SB 482: Multifamily Housing Program: supportive housing: capitalized operating reserves.
- Session Year: 2023-2024
- House: Senate
- Latest Version Date: 2023-10-11
Current Status:
Passed
(2023-10-11: Chaptered by Secretary of State. Chapter 780, Statutes of 2023.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
Existing law establishes the Department of Housing and Community Development and requires it to administer various programs intended to promote the development of housing, including the Multifamily Housing Program, pursuant to which the department provides financial assistance in the form of deferred payment loans to pay for the eligible costs of development of specified types of housing projects. Existing law establishes eligible cost categories for the Multifamily Housing Program, which include capitalized reserves for replacement and operation. In this regard, existing law authorizes the department to allow capitalized operating reserves to be used for rent subsidies for assisted units, as specified.
This bill would specify that the department may allow capitalized operating reserves to be used for eligible projects, and that assisted units may include, but not be limited to, supportive housing units, as defined. To determine project eligibility for capitalized operating reserves, the bill would authorize the department to consider specified factors, including the availability of funds and the individual financial needs of the project. The bill would require the department to offer capitalized operating reserves to supportive housing units after developers have sought capitalized reserves from other potential funding sources.
Existing law establishes the Department of Housing and Community Development and requires it to administer various programs intended to promote the development of housing, including the Multifamily Housing Program, pursuant to which the department provides financial assistance in the form of deferred payment loans to pay for the eligible costs of development of specified types of housing projects. Existing law establishes eligible cost categories for the Multifamily Housing Program, which include capitalized reserves for replacement and operation. In this regard, existing law authorizes the department to allow capitalized operating reserves to be used for rent subsidies for assisted units, as specified.
This bill would specify that the department may allow capitalized operating reserves to be used for eligible projects, and that assisted units may include, but not be limited to, supportive housing units, as defined. To determine project eligibility for capitalized operating reserves, the bill would authorize the department to consider specified factors, including the availability of funds and the individual financial needs of the project. The bill would require the department to offer capitalized operating reserves to supportive housing units after developers have sought capitalized reserves from other potential funding sources.
Existing law establishes the Department of Housing and Community Development and requires it to administer various programs intended to promote the development of housing, including the Multifamily Housing Program, pursuant to which the department provides financial assistance in the form of deferred payment loans to pay for the eligible costs of development of specified types of housing projects. Existing law establishes eligible cost categories for the Multifamily Housing Program, which include capitalized reserves for replacement and operation. In this regard, existing law authorizes the department to allow capitalized operating reserves to be used for rent subsidies for assisted units, as specified.
This bill would specify that the department may allow capitalized operating reserves to be used for eligible projects, and that assisted units may include, but not be limited to, supportive housing units, as defined. To determine project eligibility for capitalized operating reserves, the bill would authorize the department to consider specified factors, including the availability of funds and the individual financial needs of the project. The bill would also require the department to offer capitalized operating reserves to supportive housing units after developers have sought capitalized reserves from other potential funding sources. The bill would define supporting housing for purposes of the program.
Existing law establishes the Department of Housing and Community Development and requires it to administer various programs intended to promote the development of housing, including the Multifamily Housing Program, pursuant to which the department provides financial assistance in the form of deferred payment loans to pay for the eligible costs of development of specified types of housing projects. Existing law establishes eligible cost categories for the Multifamily Housing Program, which include capitalized reserves for replacement and operation. In this regard, existing law authorizes the department to allow capitalized operating reserves to be used for rent subsidies for assisted units, as specified.
This bill would also require the department to offer capitalized operating reserves to supportive housing units developed under the Multifamily Housing Program. after developers have sought capitalized reserves from other potential funding sources. The bill would define supporting housing for purposes of the program.
Existing law establishes the Department of Housing and Community Development and requires it to administer various programs intended to promote the development of housing, including the Multifamily Housing Program, pursuant to which the department provides financial assistance in the form of deferred payment loans to pay for the eligible costs of development of specified types of housing projects. Existing law establishes eligible cost categories for the Multifamily Housing Program, which include capitalized reserves for replacement and operation. In this regard, existing law authorizes the department to allow capitalized operating reserves to be used for rent subsidies for assisted units, as specified.
This bill would require the department offer capitalized operating reserves to supportive housing units developed under the Multifamily Housing Program.
The definitions of this section shall apply to all activities conducted pursuant to this chapter. Except as otherwise provided in this chapter, or unless the context requires otherwise, the definitions contained in Chapter 2 (commencing with Section 50050) of Part 1 shall also apply to this chapter.
(a) Affordable rent shall be established by the department to be consistent with the rent limitations imposed by the Low-Income Housing Tax Credit Program, as administered by the California Tax Credit Allocation Committee.
(b) Assisted unit means a unit that is affordable to a lower income household as a result of a loan provided pursuant to this chapter. In order to ensure consistency with the Low-Income Housing Tax Credit Program, occupancy of assisted units shall be limited to households whose income does not exceed the limits specified by the California Tax Credit Allocation Committee.
(c) Maintain affordable rent levels means rents may be increased by the sponsor on an annual basis in the amount that would be allowed if the project was subject to the requirements of the Low-Income Housing Tax Credit Program established pursuant to Section 42 of the federal Internal Revenue Code.
(d) Rental housing development means a structure or set of structures with common financing, ownership, and management, and which collectively contain five or more dwelling units, including efficiency units. No more than one of the dwelling units may be occupied as a primary residence by a person or household who is the owner of the structure or structures.
(e) Rehabilitation, in addition to the meaning set forth in Section 50096, includes improvements and repairs made to a residential structure acquired for the purpose of preserving its affordability.
(f) Rent-up costs means costs incurred while a unit is on the housing market but not rented to its first tenant.
(g) Sponsor has the same meaning as defined in subdivision (c) of Section 50669, and also includes a limited partnership in which the sponsor or an affiliate of the sponsor is a general partner.
(h) Supportive housing means housing with no limit on length of stay, that is occupied by the target population, and that is linked to onsite or offsite services that assist the supportive housing resident in retaining the housing, improving their health status, and maximizing their ability to live and, when possible, work in the community.
(i) Transitional housing and transitional housing development means buildings configured as rental housing developments, but operated under program requirements that call for the termination of assistance and recirculation of the assisted unit to another eligible program recipient at some predetermined future point in time, which shall be no less than six months.
SEC. 2.Section 50675.5 of the Health and Safety Code is amended to read:50675.5.(a) Eligible costs shall include the cost of developing dwelling units, transitional housing, and childcare, and after school care and social service facilities integrally linked to the assisted dwelling units.
(b) Eligible cost categories shall include all of the following:
(1) Real property acquisition, including refinancing of existing debt to the extent necessary to reduce debt service to a level consistent with the provision of affordable rents and the fiscal integrity of the project.
(2) New construction or rehabilitation, including the conversion of nonresidential structures to residential use.
(3) General property improvements that are necessary to correct unsafe, unhealthy, or unsanitary conditions, including renovations and remodeling, including, but not limited to, remodeling of kitchens and bathrooms, installation of new appliances, landscaping, and purchase or installation of central air-conditioning.
(4) Necessary and related onsite and offsite improvements.
(5) Reasonable developer fees.
(6) Reasonable consulting costs.
(7) Initial operating costs for housing units.
(8) Capitalized reserves for replacement and operation. The department shall offer capitalized operating reserves to supportive housing units after developers have sought capitalized reserves from other potential funding sources. The department may allow capitalized operating reserves to eligible projects to be used for rent subsidies for assisted units reserved for occupancy by households with incomes below limits determined by the department, which shall not exceed the income limit for very low income households. Assisted units may include, but not be limited to, supportive housing units. The department may offer capitalized reserves for operations and supportive services in the form of a grant. To determine project eligibility for capitalized operating reserves, the department may consider all of the following:
(A) The availability of funds.
(B) The individual financial needs of the project.
(C) Whether developers have sought rent or operating subsidies from other potential funding sources.
(D) Any other factors the department deems appropriate.
(9) Any other costs of rehabilitation or new construction authorized by the department.
SEC. 3.Section 50675.14 of the Health and Safety Code is amended to read:50675.14.(a)This section applies only to projects funded with funds appropriated for supportive housing projects.
(b)For purposes of this section, the following terms have the following meanings:
(1)May restrict occupancy to persons with veteran status means that the sponsor may limit occupancy to persons meeting the criteria of paragraphs (1) and (2) of subdivision (j) with respect to either of the following:
(A)Any unit in the development that has not been previously occupied.
(B)Any unit in the development that subsequently becomes vacant, for a period of not more than 120 days following the vacancy.
(2)(A)Target population means persons, including persons with disabilities, and families who are homeless, as that term is defined by Section 11302 of Title 42 of the United States Code, or who are homeless youth, as that term is defined by paragraph (2) of subdivision (e) of Section 12957 of the Government Code.
(B)Individuals and families currently residing in supportive housing meet the definition of target population if the individual or family was homeless, as that term is defined by Section 11302 of Title 42 of the United States Code, when approved for tenancy in the supportive housing project in which they currently reside.
(c)(1)The department shall ensure that at least 40 percent of the units in each development funded under the supportive housing program are targeted to one or more of the following populations:
(A)Individuals or families experiencing chronic homelessness, as defined by the United States Department of Housing and Urban Developments Super Notice of Funding Availability for Continuum of Care or Collaborative Applicant Program.
(B)Homeless youth, as that term is defined by paragraph (2) of subdivision (e) of Section 12957 of the Government Code.
(C)Individuals exiting institutional settings, including, but not limited to, jails, hospitals, prisons, and institutes of mental disease, who were homeless when entering the institutional setting, who have a disability, and who resided in that setting for a period of not less than 15 days.
(2)The department may decrease the number of units required to meet the criteria identified in paragraph (1) if the department determines that the program is undersubscribed after issuing at least one Notice of Funding Availability.
(3)Individuals and families currently residing in supportive housing meet the qualifications under this subdivision if the individual or family met any of the criteria specified in subparagraph (A), (B), or (C) of paragraph (1) when approved for tenancy in the supportive housing project in which they currently reside.
(d)Supportive housing projects shall provide or demonstrate collaboration with programs that provide services that meet the needs of the supportive housing residents.
(e)The criteria, established by the department, for selecting supportive housing projects shall give priority to supportive housing projects that include a focus on measurable outcomes and a plan for evaluation, which evaluation shall be submitted by the borrowers, annually, to the department.
(f)The department may provide higher per-unit loan limits as reasonably necessary to provide and maintain rents that are affordable to the target population.
