Assembly Standing Committee on Housing and Community Development

Good morning everyone. We will start as a subcommittee and also I want to welcome Mr. Zbur for joining us today. Mr. Gabriel is not here today, so he will be filling in for Mr. Gabriel and we will start as a subcommittee today because we don't have quorum yet. Welcome to the Assembly Housing and Community Development Committee hearing. We have 18 items on our agenda today. We have two items on consent. Each bill can have two main witnesses in support and opposition.

Each main witness will get two minutes each. There is no phone testimony for this hearing. All witnesses will testify in person. Please feel free to submit written testimony through the position portal on the committee's website. This will become part of the official record of the bill. The hearing room will be open for attendance of this hearing. Any members of the public attending the hearing are encouraged to wear a mask while in the building.

All are encouraged to watch the hearing from its stream on the Assembly's website. Thank you for your patience and understanding and our first author. I see that Ms. Friedman got here first right from my visual queue. Or do we have someone else that signed in? Mr. Valencia is not here, so let's welcome Ms. Friedman with AB 1295.

Good morning, Madam Chair. Thank you and for you and your committee staff for working on the bill. I'm going to accept the suggested clarifying committee amendments as outlined on page four of the committee analysis. This is a very simple, non-controversial bill. We know that the transportation sector in California accounts for about $30 billion between state and local funds and represents about 40% of the state's greenhouse gas emissions. But only about 2% of that funding aligns with the state's climate goals.

Unlike other state programs, funding allocated by the Strategic Growth Council is required to reduce emissions through fewer and Shorter vehicle trips, integrated land use, and transportation projects supporting low-carbon options. AB 1295 simply requires the California Strategic Growth Council to create a map of awarded projects for the Affordable Housing and Community Development program on a public platform so that the public has transparency about where their tax dollars are being spent.

The map will include the affordable housing component of the projects and a description of all components of the project. This program represents a model for how the state can build sustainable transportation and housing projects, and we think the public should know what that actually looks like in practicality. As Chair of the Transportation Committee, it's my goal to align transportation with our housing and climate goals, and this bill is a small but I believe, important step to show where the state's most climate-friendly infrastructure projects are located. With that, I would request an aye vote.

Thank you. And do you have primary witnesses to testify in support? Any additional folks in the room like to register support? Any primary witnesses in opposition? Anyone in the room like to register opposition? We will bring it back to the committee for questions. zero, actually we do have a quorum. I can count to five. Okay. Could we take roll real quick?

[Roll Call]

In that case, I'd like to move the bill.

Oh, we have a motion for Mr. Patterson. Do we have a second? Second from Mr. Kalra. With that, would you like to close?

The bill is no known opposition and I would humbly request an aye vote and thank you.

Fastest bill in the history of the Housing Committee. Great. Just because I know you get the golden star. She's already leaving the Chair too.

Would you like us to add you as a co-author? We'd love to have you as a co-author. If you'd like to be added on. Take a look. Thank you.

The motion is do pass as amended to the Assembly Appropriations Committee. Ms. Friedman, thank you for your leadership in this space. Happy to support the bill today. With that, please take roll.

[Roll Call]

That bill is out, but we will let folks add on and anyone else who has authors in this committee. Oh, there's Mr. Lee. Great.

Mr. Lee, would you like to come present? Sorry, I did not see you because I was looking in the front row. Let's see, you have AB 1490. Oh yes, good idea, Mr. Kalra. We have a motion on the consent calendar. Do we have a second? We have a second by Mr. Patterson.

[Roll Call]

That is out and we will let folks add on. Great. We have some more potential authors coming here and with that, Mr. Lee, would you like to begin presenting AB 1490?

Yes. Thank you. Thank you, Chair and members. I want to first thank the committee staff for their hard work on this bill and working on the amendments with us on this bill. Also I have to express that I did not expect to move so efficiently and speedily. So my witness is still on his way, so maybe if you'll allow him to testify a little later.

He's still on his way here, but speaking of doing it efficiently, judiciously, AB 1490 will provide incentives to adaptive reuse affordable housing projects that meet certain qualifications, such as expedited review process. Adaptive reuse is when we repurpose an existing building to create housing, as the governor did with Project Roomkey. The average housing construction cost is over. There we go. Is over $750,000 in San Francisco, according to New York Times. And adaptive reuse allows us to create housing at a much lower cost. Timing is another advantage.

New construction, affordable housing. New construction of affordable housing takes two to three years to complete, while adaptive reuse of existing building generally takes less than a year. With high homelessness rates and high housing costs in California, we need the tools to ensure adaptive reuse projects do not face unnecessary burdens. With that, I'd like to introduce my witness in support, Rand Martin from the AIDS Healthcare Foundation.

Thank you. You'll have two minutes.

Thank you. Let me catch my breath a second. Rand Martin, on behalf of the AIDS Healthcare Foundation, many of you know that five years ago, AHF embarked on a housing development program. They currently have 1425 units across the City of Los Angeles for people who are extremely in very low-income, who are paying rents of about four to $600 a month, which is unheard of in the City of Los Angeles. They have done this through adaptive reuse.

All 14 of their projects currently and ones that are coming online over the next couple of years are all existing hotels and motels that they went in, spent about $100,000 per door, and created decent living arrangements for people who were either homeless or living in substandard housing. It's been very successful. They're very pleased and proud of what they've accomplished.

But they do have challenges at the local level in terms of getting these things done for the lower costs that they anticipate, as well as in the short timelines that Mr. Lee was just talking about. And part of the problem is that many cities, Los Angeles being a prime example, since that's our home city, are not quite accommodating of adaptive reuse the way that we think they should be.

