2001-02 End of Year Reports

LEGISLATIVE SUMMARY FOR 2001-02

TABLE OF CONTENTS

• COVER PAGE
• COVER LETTER
• BUILDING STANDARDS
• COMMON INTEREST DEVELOPMENTS
• FARMWORKER HOUSING
• HOMELESSNESS
• HOUSING DISCRIMINATION
• HOUSING FINANCE
• LAND USE
• MOBILEHOMES/MANUFACTURED HOUSING
• REDEVELOPMENT
• RELOCATION ASSISTANCE
• MISCELLANEOUS
• APPENDIX [Bills in Numerical Order]

ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT

LEGISLATIVE SUMMARY FOR 2001-02

COMMITTEE MEMBERS ALAN LOWENTHAL CHAIR

Dennis Mountjoy, Vice-Chair
George Runner
David Cogdill
Simon Salinas
John Dutra
Darrell Steinberg
Christine Kehoe
Howard Wayne

STAFF

Hubert O. Bower, Jr., Chief Consultant
Jay Barkman, Consultant
Yvonne Fong, Committee Secretary

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October 2002

To All Interested Parties:

Government Code Section 65580 declares: The availability of housing is of vital statewide importance, and the early attainment of decent housing and a suitable living environment for every Californian, including farm-workers, is a priority of the highest order.

According to figures from the California Department of Housing and Community Development (HCD) Statewide Housing Plan, between1997 and 2020 California will likely add more than 12.5 million new residents and should form approximately 5 million new households. In that same report HCD states that in order to meet projected demand, homebuilders and developers will have to build an average of 220,000 units per year. According to HCD and other estimates, approximately 150,000 housing permits were issued annually over the last two years.

The lack of affordable housing continues to be a crisis for the State of California.

This session the Assembly Housing and Community Development Committee worked extensively on the Housing and Emergency Shelter Trust Fund Act of 2002 which, if passed by the voters as Proposition 46, will provide $2.1 billion for low-income housing assistance. This bond measure, passed by the Legislature and placed on the ballot, is the largest of its kind in the history of the state.

The Assembly Housing Committee worked hard to address difficult issues related to housing supply and affordability.

The following is a summary of legislation, reviewed by the Assembly Committee on Housing and Community Development during the 2001-2002 Legislative Session. This document is intended as a source for preliminary information. For additional detail about this summary or other activities of the committee, please contact the committee staff at (916) 319-2085.

Respectfully,

Alan Lowenthal, Chair
Assembly Committee on Housing and
Community Development

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BUILDING STANDARDS

Developing building standards requires a balancing act between health and safety concerns and the costs of addressing those concerns. Developers insist that it is difficult to build affordable housing when regulations increase their construction costs: consumer groups, fire departments, and disabled advocates argue for safer, more energy-efficient, and more accessible buildings. The public policy struggle is in determining the proper balance between the two aforementioned concerns.

Building standards in California are based upon model codes, such as the Uniform Building Code and the Uniform Mechanical Code. Model codes are published and approved by groups of national and regional experts on structural, mechanical, electrical, plumbing, and fire safety standards.

California building standards are adopted through a process in which state agencies, using the model codes, propose additions or changes to the California Building Standards Code (also known as Title 24 of the California Administrative Code). The California Building Standards Commission then reviews, and adopts or rejects the proposed changes. An updated version of the code is published every three years. Local governments can modify the Code, but those modifications must be equal to or more stringent than the statewide standard.

The Code applies to all buildings and residential occupancies. Some structures, however, such as high-rise commercial buildings and private schools, are not subject to the Code and are governed by the model codes and local ordinances.

Although most building standards are created and adopted in the administrative process, numerous bills are introduced each year that propose new building standards or amendments to existing building standards. These bills are drafted in response to natural disasters, requests by industries or proposals by consumer groups in reaction to perceived dangers relating to existing building standards.

Major Legislation

AB 1574 (Lowenthal) Chapter 773, Statutes of 2001: Authorizes the California Energy Commission to develop measures to enhance energy efficiency for homes built prior to the establishment of the current energy efficiency standards. Also, requires home inspectors to provide energy efficiency information to homebuyers and sellers.

AB 2787 (Aroner) Chapter 726, Statutes of 2002: Requires the Department of Housing and Community Development to develop guidelines and model housing ordinance that is consistent with the principles of universal design by December 31, 2003.

SB 460 (Ortiz) Chapter 931, Statutes of 2002: Declares any building in violation of State Housing Law if it contains lead hazards that are likely to endanger the health of the public or occupants. Also, allows local building departments and other authorized enforcement agencies including the Department of Health Services to order the abatement of lead hazard in public and residential buildings.

Other Legislation

AB 123 (Washingtin) Died in the Assembly Committee on Housing and Community Development: Would have provided grants to cities with a population over two million to bring buildings into compliance with current building standards.

AB 178 (Cox) Died in the Assembly Committee on Housing and Community Development: Would have required landlords of residential, commercial and industrial buildings to provide written notice of mold and contingent upon the enactment of SB 732 (Ortiz).

AB 326 (Dutra) Chapter 244, Statutes of 2001: Requires wood roof covering materials must be approved and listed by the State Fire Marshall effective July 1, 2002.

AB 359 (Cardoza) Died in the Senate Committee on Health and Human Services: An urgency statute to take effect immediately, would have required the Department of Health Services and the California Building Standards Commission to submit a status report on standards for protection against entrapment in swimming pools and spas by July 1, 2002. Also, would have required the department and commission to adopt regulations consistent with the United States Consumer Products Safety Commission by December 31, 2002.

AB 600 (Dutra) Died in the Assembly Committee on Judiciary: Would have created the California Homebuyer Protection and Quality Construction Act of 2002 to provide for ten year home construction warranty on new residential housing.

AB 1467 (Kehoe) Chapter 594, Statutes of 2001: Allows the court to appoint nonprofit organizations as receivers for substandard buildings. Also, allows for receivers to recover their costs by placing a lien on the property and streamlines code enforcement process for substandard vacant single family homes in Los Angeles and San Diego.

AB 1486 (Dutra) As Introduced: Would have provided immunity from liability for third party inspectors (engineers, land surveyors and architects) of residential construction.

This bill was amended August 20. 2002 to allow private mortgage insurers to insure home loans up to 103 percent of the fair market value of the real estate. Also, applies to first and second mortgages.

(Chapter 429, Statutes of 2002)

AB 2261 (Cardenas) Died in the Senate Committee on Health and Human Services: Would have authorized the Department of Health Services and health department of local government to enforce the abatement of lead hazards.

AB 2455 (Negrete McLeod) Died in the Senate Committee on Appropriations: Would have required two specified drowning prevention safety features on new and remodeled swimming pools and spas. Also, would have required the Department of Health Services to conduct toddler pool safety studies and a statewide swimming pool safety educational campaign.

AB 2545 (Nation) Died in the Senate Committee on Housing and Community Development: Would have required local code enforcement officials to provide 10 days written notice of inspection to residents of rental property.

AB 2796 (Shelley) Died in the Assembly Committee on Housing and Community Development: An urgency statute to take effect immediately, would have added the existence of lead hazards as a substandard housing condition. Also, would have authorized Department of Health Services to assess fines and penalties for lead hazard violations

SB 332 (Sher) Chapter 31, Statutes of 2002: An urgency statute to take effect immediately, revises the building standards regulating the construction of straw bale structures.

SB 622 (Ortiz) Died in the Assembly Committee on Housing and Community Development: Would have allowed local building departments and other authorized enforcement agencies including the Department of Health Services to order the abatement of lead hazard in public and residential buildings. (Note: Contents of this bill was amended into SB 460.)

SB 732 (Ortiz) Chapter 584, Statutes of 2001: Enacts the Toxic Mold Protection Act which addresses the potential health threats posed by the presence of mold in residential and commercial properties.

SB 1726 (Vasconcellos) Chapter 679, Statutes of 2002: Requires specified standards on new swimming pool and spa construction.

SB 1992 (Perata) Chapter 1051, Statutes of 2002: Requires the Department of Housing and Community Development to determine whether a proposal shall be made to the California Building Standards Commission that would require seismic gas shutoff devices and excess flow gas shutoff devices be required on dwelling units, hotels, motels, and lodginghouses.

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COMMON INTEREST DEVELOPMENTS

“Subordination of individual property rights to the collective judgment of the owners’ association, together with restrictions on the use of real property, comprise the chief attributes of owning property in a common interest development.”

California Supreme Court, September 2, 1994
Nahrstedt v. Lakeside Village Condominium Association

A common interest development (CID) combines a separate interest in the ownership of a unit with a combined interest in the ownership of the common area. The owners of the separate interests are members of an association created for the purpose of managing the CID. The board of directors of the association is responsible for the day-to-day management and operation of the CID.

Under California law, the Davis-Stirling Act (Act) governs CIDs including community apartment projects, condominium projects, planned developments, and stock cooperatives. The Act provides for association voting requirements, access to records, levying of assessments, conduct of meetings, and liability of officers and directors.

The Department of Real Estate is the governmental entity responsible for approving, with limited exceptions, the public report required before a CID can be established. It is estimated that there are over 30,000 CID associations.

The most important legislative issues surrounding CIDs continue to be:

• Disclosure of information to a prospective buyer of a unit located in a CID, especially about the potential for increases in assessments and other financial matters relating to the maintenance of the property.

• Ongoing disclosure to homeowners about issues relating to any construction defects, litigation arising out of defects, or increases in assessments that affect homeowners.

• The rights and privileges of individual homeowners within a CID when they conflict with the association’s rules or covenants, conditions, and restrictions (CC&R).

Major Legislation

AB 2546 (Nation) Chapter 817, Statutes of 2002: Prohibits homeowners’ associations from adopting any rule or regulation that arbitrarily or unreasonably restricts an owner’s ability to market his or her interest in a common interest development.

