Agenda Summary – Housing Opportunity Committee Hyatt Grand Champions Indian Wells, California Wednesday, January 23, 2008 3:30 pm – 5:15 pm
Presiding: LeFrancis Arnold, Chair Sandy Kaplan, Vice Chair Randall Traw, Vice Chair Steve White, Committee LiaisonC.A.R. Staff: Dave Milton Matthew Roberts Natalie CardenasI. Opening CommentsII. Self-Introductions of 2008 Committee MembershipIII. C.A.R. Sponsored LegislationAB 1366 (Portantino) Regional Housing Decisions and Annual Housing Element Report -AB 1366 proposes to amend the housing element report provisions of the Government Code to strengthen this annual reporting process governing local housing actions and to provide a reporting structure that will better assist local governments’ focus on the regionalimpact of their respective housing decisions. It encourages local agencies to include more specific descriptions of the planning that is being conducted as to meeting its share of regional housing needs. This information will assist efforts to better recognize those jurisdictions that are meeting or exceeding their regional housing goals. C.A.R. Position: Sponsor Status: Senate Transportation & Housing CommitteeIV.2007Legislation of Others; must pass out of “House of Origin” by January 31, 2008 to “stay alive” in 2008.A. General Housing IssuesAB 239 (DeSaulnier) Recording Fees; Contra Costa and San Mateo Counties- This measure, sponsored by Contra Costa County, proposes to allow the Contra Costa County Board of Supervisors and the San Mateo County Board of Supervisors 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. opposes AB 239 because it imposes a document recording fee without exempting documents already subject to the documentary transfer tax, and because the funds generated by the document recording fee would be used for purposes which bear no relation to document recording. C.A.R.’s opposition, coupled with that of the CA Land Title Association (CLTA), Howard Jarvis Taxpayers’ Association, Stop Hidden Taxes Coalition, CA Chamber of Commerce, and the County Recorders’ Association of CA, stalled the bill after it came out of the Assembly and it became a two-year bill. The Author has expressed his intent to try and move it again in January. C.A.R. Position: Oppose Status: Senate Local Government CommitteeSB 303 (Ducheny) 2007 Affordable Housing Act- Sponsored by the California Major Builders Council, this bill attempts to address the housing shortage in California by requiring every city’s general planto encompass a planning and projection period of 20 years and set aside enough land with appropriate zoning to supply housing at all income levels. The bill attempts to expedite a number of local government review processes and identification of potentialhousing sites. 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. SB 303 was vehemently opposed by the League of Citiesand stalled in the Assembly. It is now a two-year bill that the sponsor will attempt to move in January. C.A.R. Position: Support Status: Assembly Local Government 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 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 financiallyproblematic burdens for moderate income first time homebuyers that 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 billbecause 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 Bill SB 46 (Perata) Proposition 1C Regional Planning, Housing and Infill Incentive Account- This bill provides statutory framework for expenditure of the $850 million in Proposition 1C's Regional Planning, Housing, and Infill IncentiveAccount. Specifically, it requires the Department of Housing and Community Development(HCD) to administer a competitive program to provide capital outlay grants for infill housing development and for related infrastructure that is an integral part of infill housing development. C.A.R. Position- Watch Status- Assembly Appropriations CommitteeD. Bills of Interest Enacted in 20071. SB 343 (Negrete McLeod) Pre-hearing Availability of Local Agency Public Documents (Sponsored by C.A.R.)-This bill, which goes into effect on July 1, 2008, will improve the public hearing process by amending the Brown Act, which governs the conduct of local agencies’ public meetings. SB 343 addresses virtually all of the concerns expressed by local agency representatives while steadfastly adhering to Senator Negrete McLeod’s goal, and that of C.A.R., of providing greater public transparency for agenda-related writings that are distributed shortly before an open meeting of local legislative bodies. Specifically, the enrolled bill:1) Clearly defines thetypes of writings to which it applies- Any writing that relates to an agenda item for an open session of a regular local agency meeting that is distributed by staff to a majority of the members of a local legislative body within 72 hours of a public local agency meeting.2) Provides guidelines for making such writings available for public inspection including, but not requiring, the use of internet posting.2. AB 382 (Assembly Housing Committee) 2007 Omnibus Housing Act This is a technical, non-substantive “clean-up” bill to correct a number of Housing-related code sections or delete sections that are no longer needed.3. AB 641 (Torrico) Developer Fees AB 641 defers local government development fees until occupancy permits are issued for housing developments with at least 49% of the total units reserved