Current Affordable Housing Legislative Overview

The disappearance of redevelopment dollars led to a sharp cutback in spending towards affordable housing. Funding for the development and preservation of affordable homes fell in California by 79%, or $1.7 billion annually, in the years after redevelopment dissolution. At the same time median rents and home values have risen while income levels dropped.

A sustainable supply of housing is vital to a sustainable economy. While Governor Brown’s 2016-17 budget sets aside $400 million for affordable housing, the money is tied up in negotiations surrounding the “By-Right Proposal”, a bill that would streamline the approvals needed for developers to build affordable housing to the maximum density allowed by zoning with limited local and CEQA review. Several proposed laws are navigating the legislature, working to infill the dearth of funding. Here are bills to watch closely:

  • SB 873, signed into law on June 28, 2016, makes fundamental changes to state low-income housing tax credits. The bill restores the ability to split the state credits, allowing different parties to invest in the state and federal credits. The bill also authorizes state credits to be sold to a state investor; current law requires the investor to be a partner. In addition, the bill increases the value of the state credit by exempting the credits from federal taxes.
  • AB 2031 authorizes jurisdictions to issue affordable housing bonds against the revenue stream of redevelopment “boomerang funds.”  Boomerang funds are monies received by a jurisdiction that are not needed by a successor agency to wind-down former redevelopment agency activities.
  • AB 2501 makes a number of changes to density bonus law, including clarifying the processing of a density bonus application. The bill prohibits a local government from requiring density bonus applications to include an additional report or study that is not otherwise described or required by state law. It also requires local government to adopt procedures and timelines to provide for expeditious processing of a density bonus application.
  • AB 2502 commonly referred to as the “Palmer Fix”, authorizes a city or county to establish inclusionary housing requirements as a condition of the development of residential units.
  • AB 2734 enacts the Local Control Affordable Housing Act to require the Department of Finance to determine, each year, the amount of General Fund savings as a result of the dissolution of RDAs, and requires that 50% of those savings or $1 billion, whichever is less, be redirected to the Department of Housing and Community Development for distribution to both state level programs and local agencies for housing purposes.
  • AB 2817 increases the amount of state tax credits the California Tax Credit Allocation Committee can allocate for low-income housing to $300 million, increases the allocation for the farmworker housing tax credit to $25 million, and makes other changes to the state low-income housing tax credit program.

RSG is an active member of the San Diego Housing Federation (SDHF) and Tara Matthews, Principal, sits on the Policy Committee. SDHF, through the input of the Policy Committee, provides feedback to State legislators on proposed bills.  We would love to get your thoughts on how these bills would affect your community, so we can ensure that your voice is heard by State policy makers.  Please contact Tara Matthews at [email protected] or 714-316-2111 if you would like additional information or to share your thoughts on the proposed legislation.

Written by Tara Matthews, a Principal at RSG, and Jeff Khau, a Senior Analyst at RSG