(g)In an evaluation or ranking of a borrowers development and ownership experience, the department shall consider experience acquired in the prior 10 years.
(h)(1)A borrower shall, beginning the second year after supportive housing project occupancy, include the following data in their annual report to the department. However, a borrower who submits an annual evaluation pursuant to subdivision (e) may, instead, include this information in the evaluation:
(A)The length of occupancy by each supportive housing resident for the period covered by the report and, if the resident has moved, the reason for the move and the type of housing to which the resident moved, if known.
(B)Changes in each supportive housing residents employment status during the previous year.
(C)Changes in each supportive housing residents source and amount of income during the previous year.
(D)The tenants housing status prior to occupancy, including the term of the tenants homelessness.
(2)The department shall include aggregate data with respect to the supportive housing projects described in this section in the report that it submits to the Legislature pursuant to Section 50675.12.
(i)The department shall consider, commencing in the second year of the funding, the feasibility and appropriateness of modifying its regulations to increase the use of funds by small projects. In doing this, the department shall consider its operational needs and prior history of funding supportive housing facilities.
(j)Notwithstanding any other provision of law, the sponsor of a supportive housing development may restrict occupancy to persons with veteran status if all the following conditions apply:
(1)The veterans possess significant barriers to social reintegration and employment that require specialized treatment and services that are due to a physical or mental disability, substance abuse, or the effects of long-term homelessness.
(2)The veterans are otherwise eligible to reside in an assisted unit.
(3)The sponsor also provides, or assists in providing, the specialized treatment and services.
The definitions of this section shall apply to all activities conducted pursuant to this chapter. Except as otherwise provided in this chapter, or unless the context requires otherwise, the definitions contained in Chapter 2 (commencing with Section 50050) of Part 1 shall also apply to this chapter.
(a) Affordable rent shall be established by the department to be consistent with the rent limitations imposed by the Low-Income Housing Tax Credit Program, as administered by the California Tax Credit Allocation Committee.
(b) Assisted unit means a unit that is affordable to a lower income household as a result of a loan provided pursuant to this chapter. In order to ensure consistency with the Low-Income Housing Tax Credit Program, occupancy of assisted units shall be limited to households whose income does not exceed the limits specified by the California Tax Credit Allocation Committee.
(c) Maintain affordable rent levels means rents may be increased by the sponsor on an annual basis in the amount that would be allowed if the project was subject to the requirements of the Low-Income Housing Tax Credit Program established pursuant to Section 42 of the federal Internal Revenue Code.
(d) Rental housing development means a structure or set of structures with common financing, ownership, and management, and which collectively contain five or more dwelling units, including efficiency units. No more than one of the dwelling units may be occupied as a primary residence by a person or household who is the owner of the structure or structures.
(e) Rehabilitation, in addition to the meaning set forth in Section 50096, includes improvements and repairs made to a residential structure acquired for the purpose of preserving its affordability.
(f) Rent-up costs means costs incurred while a unit is on the housing market but not rented to its first tenant.
(g) Sponsor has the same meaning as defined in subdivision (c) of Section 50669, and also includes a limited partnership in which the sponsor or an affiliate of the sponsor is a general partner.
(h) Supportive housing means housing with no limit on length of stay, that is occupied by the target population, and that is linked to onsite or offsite services that assist the supportive housing resident in retaining the housing, improving their health status, and maximizing their ability to live and, when possible, work in the community.
(i) Transitional housing and transitional housing development means buildings configured as rental housing developments, but operated under program requirements that call for the termination of assistance and recirculation of the assisted unit to another eligible program recipient at some predetermined future point in time, which shall be no less than six months.
SEC. 2.Section 50675.5 of the Health and Safety Code is amended to read:50675.5.(a) Eligible costs shall include the cost of developing dwelling units, transitional housing, and childcare, and after school care and social service facilities integrally linked to the assisted dwelling units.
(b) Eligible cost categories shall include all of the following:
(1) Real property acquisition, including refinancing of existing debt to the extent necessary to reduce debt service to a level consistent with the provision of affordable rents and the fiscal integrity of the project.
(2) New construction or rehabilitation, including the conversion of nonresidential structures to residential use.
(3) General property improvements that are necessary to correct unsafe, unhealthy, or unsanitary conditions, including renovations and remodeling, including, but not limited to, remodeling of kitchens and bathrooms, installation of new appliances, landscaping, and purchase or installation of central air-conditioning.
(4) Necessary and related onsite and offsite improvements.
(5) Reasonable developer fees.
(6) Reasonable consulting costs.
(7) Initial operating costs for housing units.
(8) Capitalized reserves for replacement and operation. The department shall offer capitalized operating reserves to supportive housing units after developers have sought capitalized reserves from other potential funding sources. The department may allow capitalized operating reserves to eligible projects to be used for rent subsidies for assisted units reserved for occupancy by households with incomes below limits determined by the department, which shall not exceed the income limit for very low income households. Assisted units may include, but not be limited to, supportive housing units. The department may offer capitalized reserves for operations and supportive services in the form of a grant. To determine project eligibility for capitalized operating reserves, the department may consider all of the following:
(A) The availability of funds.
(B) The individual financial needs of the project.
(C) Whether developers have sought rent or operating subsidies from other potential funding sources.
(D) Any other factors the department deems appropriate.
(9) Any other costs of rehabilitation or new construction authorized by the department.
SEC. 3.Section 50675.14 of the Health and Safety Code is amended to read:50675.14.(a)This section applies only to projects funded with funds appropriated for supportive housing projects.
(b)For purposes of this section, the following terms have the following meanings:
(1)May restrict occupancy to persons with veteran status means that the sponsor may limit occupancy to persons meeting the criteria of paragraphs (1) and (2) of subdivision (j) with respect to either of the following:
(A)Any unit in the development that has not been previously occupied.
(B)Any unit in the development that subsequently becomes vacant, for a period of not more than 120 days following the vacancy.
(2)(A)Target population means persons, including persons with disabilities, and families who are homeless, as that term is defined by Section 11302 of Title 42 of the United States Code, or who are homeless youth, as that term is defined by paragraph (2) of subdivision (e) of Section 12957 of the Government Code.
(B)Individuals and families currently residing in supportive housing meet the definition of target population if the individual or family was homeless, as that term is defined by Section 11302 of Title 42 of the United States Code, when approved for tenancy in the supportive housing project in which they currently reside.
(c)(1)The department shall ensure that at least 40 percent of the units in each development funded under the supportive housing program are targeted to one or more of the following populations:
(A)Individuals or families experiencing chronic homelessness, as defined by the United States Department of Housing and Urban Developments Super Notice of Funding Availability for Continuum of Care or Collaborative Applicant Program.
(B)Homeless youth, as that term is defined by paragraph (2) of subdivision (e) of Section 12957 of the Government Code.
(C)Individuals exiting institutional settings, including, but not limited to, jails, hospitals, prisons, and institutes of mental disease, who were homeless when entering the institutional setting, who have a disability, and who resided in that setting for a period of not less than 15 days.
(2)The department may decrease the number of units required to meet the criteria identified in paragraph (1) if the department determines that the program is undersubscribed after issuing at least one Notice of Funding Availability.
(3)Individuals and families currently residing in supportive housing meet the qualifications under this subdivision if the individual or family met any of the criteria specified in subparagraph (A), (B), or (C) of paragraph (1) when approved for tenancy in the supportive housing project in which they currently reside.
(d)Supportive housing projects shall provide or demonstrate collaboration with programs that provide services that meet the needs of the supportive housing residents.
(e)The criteria, established by the department, for selecting supportive housing projects shall give priority to supportive housing projects that include a focus on measurable outcomes and a plan for evaluation, which evaluation shall be submitted by the borrowers, annually, to the department.
(f)The department may provide higher per-unit loan limits as reasonably necessary to provide and maintain rents that are affordable to the target population.
(g)In an evaluation or ranking of a borrowers development and ownership experience, the department shall consider experience acquired in the prior 10 years.
(h)(1)A borrower shall, beginning the second year after supportive housing project occupancy, include the following data in their annual report to the department. However, a borrower who submits an annual evaluation pursuant to subdivision (e) may, instead, include this information in the evaluation:
(A)The length of occupancy by each supportive housing resident for the period covered by the report and, if the resident has moved, the reason for the move and the type of housing to which the resident moved, if known.
(B)Changes in each supportive housing residents employment status during the previous year.
(C)Changes in each supportive housing residents source and amount of income during the previous year.
(D)The tenants housing status prior to occupancy, including the term of the tenants homelessness.
(2)The department shall include aggregate data with respect to the supportive housing projects described in this section in the report that it submits to the Legislature pursuant to Section 50675.12.
(i)The department shall consider, commencing in the second year of the funding, the feasibility and appropriateness of modifying its regulations to increase the use of funds by small projects. In doing this, the department shall consider its operational needs and prior history of funding supportive housing facilities.
(j)Notwithstanding any other provision of law, the sponsor of a supportive housing development may restrict occupancy to persons with veteran status if all the following conditions apply:
(1)The veterans possess significant barriers to social reintegration and employment that require specialized treatment and services that are due to a physical or mental disability, substance abuse, or the effects of long-term homelessness.
(2)The veterans are otherwise eligible to reside in an assisted unit.
(3)The sponsor also provides, or assists in providing, the specialized treatment and services.
The definitions of this section shall apply to all activities conducted pursuant to this chapter. Except as otherwise provided in this chapter, or unless the context requires otherwise, the definitions contained in Chapter 2 (commencing with Section 50050) of Part 1 shall also apply to this chapter.
(a) Affordable rent shall be established by the department to be consistent with the rent limitations imposed by the Low Income Low-Income Housing Tax Credit Program, as administered by the California Tax Credit Allocation Committee.
(b) Assisted unit means a unit that is affordable to a lower income household as a result of a loan provided pursuant to this chapter. In order to ensure consistency with the Low Income Low-Income Housing Tax Credit Program, occupancy of assisted units shall be limited to households whose income does not exceed the limits specified by the California Tax Credit Allocation Committee.
(c) Maintain affordable rent levels means rents may be increased by the sponsor on an annual basis in the amount that would be allowed if the project was subject to the requirements of the Low Income Low-Income Housing Tax Credit Program established pursuant to Section 42 of the federal Internal Revenue Code.
(d) Rental housing development means a structure or set of structures with common financing, ownership, and management, and which collectively contain five or more dwelling units, including efficiency units. No more than one of the dwelling units may be occupied as a primary residence by a person or household who is the owner of the structure or structures.
(e) Rehabilitation, in addition to the meaning set forth in Section 50096, includes improvements and repairs made to a residential structure acquired for the purpose of preserving its affordability.
