AB 59: Local Housing Trust Fund Matching Grant Program.

(1)Existing law establishes the Local Housing Trust Fund Matching Grant Program for the purpose of supporting local housing trust funds dedicated to the creation or preservation of affordable housing. Under the grant program, the department is authorized to make matching grants available to cities, counties, cities and counties, and existing charitable nonprofit organizations that have created, funded, and operated housing trust funds. The minimum allocation to a program applicant is $1,000,000 for existing trust funds, or $500,000 for newly established housing trust funds. The maximum allocation for any applicant is $2,000,000, unless the applicant has previously received a grant through the program, in which case the maximum allocation is $1,000,000. Under existing law, all funds provided under the grant program are to be matched on a dollar-for-dollar basis with moneys that are not required by any state or federal law to be spent on housing.

This bill would recast these provisions to instead authorize the department to make grants to eligible recipients, defined as cities that meet specified criteria and charitable nonprofit organizations organized under certain provisions of the Internal Revenue Code that apply jointly with a qualifying city, that have created or are operating or will operate housing trust funds. The bill would increase the maximum allocation for an eligible recipient to $5,000,000 or, if the eligible recipient has previously received a grant through the program, $2,500,000. The bill would also provide that an eligible recipient would not be required to provide matching funds if the eligible recipient is suffering a hardship, as determined by the Department of Finance, and is unable to generate matching funds, and that the maximum allocation to an eligible recipient suffering hardship would be $10,000,000 or, if the eligible recipient has previously received a grant through the program, $5,000,000.

(2)Existing law requires that funds awarded pursuant to the program be used for the predevelopment costs, acquisition, construction, or rehabilitation of rental housing projects with an affordability restriction for at least 55 years, emergency shelters, safe havens, transitional housing, for-sale housing projects, or units within for-sale housing projects.

This bill would remove emergency shelters, safe havens, and transitional housing from the authorized use of funds. The bill would instead authorize funds to be used for community land trusts, as defined, and housing projects constructed by Habitat for Humanity of California, Inc., or California Habitat for Humanity affiliates. The bill would make findings that the effect that authorizing the use of these funds for housing projects constructed by Habitat for Humanity of California, Inc., or California Habitat for Humanity affiliates serves a public purpose and does not constitute a gift of public funds.

(3)Under existing law, at least 30% of the total amount of the grant and the match must be expended on projects, units, or shelters that are affordable to, and restricted for, extremely low income households; up to 20% of the total amount of the grant and the match must be expended on projects or units affordable to, and restricted for, moderate-income persons and families whose income does not exceed 120% of the area median income; and the remaining funds must be used for projects, units, or shelters that are affordable to, and restricted for, lower income households.

The bill would instead require that funds distributed by the Department of Housing and Community Development be expended on projects or units that are affordable to, and restricted for, persons and families whose income does not exceed 120% of the area median income, if the projects or units are to be owned by the occupants, or 100% of the area median income, if the projects or units are rental housing projects or units. The bill would require that at least 50% of the total amount of the grant and match be expended on projects or units that are affordable to, and restricted for, persons and families whose income does not exceed 60% of the area median income, but that no more than 20% of the total amount of the grant and match be expended on projects or units affordable to, and restricted for, persons and families whose income does not exceed 30% of the area median income.

(4)Existing law requires an applicant for a grant provide the department with adequate documentation of the deposit in the local housing trust fund of the local match and the identity of the source of matching funds and adequate documentation that an ordinance imposing or dedicating a tax or fee to be deposited into the new trust has been enacted or the applicant has adopted a legally binding commitment to deposit matching funds into the new trust.

This bill would additionally require an eligible recipient to provide a proposed expenditure plan. The bill would provide that an eligible recipient may subsequently amend its expenditure plan subject to the approval of the department.

(5)Existing law requires recipients to have held, or agree to hold, a public hearing or hearings to discuss and describe the project or projects that will be financed with grant funds. Under existing law, any nonprofit organization, as a condition to receiving a grant, must agree that it will hold one public meeting a year to discuss the criteria that will be used to select projects to be funded. Existing law requires that the meeting be open to the public, and public notice of this meeting be provided, except to the extent that any similar meeting of a city or county would be permitted to be held in closed session.

This bill would recast this provision to require that an eligible recipient hold, or agree to hold, a public hearing or hearings in accordance with the Ralph M. Brown Act to discuss and describe the project or projects that will be financed with grant funds. The bill, if the eligible recipient that is a charitable nonprofit organization, as provided, would require that the city that has applied jointly with the charitable nonprofit organization hold the public hearing.

(6)This bill would make various technical and conforming changes to the Local Housing Trust Fund Matching Grant Program. The bill would also make findings and declarations with regard to all of its provisions.