The United Voice for Affordable Housing

INDUSTRY INSIGHT MAY 2024

NOTE FROM THE EXECUTIVE DIRECTOR

"Time is short, but together, we have a real chance to secure the stable funding this year that affordable housing providers need"

With the calendar flipping to June and state leaders continuing to confront a multi-billion dollar revenue shortfall, we are now entering the most critical four weeks of the year for funding affordable housing. The Legislature has until June 15 to vote on a budget, and June 27 is the last day legislative measures can qualify for the November ballot, including this year’s state housing bond.

CHC is working overtime on both fronts with every coalition we are part of—highlighting the urgent need to maintain housing funding so our members can keep building the affordable homes lower-income Californians desperately need.

We are sharing three key messages in the Capitol and encourage you to do the same:

Now is not the time to stop building affordable housing: CHC and our allies are urging legislators to maintain support in the budget for housing—by protecting the state’s $500 million housing tax credit program and flagship Multifamily Housing Program, along with critical homeless prevention programs. The Governor included the tax credit in his May Revise and with CHC’s support the Assembly and Senate released a joint budget this week rejecting proposed cuts to MHP and homeless programs. Without adequate funding, annual construction of new affordable homes is expected to drop by one-third—stalling development of an estimated 4,700 affordable homes.
California needs a housing bond on the November ballot: With funds from the last housing bond expiring, this is the critical year to give voters a chance to support a new long-term source of housing funding. AB 1657 (Wicks) would fund construction of tens of thousands of affordable homes—providing a financial backstop for MHP and serving as a bridge to better fiscal times, without impacting this year’s budget.
To take pressure off future budgets, communities need more flexibility to support housing: The Legislature has only a few weeks to take action on an updated version of ACA 1 (Aguiar-Curry), a ballot measure that would set thresholds for local housing and infrastructure bonds at 55%, the same level required for school bonds. A new, narrower measure would scale back some of ACA 1’s proposed expansion of local revenue authority—and focus on what Californians care about the most: Helping every community build more safe, affordable homes.

Time is short, but together, we have a real chance in the next few weeks to move these ideas forward—and to secure the stable funding this year that affordable housing providers need.

Sincerely,

Ray Pearl

LEGISLATIVE UPDATE

All of CHC’s sponsored legislation continue to advance after last week’s House of Origin deadline, along with many other bills CHC is actively supporting.

An updated list of noteworthy housing bills still moving in the Legislature:

CHC-sponsored bills:

AB 1657 (Wicks) – Authorizes the sale of a $10 billion state housing bond
AB 1789 (Quirk-Silva) – Expands the types of housing that can receive funding from the Portfolio Reinvestment Program and requires HCD to give priority to “challenged” projects with expiring affordability restrictions or that are at risk of conversion
AB 2430 (Alvarez) – Prohibits a city or county from charging local monitoring fees on 100% affordable housing developments using Density Bonus Law, if the project is subject to monitoring by state agencies
SB 937 (Wiener) – Delays imposition of development fees until after the certificate of occupancy is issued

Bills supported by CHC:

AB 1886 (Alvarez) – Clarifies the Builder’s Remedy to ensure it can only be utilized after HCD or a court of competent jurisdiction determines whether a local housing element substantially complies with the law
AB 1893 (Wicks) – Modernizes the Builder's Remedy by providing clear, objective standards for projects using the law, including density standards and project location requirements
AB 2144 (Grayson) – Adds evidence of compliance requirements to recent laws mandating local governments make annual progress reports to HCD on their fee schedules, inclusionary requirements, and development standards
AB 2243 (Wicks) – Expands the applicability of the streamlined AB 2011 approval process to additional commercial zones and makes other clarifying changes
AB 2638 (Ward) – Authorizes HCD to approve the payoff of an HCD loan in whole or part, prior to the end of its term, along with the extraction of equity from a development for purposes approved by HCD
AB 2926 (Kalra) – Updates the Preservation Notice Law to require the owner of a property with an expiring affordability covenant to accept bona fide offers from a qualified preservation buyer, or re-restrict the development as affordable housing for at least another 30 years
AB 3160 (Gabriel) – Commits the state to allocating $500 million annually to the LIHTC through 2030 (while specifying that this expansion shall only become operative if AB 3190 (Haney), a bill CHC continues to have concerns with, is adopted)
SB 1211 (Skinner) – Increases the number of allowable detached accessory dwelling units (ADUs) on a lot with an existing multifamily dwelling from no more than two detached ADUs, to no more than eight, provided that number doesn’t exceed the number of existing units already on the lot

AFFORDABLE HOUSING NEWS OF THE MONTH

NEW POLL: Strong Majority of Voters Support Housing Bond on November Ballot (Press Release)

High housing costs may be California’s biggest problem. The state’s politics haven’t caught up. (Los Angeles Times)

As home insurers exit the state, officials promise faster action (KQED)

California fails to track its homelessness spending or results, a new audit says (CalMatters)

S.F. prioritized building homes for the ‘missing middle.’ 80% of units sit empty. (San Francisco Chronicle)

Pro-housing groups hit rough waters (Politico)

$3.3 billion available for mental health beds as Newsom jump-starts Prop. 1 spending (Los Angeles Times)

Newsom wants California cities to plan housing for homeless—without enough money to fund it (Sacramento Bee)

FEDERAL UPDATE FROM DAVID GASSON

Ah summer. Well, it is beginning to feel that way but as far as things being buttoned up legislatively in Washington, not quite yet.

Tax bill, oh tax bill, will yet get a vote in the Senate? That has been the focus of ours and our advocacy colleagues on Capitol Hill as the Senate trudges its way toward the August recess and then to the election in November. The lobbying has been intense, and I am not just referring to efforts of the affordable housing community. Small business, manufacturers, tech firms, the larger real estate lobby and myriads of others have continued to visit with Republican offices in the Senate, urging, encouraging and begging for an affirmative vote on the bill.

Senator Crapo and the Republican leadership continue to urge their members to ignore these efforts and focus on the potential for a Republican Senate majority in 2025 and the prospect of a Republican electoral sweep. This would lead to another tax bill passed through the budget reconciliation process, meaning little or no Democratic input into what may be the largest tax bill ever considered. This is also my nightmare scenario regarding housing legislation. We generally play defense when Republican’s control Congress and the White House, although we have built significant support among Republican’s in Congress for the LIHTC.

Getting back to this session and the tax bill, I met with Finance Chairman Ron Wyden a few weeks ago and ...