(f) Rent-up costs means costs incurred while a unit is on the housing market but not rented to its first tenant.
(g) Sponsor has the same meaning as defined in subdivision (c) of Section 50669, and also includes a limited partnership in which the sponsor or an affiliate of the sponsor is a general partner.
(h) Supportive housing means housing with no limit on length of stay, that is occupied by the target population, and that is linked to onsite or offsite services that assist the supportive housing resident in retaining the housing, improving their health status, and maximizing their ability to live and, when possible, work in the community.
(i) Transitional housing and transitional housing development means buildings configured as rental housing developments, but operated under program requirements that call for the termination of assistance and recirculation of the assisted unit to another eligible program recipient at some predetermined future point in time, which shall be no less than six months.
SEC. 2.Section 50675.5 of the Health and Safety Code is amended to read:50675.5.(a) Eligible costs shall include the cost of developing dwelling units, transitional housing, and childcare, and after school care and social service facilities integrally linked to the assisted dwelling units.
(b) Eligible cost categories shall include all of the following:
(1) Real property acquisition, including refinancing of existing debt to the extent necessary to reduce debt service to a level consistent with the provision of affordable rents and the fiscal integrity of the project.
(2) New construction or rehabilitation, including the conversion of nonresidential structures to residential use.
(3) General property improvements that are necessary to correct unsafe, unhealthy, or unsanitary conditions, including renovations and remodeling, including, but not limited to, remodeling of kitchens and bathrooms, installation of new appliances, landscaping, and purchase or installation of central air-conditioning.
(4) Necessary and related onsite and offsite improvements.
(5) Reasonable developer fees.
(6) Reasonable consulting costs.
(7) Initial operating costs for housing units.
(8) Capitalized reserves for replacement and operation. The department shall offer capitalized operating reserves to supportive housing units after developers have sought capitalized reserves from other potential funding sources. The department may allow capitalized operating reserves to eligible projects to be used for rent subsidies for assisted units reserved for occupancy by households with incomes below limits determined by the department, which shall not exceed the income limit for very low income households. Assisted units may include, but not be limited to, supportive housing units. The department may offer capitalized reserves for operations and supportive services in the form of a grant. To determine project eligibility for capitalized operating reserves, the department may consider all of the following:
(A) The availability of funds.
(B) The individual financial needs of the project.
(C) Whether developers have sought rent or operating subsidies from other potential funding sources.
(D) Any other factors the department deems appropriate.
(9) Any other costs of rehabilitation or new construction authorized by the department.
SEC. 3.Section 50675.14 of the Health and Safety Code is amended to read:50675.14.(a)This section applies only to projects funded with funds appropriated for supportive housing projects.
(b)For purposes of this section, the following terms have the following meanings:
(1)May restrict occupancy to persons with veteran status means that the sponsor may limit occupancy to persons meeting the criteria of paragraphs (1) and (2) of subdivision (j) with respect to either of the following:
(A)Any unit in the development that has not been previously occupied.
(B)Any unit in the development that subsequently becomes vacant, for a period of not more than 120 days following the vacancy.
(2)(A)Target population means persons, including persons with disabilities, and families who are homeless, as that term is defined by Section 11302 of Title 42 of the United States Code, or who are homeless youth, as that term is defined by paragraph (2) of subdivision (e) of Section 12957 of the Government Code.
(B)Individuals and families currently residing in supportive housing meet the definition of target population if the individual or family was homeless, as that term is defined by Section 11302 of Title 42 of the United States Code, when approved for tenancy in the supportive housing project in which they currently reside.
(c)(1)The department shall ensure that at least 40 percent of the units in each development funded under the supportive housing program are targeted to one or more of the following populations:
(A)Individuals or families experiencing chronic homelessness, as defined by the United States Department of Housing and Urban Developments Super Notice of Funding Availability for Continuum of Care or Collaborative Applicant Program.
(B)Homeless youth, as that term is defined by paragraph (2) of subdivision (e) of Section 12957 of the Government Code.
(C)Individuals exiting institutional settings, including, but not limited to, jails, hospitals, prisons, and institutes of mental disease, who were homeless when entering the institutional setting, who have a disability, and who resided in that setting for a period of not less than 15 days.
(2)The department may decrease the number of units required to meet the criteria identified in paragraph (1) if the department determines that the program is undersubscribed after issuing at least one Notice of Funding Availability.
(3)Individuals and families currently residing in supportive housing meet the qualifications under this subdivision if the individual or family met any of the criteria specified in subparagraph (A), (B), or (C) of paragraph (1) when approved for tenancy in the supportive housing project in which they currently reside.
(d)Supportive housing projects shall provide or demonstrate collaboration with programs that provide services that meet the needs of the supportive housing residents.
(e)The criteria, established by the department, for selecting supportive housing projects shall give priority to supportive housing projects that include a focus on measurable outcomes and a plan for evaluation, which evaluation shall be submitted by the borrowers, annually, to the department.
(f)The department may provide higher per-unit loan limits as reasonably necessary to provide and maintain rents that are affordable to the target population.
(g)In an evaluation or ranking of a borrowers development and ownership experience, the department shall consider experience acquired in the prior 10 years.
(h)(1)A borrower shall, beginning the second year after supportive housing project occupancy, include the following data in their annual report to the department. However, a borrower who submits an annual evaluation pursuant to subdivision (e) may, instead, include this information in the evaluation:
(A)The length of occupancy by each supportive housing resident for the period covered by the report and, if the resident has moved, the reason for the move and the type of housing to which the resident moved, if known.
(B)Changes in each supportive housing residents employment status during the previous year.
(C)Changes in each supportive housing residents source and amount of income during the previous year.
(D)The tenants housing status prior to occupancy, including the term of the tenants homelessness.
(2)The department shall include aggregate data with respect to the supportive housing projects described in this section in the report that it submits to the Legislature pursuant to Section 50675.12.
(i)The department shall consider, commencing in the second year of the funding, the feasibility and appropriateness of modifying its regulations to increase the use of funds by small projects. In doing this, the department shall consider its operational needs and prior history of funding supportive housing facilities.
(j)Notwithstanding any other provision of law, the sponsor of a supportive housing development may restrict occupancy to persons with veteran status if all the following conditions apply:
(1)The veterans possess significant barriers to social reintegration and employment that require specialized treatment and services that are due to a physical or mental disability, substance abuse, or the effects of long-term homelessness.
(2)The veterans are otherwise eligible to reside in an assisted unit.
(3)The sponsor also provides, or assists in providing, the specialized treatment and services.
The definitions of this section shall apply to all activities conducted pursuant to this chapter. Except as otherwise provided in this chapter, or unless the context requires otherwise, the definitions contained in Chapter 2 (commencing with Section 50050) of Part 1 shall also apply to this chapter.
(a) Affordable rent shall be established by the department to be consistent with the rent limitations imposed by the Low Income Housing Tax Credit Program, as administered by the California Tax Credit Allocation Committee.
(b) Assisted unit means a unit that is affordable to a lower income household as a result of a loan provided pursuant to this chapter. In order to ensure consistency with the Low Income Housing Tax Credit Program, occupancy of assisted units shall be limited to households whose income does not exceed the limits specified by the California Tax Credit Allocation Committee.
(c) Maintain affordable rent levels means rents may be increased by the sponsor on an annual basis in the amount that would be allowed if the project was subject to the requirements of the Low Income Housing Tax Credit Program established pursuant to Section 42 of the federal Internal Revenue Code.
(d) Rental housing development means a structure or set of structures with common financing, ownership, and management, and which collectively contain five or more dwelling units, including efficiency units. No more than one of the dwelling units may be occupied as a primary residence by a person or household who is the owner of the structure or structures.
(e) Rehabilitation, in addition to the meaning set forth in Section 50096, includes improvements and repairs made to a residential structure acquired for the purpose of preserving its affordability.
(f) Rent-up costs means costs incurred while a unit is on the housing market but not rented to its first tenant.
(g) Sponsor has the same meaning as defined in subdivision (c) of Section 50669, and also includes a limited partnership in which the sponsor or an affiliate of the sponsor is a general partner.
(h)Supportive housing means housing with no limit on length of stay, that is occupied by the target population, and that is linked to onsite or offsite services that assist the supportive housing resident in retaining the housing, improving their health status, and maximizing their ability to live and, when possible, work in the community.
(i)Transitional housing and transitional housing development means buildings configured as rental housing developments, but operated under program requirements that call for the termination of assistance and recirculation of the assisted unit to another eligible program recipient at some predetermined future point in time, which shall be no less than six months.
SEC. 2.Section 50675.5 of the Health and Safety Code is amended to read:50675.5.(a) Eligible costs shall include the cost of developing dwelling units, transitional housing, and childcare, and after school care and social service facilities integrally linked to the assisted dwelling units.
(b) Eligible cost categories shall include all of the following:
(1) Real property acquisition, including refinancing of existing debt to the extent necessary to reduce debt service to a level consistent with the provision of affordable rents and the fiscal integrity of the project.
(2) New construction or rehabilitation, including the conversion of nonresidential structures to residential use.
(3) General property improvements that are necessary to correct unsafe, unhealthy, or unsanitary conditions, including renovations and remodeling, including, but not limited to, remodeling of kitchens and bathrooms, installation of new appliances, landscaping, and purchase or installation of central air-conditioning.
(4) Necessary and related onsite and offsite improvements.
(5) Reasonable developer fees.
(6) Reasonable consulting costs.
(7) Initial operating costs for housing units.
(8) Capitalized reserves for replacement and operation. The department shall offer capitalized operating reserves to supportive housing units. units after developers have sought capitalized reserves from other potential funding sources. The department may allow capitalized operating reserves to be used for rent subsidies for assisted units reserved for occupancy by households with incomes below limits determined by the department, which shall not exceed the income limit for very low income households. The department may offer capitalized reserves for operations and supportive services in the form of a grant.
(9) Any other costs of rehabilitation or new construction authorized by the department.
SEC. 3.Section 50675.14 of the Health and Safety Code is amended to read:50675.14.(a)This section applies only to projects funded with funds appropriated for supportive housing projects.
(b)For purposes of this section, the following terms have the following meanings:
(1)May restrict occupancy to persons with veteran status means that the sponsor may limit occupancy to persons meeting the criteria of paragraphs (1) and (2) of subdivision (j) with respect to either of the following:
(A)Any unit in the development that has not been previously occupied.
(B)Any unit in the development that subsequently becomes vacant, for a period of not more than 120 days following the vacancy.