And what this bill seeks to do is to try and streamline efforts so that we can get these things up and running with the cost reductions that we anticipate because of the type of housing, and in the time that we want doing it in a year or less instead of two or three years for ground-up construction really gets roofs over the heads of people who really need them. Now, we think these are all modest changes. We haven't asked for anything outrageous.

There are some things that we still would like to see addressed that are not addressed in this Bill that are more complicated, like permit fees, in some cases costing us $2 million for a project which really does undermine our ability to do it in a cost-effective way. Really appreciate the work of this committee and Mr. Wertheim in getting this bill in good shape, and we would appreciate your support today. Thank you.

Thank you very much. And any other folks in the audience want to express support? Any primary witnesses in opposition?

Mr. Chair and members of the committee, Jennifer Svec on behalf of the California Association of Realtors. We actually have amendments to expand the proposed CEQA exemption for 100% affordable adaptive reuse projects to also include entry-level market-rate housing development intended for owner occupancy by our state's low and moderate-income families seeking to obtain homeownership as our state's working families. Thank you.

Thank you. Any other folks in opposition? Okay, we'll bring it back to the committee. Mr. Kalra.

Thank you, Madam Chair. I appreciate the author bringing this forward. I particularly like, I mean, as obviously the author knows, the City of San Jose has been doing, and I think a lot of other bigger cities have been doing with success, slowly adapt to reuse, particularly for the unhoused and for rapidly housed, what have you. But I like this as a long-term, for the long term efforts, particularly the fact that 50% are reserved for very low income.

Oftentimes we do low-income and we know low-income in a lot of our jurisdictions, you can still make 90, 100,000 a year. Having that dedicated for very low-income. To have 50% dedicated for that I think is really critically important and important aspect of this legislation. I would love to be added on as a co-author as well. Thank you.

Great. Any other questions? Mr. Zbur.

Mr. Zabur, I just had one question, just curious what the author and the witness think about the realtor's suggestion of expanding this to for purchase housing. What do you think the pros and cons of that are and whether you considered it?

I think it's an interesting notion, something we have to discuss more about.

They've raised this issue in years past in other bills. We continue to consider that as an option. We do anticipate changes when the bill is heard in more reforms when the bill is heard in local government next week. So I know that CEQA is on the agenda for that conversation.

I mean I think you know, folks build wealth through home ownership, and if it's focused on low-income folks, that's a good thing. I'm just curious about whether or not you think that that raises opposition, that this bill doesn't but anyway, glad you're thinking about it. I'm supportive of the bill. I think it's a great bill. Thank you.

Thank you.

Any other questions? Comments, Mr. Patterson. And by the way, if folks could speak really into the mic because we're dealing with the construction, that'd be great.

I'm going to have a headache by the time this hearing.

Me too.

So in terms of if a project comes forward to a city on adaptive reuse, which, by the way, I think is great in a lot of areas, what kind of control does the city, if this bill passed, would the city have over it? Obviously, it waives the CEQA requirements and expedites 30-day review to grant entitlements. But if this bill were to pass, and there's a crummy shopping mall that was always intended to be a crummy shopping, failing shopping mall, does that not allow the city, does the city have to take any action to rezone it, or could it be mixed-use? I'm just wondering, does this totally circumvent local land use decision when there's adaptive reuse?

With the local control aspect of it, we are going to local government committee in the next committee, and we're working out some of those amendments, but it's not the idea to completely circumvent things just to speed it up and prevent, reduce hurdles. Rand, if you want to say.

Personally, philosophically, I'm still kind of debating how much local control I'm okay to give up. I've seen in my own city on the city council that I've stayed on. One of the last projects I approved was 100% affordable complex in my neighborhood. And the amount of time that it took was ridiculous on a project that the city actually wanted, and it still took way too long. And I don't think we waived our fees. We did a lot of those things. But I do have a little bit of questions about, because the city that I'm from, basically we're the only city that is kind of quote-unquote built out.

We're totally surrounded by other jurisdictions, and it makes that particular city anti-competitive from other cities that can continue to sort of build-out, build out, build-out. And so I'm concerned in sort of a special circumstance here that, of course, if a property owner has a failing shopping mall or strip mall or whatever, that they would want to take the option. It makes perfect sense.

But for a city that has limited revenue abilities to grow and expand and things like that, I get a little bit uneasy about it. I'm not really opposed to this. I think it's a very interesting concept. I might lay off today just because I want to learn more about what your thoughts are on keeping some control locally, but I think your concept is in the right direction, and I appreciate that.

And I appreciate your feedback, Assemblymember Patterson. I think by the time we get to the floor, hopefully, it'll have a lot more input about local control when it gets to you. So we can talk about the final version when it gets to you on the floor.

Yeah, yeah. And I hope to speak in favor of it on the so. So thanks for working on this and looking forward to working on more items with you.

Great. Any other questions from committee members or comments? I believe we have a motion by Mr. Kalra. Is that right? Oh, Ward. You're the second. Okay, a motion by Mr. Ward. A second by Mr. Kalra. Any other questions from committee members? Okay, would you like to close, Mr. Lee?

I think that adaptive reuse is one of those great potentials where we can use. These are opportunities of infill structures where we can reuse them, especially for those who are most in need. So this is one of the solutions out there we need to be prioritizing and respectfully ask your aye vote.