Other Legislation

AB 643 (Lowenthal) As introduced: Would have clarified that a special assessment imposed by a homeowner’s association may not be over five percent of the budgeted gross expenses for the current fiscal year.

This bill was amended August 26, 2002 to require common interest development associations, whether incorporated or unincorporated, to provide information, as specified, to the Secretary of State on a biennial basis. (Chapter 1117, Statutes of 2002)

AB 739 (Frommer) Died in the Assembly Committee on Judiciary: Would have extended from 90 to 180 days of the Calderon process, the pre-filing litigation process for construction defect claims in common interest developments with 20 or more units.

AB 1641 (John Campbell) As introduced February 23, 2001: Would have required common interest development associations shall determine whether proposed levy assessments are an assessment, or a fee or charge.

The bill was amended April 2, 2002 to allow all county recorders to accept a digitized image of a recordable real estate documents. Failed in the Assembly Committee on Local Government by a vote of 5 to 1.

AB 2289 (Kehoe) Chapter 1111, Statutes of 2002: Clarifies and adds additional notification requirements that a homeowner association must give to a homeowner delinquent on assessments and foreclosure prior to filing a lien.

AB 2417 (LaSuer) Chapter 195, Statutes of 2002: Requires the board of directors of homeowners association who meets in executive session for the purpose of executing a contract to note in the minutes following the meeting that a contract has been executed.

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FARMWORKER HOUSING

Affordable, safe, and sanitary housing is virtually nonexistent for the vast majority of California's farmworkers. When a migrant farmworker arrives in a rural agricultural town, he/she has few options: most of the existing housing is occupied; available units often consist of the most dilapidated units in the community; rents are high; and per-person charges are used to capitalize on “doubling up.” If the migrant fails to arrive in town early enough to get a substandard unit, there are four choices available: double up in an occupied unit; pay rent to live in a shed, barn, garage, or backyard; live in a car; or try to obtain housing in a surrounding community and commute to work. Although there are a number of state-operated farm labor camps and some employer-provided housing, these programs address only a minimal portion of the total housing need.

Several reasons are commonly cited for the lack of farmworker housing. Housing advocates maintain that government has not spent enough money for farmworker housing. The agricultural industry maintains that housing is expensive to provide and investments are rarely recaptured because the housing is only used seasonally. Agricultural interests also contend that governmental regulations and community opposition make farmworker housing difficult to build and maintain. Moreover, the increasing use of farm labor contractors as intermediaries has increased the distance between growers and labor, which blunt workers' attempts to attain better working conditions and benefits directly from growers.

Two state programs and a number of private camps offer a combined total of 5,607 units assisting an estimated 39,374 farmworkers and their families. The federal Rural Economic Development Services Agency (formerly the Farmers Home Administration) provides funding to build low- and moderate-income farmworker housing.

The state housing programs are:

1) OfficeofMigrantServices (OMS): This program, administered by the Department of Housing and Community Development (HCD), operates 26 migrant centers in 16 counties, annually serving an estimated 12,546 migrant farmworkers and their families in 2,107 units. Thirty percent of the farmworkers come from California, 35 percent from Mexico, and the rest from Arizona, New Mexico, and Texas. The centers generally operate from April through November. Land is provided by the local jurisdiction. The state owns the buildings and equipment and operates the program, usually by contracting with a local housing authority. The Fiscal Year 2002-03 Budget funded this program with $565,000 for minor repairs at three centers. The Housing Bond upon approval of voters at the November 5, 2002 statewide general election will provide $25 million for migrant housing.

2) Farmworker Housing Grant Program: This HCD-administered program offers up to 50 percent matching grants for the construction and rehabilitation of owner-occupied and rental housing for low-income, year-round farmworkers. This program has assisted 3,500 units and an estimated 14,280 total farmworkers and their families since 1977. The Fiscal Year 2002-03 Budget provided $14 million for additional grants. The Housing Bond will provide $200 million for farmworker housing.

3) Housing and Emergency Shelter Trust Fund Act of 2002: $200 million for farmworker housing.

Major Legislation

AB 807 (Salinas) Chapter 555, Statutes of 2001: Authorizes the Department of Housing and Community Development to make grants and loans from the Joe Serna, Jr. Farmworker Housing Grant Fund to local public entities and nonprofit corporations for short-term occupancy housing for migrant farmworkers.

SB 1227 (Burton) Chapter 26, Statutes of 2002: An urgency statute to take effect immediately upon approval of voters at the November 5, 2002 statewide general election, provides $200 million from the Housing Bond for farmworker housing.

Other Legislation

AB 1160 (Florez) Chapter 593, Statutes of 2001: An urgency statute to take effect immediately, expands the existing Joe Serna, Jr. Farmworker Housing Grant Program and authorizes the Department of Housing and Community Development to make grants and loans to local public entities, nonprofit corporations, and prescribed limited partnerships for construction and rehabilitation of farmworker housing.

AB 1526 (Florez) Died in the Assembly Committee on Housing and Community Development: Would have enacted the Farmworker Housing and Family Wellness Bond Act of 2002 and proposed $250 million general obligation bonds to provide grants for farmworker housing and family services.

AB 1550 (Wiggins) Chapter 340, Statutes of 2001: Allows Napa County to create a county service area and levy an annual assessment of $10 per planted vineyard acre for five years to acquire, construct, or maintain farmworker housing.

AB 2043 (Salinas) Chapter 494, Statutes of 2002: Authorizes the Department of Housing and Community Development to provide grants and loans from the Joe Serna, Jr. Farmworker Housing Grant Fund to rent or lease short term occupancy by migrant farmworkers in extraordinary or emergency circumstances.

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HOMELESSNESS

Homelessness is a problem in every major city in California, as well as in many rural areas.

California's streets, malls, beaches, parks, and riverbanks are rife with people who for one reason or another do not have permanent places to live. The homeless problem stems from many sources including high housing costs, unemployment, alcoholism, drug addiction, reduced services for the mentally ill, reduced federal housing funds, as well as conversions of federally subsidized housing to market rates.

Despite the acknowledgment by many in government, the media, and the private sector of the problems of homelessness, there is neither agreement on how best to attack the problem nor significant public money with which to fight it. In large part, the battle against homelessness is being fought by church groups and other non-profit organizations with volunteers, donations, and a trickle of government funds.

Many cities have enacted stiff anti-camping and panhandling ordinances in response to outraged citizens and business owners who demand a “get-tough“ approach to the problem.

Thirty seven percent of the homeless in California have families, 38 percent have problems with alcohol, 39 percent suffer from mental illness, and 26 percent have a drug problem.

The number of homeless people in California is difficult to estimate. Since a person can be homeless for days, weeks, months, or years, the homeless population is in constant fluctuation. However, according to the latest data from Housing California, California is meeting only a fraction of the need for emergency shelters. On any given night, there are approximately 185,000 homeless individuals and 105,000 homeless families. About 1 in 6 individuals and 1 in 5 families may have a bed.

To address the wide array of needs for the homeless, the state and federal government provide services to the homeless through a complicated array of agencies, departments, and programs which focus on either emergency shelter and services or narrowly-focused programs that address specific subgroups of the homeless population.

In the spring of 2002 the Governor created the Interagency Task Force on Homelessness to study and recommend solutions for integrating services provided by the numerous departments and agencies.

Federal and State Housing Programs

1) Emergency Housing Assistance Program (EHAP): Operated by the state Department of Housing and Community Development (HCD), EHAP provides grants to local service providers who offer temporary emergency shelter to the homeless. Grants may be used for the acquisition and renovation or expansion of existing facilities, general maintenance costs, and limited administrative expenses. The Budget Act of 2000 appropriated $35 million to EHAP. Proposition 46 if approved by the voters at the November 5, 2002 statewide general election will provide $195 million to EHAP.

2) Federal Emergency Shelter Grant Program (FESG): FESG provides grants to local public agencies and nonprofit organizations in small communities that do not receive emergency shelter funds directly from HCD, to provide shelter and transitional housing for homeless individuals and families. FESG grants are used for facility conversion, rehabilitation, maintenance, operating costs, rent, and supportive services such as transportation, legal aid and counseling for the homeless.

Major legislation

SB 1654 (Burton) Vetoed: Establishes the Office of Homelessness to coordinate the efficient use of existing state resources for the purpose of improving the management and oversight of all state homeless programs.

Governor's veto message: “...Having a central point of contact within state government on homeless issues has merit. Such an office could serve as a clearinghouse of information and could provide staff support to the Interagency Task Force on Homelessness that was created by my Executive Order of March 22, 2002.

However, the Department of Finance estimates the cost of operating such an office could be as high as $500,000 annually. SB 1654 has no appropriation attached to it.

Although the state cannot afford new programs at this time, in the interim, I am pleased by the progress already made by the Task Force in improving coordination of homeless services. I have made a strong personal commitment to combating homelessness in California, especially by focusing on prevention of homelessness, and I have directed the Task Force to continue its work and to report back on additional progress made by December 1, 2002.

Additionally, I have directed state agencies to develop a set of recommendations to reduce the incidence of homelessness in California, convened the State's first Summit of Homelessness, and established an interagency task force to improve integration of services and recommend and implement strategies to prevent individuals and families from becoming homeless.

I have approved appropriations of over $64 million in new State funding for the Emergency Housing Assistance Program, including $25 million for the creation of new homeless shelter facilities and the expansion of existing facilities, as well as $39 million for shelter operations. I also signed legislation making National Guard armories permanently available as winter homeless shelters.

I have approved $45 million in funding for the Supportive Housing Initiative Act that provides permanent housing with services for formerly homeless disabled adults.

In signing SB 1227, placing Proposition 46 on the November ballot, this $2.1 billion measure, if approved, will help the neediest Californians end the cycle of homelessness and move to permanent housing, while also assisting California's workforce and their families and other lower income households, obtain safe and affordable rental housing.”