(2)(A)Target population means persons, including persons with disabilities, and families who are homeless, as that term is defined by Section 11302 of Title 42 of the United States Code, or who are homeless youth, as that term is defined by paragraph (2) of subdivision (e) of Section 12957 of the Government Code.
(B)Individuals and families currently residing in supportive housing meet the definition of target population if the individual or family was homeless, as that term is defined by Section 11302 of Title 42 of the United States Code, when approved for tenancy in the supportive housing project in which they currently reside.
(c)(1)The department shall ensure that at least 40 percent of the units in each development funded under the supportive housing program are targeted to one or more of the following populations:
(A)Individuals or families experiencing chronic homelessness, as defined by the United States Department of Housing and Urban Developments Super Notice of Funding Availability for Continuum of Care or Collaborative Applicant Program.
(B)Homeless youth, as that term is defined by paragraph (2) of subdivision (e) of Section 12957 of the Government Code.
(C)Individuals exiting institutional settings, including, but not limited to, jails, hospitals, prisons, and institutes of mental disease, who were homeless when entering the institutional setting, who have a disability, and who resided in that setting for a period of not less than 15 days.
(2)The department may decrease the number of units required to meet the criteria identified in paragraph (1) if the department determines that the program is undersubscribed after issuing at least one Notice of Funding Availability.
(3)Individuals and families currently residing in supportive housing meet the qualifications under this subdivision if the individual or family met any of the criteria specified in subparagraph (A), (B), or (C) of paragraph (1) when approved for tenancy in the supportive housing project in which they currently reside.
(d)Supportive housing projects shall provide or demonstrate collaboration with programs that provide services that meet the needs of the supportive housing residents.
(e)The criteria, established by the department, for selecting supportive housing projects shall give priority to supportive housing projects that include a focus on measurable outcomes and a plan for evaluation, which evaluation shall be submitted by the borrowers, annually, to the department.
(f)The department may provide higher per-unit loan limits as reasonably necessary to provide and maintain rents that are affordable to the target population.
(g)In an evaluation or ranking of a borrowers development and ownership experience, the department shall consider experience acquired in the prior 10 years.
(h)(1)A borrower shall, beginning the second year after supportive housing project occupancy, include the following data in their annual report to the department. However, a borrower who submits an annual evaluation pursuant to subdivision (e) may, instead, include this information in the evaluation:
(A)The length of occupancy by each supportive housing resident for the period covered by the report and, if the resident has moved, the reason for the move and the type of housing to which the resident moved, if known.
(B)Changes in each supportive housing residents employment status during the previous year.
(C)Changes in each supportive housing residents source and amount of income during the previous year.
(D)The tenants housing status prior to occupancy, including the term of the tenants homelessness.
(2)The department shall include aggregate data with respect to the supportive housing projects described in this section in the report that it submits to the Legislature pursuant to Section 50675.12.
(i)The department shall consider, commencing in the second year of the funding, the feasibility and appropriateness of modifying its regulations to increase the use of funds by small projects. In doing this, the department shall consider its operational needs and prior history of funding supportive housing facilities.
(j)Notwithstanding any other provision of law, the sponsor of a supportive housing development may restrict occupancy to persons with veteran status if all the following conditions apply:
(1)The veterans possess significant barriers to social reintegration and employment that require specialized treatment and services that are due to a physical or mental disability, substance abuse, or the effects of long-term homelessness.
(2)The veterans are otherwise eligible to reside in an assisted unit.
(3)The sponsor also provides, or assists in providing, the specialized treatment and services.
The definitions of this section shall apply to all activities conducted pursuant to this chapter. Except as otherwise provided in this chapter, or unless the context requires otherwise, the definitions contained in Chapter 2 (commencing with Section 50050) of Part 1 shall also apply to this chapter.
(a) Affordable rent shall be established by the department to be consistent with the rent limitations imposed by the Low Income Housing Tax Credit Program, as administered by the California Tax Credit Allocation Committee.
(b) Assisted unit means a unit that is affordable to a lower income household as a result of a loan provided pursuant to this chapter. In order to ensure consistency with the Low Income Housing Tax Credit Program, occupancy of assisted units shall be limited to households whose income does not exceed the limits specified by the California Tax Credit Allocation Committee.
(c) Maintain affordable rent levels means rents may be increased by the sponsor on an annual basis in the amount that would be allowed if the project was subject to the requirements of the Low Income Housing Tax Credit Program established pursuant to Section 42 of the federal Internal Revenue Code.
(d) Rental housing development means a structure or set of structures with common financing, ownership, and management, and which collectively contain five or more dwelling units, including efficiency units. No more than one of the dwelling units may be occupied as a primary residence by a person or household who is the owner of the structure or structures.
(e) Rehabilitation, in addition to the meaning set forth in Section 50096, includes improvements and repairs made to a residential structure acquired for the purpose of preserving its affordability.
(f) Rent-up costs means costs incurred while a unit is on the housing market but not rented to its first tenant.
(g) Sponsor has the same meaning as defined in subdivision (c) of Section 50669, and also includes a limited partnership in which the sponsor or an affiliate of the sponsor is a general partner.
(h)Supportive housing means housing with no limit on length of stay, that is occupied by the target population, and that is linked to onsite or offsite services that assist the supportive housing resident in retaining the housing, improving their health status, and maximizing their ability to live and, when possible, work in the community.
(h)(i)Transitional housing and transitional housing development means buildings configured as rental housing developments, but operated under program requirements that call for the termination of assistance and recirculation of the assisted unit to another eligible program recipient at some predetermined future point in time, which shall be no less than six months.
SEC. 2.Section 50675.5 of the Health and Safety Code is amended to read:50675.5.(a) Eligible costs shall include the cost of developing dwelling units, transitional housing, and childcare, and after school care and social service facilities integrally linked to the assisted dwelling units.
(b) Eligible cost categories shall include all of the following:
(1) Real property acquisition, including refinancing of existing debt to the extent necessary to reduce debt service to a level consistent with the provision of affordable rents and the fiscal integrity of the project.
(2) New construction or rehabilitation, including the conversion of nonresidential structures to residential use.
(3) General property improvements that are necessary to correct unsafe, unhealthy, or unsanitary conditions, including renovations and remodeling, including, but not limited to, remodeling of kitchens and bathrooms, installation of new appliances, landscaping, and purchase or installation of central air-conditioning.
(4) Necessary and related onsite and offsite improvements.
(5) Reasonable developer fees.
(6) Reasonable consulting costs.
(7) Initial operating costs for housing units.
(8) Capitalized reserves for replacement and operation. The department shall offer capitalized operating reserves to supportive housing units. The department may allow capitalized operating reserves to be used for rent subsidies for assisted units reserved for occupancy by households with incomes below limits determined by the department, which shall not exceed the income limit for very low income households. The department may offer capitalized reserves for operations and supportive services in the form of a grant.
(9) Any other costs of rehabilitation or new construction authorized by the department.
SEC. 3.Section 50675.14 of the Health and Safety Code is amended to read:50675.14.(a)This section applies only to projects funded with funds appropriated for supportive housing projects.
(b)For purposes of this section, the following terms have the following meanings:
(1)May restrict occupancy to persons with veteran status means that the sponsor may limit occupancy to persons meeting the criteria of paragraphs (1) and (2) of subdivision (j) with respect to either of the following:
(A)Any unit in the development that has not been previously occupied.
(B)Any unit in the development that subsequently becomes vacant, for a period of not more than 120 days following the vacancy.
(2)Supportive housing means housing with no limit on length of stay, that is occupied by the target population, and that is linked to onsite or offsite services that assist the supportive housing resident in retaining the housing, improving their health status, and maximizing their ability to live and, when possible, work in the community. (3)(2)(A)Target population means persons, including persons with disabilities, and families who are homeless, as that term is defined by Section 11302 of Title 42 of the United States Code, or who are homeless youth, as that term is defined by paragraph (2) of subdivision (e) of Section 12957 of the Government Code.
(B)Individuals and families currently residing in supportive housing meet the definition of target population if the individual or family was homeless, as that term is defined by Section 11302 of Title 42 of the United States Code, when approved for tenancy in the supportive housing project in which they currently reside.
(c)(1)The department shall ensure that at least 40 percent of the units in each development funded under the supportive housing program are targeted to one or more of the following populations:
(A)Individuals or families experiencing chronic homelessness, as defined by the United States Department of Housing and Urban Developments Super Notice of Funding Availability for Continuum of Care or Collaborative Applicant Program.
(B)Homeless youth, as that term is defined by paragraph (2) of subdivision (e) of Section 12957 of the Government Code.
(C)Individuals exiting institutional settings, including, but not limited to, jails, hospitals, prisons, and institutes of mental disease, who were homeless when entering the institutional setting, who have a disability, and who resided in that setting for a period of not less than 15 days.
(2)The department may decrease the number of units required to meet the criteria identified in paragraph (1) if the department determines that the program is undersubscribed after issuing at least one Notice of Funding Availability.
(3)Individuals and families currently residing in supportive housing meet the qualifications under this subdivision if the individual or family met any of the criteria specified in subparagraph (A), (B), or (C) of paragraph (1) when approved for tenancy in the supportive housing project in which they currently reside.
(d)Supportive housing projects shall provide or demonstrate collaboration with programs that provide services that meet the needs of the supportive housing residents.
(e)The criteria, established by the department, for selecting supportive housing projects shall give priority to supportive housing projects that include a focus on measurable outcomes and a plan for evaluation, which evaluation shall be submitted by the borrowers, annually, to the department.
(f)The department may provide higher per-unit loan limits as reasonably necessary to provide and maintain rents that are affordable to the target population.
(g)In an evaluation or ranking of a borrowers development and ownership experience, the department shall consider experience acquired in the prior 10 years.
(h)(1)A borrower shall, beginning the second year after supportive housing project occupancy, include the following data in their annual report to the department. However, a borrower who submits an annual evaluation pursuant to subdivision (e) may, instead, include this information in the evaluation:
(A)The length of occupancy by each supportive housing resident for the period covered by the report and, if the resident has moved, the reason for the move and the type of housing to which the resident moved, if known.
(B)Changes in each supportive housing residents employment status during the previous year.
(C)Changes in each supportive housing residents source and amount of income during the previous year.
(D)The tenants housing status prior to occupancy, including the term of the tenants homelessness.
(2)The department shall include aggregate data with respect to the supportive housing projects described in this section in the report that it submits to the Legislature pursuant to Section 50675.12.
(i)The department shall consider, commencing in the second year of the funding, the feasibility and appropriateness of modifying its regulations to increase the use of funds by small projects. In doing this, the department shall consider its operational needs and prior history of funding supportive housing facilities.
