB 641 prohibits local governments from requiring the payment of local developer fees before the developer has received a certificate of occupancy, pursuant to a specified exemption, for any housing development in which at least 49% of the units are affordable to low- or very low-income households.C.A.R.Position:Support Status: Assembly FloorAB 677 (Nakanishi) Firefighters Home Purchase Act-The California Professional Firefighters are sponsoring this measure to create the Firefighters’ Home Purchase Act of 2007. It would establish a housing bond for the benefit of California firefighters. It would require the California Housing Finance Agency (CalHFA) to administer a Firefighter’s Home Purchase Programthat would provide firefighters an opportunity to acquire homes in the communities in which they work. The program would provide for deferred payment, down payment assistance and low-interest loans, as well as other appropriate assistance, for qualified firefighters.C.A.R. Position:Favor Status: Assembly Housing & Community Development CommitteeAB 793 (Strickland) Property Taxation: Affordable Housing Assessments-This bill requires county assessors to exclude the fiscal impact of affordable housing agreements from assessed value of real property. The bill contains a series of legislative findings and declarations emphasizing the intent of the Legislature to further a public policy of encouraging and maintaining effective land use planning by ensuring that homes purchased under an affordable housing program are valued for property tax purposes in a manner reflecting the restrictions on the homes.C.A.R Position:Favor Status: Assembly Committee on Revenue & TaxationAB 872 (Davis) CEQA Exemption for Urban Infill Affordable HousingDevelopments- This bill is the author’s effort to encourage urban infill housing projects. He proposes to exempt urban infill affordable housing projects with less than 300 units form CEQA, if the project complieswith all applicable land-use and zoning requirements. The author’s goal is to provide parameters that will encourage affordable housing development while simultaneously maintaining environmental quality.C.A.R. Position:Support Status: Assembly Committee on Natural ResourcesAB 1096 (DeVore) Environmental Quality Act and Housing Exemptions-This bill proposes to exempt from CEQA, until 2013, any agricultural housing, affordable housing, or urban infill housing. The author’s stated goal is to ensure that capital for the construction of much-needed agricultural employee housing, and urban infill housing, be expended on construction of such projects rather than administrative overhead that does not directly lead to the construction of shelter.C.A.R. Position:Favor Status: Assembly Appropriations CommitteeSB 303 (Ducheny) 2007 Affordable Housing Act-Sponsored by the California MajorBuilders Council, this is a comprehensive measure to address the current housing shortage in California by requiring every California city’s general plan to encompass a planning and projection period of 20 years and set aside enough land with appropriate zoning to supply housing at all income levels for the projected population growth. The bill attempts to accelerate the meeting of housing needs by expediting a number of local government review processes and identification of potential housing sites. Among several provisions to accomplish this end is the requirement that any approval in connection with a project that is consistent with the zoning designation, or identified in an inventory, or subject to the “by right” provisions, is subject to the Permit Streamlining Act. It also authorizes a property owner to bring an action requiring that zoning of his/her property be made consistent with the general plan. C.A.R. supports SB 303 because it seeks to encourage increasing the supply of housing by fostering more certainty in, and streamlining of, the local government housing planning process.C.A.R. Position:Support Status: Senate Appropriations CommitteeSB 934 (Lowenthal) Housing Infrastructure Zone Districts-This bill is sponsored by the League of California Cities. The League characterizes SB 934 as the “typeof fiscal mechanism that must be in place over the long term if we wish to accommodate larger portions of our population growth in existing urban centers rather than in the suburban fringe.” It proposes to create a voluntary pilot project with a local-state partnership, financed by the California Economic Development and Infrastructure Development Bank, to provide high density housing through the creation of 100 housing/infill infrastructure investment districts statewide. The projects must be consistent with regional planning objectives and allow construction of more than 500 units with an average density of 25-40 units per acre. 20% of the units must be set aside as affordable for low and moderate income families.C.A.R. Position:Favor Status: Senate Appropriations CommitteeB. Density Bonus BillsAB 1256(Caballero) Density Bonus Exemption for Inclusionary Zoning Jurisdictions-The League of California Cities is sponsoring this bill to exempt local agencies that have inclusionary housing ordinances from meeting the requirements of the state Density Bonus Law. C.A.R. opposes this measure because it will create a significant incentive for local agencies to enact inclusionary zoning ordinances. This bill and AB 1449, below, have been made into 2-year bills as the sponsors create a Density BonusLaw Working Group, consisting of practitioners and stakeholders, to attempt to reach a consensus on the structure, language and impact of state law in theses areas.C.A.R. Position:Oppose Status: Assembly Local Government CommitteeAB 1449 (Saldana) Density Bonus Reform -This bill would revise the eligibility requirements for the construction of moderate- income housing units by requiring them to conform to the existing requirements for low- and very low income housing units. AB 1449 would result in punitive and financially problematic burdens for moderate income first time homebuyersthat purchase density bonus units by “lumping” moderate income housing with low and very low income housing that is developed under the density bonus law. C.A.R. opposes this bill because homeowners