Other legislation

AB 602 (Cedillo) Died in the Senate Committee on Housing and Community Development Committee: Stated legislative intent that would have provided funding in the Budget Act of 2001-02 for the New Economics for Women, a community based organization in Los Angeles to address the economic needs of women and children of domestic violence and homelessness through continuing education.

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HOUSING DISCRIMINATION

Housing discrimination in California is governed by the state Fair Employment and Housing Act, the Unruh Civil Rights Act, and the federal Fair Housing Amendments Act of 1988.

The Fair Employment and Housing Act (FEHA): FEHA prohibits the owner of any housing accommodation from discriminating against any person in the sale or rental of housing accommodations based on race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, or age. Employers with four or fewer employees and non-profit religious organizations are exempt from FEHA.

The Department of Fair Employment and Housing (DFEH) investigates and adjudicates complaints arising under FEHA. Complaints must be filed within one year of the alleged incident.

Remedies available for housing discrimination include a DFEH order for the landlord to cease and desist and to sell or rent the accommodation to the complainant, the assessment of actual damages, and the assessment of punitive damages. In addition, the complainant can chose to file a civil action in lieu of or during the DFEH administrative process.

The Unruh Civil Rights Act: The Unruh Act broadly prohibits business establishments from discriminating against people based on their sex, race, color, religion, ancestry, national origin, or disability. The California Supreme Court has opined that the Act also prohibits other arbitrary discrimination by business establishments, such as that based on age (Marina Point Ltd. v. Wolfson (1982) 30 Cal.3d 72) and sexual orientation (Hubert v. Williams (1982) 133 Cal.App.3 Supp.1).

Several California court cases have established the applicability of the Act to the sale or rental of housing. In Marina Point Ltd., the Supreme Court held that the landlord of an apartment complex and the homeowners association in a planned development constituted business establishments, and were therefore prohibited from discriminating in the sale or rental of housing based on age. The Court did, however, carve out an exception for senior housing facilities that include special amenities for seniors. In Park Redlands Covenant Control Committee v. Simon (App. 4 Dist. 1986) 226 Cal.Rptr. 199, 181 Cal.App.3d 87, the court held that a tract housing homeowners association was a business establishment.

DFEH investigates complaints arising under the Unruh Act. In addition, the Attorney General, district attorneys, city attorneys, or any complainant can bring a civil action, with the following remedies allowed: actual damages, punitive damages in an amount equal to three times the actual damages or $1,000, whichever is greater, and attorney’s fees.

Fair Housing Amendments Act of 1988 (FHAA): The federal FHAA prohibits discriminatory housing practices based on handicap or familial status. The federal Department of Housing and Urban Development (HUD) has adopted regulations that recognize, as an exception to the prohibition against discrimination, the special needs and status of senior citizens. These regulations permit “seniors only“ developments under specified conditions. The FHAA expressly does not limit the applicability of any reasonable occupancy standards adopted by the state and local governments.

The FHAA specifies that if HUD receives a complaint alleging discrimination in housing, HUD must refer the complaint to a state or local agency for action if the agency has jurisdiction and is certified by HUD as having protections, procedures, and remedies “substantially equivalent“ to HUD in fair housing enforcement.

Major Legislation

AB 1354 (Rod Pacheco) Chapter 46, Statutes of 2002: An urgency statute to take effect immediately, exempts providers of emergency shelters or transitional housing facilities funded through the Emergency Housing Assistance Program from the anti-discrimination laws by allowing them to offer services exclusively to persons 24 years of age or younger.

AB 1926 (Horton) Chapter 803, Statutes of 2002: Allows property owners upon application to the county recorders office to strike any provisions in a deed that contain an unlawful restrictive convenant based on race, color, religion, sex, familial status, marital status, disability, national origin, or ancestry.

AB 2972 (Aroner) Chapter 1074, Statutes of 2002: Exempts providers of emergency housing or transitional housing from prohibitions against restricting occupancy to persons 24 years of age or younger.

Other Legislation

AB 2298 (Bogh) Died in the Assembly Committee on Housing and Community Development: An urgency statute to take effect immediately, would have repealed requirements imposed by the Unruh Civil Rights Act on senior housing developments in order for those developments to be exempt from the normal prohibitions on discrimination based on age or familial status. Also, would have repealed the special design requirements for senior housing.

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HOUSING FINANCE

Affordability is the most significant housing problem confronting California’s families, followed to a lesser extent by overcrowding and substandard quality. Affordability problems affect both renters and owners and low- and moderate-income families. The state’s affordability crisis has dramatic implications for the quality of life for millions of California households and, potentially, for the future performance of California’s economy. Simply put, a very large proportion of California families—both renters and homeowners—can not afford housing costs.

California has among the most expensive single-family and multi-family housing markets in the nation, and has extremely low vacancy rates in major urban areas. As a result, Californians, especially those with lower incomes, face a major affordable housing crisis. According to the Department of Finance, we need to build 250,000 housing units per year to keep pace with population growth, but only 145,000 are constructed annually. Both homeowners and renters feel the growing impact of this disparity:

According to the California Budget Project:

• Among renter households, about half (49 percent) pay more than the recommended 30 percent of their income toward shelter. Low income renter households, those with annual household incomes under $15,000, fare even worse; nine out of ten (91 percent) spend more than 30 percent of their income toward rent. Low income renter households also suffer from a shortage of affordable housing, outnumbering low cost rental units (those under $400 per month) by a ratio of more than two to one both statewide and in Los Angeles County. This translates into a statewide shortfall of 581,304 affordable units.

• Fewer owner households suffer from high cost housing burdens. However, nearly one third (31 percent) of owner households pay more than 30 percent of their income toward housing. Again, low income households suffer more, with more than three quarters (79 percent) of low income owner households paying more than 30 percent of their income toward housing.

• Stagnating household incomes have exacerbated the state’s affordable housing crisis. While household incomes for owners have increased, the household incomes of renters have failed to keep pace with inflation, falling significantly between 1989 and 1999 in inflation adjusted terms. The inflation adjusted household income of poor renters, those at the 20th percentile, fell nearly 14 percent, from $15,273 to $13,200, between 1989 and 1999. The median household income for renters with children fell 11 percent during the same period, from $31,357 to $27,920, after adjusting for inflation.

• The National Low Income Housing Coalition estimates that a California resident must ear $18.33 per hour in order to afford the state’s two-bedroom Fair Market Rent, almost three times the state’s minimum wage.

• The National Association of Home Builders estimates that a family earning the median income in San Francisco, San Mateo, and Marin Counties could afford only 7 percent of the homes sold in the area during the second quarter of 2001.

Renters

• Only about a third of California households can afford to purchase the median-priced home, compared to 60 percent nationwide.

• The median-priced home in California reached a record $280,000 in 2001. The median price in 2000 was $241,250.

• Of those who bought homes in 2001, only 36 percent were first-time homebuyers, compared to 39 percent the prior year.

Homeownership

• Only about a third of California households can afford to purchase the median-priced home, compared to 60 percent nationwide.

• The median-priced home in California reached a record $280,000 in 2001. The median price in 2000 was $241,250.

• Of those who bought homes in 2001, only 36 percent were first-time homebuyers, compared to 39 percent the prior year.

Contributing factors to the housing shortage

• The recession of the early 1990s caused vacancy rates to rise in many parts of the state, discouraging construction of rental housing.

• The 1986 Federal Tax Reform Act made investment in rental housing less profitable.

• The fiscalization of land use discourages local governments from approving new housing developments.

The lack of decent, safe housing has serious repercussions for all Californians. Bay Area companies are unable to recruit new employees because housing simply is not available. Two-income families cannot find housing near their work sites, resulting in long commutes and latchkey children.

Government Housing Finance Programs

1) Tax-exempt bond financing: The California Housing Financing Agency (CHFA) and local housing agencies provide low interest rate mortgage loans through the sale of tax-exempt revenue bonds. These mortgage loans are usually offered to eligible homebuyers through private mortgage brokers.

The Federal Tax Reform Act (TRA) of 1986 limits the amount of tax-exempt bonds that can be issued annually, based on the state’s population. In 2002, the state’s ceiling was $2.588 billion. The TRA allows the bonds to be used for housing, student loans, industrial development, and exempt facilities.

The California Debt Limit Allocation Committee (CDLAC) allocates the tax-exempt bonds to state and local issuers.

2) The Federal HOME Program: The HOME Investment Partnership Act was authorized by the Cranston-Gonzalez National Affordable Housing Act (1989). HOME is a federal block grant program which provides funds to state and local governments which, in turn, make money available for the development or rehabilitation of owner-occupied and rental units, and the provision of first-time homebuyer and rent subsidy programs.

The HOME Program is a unique program among the many programs administered by HCD. Under HOME, applicants may apply for funding for both individual projects and for programs comprising several different types of housing projects.

Under the funding formula, some communities in California are eligible to receive direct allocations from the federal Department of Housing and Urban Development (HUD) while other communities must compete for the general state allocation. However, a community eligible to receive a direct allocation may transfer that allocation to the state and then compete for a portion of the state allocation. This transfer can be very beneficial to a community which has a solid housing program, but needs more money than it would receive under the direct allocation formula. As an example, the City of Redding has transferred its $409,000 direct annual allocation to HCD and is now eligible to apply for up to a $1 million allocation from HCD.

3) Low Income Housing Tax Credits: The Low Income Housing Tax Credit provides a credit against net tax for personal income, bank and corporation, and insurance gross premiums tax for costs related to qualified low-income housing developments. The credit is 30 percent of costs for the purchase of, or improvements to, low-income housing. The credit is claimed over a four-year period. The state’s low-income housing tax credit parallels a similar credit in federal law.

Taxpayers -- usually housing developers -- apply to the California Tax Credit Allocation Committee for an allocation of both the state and federal credits. The amount of tax credit allocated to a project is based on the amount needed to insure the financial feasibility of the project and a number of criteria that target projects in areas or types of housing where there is significant need. The amount of state credit available is limited to $70 million adjusted annually for inflation, plus any unallocated and returned balances from prior years. (See SB 73 (Dunn) Chapter 668, Statutes of 2001.)