(j)Notwithstanding any other provision of law, the sponsor of a supportive housing development may restrict occupancy to persons with veteran status if all the following conditions apply:
(1)The veterans possess significant barriers to social reintegration and employment that require specialized treatment and services that are due to a physical or mental disability, substance abuse, or the effects of long-term homelessness.
(2)The veterans are otherwise eligible to reside in an assisted unit.
(3)The sponsor also provides, or assists in providing, the specialized treatment and services.
|
Date
|
Status
|
|---|---|
| Oct 11, 2023 | Chaptered by Secretary of State. Chapter 780, Statutes of 2023. |
| Oct 11, 2023 | Approved by the Governor. |
| Sep 21, 2023 | Enrolled and presented to the Governor at 4 p.m. |
| Sep 14, 2023 | Assembly amendments concurred in. (Ayes 40. Noes 0. Page 2844.) Ordered to engrossing and enrolling. |
| Sep 13, 2023 | In Senate. Concurrence in Assembly amendments pending. |
| Sep 13, 2023 | Read third time. Passed. (Ayes 80. Noes 0. Page 3431.) Ordered to the Senate. |
| Sep 5, 2023 | Read second time. Ordered to third reading. |
| Sep 1, 2023 | Read second time and amended. Ordered to second reading. |
| Sep 1, 2023 | From committee: Do pass as amended. (Ayes 11. Noes 0.) (September 1). |
| Aug 16, 2023 | August 16 set for first hearing. Placed on suspense file. |
| Jun 30, 2023 | Read second time and amended. Re-referred to Com. on APPR. |
| Jun 29, 2023 | From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 8. Noes 0.) (June 28). |
| Jun 8, 2023 | Referred to Com. on H. & C.D. |
| May 25, 2023 | In Assembly. Read first time. Held at Desk. |
| May 25, 2023 | Read third time. Passed. (Ayes 40. Noes 0. Page 1300.) Ordered to the Assembly. |
| May 23, 2023 | Ordered to special consent calendar. |
| May 18, 2023 | Read second time. Ordered to third reading. |
| May 18, 2023 | From committee: Do pass. (Ayes 7. Noes 0. Page 1172.) (May 18). |
| May 12, 2023 | Set for hearing May 18. |
| May 1, 2023 | May 1 hearing: Placed on APPR suspense file. |
| Apr 21, 2023 | Set for hearing May 1. |
| Apr 19, 2023 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 10. Noes 0. Page 797.) (April 18). Re-referred to Com. on APPR. |
| Mar 30, 2023 | Set for hearing April 18. |
| Feb 22, 2023 | Referred to Com. on HOUSING. |
| Feb 15, 2023 | From printer. May be acted upon on or after March 17. |
| Feb 14, 2023 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 14, 2023 | Unfinished Business SB482 Blakespear Concurrence | Senate Floor |
Passed |
|
| Sep 13, 2023 | SB 482 Blakespear Senate Third Reading By Blanca Rubio | Assembly Floor |
Passed |
|
| Sep 1, 2023 | Do pass as amended. | Assembly Standing Committee on Appropriations |
Passed |
|
| Jun 28, 2023 | Do pass as amended and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Housing and Community Development |
Passed |
|
| May 25, 2023 | Special Consent SB482 Blakespear | Senate Floor |
Passed |
|
| May 18, 2023 | Do pass | Senate Standing Committee on Appropriations |
Passed |
|
| May 1, 2023 | Placed on suspense file | Senate Standing Committee on Appropriations |
Passed |
|
| Apr 18, 2023 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Housing |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Abode Communities | ** Support | |
| All Home | ** Support | |
| California Apartment Association | ** Support | |
| California Housing Consortium | ** Support | |
| California Housing Partnership | ** Support | |
| California State Association Of Counties | ** Support | |
| Community Corporation of Santa Monica | ** Support | |
| Community Housing Improvement Program | ** Support | |
| Community HousingWorks | ** Support | |
| Corporation For Supportive Housing | ** Support | |
| Council of Infill Builders | ** Support | |
| Danco Communities | ** Support | |
| Destination: Home | ** Support | |
| EAH Housing | ** Support | |
| East Bay Asian Local Development Corporation | ** Support | |
| East Bay YIMBY | ** Support | |
| Eden Housing | ** Support | |
| EMB Action | * Support | Apr 18, 2023 |
| Enterprise Community Partners Inc | ** Support | |
| Grow the Richmond | ** Support | |
| Housing Authority of the City of Santa Barbara | ** Support | |
| Housing California | ** Support | |
| How to ADU | ** Support | |
| Jamboree Housing Corporation | ** Support | |
| LeadingAge California | ** Support | |
| Merritt Community Capital Corporation | ** Support | |
| Mountain View YIMBY | ** Support | |
| Napa-Solano for Everyone | ** Support | |
| Non-Profit Housing Association of Northern California | ** Support | |
| Nonprofit Housing Association Northern California | * Support | Jun 28, 2023 |
| Northern Neighbors | ** Support | |
| Peninsula for Everyone | ** Support | |
| People For Housing Orange County | ** Support | |
| Progress Noe Valley | ** Support | |
| Resources for Community Development | ** Support | |
| San Diego Housing Federation | ** Support | |
| San Francisco Housing Accelerator Fund | ** Support | |
| San Francisco Yimby | ** Support | |
| San Joaquin Valley Housing Collaborative | ** Support | |
| San Luis Obispo Yimby | ** Support | |
| Santa Cruz Yimby | ** Support | |
| Santa Rosa Yimby | ** Support | |
| Self-Help Enterprises | ** Support | |
| South Bay Yimby | ** Support | |
| Southside Forward | ** Support | |
| Ventura County YIMBY | ** Support | |
| Wakeland Housing and Development Corporation | ** Support | |
| Yimby Action | ** Support | |
| YIMBY Democrats of San Diego County | ** Support |
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB 482 |
UNFINISHED BUSINESS
Bill No: SB 482
Author: Blakespear (D)
Amended: 9/1/23
Vote: 21
SENATE HOUSING COMMITTEE: 10-0, 4/18/23
AYES: Wiener, Ochoa Bogh, Blakespear, Caballero, Cortese, McGuire, Seyarto, Skinner, Umberg, Wahab
NO VOTE RECORDED: Padilla
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/18/23
AYES: Portantino, Jones, Ashby, Bradford, Seyarto, Wahab, Wiener
SENATE FLOOR: 40-0, 5/25/23
AYES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk
ASSEMBLY FLOOR: 80-0, 9/13/23 - See last page for vote
SUBJECT: Multifamily Housing Program: supportive housing: capitalized operating reserves
SOURCE: California Housing Partnership
DIGEST:
This bill explicitly requires the Department of Housing and Community Development (HCD) to offer capitalized operating reserves to supportive housing units developed under the Multifamily Housing Program (MHP).
Assembly Amendments
clarify that HCD can offer capitalized operating reserves to supportive housing units only after developers have sought capitalized reserves from other potential funding sources and outline project eligibility that HCD may consider for capitalized operating reserves, such as availability of funds or individual financial needs.
ANALYSIS:
Existing law:
- Establishes a number of programs at HCD to make housing more affordable to California families and individuals including, but not limited to, the following:
- Affordable Housing and Sustainable Communities Program (AHSC), which funds land-use, housing, transportation, and land preservation projects to support infill and compact development that reduce greenhouse gas emissions.
- Home Investment Partnerships Program (HOME), which creates and retains affordable housing for lower-income renters or owners by funding housing rehabilitation, new construction, and acquisition/rehabilitation of single- and multifamily projects.
- Infill Infrastructure Grant Program (IIG), which provides grant funding for infrastructure improvements that are an integral part of or necessary to facilitate new infill housing in residential and/or mixed-use projects.
- MHP, which funds the new construction, rehabilitation, and preservation of permanent and transitional rental homes for lower income households through loans to local governments, non-profit developers, and for-profit developers.
- No Place Like Home Program (NPLH), which funds the development of permanent supportive housing for persons who are in need of mental health services and are experiencing homelessness, chronic homelessness, or at risk of chronic homelessness.
- Requires all housing developments that seek HCD funding comply with HCD’s Uniform Multifamily Regulations (UMR). The UMRs require an operating reserve for the purpose of defraying potential operating shortfalls arising from unforeseen circumstances, beyond the rent-up period.
This bill:
- Allows HCD to offer capitalized operating reserves to supportive housing units in MHP, after developers have sought capitalized reserves from other potential funding sources.
- Allows HCD to consider project eligibility for capitalized operating reserves by the following factors:
- Availability of funds.
- Individual financial needs of the project.
- Whether developers have sought rent or operating subsidies from other potential funding sources.
- Any other factors HCD deems appropriate.
- Adds “supportive housing” to the list of definitions that apply to program activities in MHP.
Background
Supportive services help extremely low-income (ELI) individuals (i.e., those earning less than 30% of the area median income) who suffer from homelessness stay stably housed. These supportive services can include intensive case management, medical and mental health care, substance abuse treatment, and employment services. These services are necessary for people formerly experiencing homelessness to retain housing, improve their physical and mental health, and live and work in their community. These services increase the operating costs for these types of developments. Because the rents are so low and the operating costs are higher, these developments often need a significant subsidy to pencil out.
Comments
- Capitalized Operating Subsidy Reserve (COSR). COSRs provide an upfront subsidy to cover deficits in annual operating revenues for housing developments, primarily used for permanent supportive housing for ELI individuals. If a COSR is appropriated, the account is with HCD and HCD approves disbursements as needed. Banks need to see that developers have these operating costs set aside before financing is approved.
- Case Study. A 48-unit housing development in southern California offers permanent supportive housing, where half of the units are for individuals and families who are homeless or near homeless with a prioritization for veterans and their families. Some of the supportive services that residents have access to include case workers, adult education, mental wellness, and career building. Part of the funding for this development is through NPLH, which gave the housing development a COSR of $4,875,000. Unfortunately, NPLH is running out of funds.
As the state transitions future permanent supportive housing developments for those experiencing homelessness to MHP, these developments must continue to get the funding needed to allow developers to build them. This bill would allow for a permanent supportive housing development, like the one mentioned above, to guarantee they have enough operating reserves to continue supportive services long-term.
Related/Prior Legislation
SB 948 (Becker, Chapter 667, Statutes of 2022) replaced individual project transition reserves in HCD affordable housing programs to a pooled reserve model to free up significant financial resources that can be utilized to create more housing.
