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AB-434 Housing financing programs: universal application. (2019-2020)

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Date Published: 05/20/2019 09:00 PM
AB434:v95#DOCUMENT

Amended  IN  Assembly  May 20, 2019
Amended  IN  Assembly  April 29, 2019
Amended  IN  Assembly  April 08, 2019
Amended  IN  Assembly  March 26, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 434


Introduced by Assembly Member Daly

February 11, 2019


An act to amend Sections 50675.7 and 53545.13 50675.7, 53545.13, and 53562 of, and to add Section 50468 to, the Health and Safety Code, and to add Section 75219 to the Public Resources Code, relating to housing.


LEGISLATIVE COUNSEL'S DIGEST


AB 434, as amended, Daly. Housing financing programs: universal application.
Existing law establishes, among other housing programs administered by the Department of Housing and Community Development, the Multifamily Housing Program, pursuant to which the department provides assistance in the form of deferred payment loans to pay for specified eligible costs of development of specified housing projects. Existing law requires the department to administer the Infill Incentive Grant Program of 2007, also known as the Infill Infrastructure Grant Program, and award competitive grants under that program to selected capital improvement projects that are an integral part of, or necessary to facilitate the development of, a qualifying infill project or a qualifying infill area. Existing law establishes the Transit-Oriented Development Implementation Program, to be administered by the department, to provide local assistance to specified local agencies and developers for the purpose of developing or facilitating the development of higher density uses within close proximity to transit stations.
This bill, on or before December 31, 2020, would require the Department of Housing and Community Development to develop a single, universal application form that may be used by applicants for funds under the above-described programs. The bill would exempt this form from the rulemaking provisions of the Administrative Procedure Act. The bill would authorize an applicant under these programs to submit, and require the applicable administering department to accept, an application for funding under those programs using this form.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 50468 is added to the Health and Safety Code, to read:

50468.
 (a) On or before December 31, 2020, the department shall develop a single, universal application form that may be used by applicants for any of the following:
(1) The Multifamily Housing Program (Chapter 6.7 (commencing with Section 50675)).
(2) The Infill Incentive Grant Program of 2007 (Sections 53545.12 and 53545.13).
(3) Transit-Oriented Development Implementation Program (Part 13 (commencing with Section 53560)).
(b) The form required by this section shall not be subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

SEC. 2.

 Section 50675.7 of the Health and Safety Code is amended to read:

50675.7.
 Loans shall be provided using a project selection process established by the department that meets all of the following requirements:
(a) To the extent feasible, this process shall be coordinated with the processes of other major housing funding sources, including that of the California Tax Credit Allocation Committee, and shall ensure a reasonable geographic distribution of funds.
(b) (1) The process shall require that applications for projects meet minimum threshold requirements, including, but not limited to, all of the following:
(A) The proposed project shall be located within reasonable proximity to public transportation and services.
(B) Development costs for the proposed project shall be reasonable compared to costs of comparable projects in the local area.
(C)  The proposed project shall be feasible.
(D) The sponsor shall have the capacity to own and develop the proposed project.
(2) Notwithstanding paragraph (1), an applicant for a loan under this chapter may submit, and the department shall accept, an application using the form developed pursuant to Section 50468.
(c) Projects that meet threshold requirements shall be evaluated for funding based on weighted underwriting and evaluative criteria that give consideration to projects that meet the following criteria:
(1) Serve households at the lowest income levels, consistent with long-term feasibility, considering regional variations.
(2) Address the most serious identified local housing needs.
(3) Will be developed and owned by entities with substantial and successful experience.
(4) Contain a significant percentage of units for families or special needs populations.
(5) Leverage other funds in those jurisdictions where they are available.
(d) The department may establish alternate project selection processes, threshold requirements, and priorities for funds appropriated for special purposes. These alternate processes, requirements, and priorities shall be tied to the specific needs and objectives for which the funds have been appropriated.
(e) Loans for rental housing developments and transitional housing may be reviewed, approved, and funded by the department directly to the sponsor. The department shall ensure that the sponsor notifies the local legislative body of the sponsor’s loan application prior to application submission.
(f) The department may make grants to local public entities using funds reserved by the Legislature for rehabilitation, or acquisition and rehabilitation, in support of code enforcement. The local entities shall then make the funds available as loans, and they may be allowed to collect and retain loan repayments, provided that these repayments are reloaned in accordance with the requirements of this chapter, as it relates to funds used in support of code enforcement.