The low income housing tax credit is unique among state tax provisions. The amount of credit available is capped and project sponsors must apply for an allocation of credits. In most cases, individual taxpayers receive tax credits as members of a limited partnership when the general partner is the project sponsor, and the limited partners receive credits based on their individual financial participation. Investors (i.e., the taxpayer ultimately claiming the credits) typically buy into a project by paying fifty to sixty cents for each dollar of tax credit received.

4) General Obligation Bond Financing: Prior to 1980, the federal government took the lead in financing local, affordable housing projects. Since then, however, federal housing funds have declined precipitously.

To make up a small portion of this shortfall, the Legislature enacted, and the voters approved, Propositions 77 and 84 in 1988 and Proposition 107 in 1990. Proposition 77 provided for a $150 million general bond issue: $80 million for seismic safety and $70 million for general rehabilitation loans. Proposition 84 provided for a $300 million bond issue, including $200 million for financing new construction of rental units. Proposition 107 authorized the sale of $150 million of bonds, including $100 million for the Rental Housing Construction Program. All of these funds have been spent.

This session the Legislature approved and the Governor signed SB 1227 (Burton) a $2.1 billion housing bond for various affordable housing programs. The bond will appear on the November 2002 ballot as Proposition 46 (see legislative summary).

5) Down Payment Assistance Programs

CHFA administers five down payment assistance programs for first-time and income eligible homebuyers.

• School Facility Fee Down Payment Assistance Program. This program was established by SB 50 (Greene) Chapter 407, Statutes of 1998, approved by the voters in Proposition 1A in 1998. Three of these programs provide down payment assistance, through 2003, for homebuyers of newly constructed single family residences. In order to qualify for assistance, homebuyers must meet one of the following criteria: live in an economically distressed area; purchase a home with a maximum sales price of $130,000; or meet the requirements of a first time, moderate income homebuyer.

The fourth program provides assistance for sponsors of rental units for low-income tenants.

• Affordable Housing Partnership Program. This program is a joint effort by CHFA and cities, counties, redevelopment agencies and housing authorities whereby a deferred payment subordinate loan from a locality is utilized by the first-time homebuyer to assist him or her with down payments and/or closing costs.

• California Homebuyer’s Down Payment Assistance Program. This program provides a deferred-payment junior loan of an amount up to the lesser of three percent of the purchase price or appraised value of a home. This loan may be combined with another CHFA loan or a mortgage. This program is intended to be used in conjunction with a first, second or third mortgage for such costs as the closing costs.

• 100 Percent Loan Program. This program provides up to 100 percent of the financing needs of prospective eligible first-time homebuyers.

• CalHome Program to be administered by HCD. This program provides funds for homeownership programs to assist low- and very low-income households become or remain homeowners. Funds are allocated in either grants to programs that assist individuals or loans that assist multiunit homeownership projects. Grant funds may be used for first time homebuyer downpayment assistance, home rehabilitation, homebuyer counseling, home acquisition and rehabilitation, or self-help mortgage assistance programs, or for technical assistance for self-help and shared housing homeownership. Loan funds may be used for purchase of real property, site development, predevelopment, and construction period expenses incurred on homeownership development projects, and permanent financing for mutual housing or cooperative developments.

6) Mortgage Bond and Loan Insurance: California is one of five states which has its own

“private“ mortgage insurance company, the California Housing Loan Insurance Fund (CHLIF). This has enabled Californians to obtain lower financing in areas and under conditions which the Federal Housing Administration (FHA) or private insurers cannot meet. During the severe devaluation of home prices during 1988 to 1989, CHLIF was able to replace the insurance on those CHFA loans issued by private insurance companies that were collapsing and continue homeowner coverage.

The California Housing Loan Insurance Fund was created in 1977 for the purpose of providing reasonably priced bond and loan insurance, reducing the risk factor in providing loans for single family and rental housing, including privately financed loans, and securing revenue bonds issued by local agencies.

It was not until 1988, however, that CHLIF earned a claims paying credit rating, thereby becoming the state’s equivalent of a private mortgage insurance company. Under an agreement with Standard and Poor’s and Moody’s, from 1988 until 1991 CHLIF operated under certain rating agency restrictions regarding the types of loans it could insure.

Beginning in March 1991, however, these restrictions were no longer applicable, and CHLIF can provide single-family mortgage insurance to developers of affordable housing outside of CHFA’s programs, including for-profit and non-profit developers, redevelopment agencies, and local finance agencies.

Major Legislation

AB 8 (Cedillo) Chapter 3, Statutes of 2001: An urgency statute to take effect immediately, increases the per-unit loan amount for the $19 million in loans authorized under the Downtown Rebound Program. Amounts are increased from $40,000 to $55,000 for low-income units and from $20,000 to $35,000 for other units. Also, requires that units be located in an elementary school attendance area in which at least 50 percent of students qualify for the federal free lunch program.

AB 1170 (Firebaugh) Chapter 724, Statutes of 2002: Creates the Building Equity and Growth in Neighborhoods Program, a loan program for cities and counties to provide down payment assistance to new low or moderate income homebuyers. The program and funding are predicated on voter approval of Proposition 46, the Housing Bond.

AB 1359 (Lowenthal) Chapter 395, Statutes of 2001: An urgency statute to take effect immediately, merges four predevelopment loan programs, administered by the Department of Housing and Community Development, into one program for the development of assisted housing.

AB 1891 (Diaz) Chapter 725, Statutes of 2002: Establishes a matching grant program within the Department of Housing and Community Development to fund and implement existing and new local housing trust funds dedicated to the creation or preservation of affordable housing.

SB 372 (Dunn) Chapter 721, Statutes of 2002: Creates the Preservation Opportunity Program and the Interim Repositioning Program within the Department of Housing and Community Development for the purpose of preserving existing low-income rental housing.

SB 423 (Torlakson) Chapter 482, Statutes of 2002: Creates the Workforce Housing Reward Program to be administered by the Department of Housing and Community Development to provide assistance to cities and counties that approve affordable housing development.

SB 1227 (Burton) Chapter 26, Statutes of 2002: An urgency statute to take effect immediately upon approval of voters at the November 5, 2002 statewide general election, enacts the Housing and Emergency Shelter Trust Fund Act of 2002 and provides $2.1 billion general obligation bond for state housing programs (i.e., multifamily housing, emergency housing, supportive housing, farmworker housing, CalHome program, code enforcement, downpayment assistance, and jobs housing balance).

Other legislation

AB 72 (Bates) Died in the Assembly Committee on Appropriations: Would have required that all unclaimed moneys escheated to the state from the estates of deceased persons be directed to the Housing Rehabilitation Fund for the purpose of construction, rehabilitation or acquisition of multifamily housing for elderly persons.

AB 114 (Washington) Died in the Assembly Committee on Housing and Community Development: Would have provided $25,000 in grants in cities with a population over two million to persons over 55 years of age for housing rehabilitation.

AB 490 (Diaz) Died in the Assembly Committee on Appropriations: Would have required the Department of Housing and Community Development to make matching grants from the California Housing Trust Fund to local agencies that established their own trust funds to finance affordable housing.

AB 820 (Shelley) Died in the Assembly Committee on Housing and Community Development: Would have created the California State University Housing Finance Pilot Program, administered by the California Housing Finance Agency, to provide home loan assistance up to $200,000 for the purchase of a home that do not exceed 50 percent of the appraised value of the home for new faculty members.

AB 905 (Cohn) Died in the Assembly Committee on Appropriations: Would have created the Public Safety Downpayment Assistance Program and appropriated $15 million from the General Fund to the California Housing Finance Agency to provide home downpayment assistance to public safety officers serving in Los Angeles, San Diego, San Jose, San Francisco, and Long Beach.

AB 930 (Keeley) As introduced: Would have removed home price limits required under the CalHome Program for housing rehabilitation projects.

This bill was amended August 26, 2002 to require that a proposal to subdivide a mobilehome park into resident ownership include survey results of the residents indicating their support for the conversion. Also, adds a provision to mitigate economic displacement of nonpurchasing residents upon the conversion of a mobilehome park to resident ownership. (Chapter 1143, Statutes of 2002)

AB 999 (Keeley) Died in the Assembly Committee on Appropriations: Would have separated the administration of the California Housing Loan Insurance Fund from the California Housing Finance Agency. Also, would have created a new independent board to oversee the fund’s operations.

AB 1044 (Migden) Chapter 202, Statutes of 2001: Increases the principal amount of revenue bonds California Housing Finance Agency may have outstanding by $2.2 billion thereby raising the allowable indebtedness of the agency from $8.95 billion to $11.15 billion.

AB 1611 (Keeley) As Introduced: Would have created the Affordable Higher Education Housing Program, administered by the Department of Housing and Community Development, to develop and adopt procedures for processing applications to build student and faculty housing.

This bill was amended September 7, 2001 to authorize the California Educational Facilities Authority to enter into agreements with nonprofit entities to finance the cost of constructing student and faculty housing near college campuses (Chapter 569, Statutes of 2001).

ABx2 25 (Horton) Died in the Assembly Committee on Housing and Community Development: Would have required Section 8 multifamily rental housing to be certified by the Department of Housing and Community Development as energy efficient. Also, would have allowed tax credits and deductions for energy efficient residential appliances and installation of energy conservation measures in a taxpayer’s residence or place of business.

SB 262 (Dunn) As Introduced: Would have clarified the use of loans and grants administered by the Department of Housing and Community Development under the CalHome Program to local governments or non-profits to enable low and very low-income households to become or remain homeowners.