Appreciate your work in the space, Mr. Lee. And as a supporter of streamlining, particularly 100% affordable projects, proud to support the bill today. I know adaptive use isn't the panacea that we all want it to be, but it certainly is a part of the solution which we want to continue to support. So with that, I'm happy to support the bill. And the motion is do pass to the Assembly Committee on Local Gov.

[Roll Call]

That bill is out and we will let folks add on.

Thank you.

Thank you. And next we have Mr. Valencia, who will be presenting AB 648.

Buenos Dias, Madam Chair and Members. I want to start by thanking the Committee team for diligently working on AB 648. Additionally, I would also like to acknowledge our team's Legislative Director, Nathaly Teran, who's with us in the audience for her efforts on this bill as well, and I'd like to also state that I will be accepting the Committee amendments as described in the analysis. AB 648 will increase accessibility and participation in Homeowner Association meetings by allowing these meetings to take place by teleconference.

The bill does not mandate teleconference meetings, but rather creates an additional option for Members to participate through. AB 648 contains important safeguards that ensure advanced posting of meeting notices, clear instructions on how to participate, and technical assistance. The Covid Pandemic demonstrated that meetings can successfully take place remotely. In fact, associations report significant increases in participation when Members are able to participate remotely rather than in-person. Often, working individuals are those who are left out of participating because they are unable to be physically present.

All homeowners deserve a chance to participate in their community meetings and have their voices heard. With me this morning to testify is Ms. Kelly Zibell. She is a homeowner in an HOA and a community manager, and in addition to that, we have Mr. Louis Brown who was available for any technical questions.

Good morning, Chair and Members. My name is Kelly Zibell. I have lived in a Homeowners Association since 2016. I've served on its board since 2017, and I've managed communities for approximately 20 years. I'm here today to speak in support of AB 648. For many communities throughout California, holding meetings can be very costly. Sometimes there isn't a physical location for the homeowner and board members to meet and conduct business. This requires them to hold meetings by renting another space, adding to the cost of operating the Association.

In addition, homeowners must travel to another location for the meeting, adding to the burden of participating in the Association's business. Allowing the option to have meetings via tele or video conference provides a low cost option for both owners and board members to participate in their communities. In my experience, a larger and more diverse group of homeowners attend the board meetings, volunteer to serve on the board or a committee when there is an option to attend via electronic means.

Homeowners with mobility issues or those with family commitments at home find it easier to attend an electronic meeting than those held in person. We have seen more owners participating in meetings and volunteering for board or committee positions since increasing the usage of virtual meetings. Documents related to the meeting agenda items can be shared easily, also cutting down on printing costs for Associations. Associations have faced significant cost increases in recent years, particularly in the areas of utilities and insurance.

Expanding access to technology for Homeowners Associations will allow them to continue to serve their members and keep operating costs low. I strongly encourage you to pass this legislation as it allows me and many other owners the opportunity to continue to participate in the governance of our community. Thank you, and I'm available for questions.

Thank you.

Madam Chair and Members of the Committee, Louis Brown, today, on behalf of the Community Associations Institute--California Legislative Action Committee, cosponsor of the bill, and available to answer any technical questions that might come from the Committee. We ask for an aye vote.

Thank you. And other folks who'd like to express support?

Madam Chair and Members, Jennifer Wada, on behalf of the California Association of Community Managers, a cosponsor of the bill, in support.

Thank you. Any additional support in the room? Primary witnesses in opposition?

Good morning, Madam Chair and Members of the Committee. I'm Marjorie Murray, Center for California Homeowner Association Law. I want to express our concerns about the bill. Homeowner Associations have actually had the right for many years, since 2011, to hold teleconference meetings or video conference or meetings by phone. This was done through a Senate Housing Committee Bill in 2011. However, there was one condition attached to the statute, and that is that there be a physical location where one board director was present and where homeowners could assemble.

This physical location requirement got suspended during the pandemic for what is probably an obvious reason to you: that it was not a good idea for homeowners to congregate, thus increasing the risk of spreading the virus. Along with city councils and the Legislature itself, Homeowner Associations as governments were given specific permission to meet virtually, so meeting by Zoom or Google became the norm.

What has gotten glossed over, although it's mentioned in the analysis, is the fact that cell phone service and video conferencing is not available in two-thirds of California. Just talk to the supervisors and city councils in the 37 rural counties and mountain counties of California to get an idea of what that infrastructure is like. I mean, President Biden has designated hundreds of millions of dollars to try to correct what is called the Digital Divide. Some would say Digital Abyss.

In other words, the legislation is permitting something which is not technically feasible throughout California. So the goals set out in the fact sheet that homeowners be able to participate, it's a noble goal, but it is not one that necessarily can be implemented. To solve the problem of lack of participation and the failure of infrastructure, we have offered an amendment that board meetings be recorded and archived so that members, as well as board directors who are absent from meetings can access those records.

Furthermore, that those meeting records should be identified as Association records under Civil Code 5200 and legally accessible by both members and board directors. The author's office has our amendment, and we will continue to ask that it be incorporated into the bill. The fact sheet says the legislation will promote transparency in board operations. Again--

If you could wrap up?

Yes. Again, a noble aim. And preserving the meetings as Association records will make sure that transparency becomes a reality. So for the moment, we ask that this bill not be passed or be passed with the recommendation that these amendments be incorporated.

Thank you. Would you like to testify as well?

Yes. Thank you.

And if you could get close to the mic.

Good morning. My name is Mike Johnson. I'm a trial attorney. I've been doing pro bono work with Marjorie Murray's Center close to 30 years, I think. I first got involved when a Homeowner Association attempted to foreclose on a gentleman who owned his property outright because he was delinquent in dues to the total sum of about 1,000 dollars. Fortunately, we were able to stop that foreclosure and let him continue to live his life as short as it was at that point in time, peacefully, as it were.