will have no incentive to maintain and improve their property. Furthermore, AB 1449 appears to dilute the density bonus law by setting up a process by which local agencies can opt out of the density bonus program.C.A.R. Position:Oppose Status: Assembly Local Government CommitteeC. Proposition 1C Bills (aka: “How many ways can we spend the Bond Funds?”)Each of the bills listed below propose to expend funds from the Housing and Emergency Shelter Trust Fund Act of 2006 (Proposition 1C). The Leadership of the Legislature (President Pro Tem of the Senate Don Perata and Speaker of the Assembly Fabian Nunez) has indicatedthat ALL bills proposing to spend IC funds shall be two-year bills. It is anticipated that the measures authored by these leaders, SB 46 (Perata) and AB 1053 (Nunez), will be the ultimate vehicles for creation of the programs that expend these funds. A conference committee will be created and “pieces” of many of the other bills may be amended into the two leadership bills.AB 29 (Hancock) - Infill development and incentive grants AB 842 (Jones) -Regional transportation plans and infill housing AB1017 (Ma) - California Affordable Housing Revolving Development and Acquisition Fund AB 1053 (Nunez) - Strategic Plan regarding expenditure of 1C funds AB 1091 (Bass) - Transit-Oriented Development Implementation Program AB 1493 Saldana) - Local Housing Trust Fund Matching Grant Program AB 1536 (Smyth) - Housing-related park grants SB 46 (Perata) - Regional Planning, Housing, and Infill Incentive AccountSB 522 (Dutton) - Infill housing and mixed-use residential projects SB 545 (Cox) - Workforce housing construction SB 586 (Dutton) - California Affordable Housing Revolving Development and Acquisition ProgramIV. Federal IssuesA. FHA ReformC.A.R. Policy: C.A.R. supportsincreasing FHA’s loan limit to 100% of the conforming loan limit, allowing zero down mortgages, allowing FHA to set insurance premium using risk based pricing, and allowing FHA to insure zero down mortgages.On March 29, 2007, Maxine Waters introduced H.R. 1852, the expanding American Homeownership Act. The bill will attempt to expand the FHA’s ability to compete with the subprime market and regain market share. The reforms proposed includ:
Increasing the FHA insurable limits. Currently, the FHA insures 95% of an area’s median home price with a ceiling of 87% of the conforming loan limit ($362,790) and a floor of 48% of the conforming loan limit. The legislation would increase theFHA limit to 100% of an area’s median home price capped at 100% of the conforming loan limit ($417,000), with a floor of 65% of the conforming loan limit ($271,050).
Making it so that condos are insured in the same manner as single-family homes.
Allowing for the coverage of zero-down loans. Currently, the FHA may only insure loans with a minimum of three percent down.
Allowing the FHA to set its insurance premiums by risk.
H.R. 1852 has been marked up out of Committee and is expected to be brought to the House Floor for a vote prior to the end of this year.B. Employer Assisted HousingC.A.R. Policy: C.A.R. supports tax incentives for employers who assist with the cost of housing for their employees.
Due to the high cost of housing, employee downpayment assistance programs are becoming more frequent among employers as a means of attracting and retaining employees. However, under current law there are no incentives for employers to offer this benefit and this type of assistance is often treated as taxable income to the employee. In January 2007 C.A.R took the position that: “C.A.R., in conjunctionwith NAR support income tax-based incentives for employer-assisted housing as part of a housing affordability strategy.”H.R. 1850, Housing America’s Workforce Act, was introduced by Rep. Velazquez (D-NY) on March 29, 2007. H.R. 1850 has been referred to the House Ways & Means and the House Financial Services Committees. H.R. 1850 currently has seven (7) cosponsors, including Rep Baca and Rep. Loretta Sanchez. H.R. 1850 would allow an employer a business tax credit for up to 50% of the qualified housing expenses paid for the benefit of their employees. The credit would be limited to the lesser of $10,000 or 6% of an employees home purchase price, or up to $2000 in rental assistance. The housing assistance would also be excluded from the employee’s gross income. C. Qualified Veteran Mortgage BondsC.A.R. Policy: C.A.R. supports eliminating the pre-1977 service requirement for QVMB eligibility.On January 18, 2007, California Congresswoman Susan Davis has introduced the H.R. 551, the Home Ownership for America’s Veterans Act. The purpose of H.R. 551 is to increase access to lower cost mortgages funded by Qualified Veteran Mortgage Bonds (QVMB) for America’s veterans. Under current law, veteran’s must have served prior to 1977 to qualify for a QVMB loan. Currently, only five states are allowed to utilize the QVMB program, California, Wisconsin, Alaska, Texas and Oregon. Congress addressed the issue of QVMB during the last session of Congress, and while some states received the qualification fix, California opted not to because of the severe reduction in funding authorization that would have accompanied it. However, since Congress only extended funding to the other states for four years, this issue will have to be addressed either during the 110th or more likely the 111th session.D. VA Loan LimitsC.A.R. Policy: C.A.R. supports increasing the VA loan limit, especially in high-cost areas to allow veterans better access to affordable home loans.On May 16, 2007, Senator Hillary Clinton (D-NY) and Congressman Patrick Murphy (D-PA) introduced companion bills in both the House and the Senate. The purpose of these bills, S. 1409 and H.R. 2385, the 21st Century GI Bill of Rights Act, is to extend and improve access to a number of benefits designed for veterans. This includes exempting “Veterans from paying loan fees and expand opportunities for veterans to purchase, build, repair or improve a home by increasing access to low interest loans through the Veterans Affairs Home Loan Guaranty Loan Program for homes valued up to $625,000. The current program requires loan fees and is capped at the conforming loan rate of $417,000.”V. OtherVI. Adjournment