AB 434 (Daly, Chapter 192, Statutes of 2020) aligned six rental housing programs with MHP, to enable HCD to implement a single application and scoring system for making coordinated awards under all seven programs.
SB 3 (Beall, Chapter 365, Statutes of 2017) enacted the Veterans and Affordable Housing Bond Act of 2018 and authorized the issuance of $4 billion in general obligation bonds for housing programs, including: MHP, IIG, Transit Oriented Development Rental Housing Program, Joe Serna, Jr. Farmworker Housing Grant Fund, Local Housing Trust Fund Matching Grant Program, CalHome Program, Self-Help Housing Fund, and CalVet Home Loan Program.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
According to the Assembly Appropriations Committee:
HCD estimates ongoing General Fund costs of approximately $187,000 annually for one staff position to conduct compliance monitoring activities for MHP supportive housing projects with capitalized operating reserves.
SUPPORT: (Verified 9/13/23)
California Housing Partnership (source)
Abode Communities
All Home
California Apartment Association
California Housing Consortium
Community Corporation of Santa Monica
Community Housing Improvement Program
Community Housingworks
Corporation for Supportive Housing
Council of Infill Builders
Danco Communities
Destination: Home
EAH Housing
East Bay Asian Local Development Corporation
East Bay YIMBY
Eden Housing
Grow the Richmond
Housing Authority of The City of Santa Barbara
Housing California
How to ADU
Jamboree Housing Corporation
Merritt Community Capital Corporation
Mountain View YIMBY
Napa-Solano for Everyone
Non-Profit Housing Association of Northern California
Northern Neighbors
Peninsula for Everyone
People for Housing - Orange County
Progress Noe Valley
Resources for Community Development
San Diego Housing Federation
San Francisco Housing Accelerator Fund
San Francisco YIMBY
San Joaquin Valley Housing Collaborative
San Luis Obispo YIMBY
Santa Cruz YIMBY
Santa Rosa YIMBY
Self-Help Enterprises
South Bay YIMBY
Southside Forward
Ventura County YIMBY
Wakeland Housing and Development Corporation
YIMBY Action
YIMBY Democrats of San Diego County
OPPOSITION: (Verified 9/13/23)
ARGUMENTS IN SUPPORT: According to the author, “Capitalized Operating Subsidy Reserves (COSRs) are fundamental in guaranteeing that critically needed affordable housing development projects for homeless housing can be built. By requiring HCD to offer these COSRs through the Multifamily Housing Program, we can guarantee that more special needs units with life-changing supportive services are built and change the lives of our extremely low income neighbors for decades to come.”
ARGUMENTS IN OPPOSITION: One individual wrote in opposition to this bill, stating that “The state of California and HCD should not be financing housing or subsidizing housing.”
ASSEMBLY FLOOR: 80-0, 9/13/23
AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas
Prepared by: Mehgie Tabar / HOUSING / (916) 651-4124
9/14/23 10:01:00
**** END ****
SENATE THIRD READING
STR Bill Id:SB 482
Author:(Blakespear)
As Amended Ver:September 1, 2023
Majority vote
SUMMARY
Requires the Department of Housing and Community Development (HCD) to offer capitalized operating reserves to supportive housing units funded by the Multifamily Housing Program (MHP), subject to specified conditions, and adds "supportive housing" to the list of definitions that apply to program activities in MHP.
Major Provisions
COMMENTS
Background: Supportive services help extremely low-income individuals (i.e., those earning less than 30% of the area median income) who suffer from homelessness stay stably housed. These supportive services can include intensive case management, medical and mental health care, substance abuse treatment, and employment services. These services are necessary for people formerly experiencing homelessness to retain housing, improve their physical and mental health, and live and work in their community. These services increase the operating costs for these types of developments. Because the rents paid by tenants in these developments are so low and the operating costs are higher than affordable housing developments without supportive services, these developments often need a significant subsidy to pencil out.
Capitalized operating subsidy reserves (COSRs) provide upfront subsidy to cover deficits in annual operating revenues for housing developments, primarily used for permanent supportive housing for ELI individuals. If HCD funds a COSR, HCD approves disbursements as needed. To underwrite a development, lenders need evidence that developers have sufficient operating costs set aside before approving financing.
For example, a 48-unit housing development in southern California offers permanent supportive housing, where half of the units are for individuals and families who are homeless or near homeless with a prioritization for veterans and their families. Some of the supportive services include case workers, adult education, mental wellness, and career building. Part of the funding for this development is through NPLH, which provided the housing development a COSR of $4,875,000. Unfortunately, NPLH and several other programs that currently offer COSRs are running out of funds. As the state transitions future permanent supportive housing developments to MHP, these developments must continue to get the funding needed to allow developers to build them. This bill would allow permanent supportive housing developments, like the one mentioned above, to guarantee they have enough operating reserves to continue supportive services long-term.
According to the Author
"The Corporation for Supportive Housing estimates that California will need to build approximately 62,966 additional supportive housing units to end homelessness over the next twelve years. There are numerous shovel-ready supportive housing projects across the state that developers are unable to secure the financing needed to begin construction on solely due to the lack of funding for operating costs. Capitalized operating subsidy reserves (COSRs) are a vital tool that can allow these stalled projects and others in the pipeline to receive the financing they need to be constructed. SB 482 will direct the Department of Housing and Community Development to provide COSRs to supportive housing projects through the Multifamily Housing Program. This will expand production of housing units targeted to low-income Californians with complex health challenges and disabilities."
Arguments in Support
According to the California Housing Partnership, this bill's sponsor, "COSRs are a vital financing tool to create long-lasting permanent supportive housing. A COSR is money upfront to cover losses by supportive housing for 15-20 years. By financing shortfalls upfront, banks are more comfortable providing money to these developments. HCD has provided COSRs in programs like No Place Like Home and the Veteran's Housing and Homelessness Prevention Program. However, these programs are running out of funding, and HCD is consolidating programs to increase efficiency. SB 482 requires HCD to offer COSRs in its MHP program, the flagship housing program at HCD. In this way, HCD can directly fund supportive housing through MHP without developers having to apply for additional programs. Additionally, as certain program run out of funds, this bill ensures that developments that serve out most vulnerable populations are not left behind due to funding shortfalls."
Arguments in Opposition
None on file.
FISCAL COMMENTS
According to the Assembly Appropriations Committee, HCD estimates minor and absorbable costs.
VOTES
SENATE FLOOR: 40-0-0
YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk
ASM HOUSING AND COMMUNITY DEVELOPMENT: 8-0-0
YES: Wicks, Joe Patterson, Wendy Carrillo, Gabriel, Kalra, Quirk-Silva, Sanchez, Ward
ASM APPROPRIATIONS: 11-0-5
YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Papan, Pellerin, Weber, Wilson
ABS, ABST OR NV: Megan Dahle, Dixon, Mathis, Sanchez, Soria
UPDATED
VERSION: September 1, 2023
CONSULTANT: Nicole Restmeyer / H. & C.D. / (916) 319-2085 FN: 0001481
Date of Hearing: August 16, 2023
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Chris Holden, Chair
SBPCA Bill Id:SB 482
Author:(Blakespear) – As Amended Ver:June 30, 2023
Policy Committee: | Housing and Community Development | Vote: | 8 - 0 |
|
| ||
|
|
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill requires the Department of Housing and Community Development (HCD) to offer capitalized operating reserves to supportive housing units funded by the Multifamily Housing Program (MHP) after developers have sought capitalized reserves from other potential funding sources. The bill also defines “supportive housing” for purposes of the MHP.
FISCAL EFFECT:
HCD estimates ongoing General Fund costs of approximately $187,000 annually for one staff position to conduct compliance monitoring activities for MHP supportive housing projects with capitalized operating reserves.
COMMENTS:
- Purpose. According to the author:
There are numerous shovel-ready supportive housing projects across the state that developers are unable to secure the financing needed to begin construction on solely due to the lack of funding for operating costs. Capitalized operating subsidy reserves (COSRs) are a vital tool that can allow these stalled projects and others in the pipeline to receive the financing they need to be constructed. [This bill] will direct HCD to provide COSRs to supportive housing projects through the Multifamily Housing Program. This will expand production of housing units targeted to low-income Californians with complex health challenges and disabilities.
- Background. Capitalized operating reserves provide an upfront subsidy to cover deficits in annual operating revenues for housing developments. These reserves are often used in conjunction with permanent supportive housing projects for extremely-low income households. Supportive housing developments tend to have higher operating costs due to the associated supportive services offered in conjunction with a unit and lower rents charged on those units. Capitalized operating reserve funding allocations are held in an account administered by HCD and the department reviews and approves disbursements as needed.
Existing law establishes MHP to provide deferred loans to eligible applicants for the development and construction of a new transitional or rental housing development, rehabilitation, or acquisition and rehabilitation, of a transitional or rental housing development, or conversion of a nonresidential structure to a transitional or rental housing development. Eligible costs include the cost of developing dwelling units, transitional housing, and childcare, and after school care and social service facilities linked to assisted development units.
Existing law specifies eligible cost categories for MHP funds, including capitalized reserves for replacement and operation. Existing law authorizes HCD to allow capitalized operating reserves be used for rent subsidies for assisted units reserved for occupancy by very low income households. HCD is authorized to offer capitalized reserves for operations and supportive services in the form of a grant.
This bill requires, rather than authorizes, HCD to offer capitalized operating reserves to supportive housing units, after developers have sought capitalized reserves from other funding sources.
- Prior Legislation. SB 948 (Becker), Chapter 667, Statutes of 2022, replaced individual project transition reserves in HCD affordable housing programs with a pooled reserve model to mitigate the loss or exhaustion of project rental or operating subsidies, as specified.
Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081
Date of Hearing: June 28, 2023
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Buffy Wicks, Chair
SBPCA Bill Id:SB 482
Author:(Blakespear) – As Introduced Ver:February 14, 2023
SENATE VOTE: 40-0
SUBJECT: Multifamily Housing Program: supportive housing: capitalized operating reserves
SUMMARY: Requires the Department of Housing and Community Development (HCD) to offer capitalized operating reserves to supportive housing units funded by the Multifamily Housing Program (MHP), and adds “supportive housing” to the list of definitions that apply to program activities in MHP.
EXISTING LAW:
- Establishes a number of programs at HCD to make housing more affordable to California families and individuals including, but not limited to, the following:
- MHP, which funds the new construction, rehabilitation, and preservation of permanent and transitional rental homes for lower income households through loans to local governments, non-profit developers, and for-profit developers; and
- No Place Like Home Program (NPLH), which funds the development of permanent supportive housing for persons who are in need of mental health services and are experiencing homelessness, chronic homelessness, or at risk of chronic homelessness. (Health and Safety Code Section 50675 et seq. and Welfare and Institutions Code Section 5849.1 et seq.)