This bill was amended August 20, 2001 to require cities or counties to pay reasonably attorney’s fees and levies monetary penalties against cities and counties found out of compliance with state housing element law. (Died in Assembly Housing and Community Development Committee)

SB 369 (Dunn) Chapter 12, Statutes of 2002: An urgency statute to take effect immediately, re-enacts the local governments authority to issue mortgage revenue bonds for multifamily housing.

SB 429 (Soto) Chapter 117, Statutes of 2001: An urgency statute to take effect immediately, creates an exemption, for bona fide preservation transactions, from the states notice requirements and sale restrictions on government assisted housing.

SB 444 (Perata) Vetoed: Would have allowed home repair loans made by the Department of Housing and Community Development to victims of the 1989 Loma Prieta earthquake to be assumed by a member of the household under specified circumstances.

Governor’s veto message: “...I recognize the difficult circumstances in which a number of people in Berkeley and Oakland find themselves with respect to the need for repairs to their homes and the difficulty in securing additional loans due to the requirements of the CALDAP loan. Nevertheless, I am troubled that this bill will not even help all of the Loma Prieta earthquake loan recipients, let alone loan recipients from other natural disasters.

Since this bill does not assist all borrowers equally, and given the rapid decline of revenue into the General Fund which would only be exacerbated by delayed loan repayments, I regretfully have no choice but to veto this legislation. I am however directing HCD to follow its existing policy of working with a family when faced with extraordinary circumstances to insure the loan is repaid in a manner that is agreeable to both the family and the state.”

SB 533 (Margett) As Introduced: Would have allowed the Department of Housing and Community Development to establish the Elderly and Disabled Person’s Revolving Home Improvement Loan Program to provide no interest loans for elderly and disabled persons to finance home improvements for independent living.

This bill was amended August 27, 2002 (Chesbro) to require the Department of Developmental Services to identify services or support that would enable each person living in a developmental center to instead live successfully in an integrated community setting. (Vetoed)

Governor’s veto message: “The purpose of this bill is to collect accurate and timely data to assist the Department of Development Services, the Regional Centers and the Legislature in understanding the needs of developmental center clients so they can be moved into community placements. However, I believe developing the actual resources necessary to move developmental centers clients into the community would be a better use of funds than creating discretionary reporting requirements. I demonstrated my ongoing commitment to developing these resources by proposing a $20.4 million increase for the Community Placement Plan activities in my 2002–03 budget.

I have been advised that this bill would result in 2002-03 General Fund costs of $35.5 million. Given our current economic climate, now is not the time to fund new, discretionary data systems when we are struggling to maintain and fund existing services to clients.”

SB 784 (Torlakson) Chapter 608, Statutes of 2001: Allows $60 million remaining in the Jobs-Housing Balance Incentive Grant Program to remain available for more than one year. Also, authorizes the Department of Housing and Community Development to award grants to cities and counties for any local determined projects or services.

SB 1893 (Johannessen) Chapter 473, Statutes of 2002: Increases loan limit for single family homes and reduces mortgage rates for qualifying veterans under the California Veterans Farm and Home Purchase Act.

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LAND USE

Housing Element Law requires every locality to adopt and update a housing element every five years which includes an identification of existing and projected housing needs, an inventory of land suitable for residential development, and a five-year plan to meet those identified needs.

The housing element, as a planning tool, was initially developed to describe how growth would be accommodated using a “best case scenario“ approach. A locality was not expected to build the units, but was required to provide appropriate zoning for the development of the housing need identified within its housing element, including the regional need for housing.

Over the years, amendments have been made to Housing Element Law which hold local governments responsible for ensuring that housing is actually built, including identifying specific sites, to accommodate a community's lower income housing unit regional allocation.

In 1981, California began a comprehensive program to allocate among local governments the statewide need for low-, moderate- and above moderate-income housing units. For the first time, each community was required to include in the housing element of its general plan a plan to meet its “share“ of California's housing need.

Because both the federal and state governments have consistently reduced funding for affordable housing over the last twenty years, many local governments find it difficult to meet regional allocation goals. In addition to a shortage in resources, local governments are also plagued by the ever-increasing phenomenon of NIMBYism or “not-in-my-back-yard“ when efforts are made to provide and disperse additional affordable housing in the community.

Furthermore, cash-strapped cities and counties often engage in the “fiscalization of land use“ by prioritizing commercial, retail and industrial development--which generate more property and sales tax revenue--over residential development.

In 1998 the Legislature passed AB 438 (Torlakson) which allowed local jurisdictions to fulfill a portion of their region's affordable housing needs, by providing either substantially rehabilitated units and market-rate units converted to affordable units, or federally assisted multi-family units whose affordability has been extended for 40 years.

Additionally, the Select Committee on Jobs-Housing Balance has analyzed the shortage of affordable housing near work sites resulting in long commutes, increased traffic congestion and greater numbers of latchkey children.

Housing Element Process

A local jurisdiction's regional housing needs allocation is developed through the following process:

1) Every five years, the Department of Finance projects statewide growth for the next five-year
period. From this data the Department of Housing and Community Development (HCD)
establishes the existing and projected statewide need for affordable housing by income group.

2) HCD, in consultation with the regional council of governments (COGs), divides the statewide
need into regional shares.

3) The COG distributes the regional need to the county(s) and cities within the region.

4) The local government develops its housing element, which includes the local government's
regional share.

5) The local government submits its housing element for review to HCD to ensure conformity
and consistency with the statewide need for housing.

6) The local government adopts its housing element after considering HCD's comments and
revising its element to reflect those comments or adopting findings as to why HCD's
comments should be ignored.

Major Legislation

AB 369 (Dutra) Chapter 237, Statutes of 2001: Requires a court to award attorney's fees to an affordable housing developer that has had a housing project for very low, low- or moderate-income families unfairly denied by a local agency. Also, allows a court to make the determination that the award of attorney's fees and cost of suit would not further the purposes of the state's anti-not in my backyard law.

AB 1866 (Wright) Chapter 1062, Statutes of 2002: Requires local governments to use a ministerial process for approving second housing units and prohibits them from applying any development standard that would have the effect of precluding an affordable housing development from receiving a density bonus and concessions.

SB 1098 (Alarcon) Chapter 939, Statutes of 2001: Prohibits cities and counties from using interim ordinances to deny development projects of multi-family housing.

SB 1495 (Torlakson) Chapter 503, Statutes of 2002: Modifies the Jobs Housing Balance Improvement Program, administered by the Department of Housing and Community Development, to consider incorporations and annexations when calculating the increase in an applicant's residential building permit for grant awards.

Other legislation

AB 244 (Strom-Martin) Died in the Senate Committee on Appropriations: Would have created the California Indian Assistance Fund and appropriated $500,000 from the Indian Gaming Special Distribution Fund. Also, would have required the Department of Housing and Community Development to facilitate the planning and development of housing for American Indians.

AB 381 (Papan) As Introduced: Would have required 15 percent of funds in the Jobs-Housing Balance Improvement Act to be used as an incentive to cities and counties to increase housing within one-third mile of a transit station.

This bill was amended August 21, 2002 (Salinas) to require an analysis to be conducted by the Legislative Analyst relative to changes in operating costs experienced by transit operators and providers as specified. (Chapter 745, Statutes of 2002)

AB 382 (Cedillo) Died in the Assembly Committee on Housing and Community Development: Would have created the Inner-City Community Transformation Fund in the State Treasury as a continuously appropriated fund administered by the Department of Housing and Community Development to award grants for inner-city community development.

AB 404 (Diaz) Died in the Assembly Committee on Appropriations: Would have created the New Neighborhoods Multifamily Affordable Housing Fund and appropriated $1.5 million from the General Fund for local matching grants to be used for at least seven planning studies to identify new neighborhood sites and infrastructure barriers.

AB 499 (Cogdill) As Introduced: Would have provided additional eligibility requirements for infrastructure incentives under the Inter-Regional Partnership State Pilot Project to Improve the Balance of Jobs and Housing. Also, would have designated an enterprise zone in San Joaquin and Stanislaus.

This bill was amended August 8, 2002 (Rod Pacheco) to require the Department of General Services to transfer title of state Building 101, the former Lake Norconian Club Hotel, to the City of Norco.

(Chapter 746, Statutes of 2002)

AB 928 (Daucher) Died in the Assembly Committee on Housing and Community Development: Would have created the Live Near Your Work Program administered by the Department of Housing and Community Development to provide grants to assist individuals to buy or rent housing near their work. Also, would have provided an employer a credit against the tax net equal to the amount paid for the program grant.

AB 1284 (Lowenthal) As Introduced: Would have enacted the Job Center, Community Infill Housing Development Incentive Act of 2001 to authorize cities and counties within specified metropolitan statistical areas with an imbalance between housing and jobs to create a housing opportunity district to mitigate the imbalance.

This bill was amended August 8, 2002 to enact the Housing Development Incentive Act of 2002. Also, would have allowed the Department of Housing and Community Development to establish housing opportunity districts and reallocate property tax revenues to fund low and moderate income housing in those districts. (Died in the Senate Committee on Appropriations)

AB 1606 (Bates) Died in the Assembly Committee on Local Government: Would have allowed a city or county to satisfy its regional housing need on the basis of two units of credit for each unit of housing converted to low income housing on a decommissioned military base.

AB 1829 (Robert Pacheco) Died in the Assembly Committee on Housing and Community Development: Would have required the Department of Housing and Community Development, in evaluating the housing element of a local general plan, to include congregate housing for seniors in determining whether a city or county meets its share of the regional housing needs.

AB 2175 (Daucher) As Introduced: Would have required the Department of Housing and Community Development to give special consideration or bonus points to cities and counties that include human services element in the general plan.

This bill was amended August 20, 2002 to require the Office of Planning and Research to add guidelines for addressing human service matters within the context of the guidelines of city or county general plans. (Vetoed)

Governor's veto message: “This certainly is a worthy objective. However, most departments and agencies, including OPR, have experienced budget reductions for 2002-03. To accomplish the objective of this bill unfortunately would require an unbudgeted General Fund appropriation of $100,000. In light of the State's current fiscal situation, we must restrain funding for new programs.“

AB 2476 (Rod Pacheco) Died in the Senate Committee on Appropriations: Would have allowed the Department of Housing and Community Development to distribute funds for local studies of transportation issues as impacted by the imbalance between jobs and housing.

