AB 723: Housing: finance.

(1)Existing law requires the Department of Housing and Community Development to allocate funds under the federal Community Development Block Grant Program to cities and counties. Existing law requires the department to determine and announce, in the applicable Notice of Funding Availability, the maximum amount of grant funds that may be used for economic development projects and programs, housing for persons and families of low or moderate income or for purposes directly related to the provision or improvement of housing opportunities for these persons and families, and for cities and counties that apply on behalf of certain Indian tribes. Existing law requires the department to develop and use certain eligibility criteria and requirements for certain economic development fund applications.

This bill would authorize the Department of Housing and Community Development to issue a Notice of Funding Availability under which the director of the department could determine that an applicant previously awarded funds is eligible to apply for, and receive, additional funds pursuant to the Community Development Block Grant Program, without regard to whether the applicant has expended at least a certain percentage of funds previously awarded.

(2)Existing law authorizes the Housing Finance Agency to issue revenue bonds for the purpose of financing the acquisition, construction, rehabilitation, refinancing, or development of multifamily rental housing and for the provision of capital improvements in connection with, and determined necessary to, that multifamily rental housing. Existing law requires no less than 20%, or 15% for those multifamily rental housing developments located in a target area, as defined, of the total number of units in a multifamily rental housing development, financed or for which financing has been extended or committed from the proceeds of sale of each bond issuance of the agency, to be for occupancy on a priority basis by lower income households. Existing law further requires that not less than ¹/₂ of the units required for occupancy on a priority basis by lower income households be for occupancy on a priority basis for very low income households.

This bill would authorize the agency to waive the priority requirements for very low income households upon approval of the board and a specified determination.

Existing law prohibits rental payments on units required for occupancy by very low income households paid by persons occupying the units from exceeding 30% of 50% of the area median income, and sets forth occupancy assumptions for adjusting rents for household size, as specified.

This bill would, commencing September 1, 2016, authorize the agency to also utilize occupancy assumptions that it has determined are appropriate and commercially reasonable for financing extended pursuant to these provisions.

Existing law provides that the authorization to issue revenue bonds for these purposes constitutes an alternative method to issue bonds for making construction loans and mortgage loans for multifamily rental housing.

This bill would instead provide that the authorization to issue revenue bonds for these purposes constitutes an alternative method to finance construction loans and mortgage loans for multifamily rental housing.

(3)This bill would declare that it is to take effect immediately as an urgency statute.