for occupancy by lower income households. C.A.R. supported AB 641 because it will enhance the financial feasibility of constructing affordable housing.4. AB 929 (S. Runner) Increase of Bond Authority for CalHFA Existing law sets forth various powers and duties of theCalifornia Housing Finance Agency in conjunction with the financingof housing. Existing law authorizes the agency to issue revenue bondsnot exceeding aspecified amount outstanding at any time, exclusiveof indebtedness incurred to refund or renew bonds previously issuedby the agency, the proceeds of which are used to finance housingdevelopments and other residential structures. The bill increases by $2,000,000,000 authorization of bonds to be issued by the agency and utilized for its first-time homebuyers lending activities.5. AB 1053 (Nunez) Strategic Plan regarding expenditure of 1C funds- Permits Business Improvement Districts (BIDs) to be an "eligible joint applicant" for receipt of funds provided under the $850 million Regional Planning, Housing, and Infill Incentive Account, created by Proposition 1C. It requires, prior to receiving funds, butafter a grant award, that joint applicants submit to the Department of Housing and Community Development (HCD) documentation that the actual number of permitted housing units is equal to, or greater than, the number of units in the grant application. 6. SB 586 (Dutton) California Affordable Housing Revolving Development and Acquisition Program This bill allocates the $100 million in the Affordable Housing Innovation Fund of Proposition 1C, as follows:1) Provides $50 million for the Affordable Housing Revolving Development and Acquisition Program (Program) established by this bill. Of that amount, $25 million is made available to the "Loan Fund" and $25 million is madeavailable to the "Practitioner Fund." 2) Allows HCD to administer the program for 24 months after adoption of guidelines and regulations. 3) Provides that the Loan Fund is created for the purpose of providing loans to purchase real property for the development or preservation of housing affordable to lower-income households. 4) Requires HCD to select, by competitive application, a private sector entity to manage the Loan Fund for five years with options for extending the agreement in five year increments. V. Report from C.A.R. Foreclosure/Troubled Mortgage Task Force Greg Galli, ChairRecommendations to Finalize in January:1. Create a C.A.R. Template for the conduct bylocal C.A.R. Associations of “Foreclosure Prevention Workshops” in conjunction with local lender representatives.2. Create a specific location on the C.A.R. Website with a link on the home page that has “everything a REALTOR® should know” about dealing with troubled mortgages and foreclosures on behalf of their clients.3. Set up a REALTOR® Blog on the C.A.R. Website to facilitate the exchange of experiences and expertise in the foreclosure, troubled mortgage, and REO environment.VI. Federal IssuesA. Subprime Mortgage Reform (Please See IBP )B. FHA ReformC.A.R. Policy:C.A.R. supports increasing FHA’s loan limit, allowing FHA to treat all condos as single family homes, 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 shares in high-cost areas. The reforms proposed include:
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. California Congressmen Gary Miller and Dennis Cardoza added an amendment to increase the FHA loan limit to 125% of an area’s median home price, capped at $729,750.
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.
On September 18, the House passed H.R. 1852 by a vote of 348 – 72.On December 14, the Senate passed S. 2338, the Senate FHA reform bill by a vote of 93 – 1. The Senate version differs from the House version in a few ways; including, a requirement for at least 1.5% down and increasing the FHA loan limit to 100% of conforming ($417,000).The Senate and House are expected to Conference in February to work out the differences between the two bills. Senator Feinstein voted in favorof the FHA reform, and while Senator Boxer was unable to make the vote, she submitted for the Senate record a letter of support for both the bill and higher FHA loan limits.C. Home Ownership Opportunities for VeteransC.A.R. Policy:C.A.R. supports amending the Qualified Veteran Mortgage Bond (QVMB) qualifications to allow veterans who enlisted after 1977 to have access to low interest rate and low cost home loans financed by these bonds. C.A.R. also supports increasing the VA loan limit, in high-cost areas to allow veterans better access to affordable home loans.In Congress’ final week of work for 2007, both chambers passed a veterans’ benefits bill that will, among other things, amend the qualifications for QVMB. So long as applicants are qualified and apply within 25 years of their discharge, they will have access to these affordable loans. The President is expected to sign the bill in early 2008.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.”D. National Affordable Housing Trust Fund (Please See IBP )VII. Affordable Housing Definition IBP- A DiscussionSee Attached IBP prepared by Staff at the direction of the 2007 HOC pursuant to the following motion:That C.A.R. Staff prepare an Issues Briefing Paper (IBP) on “affordable housing”, what it means under C.A.R.’s existing policy, and identify approaches and funding options supportable under that policy.VIII. Other BusinessIX. Adjournment