SEC. 3.

 Section 53545.13 of the Health and Safety Code is amended to read:

53545.13.
 (a) The Infill Incentive Grant Program of 2007 is hereby established to be administered by the department.
(b) Upon appropriation of funds by the Legislature for the purpose of implementing paragraph (1) of subdivision (b) of Section 53545, the department shall establish and administer a competitive grant program to allocate those funds to selected capital improvement projects that are an integral part of, or necessary to facilitate the development of, a qualifying infill project or a qualifying infill area.
(c) A qualifying infill project or qualifying infill area for which a capital improvement project grant may be awarded shall meet all of the following conditions:
(1) Be located in a city, county, or city and county, in which the general plan of the city, county, or city and county, has an adopted housing element that has been found by the department, pursuant to Section 65585 of the Government Code, to be in compliance with the requirements of Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code.
(2) Include not less than 15 percent of affordable units, as follows:
(A) For projects that contain both rental and ownership units, units of either or both product types may be included in the calculation of the affordability criteria.
(B) (i) To the extent included in a project grant application, for the purpose of calculating the percentage of affordable units, the department may consider the entire master development in which the development seeking grant funding is included.
(ii) Where applicable, an applicant may include a replacement housing plan to ensure that dwelling units housing persons and families of low or moderate income are not removed from the low- and moderate-income housing market. Residential units to be replaced may not be counted toward meeting the affordability threshold required for eligibility for funding under this section.
(C) For the purposes of this subdivision, “affordable unit” means a unit that is made available at an affordable rent, as defined in Section 50053, to a household earning no more than 60 percent of the area median income or at an affordable housing cost, as defined in Section 50052.5, to a household earning no more than 120 percent of the area median income. Rental units shall be subject to a recorded covenant that ensures affordability for at least 55 years. Ownership units shall initially be sold to and occupied by a qualified household, and subject to a recorded covenant that includes either a resale restriction for at least 30 years or equity sharing upon resale.
(D) A qualifying infill project or qualifying infill area for which a disposition and development agreement or other project- or area-specific agreement between the developer and the local agency having jurisdiction over the project has been executed on or before the effective date of the act adding this section, shall be deemed to meet the affordability requirement of this paragraph (2) if the agreement includes affordability covenants that subject the project or area to the production of affordable units for very low, low-, or moderate-income households.
(3) Include average residential densities on the parcels to be developed that are equal to or greater than the densities described in subparagraph (B) of paragraph (3) of subdivision (c) of Section 65583.2 of the Government Code, except that a project located in a rural area as defined in Section 50199.21 shall include average residential densities on the parcels to be developed of at least 10 units per acre.
(4) Be located in an area designated for mixed-use or residential development pursuant to one of the following adopted plans:
(A) A general plan adopted pursuant to Section 65300 of the Government Code.
(B) A project area redevelopment plan approved pursuant to Section 33330.
(C) A regional blueprint plan as defined in the California Regional Blueprint Planning Program administered by the Business, Transportation and Housing Agency, or a regional plan as defined in Section 65060.7 of the Government Code.
(5) For qualifying infill projects or qualifying infill areas located in a redevelopment project area, meet the requirements contained in subdivision (a) of Section 33413.
(d) (1) In its review and ranking of applications for the award of capital improvement project grants, the department shall rank the affected qualifying infill projects and qualifying infill areas based on the following priorities:
(A) Project readiness, which shall include all of the following:
(i) A demonstration that the project or area development can complete environmental review and secure necessary entitlements from the local jurisdiction within a reasonable period of time following the submittal of a grant application.
(ii) A demonstration that the eligible applicant can secure sufficient funding commitments derived from sources other than this part for the timely development of a qualifying infill project or development of a qualifying infill area.
(iii) A demonstration that the project or area development has sufficient local support to achieve the proposed improvement.
(B) The depth and duration of the affordability of the housing proposed for a qualifying infill project or qualifying infill area.
(C) The extent to which the average residential densities on the parcels to be developed exceed the density standards contained in paragraph (3) of subdivision (c).
(D) The qualifying infill project’s or qualifying infill area’s inclusion of, or proximity or accessibility to, a transit station or major transit stop.
(E) The proximity of housing to parks, employment or retail centers, schools, or social services.
(F) The qualifying infill project or qualifying infill area location’s consistency with an adopted regional blueprint plan or other adopted regional growth plan intended to foster efficient land use.
(2) Notwithstanding any other law, an applicant for a grant under this section may submit, and the department shall accept, an application using the form developed pursuant to Section 50468.
(e) In allocating funds pursuant to this section, the department, to the maximum extent feasible, shall ensure a reasonable geographic distribution of funds.
(f) Funds awarded pursuant to this section shall supplement, not supplant, other available funding.
(g) (1) The department shall adopt guidelines for the operation of the grant program, including guidelines to ensure the tax-exempt status of the bonds issued pursuant to this part, and may administer the program under those guidelines.
(2) The guidelines shall include provisions for the reversion of grant awards that are not encumbered within four years of the fiscal year in which an award was made, and for the recapture of grants awarded, but for which development of the related housing units has not progressed in a reasonable period of time from the date of the grant award, as determined by the department.
(3) The guidelines shall not be subject to the requirements of Chapter 3.5 (commencing with Section 11340) of Division 3 of Title 2 of the Government Code.
(h) For each fiscal year within the duration of the grant program, the department shall include within the report to the Legislature, required by Section 50408, information on its activities relating to the grant program. The report shall include, but is not limited to, the following information:
(1) A summary of the projects that received grants under the program for each fiscal year that grants were awarded.
(2) The description, location, and estimated date of completion for each project that received a grant award under the program.
(3) An update on the status of each project that received a grant award under the program, and the number of housing units created or facilitated by the program.
(i)  Notwithstanding paragraph (3) of subdivision (c), a city of greater than 100,000 in population in a standard metropolitan statistical area of less than 2,000,000 in population may petition the department for, and the department may grant, an exception to the jurisdiction’s classification pursuant to subdivisions (d) to (f), inclusive, of Section 65583.2 of the Government Code, if the city believes it is unable to meet the density requirements specified in paragraph (3) of subdivision (c). The city shall submit the petition with its application and shall include the reasons why the city believes the exception is warranted. The city shall provide information supporting the need for the exception, including, but not limited to, any limitations that the city may encounter in meeting the density requirements specified in paragraph (3) of subdivision (c). Any exception shall be for the purposes of this section only. This subdivision shall become inoperative on January 1, 2015.

