Tuesday, September 8, 2020
For years affordable housing advocates have asked the state to create a "one-stop shop" to access the public financial resources that make the development of affordable homes possible. With your help, we can take a major step towards this goal by securing the Governor's signature on AB 434 (Daly), which streamlines seven HCD rental housing programs into a single application and award process beginning in 2022. By sending the attached sample letter to Leg.Unit@gov.ca.gov as soon as possible, you can help reduce the time, cost and risk of development. The Governor must act on this bill by September 30.
According to a recent study by the Terner Center for Housing Innovation at UC Berkeley, 89% of new affordable developments built with 9% Low-Income Housing Tax Credits rely on four or more sources of funding, and each additional source of funding is associated with an average increase of $6,450 (2%) in the cost of each affordable home. If the Governor signs AB 434 into law, it will mean that developments can reduce the number of state funding applications, saving thousands of dollars per home and reducing uncertainty and the time of development.
AB 434 harmonizes the statutes relating to the Multifamily Housing Program and the following six special purpose rental housing programs so that HCD can use a single application and scoring system to make coordinated awards for all seven programs at one time while maintaining the special intent of each original program:
- Housing for a Healthy California
- Infill Infrastructure Grant Program
- Joe Serna, Jr. Farmworker Housing Grant Program
- SB 2 Farmworker Program
- Transit-Oriented Development Housing Program
- Veterans Housing and Homelessness Prevention Program
With this single AB 434 application and award process, applicants would select which specialty programs they are applying for based on the populations they intend to serve. HCD would use a single scoring and tiebreaker system to rank applications and would then fund developments in ranked order, using funds from the specialty programs as requested. Once funds were exhausted in any specialty program, the top ranked applications would receive the more general MHP funds until depleted.
At HCD's request, Assemblymember Daly amended the bill recently to allow HCD to apply additional scoring categories in awarding the specialty program funds, but those additional scoring categories would not apply to the MHP competition.
AB 434 will allow affordable home developers to obtain all the HCD funding they need at the same time and be ready to apply immediately for tax credits. It will also allow developments that are eligible for one of HCD's specialty programs to apply for MHP or other funding in the same round, increasing the application's odds of success.
By streamlining the application process for HCD resources, AB 434 will measurably reduce the cost of producing affordable homes by reducing staff time spent on multiple applications and decreasing development timelines. Please help make AB 434 a reality by requesting the Governor's signature today.
For more information, contact Mark Stivers at mstivers@chpc.net.
