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AB-2140 Housing: Building Home Ownership for All Program.(2023-2024)

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Date Published: 02/06/2024 09:00 PM
AB2140:v99#DOCUMENT

Revised  March 20, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 2140

Introduced by Assembly Member Juan Carrillo
(Coauthors: Assembly Members Alvarez, Garcia, Gipson, Reyes, Villapudua, and Wilson)

February 06, 2024

An act to add Section 12335 to the Government Code, relating to housing.


LEGISLATIVE COUNSEL'S DIGEST


AB 2140, as introduced, Juan Carrillo. Housing: Building Home Ownership for All Program.
Existing law defines the duties of the Treasurer, which includes, but is not limited to, keeping an account of all money received and disbursed. Existing law required the Treasurer to, as soon as April 1, 2022, but no later than specified, in consultation with the California Housing Finance Agency and other specified state agencies, develop a framework for the California Dream For All Program in accordance with the goals and intent of the program, including, among other things, making home ownership more affordable by reducing the cost of home ownership by up to 45 percent for lower and moderate-income Californians, and submit a report, as specified, outlining the program framework to the Legislature.
This bill would require the Treasurer, on or before December 31, 2025, and in consultation with the California Housing Finance Agency, the Department of Housing and Community Development, and other stakeholders deemed relevant by those state bodies, to develop a framework for the Building Home Ownership for All Program in accordance with the goals and elements of the program, including, among other things, expanding access to homeownership by making it affordable for lower and moderate-income Californians, and submit a report, as specified, outlining the program framework to the Legislature. The bill would also make findings and declarations related to the program.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 The Legislature finds and declares all of the following:
(a) California has a statewide housing crisis, represented by a shortage of nearly 3,500,000 homes.
(b) California’s housing crisis stifles economic growth, contributes to the homelessness epidemic, consumes an ever-growing share of the paychecks of working families, and holds millions of households back from realizing the California dream of home ownership.
(c) Home ownership is still the primary way in which most Americans build wealth and assets. California has the third-highest median home price in the nation and the high cost of housing has pushed what was once a modest goal further and further out of reach for most people of color.
(d) Home ownership rates in California are among the lowest nationwide, and in recent years those numbers have continued downward. Between 2020 and 2022, California home ownership declined by 3.19 percent.
(e) While the home ownership gap is an issue throughout the nation, the African American and Latinx home ownership rate is significantly worse in California. African Americans and Latinx have a home ownership rate across the nation of 42 percent and 47 percent, respectively, whereas that rate in California drops down to 35 percent and 42 percent, respectively.
(f) The Legislative Analyst’s Office has identified a lack of housing supply as one of the culprits for the severe home ownership gap. The office completed a 2016 housing affordability report, which found that “the state’s housing shortage also makes many Californians, not only low-income residents, more likely to commute longer distances, live in overcrowded housing, and delay or forgo home ownership.”
(g) Access to sustainable home ownership can be expanded with fiscal assistance, housing counseling, sound lending, flexible underwriting that ensures the ability to pay, and backing by Federal Housing Administration (FHA) mortgage insurance.
(h) As production has slowed and changed, for-sale inventory has tightened, particularly for entry-level homes.
(i) Higher home prices have translated to less diversity in who is able to purchase a home.
(j) Home ownership is a powerful tool to close the racial and ethnic wealth gap across the State of California and nationwide.

SEC. 2.

 Section 12335 is added to the Government Code, immediately following Section 12334, to read:

12335.
 (a) The Treasurer shall, on or before December 31, 2025, in consultation with the California Housing Finance Agency, the Department of Housing and Community Development, and other stakeholders determined relevant by those state bodies, develop a framework for the Building Home Ownership for All Program in accordance with the goals and elements of the program and submit a report outlining the program framework to the Legislature in compliance with Section 9795.
(b) The goals of the program shall include, but not be limited to, all of the following:
(1) Expanding access to homeownership by making it affordable for lower and moderate-income Californians, including, but not limited to, those who were impacted by generational barriers to home ownership due to systemic racism, including redlining, those who lost homes during the Great Recession and have not returned to home ownership, and those with substantial higher education student loan debt.
(2) Establishing a program to finance the construction of for-sale housing units at a price that is ultimately affordable to lower and moderate-income Californians.
(3) Evolving the program over time to create a self-sustaining model, including utilizing nongovernmental funding sources.
(4) Ensuring that there is not a reduction in funding to existing rental programs due to enactment of the program.
(c) The framework of the program shall include, but not be limited to, all of the following elements:
(1) Income limits for Californians and price limits for homes eligible for the program, both on a regional basis.
(2) Options for the initial capitalization for the program.
(3) Ongoing state financial support limited to nominal administrative costs.
(4) Program structuring to encourage nongovernmental funding similar to existing programs, including, but not limited to, the Low-Income Housing Tax Credit Program (26 U.S.C. Sec. 42) and the New Markets Tax Credit Program (26 U.S.C. Sec. 45D).
(5) Opportunities to leverage existing federal, state, and local homeownership programs to support the goals of the program.
(6) Integration of the program with existing state housing plans and strategies, including aligning with regional housing needs assessments and plans developed by local governments under existing law.
(7) Opportunities to facilitate the involvement of small development firms, community development corporations, community land trusts, and other community based nonprofit housing developers in the production of these homes, including those owned and operated by members of formerly redlined communities.
(8) Changes to existing law relating to land use and multifamily homeownership that would reduce the cost to construct for-sale single-family and multifamily homes.
(9) Changes to streamline approval processes for housing projects under the program, including projects in areas with high housing demand, to expedite construction and reduce bureaucratic delays.
(10) Quantification of the extent of the racial wealth gap in California.
(11) Potential size, structure, and geography of a pilot project.
(12) Incorporation of financial education and homeownership readiness programs, focusing on communities with lower rates of homeownership.
(13) Monitoring of the impact of the program on expanding access to homeownership through the collection and analysis of data disaggregated by race, ethnicity, and income.
(d) The report shall include, but not be limited to, all of the following:
(1) The structure of the program, including, but not limited to, the administering entity and the financial structure of the program.
(2) The type of financial assistance offered to homebuilders.
(3) An analysis on the feasibility of establishing the program and the financial risks to the state, including, but not limited to, the costs and benefits of the program compared to available alternatives and existing programs, and how those costs and risks compare to the costs and risks to society of continuing current barriers to homeownership for working families and not combating systemic racism and inequities that have kept generations from building wealth and thriving in the middle class.

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REVISIONS:
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