My position here today is to argue that we should not legislate a loophole, so when we want a location incorporated into the bill, for people to still be able to show up in person, to participate in the election process. In other words, to watch the election supervisor, make sure there's a quorum, make sure that the role of the Homeowner Association has been established, and make sure the ballots are properly handled. There is a specific location in the legislation.

A specific location is called for in the legislation. It seems fairly simple to me. Boards meet, and where they meet, generally speaking, is either in a community association property or--as was previously testified to--a rental place. I don't see any reason why the legislation cannot require that the ballot counting process be done at that specific location where generally the board has had its meetings or that effect. To just say you need a location opens the door, as we all know, and legislation that's not specific--

And if you could wrap up?

Thank you. Legislation that's not specific, you turn it over to lawyers, and guess what we do with it? So with that, I endorse Marjorie Murray's comments relative to a no vote at this point in time or to continue working with the author's office on the amendments. Thank you.

Thank you. Any additional folks in the room who would like to register opposition? Okay. We'll bring it back to the Committee for questions or comments. Mr. Patterson.

Just real briefly, I support the bill. I do like the idea of adding some kind of recording mechanism to it. You know, most cities do that. But regardless, I think we can never get quorum and things like that, my HOA, so to the extent we can make it easier for them to conduct business is a good thing.

Any other questions or comments? Do we have a motion? Motion by Mr. Kalra; a second by Mr. Zbur. And with that, the motion is 'do pass as amended.' Would you like to close, Mr. Valencia?

Thank you, Madam Chair. My team and I are committed to continuing to have conversations with the opposition regarding their concerns, and with that, I really appreciate all of your time and ask for yes vote. Gracias.

Thank you very much, and appreciate your work in the space and taking the Committee amendments and appreciate your continued work with the opposition. With that, happy to support the bill today.

[Roll Call].

That has seven votes. It's out, and we will leave it open for folks to add on. Let's see. Thank you, Mr. Valencia.

Thank you.

And next we have Mr. Carrillo. I believe you are here presenting AB 1332.

Yes. Good morning. Thank you, Madam Chair and Committee Members, for allowing me to present Assembly Bill 1332. I want to start by thanking the community staff for their work on this bill. It is a better bill thanks to their efforts. As all of you know, California has failed to build anywhere near enough new housing units required to keep up with demand.

Over the past several years, the Legislature, thanks in part to many of you on this Committee, has agreed that accessory dwelling units should be a part of the solution, and the Legislature has passed laws that make permitting and authorizing ADUs easier. I strongly believe that making ADUs more accessible and more affordable should continue to be a cornerstone of our efforts to address the housing crisis. ADUs are infill. They are affordable, and they're often a critical stepping stone to the middle class families to build generational wealth.

Whether by providing an affordable option to family members and loved ones, or as a rental income, building and owning an ADU can be a life changing asset. One of the first barriers homeowners run into when considering an ADU is planning and designing the unit itself. This requires the homeowners to spend thousands of dollars to hire an architect or an engineer just to find out how much building the unit will cost. For many low and middle income homeowners, this is simply not an option.

AB 1332 will speed up the process and lower the cost of building ADUs by requiring local governments to keep a catalog of pre-approved ADU plans on their website. By having access to a catalog of pre-approved plans, homeowners will not only save time and money, it will provide much needed clarity to families that otherwise might think building an ADU on their property is too abstract and out of reach.

In my own personal experience as a city planner, I can tell you how frustrating it is being on the other side of the counter as a regular homeowner who wants to build an ADU and having to tell them that they need to hire an architect or an engineer, which is going to cost them at least $4,000, wait about a month at least to have that engineer architect present the plans, submit the plans to the Planning Department for review and approval, and then building and safety.

So it's also going to be saving time. Oftentimes it takes up to three months at least just to get an ADU approved. It is also my personal experience that it does build general wealth. I do have an ADU in my house. My daughter came out from college, she graduated and she decided to come back home. And she was able to live in the ADU for about three years where she was able to save some money, and she recently moved in December.

So that helps really our kids and in some cases our aging parents as well. We need to provide them a safe place to live because we recognize they're aging, they need assistance, and they also need privacy, and ADU will also allow them to have that. So with that, I have joining me to testify in support and answer questions is Luis Miramonte, vice president of public policy in the Bay Area Council.

Thank you.

Thank you, Assembly Member. Good morning, Madam Chair. My name is Luis Miramontes. I'm Vice President of Public Policy for the Bay Area Council. I'm also on the Board of the Casita Coalition, which represents an increasingly large ADU industry in California. As this Committee well knows, ADUs have been an important part of the state's affordable housing strategy and have increased from about 1,000 units in 2017 to about 20,000 units in 2022.

They now represent a five to $6 billion industry and create thousands of jobs in hundreds of communities across California. The Casita coalition recommends that local governments adopt a pre approved program, as this bill would establish and has a pre approval guidebook that I really appreciate the Assembly Member and the Committee using to help shape the bill. The pre approval process is an opportunity for homeowners to save money on architects, design contractors and consultants.

But pre approval ADUs is also an opportunity for local governments to shape what is built and accomplish their vision for their community aesthetic in a more forthright manner. ADUs provide an important source of affordable housing across California, as I've mentioned, and pre approved programs are successful in California today, in San Jose, in Los Angeles, and in Napa County, where actually 14 cities and two counties coordinate on the same pre approval program. This bill would require local governments to adopt a menu of options.