AB 2485 (Bill Campbell) Died in the Assembly Committee on Appropriations: Would have established the Brownfields Best Practices Awards Program at the California Policy Research Center at the University of California, Berkeley to encourage local agencies to undertake brownfields remediation and redevelopment projects. Also, would have provided a portion of the property tax increment to local agencies from brownfields remediation and redevelopment.

AB 2863 (Longville) Died in the Assembly Committee on Local Government: Would have clarified residential unit and substantial compliance for purposes of the housing element requirements.

AB 2864 (Wiggins) As introduced: Would have required the local annual planning report to describe the degree to which the general plan complies with the regional housing needs.

This bill was amended August 8, 2002, an urgency statute to take effect immediately, that would have allocated $18,500,000 from the General Fund to county sheriffs' to enhance their law enforcement efforts. (Died in the Senate Committee on Budget and Fiscal Review)

AB 2867 (Kehoe) As Introduced: Would have allowed the Department of Housing and Community Development to include the replacement of affordable housing that is lost when school facilities are built as one of the alternative criteria for making loans under the Multifamily Housing Program.

This bill was amended August 5, 2002 to allow the City of San Diego, Redevelopment Agency, Housing Authority, Housing Commission, and the Unified School District to enter into a joint powers agreement and create a joint powers agency to develop and construct a model school project in the City Heights Project Area. (Chapter 961, Statutes of 2002)

AB 2896 (Simitian) Died in the Assembly Committee on Local Government: Would have defined “housing unit“ and “unit“ for purposes of conforming to housing element requirements.

SB 442 (Vasconcellos) Chapter 577, Statutes of 2001: Requires the Director of e-Government in the Governor's Office shall make operational by July 1, 2003, an interactive internet web site that includes an inventory of all low-income, publicly-assisted or publicly financed multi-unit low-income rental housing to be used as a resource to individuals and agencies in locating affordable housing for low income persons. Also, requires the Department of Housing and Community Development to include in the statewide housing plan housing assistance for the elderly, persons with disabilities, large families, female head of households, and farmworkers.

Governor's item veto message: “I am signing SB 442 which specifies that the strategy for coordinating the housing activities of state and local agencies include housing assistance for various special populations such as the elderly and the disabled communities.

Further, in light of the rapid decline of our economy and a budget shortfall of $1.1 billion through the first three months of this fiscal year alone, I have no choice but to oppose additional General Fund spending. Therefore, I am deleting Section 4 of the bill that would make a $150,000 General Fund appropriation to the Director of e-Government. The Director is authorized to do as much as he can within existing resources.“

SB 498 (Dunn) Failed in the Assembly Committee on Housing and Community Development by a vote of 1 to 2: The bill as amended August 15, 2002 would have modified state housing element law and imposed fines on cities and counties that fail to comply by having a housing element certified by the Department of Housing and Community Development.

SB 520 (Chesbro) Chapter 671, Statutes of 2001: Adds “familial status“ and “persons with disabilities“ to the list of prohibited housing discrimination. Also, requires the housing element of a general plan to consider housing needs for persons with disabilities.

SB 910 (Dunn) Died in the Assembly Committee on Housing and Community Development: Would have modified state housing element law and imposed fines on cities and counties that fail to comply by having a housing element certified by the Department of Housing and Community Development.

(Note: Contents of this bill was amended into SB 498.)

SB 1721 (Soto) Chapter 147, Statutes, of 2002: Clarifies that state law prohibit local agencies from denying housing developments for low or moderate income households including farmworker housing.

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MOBILEHOMES/MANUFACTURED HOUSING

Mobilehome Parks

Mobilehome parks are a popular source of affordable housing, especially for seniors and low- and moderate-income families. Statewide, there are 5,750 parks, with 464,778 spaces, housing an estimated 800,000 people.

The mobilehome park industry, however faces many challenges: few new parks are being built; park owners and residents are often locked in a struggle of complaints, counter-complaints, lawsuits, and counter-lawsuits; residents are buying their parks through the conversion process and becoming park owners; a growing number of land-lease manufactured home communities are being constructed which offer affordability without the problems of the park owner/resident relationship; and additionally some mobilehome parks face safety and security issues.

The age and location of many parks create other problems. Older mobilehome parks suffer from significant infrastructure deterioration: sewers, utilities, roads, and common areas need to be upgraded and replaced. As cities expand, the areas surrounding the parks are developed for industrial or commercial use. Park owners are tempted to sell their land to developers for higher profits, thereby displacing long-time residents.

There are five major issues facing mobilehome park residents in the state:

1. Rent increases largely a local issue.
2. Old and dilapidated facilities.
3. Rents and fees.
4. Pass-through fees.
5. Maintenance and organization

In response to some of these issues, SB 700 (O’Connell), Chapter 520, Statutes of 1999 created a new state inspection program that requires at least one inspection every four years. The program focuses mainly on those parks with the most serious violations or substantial number of complaints.

Senior-Only Mobilehome Parks

Prior to 1988, many mobilehome parks were reserved for adults only (age 18 and over). The passage of the 1988 Fair Housing Amendments Act, which prohibits age discrimination in housing except for senior citizen housing, caused a shift in the demographics of mobilehome parks by forcing owners whose parks did not meet the criteria for senior housing to open their parks to families with children. In 1988, 75 percent of mobilehome parks were either senior- or adult-only parks; by 1994, only 25 percent of parks restricted occupancy to seniors.

In 1995, under pressure from senior groups, Congress enacted HR 660, which eliminated the requirement that senior housing provide significant facilities and services requirements. While this change makes it easier to develop senior housing, it is unclear whether family mobilehome parks will be able to convert to senior parks since 80 percent of the spaces must be rented to a person who is age 55 or older.

New Directions For Manufactured Housing

For the last several decades, the manufactured housing industry has been quietly transforming itself — with quality improvements, imaginative designs, and legislative measures on both federal and state levels — from a narrow-niche builder of “trailers” or “mobilehomes” into a broad-band builder of a wide range of housing products. Many of these new housing products compete quality-for-quality and amenity-for-amenity with conventional site-built housing.

Although still the supplier of mobilehome park housing, the industry has been busy creating new markets for its new products. The industry is producing housing for inner-city infill lots; standard single-family subdivision developments; long-term, land-lease manufactured housing communities; and rural property. More than half of all new manufactured homes are being sited outside of mobilehome parks, with approximately 32 percent installed on permanent foundations in urban, suburban, or rural neighborhoods.

The driving force behind the manufactured home industry is the affordability of its products. Through the efficiencies of factory, and savings generated from a shorter construction schedule, manufactured housing is the most affordable type of housing available in California today. Construction costs average $9 less per square foot than site-built construction. In 1995, the average cost per square foot for site-built construction was $50.00, compared to manufactured housing with an average per-foot “installed“ cost of $41.00. For an average 1500 square foot home, the savings amount to $13,500.

Major Legislation

SB 1410 (Chesbro) Chapter 672, Statutes of 2002: Allows mobilehome owners to rent their mobilehome and sublet their space under specified circumstances.

Other legislation

AB 210 (Corbett) Chapter 151, Statutes of 2001: Allows mobilehome park tenants who paid security deposits before 1989 a refund upon renewal or extension of their lease.

AB 718 (Wiggins) Failed passage in the Assembly Committee on Housing and Community Development by a vote of 1 to 1: Would have added to the mobilehome park rental agreements that would require management maintain existing physical improvements through rent and not other fees.

AB 781 (John Campbell) Failed passage in the Assembly Committee on Housing and Community Development by a vote of 3 to 5: Would have excluded mobilehome parks from local rent control ordinances if the average home value including property exceeds $300,000 or if the mobilehome has sold for over $100,000 of the full cash value.

AB 970 (Dutra) Chapter 213, Statutes 2001: Allows the Department of Housing and Community Development to transmit or receive a certificate of title for manufactured homes, mobilehomes, commercial coaches, truck campers, and floating homes electronically in place of by mail if economically and technologically feasible and that the system is safe and secure from intrusion by unauthorized persons. Also, provides that HCD may establish electronic programs to improve the titling and registration of personal property.

AB 1202 (Harman) Chapter 83, Statutes of 2001: Provides that a mobilehome park may not require a homeowner or resident to pay a cleaning deposit or obtain liability insurance in order to use the park clubhouse or recreational hall.

AB 1318 (Correa) Chapter 356, Statutes of 2001: Clarifies and makes consistent regulations regarding the construction and installation standards related to multi-unit manufactured homes in mobilehome parks.

AB 1328 (Briggs) Failed passage in the Assembly by a vote of 27-14: Would have allowed mobilehome park management to charge prospective purchaser an application screening fee of up to $30 cost associated to tenant screening and consumer credit report.

AB 1541 (Dickerson) Chapter 490, Statutes of 2001: Excludes loft areas from the calculation of total square footage in a park trailer. Also, establishes safety requirements for park trailer units with lofts sold prior to January 3, 2001.

AB 1648 (Salinas) Died in the Assembly Committee on Appropriations: Would have provided additional enforcement mechanisms to the Department of Housing and Community Development and authorized local jurisdictions to enforce compliance with the Mobilehome Parks Act.

AB 2079 (Jackson) Failed passage on the Assembly Floor by a vote of 29 to 27: Would have required mobilehome park owners to provide prospective tenants the same lease and rental terms that are offered to current tenants.

AB 2382 (Corbett) Chapter 141, Statutes of 2002: Allows the Attorney General, city attorney, and county counsels to file civil action to abate nuisance in a mobilehome park.

