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AB-880 Affordable Disaster Housing Revolving Development and Acquisition Program.(2021-2022)

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Date Published: 02/17/2021 09:00 PM
AB880:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 880


Introduced by Assembly Member Aguiar-Curry

February 17, 2021


An act to add Chapter 8.4 (commencing with Section 50709) to Part 2 of Division 31 of the Health and Safety Code, relating to housing.


LEGISLATIVE COUNSEL'S DIGEST


AB 880, as introduced, Aguiar-Curry. Affordable Disaster Housing Revolving Development and Acquisition Program.
Existing law requires the Department of Housing and Community Development to allocate funds under the federal Community Development Block Grant Program to cities and counties. Existing law requires the department to determine and announce in the applicable Notice of Funding Availability the maximum grant request limitation for each applicant of which a maximum per year can be used for either general program or economic development applications. Existing law requires the department to inform cities and counties that are eligible for economic development and general program grants of the eligibility criteria and requirements.
This bill would, upon appropriation of the Legislature, establish the Affordable Disaster Housing Revolving Development and Acquisition Program to fund the predevelopment expenses, acquisition, construction, reconstruction, and rehabilitation of property to develop or preserve affordable housing in the state’s declared disaster areas that have experienced damage and loss of homes occupied by or affecting lower income households. The bill would require the department to administer the program. The bill would require the department to establish an application process for community development financial institutions, as defined, to apply for emergency short-term or temporary loans under the program.
This bill would require community development financial institutions receiving awards through the program to issue short-term loans to nonprofit housing development corporations, tribally designated housing entities, and local government agencies to fund the cost of developing dwelling units and transitional housing, childcare, after school care, and social service facilities that are integrally linked to the dwelling units, as specified. The bill would authorize certain cost categories related to the development of dwelling units, including the acquisition of real property, new construction or rehabilitation, general property improvements that are necessary to correct unsafe, unhealthy, or unsanitary conditions, and necessary and related onsite and offsite improvements.
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’s recent natural disasters have been unprecedented and catastrophic. In 2019, over 6,872 fires were recorded with an estimated 253,321 acres of burned land, destruction of 732 structures, and three fatalities. That number was exceeded in 2020, with 9,279 fires burning 4,197,628 acres. This includes the SCU Lightning Complex Fires, the LNU Lightning Complex Fires, the CZU Lightning Complex Fires, the Valley Fire, the Creek Fire, the North Complex Fire, the Bobcat Fire, the Glass Fire, the El Dorado Fire, the Red Salmon Complex Fire, the Slater/Devil Fires, the August Complex Fire, and the Zogg Fire.
(b) The wildfires of 2017 and 2018 destroyed 28,000 homes in the Counties of Butte, Colusa, Glenn, Lake, Mendocino, Napa, Santa Barbara, Shasta, Sonoma, Trinity, and Ventura. The $500,000,000,000 in economic losses resulting from the wildfires was more than the combined losses of Hurricanes Harvey, Katrina, and Sandy.
(c) The deadly Camp Fire alone destroyed the entire town of Paradise, killed 85 people, resulted in $16,500,000 in losses, and was the deadliest fire in California history and the most expensive natural disaster in the world in 2018.
(d) The deadly fires of 2020 damaged or destroyed 10,488 structures and caused 31 fatalities. Neither northern California nor southern California were spared.
(e) Fires are becoming the new normal and disproportionately affect low-income people, including seniors, disabled persons, and people of color, with Native Americans being six times more vulnerable, and African Americans and Hispanics being 50 percent more vulnerable.
(f) By far, most of the structures destroyed in recent disasters have been people’s homes. Low-income people of color have been disproportionately affected and will have the longest recovery times.
(g) All federal disaster funding, traditionally the major source of financial support for natural disasters, is insufficient and takes years to obtain. This includes Federal Emergency Management Agency and Community Development Block Grant Disaster Recovery funding. The $124,000,000 in Community Development Block Grant Disaster Recovery funds allocated to California in fiscal year 2018 for the 2017 disasters were received by the Department of Housing and Community Development in the first quarter of 2020 and will not be committed for another six months. As a result, recovery is slow and those most in need of assistance do not get assistance until long after they need it.
(h) The experience of the California wildfires points to significant federal underfunding, long funding delays, and the critical need for state funds to respond quickly and impactfully to accelerate housing recovery efforts immediately after disasters occur and years before federal funds are deployed into California’s communities.
(i) The Golden State Acquisition Fund is an LLC with seven originating community development financial institutions that was seeded with $23,000,000 from the Affordable Housing Innovation Fund authorized by voters in 2006 in Proposition 1C. These funds were leveraged with additional capital from each community development financial institution to create a $93,000,000 fund that has successfully produced and preserved 18 projects with 1,490 affordable units.
(j) The State of New Jersey currently operates the Disaster Relief Emergency Financing Program, created after Hurricane Sandy, that provides short-term or temporary loans to local government entities, public water utilities, and private persons, which are paid back following state receipt of Federal Emergency Management Agency and Community Development Block Grant Disaster Recovery funds.