- Requires all housing developments that seek HCD funding to comply with HCD’s Uniform Multifamily Regulations (UMR). The UMRs require an operating reserve for the purpose of defraying potential operating shortfalls arising from unforeseen circumstances, beyond the rent-up period. (25 California Code of Regulations § 8308)
FISCAL EFFECT: Unknown.
COMMENTS:
Author’s Statement: According to the author, “The Corporation for Supportive Housing estimates that California will need to build approximately 62,966 additional supportive housing units to end homelessness over the next twelve years. There are numerous shovel-ready supportive housing projects across the state that developers are unable to secure the financing needed to begin construction on solely due to the lack of funding for operating costs. Capitalized operating subsidy reserves (COSRs) are a vital tool that can allow these stalled projects and others in the pipeline to receive the financing they need to be constructed. SB 482 will direct the Department of Housing and Community Development to provide COSRs to supportive housing projects through the Multifamily Housing Program. This will expand production of housing units targeted to low-income Californians with complex health challenges and disabilities.”
Background: Supportive services help extremely low-income individuals (i.e., those earning less than 30 percent of the area median income) who suffer from homelessness stay stably housed. These supportive services can include intensive case management, medical and mental health care, substance abuse treatment, and employment services. These services are necessary for people formerly experiencing homelessness to retain housing, improve their physical and mental health, and live and work in their community. These services increase the operating costs for these types of developments. Because the rents are so low and the operating costs are higher, these developments often need a significant subsidy to pencil out.
Capitalized operating subsidy reserves (COSRs) provide upfront subsidy to cover deficits in annual operating revenues for housing developments, primarily used for permanent supportive housing for ELI individuals. If HCD funds a COSR, HCD approves disbursements as needed. To underwrite a development, lenders need evidence that developers have sufficient operating costs set aside before approving financing.
For example, a 48-unit housing development in southern California offers permanent supportive housing, where half of the units are for individuals and families who are homeless or near homeless with a prioritization for veterans and their families. Some of the supportive services include case workers, adult education, mental wellness, and career building. Part of the funding for this development is through NPLH, which provided the housing development a COSR of $4,875,000. Unfortunately, NPLH and several other programs that currently offer COSRs are running out of funds. As the state transitions future permanent supportive housing developments to MHP, these developments must continue to get the funding needed to allow developers to build them. This bill would allow permanent supportive housing developments, like the one mentioned above, to guarantee they have enough operating reserves to continue supportive services long-term.
Arguments in Support: According to the California Housing Partnership, the bill’s sponsor, “COSRs are a vital financing tool to create long-lasting permanent supportive housing. A COSR is money upfront to cover losses by supportive housing for 15-20 years. By financing shortfalls upfront, banks are more comfortable providing money to these developments. HCD has provided COSRs in programs like No Place Like Home and the Veteran’s Housing and Homelessness Prevention Program. However, these programs are running out of funding, and HCD is consolidating programs to increase efficiency. SB 482 requires HCD to offer COSRs in its MHP program, the flagship housing program at HCD. In this way, HCD can directly fund supportive housing through MHP without developers having to apply for additional programs. Additionally, as certain program run out of funds, this bill ensures that developments that serve out most vulnerable populations are not left behind due to funding shortfalls.”
Arguments in Opposition: None on file.
Committee Amendments: The committee may wish to consider amending the bill to require developers seeking COSRs through MHP to first attempt to secure subsidy reserves through alternate means before requesting them through MHP, in order to ensure any available local funds are sought before scarce state affordable housing dollars.
Related Legislation:
SB 948 (Becker), Chapter 667, Statutes of 2022: Replaced individual project transition reserves in HCD affordable housing programs to a pooled reserve model to free up significant financial resources that can be utilized to create more housing.
AB 434 (Daly), Chapter 192, Statutes of 2020: Aligned six rental housing programs with MHP, to enable HCD to implement a single application and scoring system for making coordinated awards under all seven programs.
REGISTERED SUPPORT / OPPOSITION:
Support
California Housing Partnership (Sponsor)
Abode Communities
All Home
California Apartment Association
California Housing Consortium
California State Association of Counties
Community Corporation of Santa Monica
Community Housing Improvement Program (CHIP)
Community HousingWorks
Danco Communities
Destination: Home
EAH Housing
East Bay Asian Local Development Corporation
East Bay Yimby
Eden Housing
Enterprise Community Partners, INC.
Grow the Richmond
Housing Authority of The City of Santa Barbara
Housing California
How to ADU
LeadingAge California
Mountain View Yimby
Napa-Solano for Everyone
Non-profit Housing Association of Northern California (NPH)
Northern Neighbors
Peninsula for Everyone
People for Housing Orange County
Progress Noe Valley
Resources for Community Development
San Francisco Housing Accelerator Fund
San Francisco Yimby
San Joaquin Valley Housing Collaborative
Santa Cruz Yimby
Santa Rosa Yimby
Self Help Enterprises
SLO County Yimby
South Bay Yimby
Southside Forward
Ventura County Yimby
Wakeland Housing and Development Corporation
Yimby Action
Yimby Democrats of San Diego County
Opposition
None on file.
Analysis Prepared by: Nicole Restmeyer / H. & C.D. / (916) 319-2085
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB 482 |
THIRD READING
Bill No: SB 482
Author: Blakespear (D)
Introduced: 2/14/23
Vote: 21
SENATE HOUSING COMMITTEE: 10-0, 4/18/23
AYES: Wiener, Ochoa Bogh, Blakespear, Caballero, Cortese, McGuire, Seyarto, Skinner, Umberg, Wahab
NO VOTE RECORDED: Padilla
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/18/23
AYES: Portantino, Jones, Ashby, Bradford, Seyarto, Wahab, Wiener
SUBJECT: Multifamily Housing Program: supportive housing: capitalized operating reserves
SOURCE: California Housing Partnership
DIGEST:
This bill explicitly requires the Department of Housing and Community Development (HCD) to offer capitalized operating reserves to supportive housing units developed under the Multifamily Housing Program (MHP).
ANALYSIS:
Existing law:
- Establishes a number of programs at HCD to make housing more affordable to California families and individuals including, but not limited to, the following:
- Affordable Housing and Sustainable Communities Program (AHSC), which funds land-use, housing, transportation, and land preservation projects to support infill and compact development that reduce greenhouse gas emissions.
- Home Investment Partnerships Program (HOME), which creates and retains affordable housing for lower-income renters or owners by funding housing rehabilitation, new construction, and acquisition/rehabilitation of single- and multifamily projects.
- Infill Infrastructure Grant Program (IIG), which provides grant funding for infrastructure improvements that are an integral part of or necessary to facilitate new infill housing in residential and/or mixed-use projects.
- MHP, which funds the new construction, rehabilitation, and preservation of permanent and transitional rental homes for lower income households through loans to local governments, non-profit developers, and for-profit developers.
- No Place Like Home Program (NPLH), which funds the development of permanent supportive housing for persons who are in need of mental health services and are experiencing homelessness, chronic homelessness, or at risk of chronic homelessness.
- Requires all housing developments that seek HCD funding comply with HCD’s Uniform Multifamily Regulations (UMR). The UMRs require an operating reserve for the purpose of defraying potential operating shortfalls arising from unforeseen circumstances, beyond the rent-up period.
This bill:
- Allows HCD to offer capitalized operating reserves to supportive housing units in MHP.
- Adds “supportive housing” to the list of definitions that apply to program activities in MHP.
Background
Supportive services help extremely low-income (ELI) individuals (i.e., those earning less than 30% of the area median income) who suffer from homelessness stay stably housed. These supportive services can include intensive case management, medical and mental health care, substance abuse treatment, and employment services. These services are necessary for people formerly experiencing homelessness to retain housing, improve their physical and mental health, and live and work in their community. These services increase the operating costs for these types of developments. Because the rents are so low and the operating costs are higher, these developments often need a significant subsidy to pencil out.
Comments
- Capitalized Operating Subsidy Reserve (COSR). COSRs provide an upfront subsidy to cover deficits in annual operating revenues for housing developments, primarily used for permanent supportive housing for ELI individuals. If a COSR is appropriated, the account is with HCD and HCD approves disbursements as needed. Banks need to see that developers have these operating costs set aside before financing is approved.
- Case Study. A 48-unit housing development in southern California offers permanent supportive housing, where half of the units are for individuals and families who are homeless or near homeless with a prioritization for veterans and their families. Some of the supportive services that residents have access to include case workers, adult education, mental wellness, and career building. Part of the funding for this development is through NPLH, which gave the housing development a COSR of $4,875,000. Unfortunately, NPLH is running out of funds.
As the state transitions future permanent supportive housing developments for those experiencing homelessness to MHP, these developments must continue to get the funding needed to allow developers to build them. This bill would allow for a permanent supportive housing development, like the one mentioned above, to guarantee they have enough operating reserves to continue supportive services long-term.
Related/Prior Legislation
SB 948 (Becker, Chapter 667, Statutes of 2022) replaced individual project transition reserves in HCD affordable housing programs to a pooled reserve model to free up significant financial resources that can be utilized to create more housing.
AB 434 (Daly, Chapter 192, Statutes of 2020) aligned six rental housing programs with MHP, to enable HCD to implement a single application and scoring system for making coordinated awards under all seven programs.
