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AB-1637 Local housing authority: middle-income housing projects.(2017-2018)

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Date Published: 07/10/2017 09:00 PM
AB1637:v95#DOCUMENT

Amended  IN  Senate  July 10, 2017
Amended  IN  Assembly  May 15, 2017
Amended  IN  Assembly  May 03, 2017
Amended  IN  Assembly  March 28, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1637


Introduced by Assembly Member Gloria

February 17, 2017


An act to add Article 4.5 (commencing with Section 34340) to Chapter 1 of Part 2 of Division 24 of the Health and Safety Code, relating to housing.


LEGISLATIVE COUNSEL'S DIGEST


AB 1637, as amended, Gloria. Local housing authority: middle-income housing projects.
The Housing Authorities Law authorizes a housing authority of a city or county to, among other things, prepare, carry out, acquire, lease, and operate housing projects and housing developments for persons of low income, as provided. That law grants powers to an authority relating to, among other things, the issuance of bonds.
This bill would make findings and declarations relating to affordable housing. The bill would authorize an authority to develop and finance a middle-income housing project project, as defined, if funds received pursuant to bonds are only used to finance units occupied by persons of low income. the project receives gap financing, as defined. The bill would authorize units occupied by persons and families of middle income to be financed with prohibit financial or other assistance from any public or private source. The bill would prohibit funds received pursuant to bonds and specified public sources source, as specified, from being used to finance provide gap financing to units that will be occupied at market-rate rents.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature hereby finds and declares all of the following:
(a) Housing authorities are vitally important public agencies dedicated to preserving and increasing affordable housing throughout California.
(b) It is in the public interest that housing authorities maintain their focus on providing affordable housing options for extremely low, very low, and low-income Californians.
(c) It is also in the public interest that a continuum of housing be provided for a broad spectrum of persons, but specifically including those of low income and also including those earning middle incomes.
(d) It is in the public interest that mixed-income projects be developed by housing authorities so that persons of divergent income levels may live in the same project, with each “mixed income housing project” including persons of low and very low incomes.
(e) By allowing housing authorities to develop and finance mixed income projects, additional low-income housing will be built, much of which would not otherwise have been constructed because of insufficient financing options.
(f) Currently, there are inadequate sources of financing available to encourage developers to develop, construct, and operate a sufficient number of mixed income projects to provide for a continuum of housing at various income levels.
(g) The lack of an adequate supply of housing at all levels drives up the rents and costs of ownership of all levels of housing, which has a detrimental effect upon the residents of the State of California. The absence of an adequate supply of housing for those households earning very low, low, moderate, and middle incomes causes a disproportionate hardship on those households.
(h) The creation of additional middle income housing would allow for the development of housing for persons who are school teachers, nurses, police, first responders, and firefighters, among others.
(i) Section 42 of the Internal Revenue Code, relating to low-income tax credit, allows federal tax credits to be used to finance projects in which not less than 20% of the units are affordable to, and occupied by, persons and families earning 50% or less of the area median gross income, or in projects in which not less than 40% of the units are affordable to, and occupied by, persons and families that earn 60% or less of the area median gross income. Current state law, the Housing Authorities Law (Article 1 (commencing with Section 34200) of Part 2 of Division 24 of the Health and Safety Code), allows for multifamily housing bonds to be issued to serve the same populations that are provided for under Section 142(d) of the Internal Revenue Code, relating to qualified residential projects.

SECTION 1.SEC. 2.

 Article 4.5 (commencing with Section 34340) is added to Chapter 1 of Part 2 of Division 24 of the Health and Safety Code, to read:
Article  4.5. Middle-Income Housing Projects

34340.
 (a) An authority may develop and finance a middle-income housing project as follows:

(1)Funds received pursuant to bonds issued pursuant to Article 5 (commencing with Section 34350) shall only be used to finance units that will be occupied by persons of low income.

(2)Units that will be occupied by persons and families of middle income may be financed with

(1) Middle-income housing projects may receive gap financing from funds received pursuant to Section 34315.3.

(3)Funds received pursuant to bonds issued pursuant to Article 5 (commencing with Section 34350) and financial

(2) Financial or other assistance received from any public source pursuant to Section 34315.3 shall not be used to finance provide gap financing to units that will be occupied at market-rate rents.
(b) For the purposes of this article, the following terms have the following meanings:
(1) “Middle-income housing project” means a housing project that includes at least 40 percent of units, excluding units available for managers, that will be occupied by persons of low income, as well as at least 10 percent of units that are affordable to and will be occupied by persons and families of middle income.
(2) “Persons of low income” has the same meaning as in Section 34213.
(3) “Persons and families of middle income” has the same meaning as in Section 65008 of the Government Code.
(4) “Gap financing” means a loan from a housing authority to fund the remaining cost of development of a middle-income housing project after other funds have been secured, including, but not limited to, bond funds, tax credits, conventional loans, or other private and public funds.
(c) Nothing in this section shall be construed to change current law regarding housing authority bond authority pursuant to this part or low-income housing tax credits, as described by Section 42(g) of the Internal Revenue Code.