SEC. 2.

 Chapter 8.4 (commencing with Section 50709) is added to Part 2 of Division 31 of the Health and Safety Code, to read:
CHAPTER  8.4. Affordable Disaster Housing Revolving Development and Acquisition Program.

50709.
 (a) Upon appropriation by the Legislature of at least two hundred million dollars ($200,000,000), the Affordable Disaster Housing Revolving Development and Acquisition Program shall be established and administered by the Department of Housing and Community Development. The purpose of the program is to fund the predevelopment expenses, acquisition, construction, reconstruction, and rehabilitation of property to develop or preserve affordable housing in the state’s declared disaster areas that have experienced damage and loss of homes occupied by or affecting lower income households.
(b) The Affordable Disaster Housing Revolving Development and Acquisition Loan Fund is hereby established in the State Treasury. The fund shall consist of the money appropriated pursuant to subdivision (a), which shall be made available to the department for purposes of the program.

50709.1.
 For purposes of this article:
(a) “Community Development Financial Institution” means an entity that meets the requirements of Section 1805.201 of Title 12 of the Code of Federal Regulations.
(b) “Department” means the Department of Housing and Community Development.
(c) “Local government agency” means the same as defined in Section 50077.
(d) “Program” means the Affordable Disaster Housing Revolving Development and Acquisition Program created under Section 50709.
(e) “Tribally designated Housing Entity” means an entity as defined in Section 4103 of Title 25 of the United States Code and Section 50104.6.5 of the Health and Safety Code.

50709.2.
 (a) The department shall establish an application process for community development financial institutions to apply for emergency short-term or temporary loans pursuant to this chapter.
(b) (1) The department shall adopt guidelines for the operation of the program. The guidelines shall not be subject to the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.
(2) The department shall adopt guidelines for the program before issuing any request for qualifications for projects to be funded with program funds.

50709.3.
 Emergency short-term or temporary loans may be made through the program upon the determination and certification in writing by the department that use of the funds is necessary and appropriate to accomplish any of the following:
(a) The development and construction of a new transitional or rental housing development.
(b) The rehabilitation, or acquisition and rehabilitation, of a transitional or rental housing development.
(c) The conversion of a nonresidential structure into a transitional or rental housing development.
(d) The development and construction, rehabilitation, or acquisition and rehabilitation of a mobilehome park or manufactured housing community.

50709.4.
 (a) A community development financial institution receiving an emergency loan pursuant to the program shall offer short-term loan to nonprofit housing development corporations, tribally designated housing entities, and local government agencies for any of the purposes described in this section.
(b) Eligible costs shall include the cost of developing dwelling units and transitional housing, childcare, after school care, and social service facilities that are integrally linked to the dwelling units. Eligible cost categories shall include all of the following:
(1) Real property acquisition, including refinancing of existing debt to the extent necessary to reduce debt service to a level consistent with the provision of affordable rents and the fiscal integrity of the project.
(2) New construction or rehabilitation, including the conversion of nonresidential structures to residential use.
(3) General property improvements that are necessary to correct unsafe, unhealthy, or unsanitary conditions and renovations and remodeling, including, but not limited to, remodeling of kitchens and bathrooms, installation of new appliances, landscaping, and purchase or installation of central air conditioning.
(4) Necessary and related onsite and offsite improvements.
(5) Reasonable development fees.
(6) Reasonable consulting costs.
(7) Initial operating costs for housing units.
(8) Predevelopment costs related to new or existing affordable housing.
(9) Capitalized reserves for replacement and operation of housing units. The department may allow capitalized operating reserves to be used for rent subsidies for assisted units reserved for occupancy by households with incomes below limits determined by the department, which shall not exceed the income limit for very low income households, as defined in Section 50105.