SB 3 (Beall, Chapter 365, Statutes of 2017) enacted the Veterans and Affordable Housing Bond Act of 2018 and authorized the issuance of $4 billion in general obligation bonds for housing programs, including: MHP, IIG, Transit Oriented Development Rental Housing Program, Joe Serna, Jr. Farmworker Housing Grant Fund, Local Housing Trust Fund Matching Grant Program, CalHome Program, Self-Help Housing Fund, and CalVet Home Loan Program.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
According to the Senate Appropriations Committee, HCD estimates ongoing costs of approximately $374,000 annually for 2.0 PY of additional staff to conduct compliance monitoring activities for MHP supportive housing projects with capitalized operating reserves. (General Fund)
SUPPORT: (Verified 5/18/23)
California Housing Partnership (source)
Abode Communities
All Home
California Apartment Association
California Housing Consortium
Community Corporation of Santa Monica
Community Housing Improvement Program
Community Housingworks
Corporation for Supportive Housing
Council of Infill Builders
Danco Communities
Destination: Home
EAH Housing
East Bay Asian Local Development Corporation
East Bay YIMBY
Eden Housing
Grow the Richmond
Housing Authority of the City of Santa Barbara
Housing California
How to ADU
Jamboree Housing Corporation
Merritt Community Capital Corporation
Mountain View YIMBY
Napa-Solano for Everyone
Non-Profit Housing Association of Northern California
Northern Neighbors
Peninsula for Everyone
People for Housing - Orange County
Progress Noe Valley
Resources for Community Development
San Diego Housing Federation
San Francisco Housing Accelerator Fund
San Francisco YIMBY
San Joaquin Valley Housing Collaborative
San Luis Obispo YIMBY
Santa Cruz YIMBY
Santa Rosa YIMBY
Self-Help Enterprises
South Bay YIMBY
Southside Forward
Ventura County YIMBY
Wakeland Housing and Development Corporation
YIMBY Action
YIMBY Democrats of San Diego County
OPPOSITION: (Verified 5/18/23)
ARGUMENTS IN SUPPORT: According to the author, “Capitalized Operating Subsidy Reserves (COSRs) are fundamental in guaranteeing that critically needed affordable housing development projects for homeless housing can be built. By requiring HCD to offer these COSRs through the Multifamily Housing Program, we can guarantee that more special needs units with life-changing supportive services are built and change the lives of our extremely low income neighbors for decades to come.”
ARGUMENTS IN OPPOSITION: One individual wrote in opposition to this bill, stating that “The state of California and HCD should not be financing housing or subsidizing housing.”
Prepared by: Mehgie Tabar / HOUSING / (916) 651-4124
5/20/23 12:51:37
SENATE COMMITTEE ON
Senator Anthony Portantino, Chair
2023 - 2024 Regular Session
SB 482 (Blakespear) - Multifamily Housing Program: supportive housing: capitalized operating reserves
Version: | Policy Vote: |
Urgency: | Mandate: |
Hearing Date: | Consultant: |
Bill Summary:
SB 482 would require the Department of Housing and Community Development (HCD) to offer capitalized operating reserves to supportive housing units developed under the Multifamily Housing Program (MHP).
Fiscal Impact:
- HCD estimates ongoing costs of approximately $374,000 annually for 2.0 PY of additional staff to conduct compliance monitoring activities for MHP supportive housing projects with capitalized operating reserves. (General Fund)
Background:
Existing law establishes the MHP for the purpose of providing deferred loans to eligible applicants for the development and construction of a new transitional or rental housing development, rehabilitation, or acquisition and rehabilitation, of a transitional or rental housing development, or conversion of a nonresidential structure to a transitional or rental housing development. Eligible costs include the cost of developing dwelling units, transitional housing, and childcare, and after school care and social service facilities linked to assisted development units. Existing law specifies eligible cost categories for MHP funds, including capitalized reserves for replacement and operation. Existing law authorizes HCD to allow capitalized operating reserves to be used for rent subsidies for assisted units reserved for occupancy by households with incomes that do not exceed the income limit for very low income households. HCD is authorized to offer capitalized reserves for operations and supportive services in the form of a grant.
Proposed Law:
SB 482 would explicitly require HCD to offer capitalized operating reserves to supportive housing units. The bill would also move the definition of “supportive housing” from a section of law that applies only to supportive housing projects to the general definitions section of MHP law.
Related Legislation:
SB 948 (Becker), Chap. 667/2022, replaced individual project transition reserves in HCD affordable housing programs with a pooled reserve model to mitigate the loss or exhaustion of project rental or operating subsidies, as specified.
AB 434 (Daly), Chap. 192/2020, aligned six specified housing programs administered by HCD with its primary rental housing program, the MHP, and provided for a single application and scoring system in order to make coordinated funding awards under all seven programs, as specified.
Staff Comments:
Capitalized operating reserves provide an upfront subsidy to cover deficits in annual operating revenues for housing developments, and these reserves are often used in conjunction with permanent supportive housing projects for extremely low income households. Supportive housing developments tend to have higher operating costs because of the associated supportive services offered in conjunction with a unit and lower rents charged on those units. Capitalized operating reserve funding allocations are held in an account administered by HCD and the department reviews and approves disbursements as needed.
SB 482 would require, rather than authorize, HCD to offer capitalized operating reserves to supportive housing units developed under the MHP. The ongoing staffing resource needs noted above assume that $40-$50 million would be annually funded for capitalized operating reserves to 20-25 special needs projects.
-- END --
SENATE COMMITTEE ON HOUSING
Senator Scott Wiener, Chair
2023 - 2024 Regular
Bill No: SB 482 Hearing Date: 4/18/2023
Author: | Blakespear | ||
Version: | 2/14/2023 Introduced | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Mehgie Tabar | ||
SUBJECT: Multifamily Housing Program: supportive housing: capitalized operating reserves
DIGEST: This bill would explicitly require the Department of Housing and Community Development (HCD) to offer capitalized operating reserves to supportive housing units developed under the Multifamily Housing Program (MHP).
ANALYSIS:
Existing law:
- Establishes a number of programs at HCD to make housing more affordable to California families and individuals including, but not limited to, the following:
- Affordable Housing and Sustainable Communities Program (AHSC), which funds land-use, housing, transportation, and land preservation projects to support infill and compact development that reduce greenhouse gas emissions.
- Home Investment Partnerships Program (HOME), which creates and retains affordable housing for lower-income renters or owners by funding housing rehabilitation, new construction, and acquisition/rehabilitation of single- and multifamily projects.
- Infill Infrastructure Grant Program (IIG), which provides grant funding for infrastructure improvements that are an integral part of or necessary to facilitate new infill housing in residential and/or mixed-use projects.
- MHP, which funds the new construction, rehabilitation, and preservation of permanent and transitional rental homes for lower income households through loans to local governments, non-profit developers, and for-profit developers.
- No Place Like Home Program (NPLH), which funds the development of permanent supportive housing for persons who are in need of mental health services and are experiencing homelessness, chronic homelessness, or at risk of chronic homelessness.
- Requires all housing developments that seek HCD funding comply with HCD’s Uniform Multifamily Regulations (UMR). The UMRs require an operating reserve for the purpose of defraying potential operating shortfalls arising from unforeseen circumstances, beyond the rent-up period.
This bill:
- Allows HCD to offer capitalized operating reserves to supportive housing units in MHP.
- Adds “supportive housing” to the list of definitions that apply to program activities in MHP.
COMMENTS:
- Author’s statement. “Capitalized Operating Subsidy Reserves (COSRs) are fundamental in guaranteeing that critically needed affordable housing development projects for homeless housing can be built. By requiring HCD to offer these COSRs through the Multifamily Housing Program, we can guarantee that more special needs units with life-changing supportive services are built and change the lives of our extremely low income neighbors for decades to come.”
- The Need for Operating Subsidies in Supportive Housing. Supportive services help extremely low-income (ELI) individuals (i.e., those earning less than 30% of the area median income) who suffer from homelessness stay stably housed. These supportive services can include intensive case management, medical and mental health care, substance abuse treatment, and employment services. These services are necessary for people formerly experiencing homelessness to retain housing, improve their physical and mental health, and live and work in their community. These services increase the operating costs for these types of developments. Because the rents are so low and the operating costs are higher, these developments often need a significant subsidy to pencil out.
- Capitalized Operating Subsidy Reserve (COSR). COSRs provide an upfront subsidy to cover deficits in annual operating revenues for housing developments, primarily used for permanent supportive housing for ELI individuals. If a COSR is appropriated, the account is with HCD and HCD approves disbursements as needed. Banks need to see that developers have these operating costs set aside before financing is approved.
- Case Study. A 48-unit housing development in southern California offers permanent supportive housing, where half of the units are for individuals and families who are homeless or near homeless with a prioritization for veterans and their families. Some of the supportive services that residents have access to include case workers, adult education, mental wellness, and career building. Part of the funding for this development is through NPLH, which gave the housing development a COSR of $4,875,000. Unfortunately, NPLH is running out of funds.
As the state transitions future permanent supportive housing developments for those experiencing homelessness to MHP, these developments must continue to get the funding needed to allow developers to build them. This bill would allow for a permanent supportive housing development, like the one mentioned above, to guarantee they have enough operating reserves to continue supportive services long-term.
Related Legislation:
SB 948 (Becker, Chapter 667, Statutes of 2022) — replaced individual project transition reserves in HCD affordable housing programs to a pooled reserve model to free up significant financial resources that can be utilized to create more housing.
AB 434 (Daly, Chapter 192, Statutes of 2020) — aligned six rental housing programs with MHP, to enable HCD to implement a single application and scoring system for making coordinated awards under all seven programs.
SB 3 (Beall, Chapter 365, Statutes of 2017) — enacted the Veterans and Affordable Housing Bond Act of 2018 and authorized the issuance of $4 billion in general obligation bonds for housing programs, including: MHP, IIG, Transit Oriented Development Rental Housing Program, Joe Serna, Jr. Farmworker Housing Grant Fund, Local Housing Trust Fund Matching Grant Program, CalHome Program, Self-Help Housing Fund, and CalVet Home Loan Program.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
POSITIONS: (Communicated to the committee before noon on Wednesday,
April 12, 2023.)
SUPPORT:
California Housing Partnership (Sponsor)
All Home
California Apartment Association
California Housing Consortium
Community Corporation of Santa Monica
Community Housing Improvement Program (CHIP)
Community Housingworks
Corporation for Supportive Housing
Council of Infill Builders
Danco Communities
Destination: Home
EAH Housing
East Bay Asian Local Developement Corporation
East Bay YIMBY
Grow the Richmond
Housing Authority of The City of Santa Barbara
Housing California
How to ADU
Merritt Community Capital Corporation
Mountain View YIMBY
Napa-Solano for Everyone
Non-Profit Housing Association of Northern California (NPH)
Northern Neighbors
Peninsula for Everyone
People for Housing - Orange County
Progress Noe Valley
Resources for Community Development
San Diego Housing Federation
San Francisco Housing Accelerator Fund
San Francisco YIMBY
San Joaquin Valley Housing Collaborative
San Luis Obispo YIMBY
Santa Cruz YIMBY
Santa Rosa YIMBY
Self-Help Enterprises
South Bay YIMBY
Southside Forward
Ventura County YIMBY
Wakeland Housing and Development Corporation
YIMBY Action
YIMBY Democrats of San Diego County
OPPOSITION:
1 Individual
-- END --
Discussed in Hearing
2MIN
Senate Floor
1MIN
Assembly Floor
3MIN
Assembly Standing Committee on Housing and Community Development
5MIN
Senate Standing Committee on Housing
Bill Author
Bill Co-Author(s):