It would not require local governments to actually design the adus themselves. And so the members of the Casita Coalition could, any other builder in California, too, could submit to a city a plan for their consideration in their pre approval program that'll help speed up the process for builders and for homeowners who want to build an ADU. I also want to emphasize that these programs give a leg up to small, community based builders who have more intimate knowledge.

I hope the noise does not condition you against new construction. So these programs give a leg up to small, community based builders, just the type of people that I think we should be elevating in the construction space today. And I urge your support for this bill. Thank you.

Thank you. Do we have any other witnesses in support of the bill?

Good morning, Chair, Members. Brady Grant, on behalf of the California Building Officials. We're in a support, if amended position for now just to get some compliance mechanisms designed by HCD for pre approval program so that our smaller jurisdictions and those with less financial resources can comply with the law in that way. We appreciate the Committee staff, the author's office and the sponsors for working with us and look forward to those continued conversations. Thank you.

Thank you.

Good morning, Madam Chair, Members of the Committee. Jordan Panana Carbajal, on behalf of California YIMBY in support. Thank you.

Thank you. Any primary witnesses in opposition? Any additional folks in the room wish to register opposition? Okay, we'll bring it back to the Committee. Mr. Kalra and then Ms. Quirk-Silva.

Thank you, Madam Chair. And I want to thank the author for bringing this forward. This has been a movement, this whole ADU movement, and I think it's been a successful one for the state, but there are definitely still hurdles. As mentioned, San Jose, LA, some of these big cities already have processes, but I don't think it's fair if you just happen to live on the other side of a municipal line that all of a sudden your burdens increase dramatically.

There should be at least some level set of some expectations that folks can have, because as mentioned in an analysis, 10% of new construction now from 1% to 10% are ADUs. It's absolutely a part, it's one of the tools that we need, especially in existing neighborhoods. I don't think it's fair just for other neighborhoods to take on the entire burden of creating new housing stock. Existing neighborhoods, older neighborhoods that are already fully developed, should also take on some of the responsibility of increasing their housing stock.

And really, ADUs is practically the only way to do it in a meaningful way. And so I don't know if there's a motion. I'm happy to move the bill, and I'd love to be added on as a co-author, sir.

Great. Ms. Quirk-Silva.

I too want to thank the author, and I just want to start a little bumper car movement. I love ADUs. Now, why do I get excited? Why do I get excited? Because it's really the only thing to get excited about in California regarding housing, because we've had very limited production otherwise.

But there is, for the average homeowner who might be stepping into this if they even start the beginning phases of planning, the permitting, all of these steps can not only be costly, but as mentioned, delayed by waiting for planning commissions and so forth.

So I too want to be added as an author on this, but we have seen when there are shelf-ready plans available and consumer can choose plan A, B, or C that many times, not only do they do that, but that speeds up the process. And then it also doesn't require them to use those plans. So if they want to be extraordinarily creative, they can do that as well. So very good bill. And I move the bill.

Great. Any other questions or comments from Members? Would you like to close, Mr. Carrillo?

I just want to thank again. Again, I'm a believer of ADUs. I do have an ADUs in my house. My daughter lived in it for three years. She was able to save some money to move on her own. And again, our aging parents need a place to live where we can keep an eye on them. This also provides their own Independence. It's a win-win all around. General wealth, as you know, that's another good way to start the ADU process. So with that, I just close by respectfully ask for your aye vote. Thank you.

Great. Well, thank you, Mr. Carrillo. Really appreciate this bill. I agree with my colleagues. I think ADUs have been a real bright spot for us in housing policy over the last couple of years. Also, you're one of our newer Members, but have really demonstrated to be really a leader in the housing space. So excited about your future leadership and would love to be added as a co-author as well. So thank you for bringing this bill forward.

And with that, the motions do pass to the Assembly Committee on Local Government. Oh, there was a second, right? Yes. Yeah. Sharon. Okay. Ms. Quirk-Silva.

[Roll Call]

Thank you very much.

Great. And next, I believe we have Mr. Ting. Enjoy the construction sound while you testify.

I'll try to speak into the microphone.

It's very on brand for Housing Committee.

Yeah, it's sort of like it's how my head feels during June around budget time. First, let me just thank you, Madam Chair, for your Committee staff, thank the Committee staff. I know that we had a number of conversations over the last week on this bill and I think it's in a much stronger place.

I'm happy to accept the Committee amendments clarifying that local government can decide if they will allow ADUs to be separately conveyed limit to ensure that ADUs will be transacted as condominiums and not as other types of property. Also ensuring that the condo subdivisions consistent with the Subdivision Mapped Act and the Davis Sterling Act.

Also requiring that all liens in the property are satisfied or that all lien holders have provided consent to the recordation of the map to the county assessor and also required that the ADU go through a safety inspection before the recordation of condo map. As we had just talked about all the various positives about ADUs, we think taking the next step and allowing separate conveyance of ADUs is really a very positive step to even creating home ownership opportunities.

As we have talked about in the Committee, this is one of the only more affordable rental options. So by allowing them to be separately conveyed, they could be also some of the more affordable homeowner options. I really appreciate the discussions we've had with opposition. We feel that we're moving in a good direction and we'll be able to, as we go through the process, be able to come together and be able to satisfy their concerns.

And just so you all know, there's already many communities across the country that have allowed ADUs to be sold for homeowners, whether that's Austin, Texas, Portland, Oregon, Princeton, New Jersey, as well as British Columbia, California. I have Rafael Perez from the Casita Coalition, and then Luis Miramontes is going to stay here to answer any questions. So go to Mr. Perez.