SEC. 4.Section 75219 is added to the Public Resources Code, to read:
75219.

Notwithstanding any other law, an applicant seeking an award of funds under the program may submit, and the council shall accept, an application using the form developed by the Department of Housing and Community Development pursuant to Section 50468 of the Health and Safety Code.

SEC. 4.

 Section 53562 of the Health and Safety Code is amended to read:

53562.
 (a) To the extent that funds are available, the department shall make grants to cities, counties, cities and counties, or transit agencies for the provision of infrastructure necessary for the development of higher density uses within close proximity to a transit station, or to facilitate connections between that development and the station.
(b) To the extent that funds are available, the department shall make loans for the development and construction of a housing development project within close proximity to a transit station. To be eligible for a loan, at least 15 percent of the units in the proposed development shall be made available at an affordable rent or at an affordable housing cost to persons of very low or low income for at least 55 years. Developments assisted pursuant to this subdivision shall be on parcels at least a portion of which are located within one-quarter mile of a transit station. A housing development project may include a mixed-use development consisting of residential and nonresidential uses.
(c) Notwithstanding any other law, an applicant seeking grants or loans under this part may submit, and the department shall accept, an application using the form developed by the department pursuant to Section 50468.

(c)

(d) As used in this part, “transit station” shall have the same meaning as defined in subdivision (b) of Section 65460.1 of the Government Code.