AB 2495 (Correa) Chapter 1065, Statutes of 2002: Allows a mobilehome or manufactured home to exceed four dwelling units in any mobilehome park.

AB 2812 (Pescetti) Died in the Senate Committee on Judiciary: Would have required mobilehome park management to give 60 days notice to heirs, joint tenants, or personal representatives upon the death of the mobilehome owner when there are outstanding liabilities on the home.

AB 2866 (Keeley) Failed passage in the Assembly by a vote of 27 to 32: Would have allowed mobilehome owners up to 45 days the right of first refusal when a parkowner decides to sell their park or consider a thrid party offer to buy the park.

SB 122 (Dunn) Vetoed: Would have appropriated $50,000 from the Mobilehome-Manufactured Home Revolving Fund to the Department of Housing and Community Development to augment the functions of the Mobilehome Ombudsman in the handling and resolution of complaints. Also, would have required the Ombudsman to report to the Legislature on the numbers and types of complaints and the number of resolved and unresolved complaints by December 31 of each even-numbered year.

Governor’s veto message: “This bill would increase the responsibilities of the Mobilehome Ombudsman and require biennial reporting to the Legislature on the complaints process by the Ombudsman’s staff.

Although this bill would provide a one time $50,000 appropriation from the Mobilehome-Manufactured Home Revolving Fund for Ombudsman functions, this is insufficient for the on-going activities this bill mandates.

It is important that consumer complaints be properly resolved. According, I am open to a new role for the Ombudsman and will work with the author to that end.”

SB 325 (O’Connell) Chapter 434, Statutes of 2001: Creates the Special Occupancy Parks Act and deletes provisions relating to Special Occupancy Parks from the Mobilehome Parks Act effective January 1, 2003. Also, renames the Mobilehome Parks Revolving Fund to the Mobilehome Parks and Special Occupancy Parks Revolving Fund.

SB 339 (Dunn) As Introduced: Would have modified the Mobilehome Park Act to require increase notification in the inspection of the park. Also, would have required park owners to obtain a permit prior to making any lot line adjustments.

This bill was amended August 15, 2002 (Ortiz) to require long term health care facilities to do medical assessment before transferring any residents due to a change in facility licensure or operation.

(Chapter 554, Statutes of 2002)

SB 920 (Dunn) Chapter 437, Statutes of 2001: Requires management of a mobilehome park providing utility services through a master-meter system to notify residents of assistance available to low income persons under the California Alternative Rates for Energy Program.

SB 1564 (Polanco) As Introduced: Would have required the Department of Housing and Community Development to convene a task force comprised of representatives of manufactured housing, homeowners, financial institutions, and local housing agencies to develop strategies to lower the cost of financing and affordability of manufactured housing.

This bill was amended August 21, 2002 to allow Leisure World, a common interest development, in Orange County to charge a transfer fee of not more than $3,500 to the seller.

(Failed in the Assembly Committee on Housing and Community Development by a vote of 0 to 2.)

SB 1663 (Soto) Vetoed: Would have authorized the City of Pomona to assume code enforcement responsibilities of the Mobilehome Parks Act until December 31, 2007.

Governor’s veto message: “...In addition to providing special rights to only one specified city, this bill would allow the city to select which parks to oversee. This will likely result in confusion for mobilehome park residents about who is responsible for enforcement activities for a particular park, the State or the city. Also, the city may unevenly enforce the requirements from one park to another.

Moreover, I will sign SB 1788 which expands the Department of Housing and Community Development’s enforcement powers. These new powers should improve the condition of mobilehome parks in the City of Pomona.”

SB 1778 (Dunn) Chapter 713, Statutes of 2002: Expands the list of violations the Department of Housing and Community Development may issue citations and fines to manufactured home dealers or licensees.

SB 1935 (Costa) Chapter 98, Statutes of 2002: Renames commercial coaches and special purpose commercial coaches as commercial modulars and special purpose commercial modulars. Also, states that all statutory references to commercial coaches and special purpose commercial coaches shall be referred to commercial modulars and special purpose commercial modulars.

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REDEVELOPMENT

Redevelopment began in 1945 as a post-war blight removal program that used federal urban-renewal grants to clean up blighted urban areas. These first projects were few in number: 27 projects in 1966. Project size was also limited; prior to 1957, most project areas ranged from 10 to 100 acres.

Today, however, due to the use of tax-increment financing authorized by the voters in 1952 and fiscal restrictions imposed upon local governments by Proposition 13, redevelopment has emerged as a key local financing tool. Redevelopment has grown so tremendously that now there is scarcely a jurisdiction that does not have an agency; there are currently 369 cities, 26 counties, and 5 joint city-county agencies. Many project areas encompass thousands of acres.

Redevelopment offers several unique powers to local officials. First, under redevelopment, jurisdictions can issue bonds without a vote of the people; and second, they can use eminent domain authority to take private property for other private development uses.

Redevelopment agencies accumulate their funds by freezing the property tax base within a project area that has been designated as “blighted.” With the property tax base frozen, all the affected taxing entities that receive property tax — schools, fire departments, police departments, special districts — continue to receive the same share of property tax that they received in the year when the redevelopment plan took effect. For instance, if a school was receiving $100,000 in property tax in 1990, it continues to receive that amount from the project area throughout the life of the redevelopment plan. Any additional property tax generated above the base year goes to the redevelopment agency. But the agency must share a percentage of this money with the affected taxing entities. A statutory formula requires certain percentages of funds to be passed through to the affected taxing entities. The specific percentages increase through the term of the redevelopment project.

A central interest the state has with redevelopment is its significant fiscal impact on the General Fund. These state costs are the result of the state guaranteeing minimum levels of school funding. Schools currently receive approximately 50 percent of local property tax dollars. When a redevelopment project area is declared and the property tax base within that area is “frozen,” a large portion of the increase in the property tax increment generated within the project area flows to the redevelopment agency. Schools — unlike all the other affected taxing entities that receive property tax within a project area — are then reimbursed by the state for any amounts that they lose to redevelopment.

These high state costs, the lack of clear public scrutiny, proliferation of agencies, and large project areas make redevelopment controversial. Once agencies are started, they gather momentum and are rarely if ever stopped.

City officials and developers tout redevelopment's benefits and advantages to revive down-trodden urban areas; tax watch-dog groups and adversely-affected business owners view redevelopment agencies as administrative behemoths that gobble up scarce tax dollars and engage in grand-scale development deals of dubious value. The suspicious see redevelopment agencies as engaging in games of fiscal sleights of hand with its true powers only understood by attorneys, consultants, and staff.

In many cases, redevelopment powers have been used prudently and have produced good results. Examples are numerous where a run-down urban area is “redeveloped” and brought back to life again. In other more-controversial cases, these powers have been used to “develop” as opposed to redevelop. This happens when large areas of vacant land are deemed “blighted,” and redevelopment agencies issue bonds without a public vote. These funds are then used to build infrastructure to attract development or to engage in bidding wars with surrounding communities to attract auto malls and “big-box” retailers and other sales-tax generators.

The Legislature sought to limit redevelopment abuses by passing laws, such as AB 1290 (Isenberg), Chapter 942, Statutes of 1993, to attempt to keep redevelopment focused on removing true urban blight.

Redevelopment Reform: AB 1290

The early 1990's were difficult times for redevelopment agencies. Many members of the Legislature were openly criticizing agencies for adopting large project areas with questionable evidence of blight, engaging in bidding wars with other jurisdictions for new commercial developments, and hoarding millions of dollars in unspent housing set aside funds. The cry for reform was in the air. With little sympathy for the pleas of the defenders of redevelopment, the Legislature raided these perceived “cash cows” to help balance the state's budget deficit for two years in a row. In response to this negative environment, the California Redevelopment Association sponsored AB 1290 (Isenberg), Chapter 942, Statutes of 1993, which proposed numerous reforms to the existing redevelopment process. The bill focused on issues that had historically caused concerns among redevelopment critics, including the definition of “blight,” the length of time a redevelopment plan stayed in effect, and mitigation agreements.

In brief, AB 1290:

• Altered the definition of “blight”.

• Specified term limits for new and previously adopted project areas, i.e., the term of the redevelopment plan, the term of the available flow of tax increment moneys, and the term of the agency's redevelopment powers.

• Increased and modified penalties for the failure to expend tax increment moneys in an agency's Low and Moderate Income Housing Fund.

• Authorized the development of affordable housing units outside the project area to count toward an agency’s inclusionary requirements. Under the provisions of the bill, an agency must produce two units outside the project area for every one unit owed.

• Prohibited the dedication of sales tax to an agency by its legislative body.

• Authorized the financing of facilities or capital equipment made in conjunction with the development or rehabilitation of property used for industrial or manufacturing purposes.

• Deleted provisions relating to negotiated mitigation agreements and, instead, provided for a guaranteed statutory pass-through beginning in the first year of a project area for all affected taxing entities.

Major Legislation

AB 637 (Lowenthal) Chapter 738, Statutes of 2001: Eliminates the January 1, 2002 sunset date on the inclusionary housing provisions that require 15 percent of all housing built within a redevelopment project area to be made available to low and moderate income households. Also, makes several changes to the Redevelopment Housing Law intended to address redevelopment agencies' continued interest in simplifying Low and Moderate Income Housing Fund requirements and housing advocates' interest in ensuring that those funds are used effectively.

SB 53 (Torlakson) Chapter 9, Statutes of 2001: An urgency statute to take effect immediately, makes permanent the provisions of the Community Redevelopment Disaster Project Law.

SB 211 (Torlakson) Chapter 741, Statutes of 2001: Allows, under specified circumstances, redevelopment agencies to extend deadlines in a redevelopment plan and for receiving tax increment revenue.

SB 701 (Torlakson) Chapter 782, Statutes of 2002: Makes several changes to California redevelopment law, including cleanup and clarification of technical issues in SB 211 (Torlakson) Chapter 741, Statutes of 2001 and AB 637 (Lowenthal) Chapter 738, Statutes of 2001, that resulted from last year's working group. Also, adds new language left unresolved in last year's bills.