Thank you. My name is Rafael Perez, Vice Chair of the Casita Coalition. I'd like to share an audacious idea with you. Imagine a California where a formerly undocumented father and teen mother could form a family and within 10 years, no college education, lots of overtime, could save enough money to buy a home in coastal California. That was my parents 30 years ago.

But as I look at my younger sister, who would love to bring her family back to California and buy a home anywhere in the area code we grew up in, there's nothing available for them. We are here today with a solution that gives people like my little sister hope. At a time when the least constructed type of home is the for sale starter home solutions are not easy or abundant.

A mentor once told me after I shared that I believe the solution to turn our economy around was in our backyards. He looked at me and said, if not you, then who? If not now, then when? That moment set me on a journey that led a realtor, college educator, and fair housing advocate to end up Vice Chair of the Casita Coalition with inflation impacts, the urgency of now is real home ownership is the best hedge against inflation.

Ask anybody with home equity and a low interest rate, ADUs have been the bright spot when it comes to solutions that are actually getting housing built. Condos have been a time tested tool to get people in the door to homeownership or downsize from larger homes. The ability to convert an ADU to a condo will give families the opportunity to create solutions in their backyard on both the front and back end of homeownership.

ADU condos will bring hope to so many people across our state that are sitting there pre-approved without a home they can actually buy. I have clients in that exact situation. Let's work together and let's not kick the can down the road for a better day. Please join me in supporting AB 1033 because people should have the opportunity to afford to live and own a home in the same area code as their parents, grown children, and other loved ones. Thank you.

Thank you.

Very briefly, Madam Chair. Luis Miramontes with Barrier Council. I just want to emphasize from Mr. Ting's point that ADUs are separately conveyed in several states across the country and are tremendous successes there. In Princeton, New Jersey, they sell for 30% to 50% below commensurate homes in the same neighborhood.

ADUs in Portland, Oregon sell for 40% to 60% below other homes in the same neighborhood, and almost all of them are affordable to two people earning 120% of area media meeting income. In Seattle, Washington, 40% of ADUs are sold below market rate. Here in California, ADUs are rented at rates that are traditionally affordable to low income people, according to research from the UC Berkeley Turner Center.

I hope that with this bill we'll be able to create a pipeline of middle class starter homes for Californians who otherwise would be locked out of the home ownership market. I also want to thank our supporters and our opponents for working with us on this bill, and I share Mr. Ting's optimism that we'll be able to work through all of the concerns on the bill. Thank you.

Thank you. Additional folks want to express support for the bill? Please name, organization, and position.

Madam Chair, Members. Norlyn Asprec on behalf of Meta in support. Thank you.

Holly Fraumeni de Jesús with Lighthouse Public Affairs on behalf of SPUR in support.

Mark Newberger, California State Association of Counties, in support.

Thank you. Any primary witnesses in opposition?

Madam Chair, Members of the Committee, Jennifer Speck on behalf of the California Association of Realtors, I'd first like to note CAR has been a leader in the advocacy efforts to shape the state's existing ADU laws.

While we continue to support the creation of entry level, affordable market rate housing ownership units, we must oppose AB 1033 unless it is amended to Institute appropriate safeguards which ensure homeownership is preserved, and that predatory ADU development, sales and lending practices likely to target unsuspecting seniors, nonenglish speakers, and our state's Low and moderate income homeowners are eliminated.

Never in my more than 20 year career could I have predicted that California would seek to eagerly model policies established in Texas cited by the sponsors as a core reason to support AB 1033. I think the Committee Members should be aware that Texas's planning and zoning requirements are solely controlled and defined by the local governments who define permit approval processes that are generally limiting adus to one per parcel and mandates lender approval before commencing construction of an ADU intended to be conveyed separately.

Texas provides no state oversight nor mandates local ordinances development and requires all units to meet new construction standards, which is a stark contrast to California's ADU law and the Bill before you today. It is important to note that the Texas model does resolve our concerns.

However, a complete evisceration of our state ADU law is not practical, as demonstrated by historic resistance by California's local governments in ADU construction prior to 2015, when the state mandated ADU permitting requirements AB 10303's placement in our state's buy right ADU development law permits ADUs to be constructed ministerially without complying with the state's well defined new construction standards and mandates, among other things, a recording of a lot split map before seeking a lien release from the lender.

This violates state and federal lendering laws and regulations. To be clear, AB 1033 provides no limitations, guardrails, or protections from predatory sales and lending practices. If enacted, AB 1033 will trigger a wave of foreclosures. Given a lender's only legal remedy is to foreclose to enforce their contractual rights and protect their lien. AB 1033 is a much broader complicated and is ripe with unintended consequences that are sure to damage homeowners and their families.

AB 1033, even as proposed to be amended, does not prohibit a broad array of ownership models which run afoul of land use lending requirements and have the potential to wreak havoc with homeowners loans and will force buyers into more expensive, higher interest rate portfolio loans, which require a 25% down payment. Finally, it cannot go without saying AB 1033 seeks to circumvent state law established in SB nine, which was enacted in 2021 just two years ago, to achieve the author and sponsor's objective to increase homeownership opportunities.

We would suggest that AB 1033 instead be amended to establish condo developments within the SB nine model, which already contains carefully negotiated guardrails.

