Existing law establishes, among other housing programs, the Multifamily Housing Program, pursuant to which the Department of Housing and Community Development provides financial assistance in the form of deferred payment loans to pay for the eligible costs of development for specified types of housing projects. Existing law, the Mitigation Fee Act, establishes procedures and limitations with respect to the establishment, increase, or imposition of fees, as defined, as a condition of approval of a development project by a local agency, including requiring the local agency to determine the reasonable relationship between the fee’s use and the type of development project on which the fee is imposed.

This bill would establish the Housing Cost Reduction Incentive Program, to be administered by the department, for the purpose of reimbursing cities, counties, and cities and counties for development impact fee waivers or reductions provided to qualified rental housing developments. Upon appropriation, the bill would require the department to provide grants to applicants in an amount equal to 50% of the amount of development impact fee waived or reduced for a qualified rental housing development by issuing a Notice of Funding Availability for each calendar year in which funds are made available for the program, as provided. The bill would require an applicant that receives a grant under the program to use those funds solely for those purposes for which the development impact fee that was waived or reduced would have been used. The bill would require the department to adopt guidelines to implement the program and exempt those guidelines from the rulemaking provisions of the Administrative Procedure Act.