Other legislation

AB 296 (Corbett) Chapter 124, Statutes of 2001: An urgency statute to take effect immediately, allows the City of San Leandro and the County of Alameda to amend the Joint Redevelopment Plan without any further action by the other, and that any amendment shall only affect property within that entity's project area. Prohibits San Leandro and Alameda from taking any action under this bill until the San Leandro Redevelopment Agency files a corrected report with the State Controller. Also, makes findings and declarations regarding the necessity of a special law rather than general law.

AB 406 (Diaz) Died in the Assembly Committee on Housing and Community Development: Would have required redevelopment agencies to use not less than 25 percent (rather than the current 20 percent) of all tax revenue allocated to the agency for low and moderate income housing.

AB 516 (Cedillo) As Introduced February 21, 2001: Would have included renovation in the definition of redevelopment.

This bill was amended April 2, 2002, an urgency statute to take effect immediately, to require the Department of Transportation to erect highway signs and markers on Route 10 in Los Angeles from nonstate sources in recognition of historic Byzantine-Latino Quarter (Chapter 100, Statutes of 2002).

AB 618 (Calderon) Failed passage in the Assembly Committee on Housing and Community Development as proposed to be amended May 10, 2001 by a vote of 4 to 2: Would have redirected spending authority, for a portion of the low- and moderate-income housing fund, from the Los Angeles County Housing Authority to the City of Industry to be disbursed within 5, 10 and 15 miles of the city.

AB 661 (Correa) Chapter 626, Statutes of 2001: Allows the Orange County Redevelopment Agency to spend funds, set aside for low- and moderate-income households, within the city limits of cities located within the county.

AB 750 (Cedillo) Died in the Assembly Committee on Housing and Community Development: Would have required redevelopment agencies to determine that planning and administrative expenses are not disproportionate for the cost of production, improvement or preservation. Also, would have required agencies to expend excess proceeds of a sale returned within three years to make affordable an equal number of owner occupied units at the same income level.

AB 1567 (Runner) Chapter 491, Statutes of 2001: Allows the City of Lancaster Redevelopment Agency to satisfy its inclusionary housing requirement by purchasing long-term affordability covenants on mobilehome parks and sunsets January 1, 2006.

AB 1595 (Wyman) Died on the Assembly Inactive File: Would have provided an extension for inclusionary housing requirements for the redevelopment of George Air Force Base.

AB 1653 (Robert Pacheco) Died in the Assembly Committee on Housing and Community Development: Would have stated the intent of the Legislature to study the Community Redevelopment Law and subsequent impact of court decisions that have interpreted and built upon that statutory law.

SB 459 (McPherson) Chapter 471, Statutes of 2001: Allows the Santa Cruz Redevelopment Agency to increase limit on individual home loans and sunsets January 1, 2005.

SB 1460 (Ortiz) Chapter 468, Statutes of 2002: Includes the R Street Area in the capitol area and the project area of Capitol Area Plan in the City of Sacramento.

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RELOCATION ASSISTANCE

In 1970, the Legislature adopted the California Relocation Assistance Act, requiring public entities to provide procedural protections and benefits when they displace businesses, homeowners, and tenants in the process of implementing public projects for public benefit. Typical projects that trigger the payment of relocation assistance are a freeway construction project or the redevelopment of a “blighted” area.

The state law was patterned after the federal Uniform Relocation Assistance and Real Property Acquisition Act. The most significant policy implications of relocation law for affordable housing are:

• the short and long-term costs of displacing and relocating tenants in so-called “blighted” areas in the community, and
• the decrease in an inventory of affordable housing stock that is not being replaced as quickly as it is being eliminated.

Legislation

AB 472 (Cedillo) Chapter 414, Statutes of 2001: Requires residential rental property owners to pay tenants relocation assistance who are displaced by code violations. Also, requires a court appointed receiver for rental property to notify the court of an order or notice to correct substandard conditions with which the receiver can not remedy.

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MISCELLANEOUS

Major legislation

AB 1008 (Lowenthal) As Introduced: Would have created the Rental Housing Accessibility Grant Pilot Program and authorizes the Department of Housing and Community Development to award up to $250,000 each for three pilot programs for exterior modifications to rental housing that improves accessibility to low income tenants with disabilities by December 31, 2004. Also, would have required HCD to report to the Legislature on the program by December 31, 2005.

This bill was amended August 26, 2002 to make a number of statutory changes to realign existing code enforcement statutes with the requirements of the Housing Bond. Also, authorizes the University of California to request specified property tax information from the State Controller for purposes of studying tax delinquent properties. (Chapter 723, Statutes of 2002)

AB 1112 (Goldberg) Chapter 487, Statutes of 2001: Requires the registration of owners of substandard residential property in the County of Los Angeles as a pilot project and sunsets January 1, 2005. Also, requires Los Angeles to report to the Legislature on the effectiveness of the reporting requirements by July 1, 2004.

SB 985 (Kuehl) Chapter 729, Statutes of 2001: Requires property owners in Los Angeles, Santa Monica and West Hollywood to give tenants, who are on a month-to-month rental agreement for at least one year, 60 days termination notice without cause and sunsets January 1, 2005. Requires a tenant to give at least 30 days notice prior to ending a periodic tenancy. Requires any rental agreement and three day notice to pay-or-quit to disclose name, telephone number, and address to whom the rent shall be paid. Also, closes a loophole that permits buildings in rent control areas to evade controls by getting a permit to convert to condominiums but do not.

SB 1403 (Kuehl) Chapter 301, Statutes of 2002: Requires all property owners to give tenants, who are on a month-to-month rental agreement for more than one year, 60 days termination notice. Requires 24 hour written notice by a landlord to a tenant before entering a rental unit. Also, makes clarifying changes to Ellis Act with respect to the rent allowed to be charged when a unit is removed and then put back on the rental market in a rent controlled jurisdiction.

Other legislation

AB 474 (Negrete McLeod) Died in the Assembly Committee on Housing and Community Development: Would have created the California Low Income Energy Efficiency Program administer by the Department of Community Services and Development to reduce energy rates, increase weatherization, and replace energy inefficient appliances for low income persons.

AB 628 (Oropeza) Died in the Senate Committee on Appropriations: Would have appropriated $500,000 from the General Fund to the Department of Housing and Community Development to create pilot projects, in conjunction with the Department of Aging, in three counties to assist Section 8 qualified seniors locate safe affordable housing.

AB 2285 (Horton) Died in the Senate Committee on Judiciary: Would have provided an exclusive procedure for the resolution of de minimus boundary encroachment disputes.

SB 183 (Burton) As Introduced: Would have required the Business, Transportation and Housing Agency to establish a security deposit guarantee program for tenants of residential rental property to participating cities and counties.

This bill was amended April 18, 2002 to provide enhanced retirement benefits to members of the State Bargaining Unit 7, Protective Services and Public Safety. Also, allows persons who were employed in fellowship programs to purchase credit for that time in CalPERS.

(Chapter 56, Statutes of 2002)

SB 581 (Alarcon) Vetoed: Would have required owners or residential rental property who have been cited for substandard conditions to register with local building officials effective July 1, 2003., unless no code enforcement actions have been registered against the property in the past three years. Also, would have made it a misdemeanor punishable by one year imprisonment and/or fine up to $100,000 for noncompliance.

Governor's veto message: &8220;...While this bill may be meritorious, I am vetoing it because I recently signed AB 1112 (Goldberg) which creates a five year pilot program for a landlord registry in Los Angeles County. I am also concerned about the financial application of this measure were the pilot to be expanded statewide. Given the local costs associated with this program and our rapidly declining economy which is $1.1 billion below projections for the first three months of the fiscal year, I would prefer to evaluate the effectiveness of the landlord registry in Los Angeles County before expanding it to include the entire state.&8221;

SB 1500 (Johnson) Vetoed: Would have added a disclaimer to the requirement to disclose a seismic hazard in a real estate transfer disclosure statement.

Governor's veto message: &8220;A vital part of any successful real estate transaction is a disclosure of all material facts. Although the purpose of this bill is laudable, i.e., to disclose whether a natural hazard has been mitigated, in this case, the additional disclosures may lead to consumer confusion. This bill could have the unintended consequence of leaving a potential buyer with the impression that a hazard that has been mitigated in accordance with state approved standards is one that is no longer a concern, when in fact the mitigation may not necessarily have that effect.

Furthermore, SB 1500 erroneously presumes that the State's &8221;Guidelines for Evaluation and Mitigation of Seismic Hazards&8220; are the equivalent of state building standards and that they are appropriate for use by the general public in understanding seismic hazards and their mitigation. In reality, that document is a technical publication intended for the development of local standards and intended for a geologic professional audience.

The proposed new disclosure form would advice homeowners, buyers, and sellers to retain geologic consultants. This suggestion essentially directs the homeowners away from service that should be freely available from the local planning department, both confusing the consumer and incurring unnecessary costs in home purchase transactions.

Finally, SB 1500 fails to include any reference to the mitigation of earthquake-induced liquefaction hazards, which can cause damaging ground failure as well.&8221;

SB 1821 (Dunn) Chapter 1038, Statutes of 2002: Clarifies state notice requirements that apartment owners must give when rental restrictions are set to expire on a project built with the assistance of tax credits.

SB 2010 (Alpert) Chapter 1086, Statutes of 2002: An urgency statute to take effect immediately, provides the California Tax Credit Allocation Committee to implement the provisions of the federal Community Renewal Tax Relief Act of 2000.

SJR 6 (Dunn) Resolution Chapter 18, Statutes of 2001: Requests the President and Congress to review the pre-1986 tax code provisions applicable to rental housing and to enact new tax benefits and provide additional incentives to invest in multifamily rental housing.

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APPENDIX (Bills in Numerical Order)

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