With that said, the proposed amendments in the analysis create far more questions than they answer, and we look forward to continuing to work with the author and the Committee staff to work through and resolve our concerns while ensuring that the bill's goals to create additional homeownership opportunities for our state's working families is realized in a manner that does not jeopardize a family's housing stability and wealth generation opportunities. Thank you. Thank you. Any additional folks in opposition wish to register that?

Thank you Madam. Chair Members, Carlos Gutierrez, on behalf of the Community Associations Institute California Legislative Action Committee, we just have concerns in regards to how this is going to impact current homeowner associations and sub associations in terms of assessments. We are working with the author and we continue to do so. I'd also like to register opposition for California Land Title Association.

Thank you.

Jennifer Wada on behalf of the California Association of Community Managers in opposition also concerns for the impact on common interest developments.

Indira Mcdonald on behalf of the California Mortgage Bankers Association, also expressing concerns and opposed unless amended for the reasons previously stated.

Thank you. We will bring it back to the Committee. Any questions? Mr. Zbur? And then Mr. Kalra.

I had one question, and I was trying to figure this out as reading through. Does the Bill require local jurisdictions that allow ADUs to allow essentially this sort of lot split, or is that something that is discretionary that the local jurisdictions can elect if they choose to?

The Bill has it so that local jurisdictions would have to opt in.

Local jurisdictions would not automatically be opted in. They would have to take a proactive action to allow their city to.

Allow the ADU to be sold off separately. That's an important criterion for me, but thank you for clarifying that.

Mr. Kalra

Thank you, Madam Chair. And I think this is a good partner Bill from the last Bill we heard from Mr. Senator Korea in terms of expediting adus, but as you stated and your witnesses stated in San Jose, the medium home price, $1.3 million, this is an entry point that otherwise wouldn't be available at all. I know that there are some of the concerns that were raised.

I think are certainly legitimate in terms of how you figure out for sale and what have you when you're talking about just an ADU and someone's property. But I think, all in all, it's, again, one more tool to allow, in this case, wealth generation and property ownership for those that otherwise would not have any other opportunity to do so. And I'd love to be at it as co author and remove the Bill if there hasn't been a motion.

We have a motion by Mr. Kalra and Ms. Quirk-Silva.

Two questions for the author. One is, as you said, it would be up to the local jurisdiction, but it's also up to the single family owner.

Absolutely.

To split their lot, if you want to say it that way. But could you speak to the assessment part on, as with condominiums, there's a homeowner Association. How is that?

Great, I think. Great question. So I appreciate the point. Absolutely. This does not prescribe anything to the homeowner. It just gives the property owner greater opportunity to create value on their property, should they choose. As a former county assessor, it's quite a simple process. Whenever you do a lot split, there's a specific process of doing a reassessment as part of any property that gets subdivided, which is very common when you're doing a large development.

Or if you do a condo development, you have the condo maps, and then after you do the condo maps, you actually have to get an assessment for each of those subdivisions. So it's a very common practice that any county assessor would be able to easily do.

And then just one follow up question related to that. Is there a minimum, if you want to say lot size, that this applies.

The minimum lot sizes would be what's been previously prescribed in state law, so we don't address that. We're just giving property owners the opportunity that if they had built an ADU, if they wanted to do some separate conveyance, for whatever reason they have, whether it's to family members, whether it's on the open market, they just have that opportunity.

Thank you. Any other questions? Mr. Ward.

Thank you. I'm very excited for the Bill. I think it's a natural evolution of where we've been thinking about ADU policy and opportunities across the state. First, for the work that we've done as a Legislature to permit the opportunity for ADU constructions.

And now we're sort of naturally taking that step about for sale opportunity, allowing middle income families, lower income families, that first home, that first step for homeownership purposes, building their own wealth simultaneously, you're also offering that homeowner, the existing homeowner that's choosing to sell that off, the opportunity to sell their property, to establish, to recapture some of that equity and maybe go on to do other things as well with that.

Acquire more property or do a remodel or whatever they choose to do with that, send their kid to college. But getting this right is going to be important to dive into some of the technical details. And I know you're going to work closely with all stakeholders as well as this goes forward to be able to do that.

The only questions that I have today, just first, sort of broadly, why structure this Bill as something that is requiring cities and counties to update their ordinance as opposed to just allowing a state law to permit the sale?

I think it's a great question. I think it's sort of just given exactly what some of our other colleagues said, I think there's a little bit of hesitancy. I was here a couple of weeks ago, I forget whether it was last week or the week before around taking away the owner occupancy requirement on Adus. It's sort of like this is the first baby step. I think there's always been a significant amount of opposition at times from certain cities.

And so we thought this was just a good first step to.

Right, but the law is going to require a seat update or it's just another step that a local government is going to have to update staff time and everything that goes into that. I'm just wondering if there's a different direction to achieve the same end.

Potentially. Potentially. Again, we're taking the amendments, but potentially we could have opted for an opt out instead of an opt in. So that way, again. This is an opt in. But I guess we could have also said, hey, if you want to opt out, you can opt out. Okay.

Because the way I see it is.

That, but as the amendments are right now.

Okay, got it. And then help me understand. So by using a condominium type of a process, what is the purchaser actually getting for the equity? Are they getting the structure? Are they ending the land under it? Is a proportion of that land value still shared between the new owner and the previous or the existing owner, the one that sold that off?

Yeah, I have to go back and just kind of recollect. I mean, we're not touching on any of the current subdivision laws, so I forget exactly how that land legally is required to be subdivided. But you would have some interest in the land as well as in the.

So there's not shared land. Jennifer might know the witness.

Common interest developments, by nature share the land.

That's right. And so you're just getting the equity out of the structure.

In a way. So we've got a couple of issues that happen. One is, the question is what kind of liens are on the parcel, and if you have a first trustee. And what happens if you purchase the parcel and the liens now exceed the value of the remaining parcel or the remaining condo unit that gets a parcel number? You're now over encumbered. And if you seek the lienholder's release after you record a condo map, you basically ignored the rights of the lender.

And the lender has only one remedy, which is to foreclose.

Right.

The other problem is, with respect to condos, essentially, the landscaping and the exterior buildings become common areas. But that is an extremely complicated area. So where is parking? Where is your access point? How do you access the unit? Do you get access to shared yards? Who's getting the conveyance? Right? Is it the AdU developer that sells to anybody that's extraordinarily close to your home? You lose control, remember, because we're potentially removing the owner occupancy requirement.

That means that the owner no longer could be the individual that's making the termination. It could be developers, investor reits. And we all know that Blackstone owns a wide swath of properties throughout the State of California, and we're having issues with additional build to rent policies. So I'm not really sure how this all works out. And we're going to have a very deep and intellectual dialogue as this Bill moves forward in trying to figure out.

The right guardrails, because my oversimplified Sort of Alkamore I'd like to see this go, is the ability to really fully, truly subdivide that. And if I'm hearing the Bill does not apply to lot splits, it does not. And it would seem to me a little simpler in an outcome that we were able to actually say, this is your area. This is the area.

Yes.

You might need an easement for access, for driving, or for pedestrian access to that unit, because if one property, the existing property owner, foreclosed on that property, what does that mean for the legal issues or the financial issues of that new property owner? These are the technical things that I hope that I know that you'll work on. In addition, I've got concern about the federal interest or the federal loan provisions that I'm sure are solvable.

But I do want to see the outcome, and I know that you will get it there. So I want to thank you for that. I'm very happy to support the Bill today. I just wanted to raise these issues that I hope will be worked on as it goes through the process.

Sorry. You can currently do a lot split. This just creates a different option.

I know you currently can. I'm wondering under this, you can do.

That, you could do a lot split under this.

Right. Okay. But this only allows the for sale under condoization process. Okay. All things are possible.

They could layer a lot split with this.

Thank you.

Appreciate it.

Yeah.

To the extent that we were looking, when you're looking at for sale opportunities for the affordability questions for existing law, we're trying to make sure that it's being preserved for Low and middle income Californians. If there's for sale opportunities, that will allow us to be able to use a lot of the same language to guarantee that outcome as well. I think that would be something, an improvement to look forward to.

Yeah, absolutely. But I think the way I look at it is me and my family, we owned a duplex in San Francisco. We did what many San Francisco's did, and we did a lot split. We did a condo conversion. We did all of those items, which is already under California State law. So I think what we're trying to do is model something similar.

Obviously, we appreciate opposition for raising some legitimate issues that we're going to continue to work on to make sure that there is consistency with the law and with all these other items. But again, this is something that many property owners, including myself, have already done in the past. This is not something that is some sort know. We're not inventing the Internet. We're not sending someone to space.

This is something that we should be able to do in California. Ask Rafael to answer any technical questions.

To answer your question as to what's included. It's going to vary property to property. Right. So when a homeowner hires a consultant to come in and help them record that condo map, what's going to be included is going to be property specific. So some properties may accommodate dedicated yard space and dedicated parking and driveways. Other properties may have a wider range of shared space. And I believe the amendment does require notification of the lender and approval recordation of that with the assessor.

So really we're looking at the people who don't have a mortgage are going to be the primary people who are going to be able to really get these done, which is a third of the homes in this country. But what's included once again is going to be different site to site. Some may have a shared sewer line, for example. Those CCNRs, those HOA rules are going to accommodate for that shared expense, whereas others may have a different layout, a different amount of space included.

So it's going to be a wide range. It's going to be site-specific.

We have, I think, Mr. Zbur and then Mr. Patterson.

I just want to say I think some of the concerns that are being raised by the realtors are legitimate ones. It sounds like some of the amendments you already took addressed many of them and you're going to continue working on some of the others. Just one comment, I think, in response to the Assembly Members comments from San Diego. I think in LA, keeping the opt in is a really important part of allowing many folks that represent some of the LA districts to be able to support this.

So I just wanted to mention that.

Thank you.

Mr. Patterson.

Yeah, thanks. Well, first of all, I don't get quite as excited about adus as Assembly Member Quirk Silva, but I do get pretty excited about it. I understand where you're going with this and I like what you're trying to do here. In a past life, when I was younger, more hair, less kids, things like that, I still to this day have a broker's license and we did loans and things. And so I do think your witness is correct.

I think this is mostly going to be a tool for people without financing because it's going to be very complicated if people have financing, which is why I'm concerned is because I think with all the dicey things going on, it sort of just boggles my mind what the unintended consequences could be. I like that you're willing to work with the opposition. I like where you're going. I like that you still want to work on it.

I think right now I have some concerns to get there, but thanks a lot for trying to get there and hopefully by the time it gets to the floor, we're good. So thanks.

Any other questions? I believe we have a motion. Right.

I have Assembly Member cholera. Cholera.

And a second by Ms. Quirk-Silva. Great. Mr. Ting, would you like to close again?

Very much appreciate all the feedback and the comments with the stakeholders. I think we all want to get to the same place so that we're able to allow property owners to separately convey adus in a way that's safe and smart and that will provide social and financial benefit with that respect for you, for. I vote for AB 1033.

Thank you, Mr. Ting. And I know you and your staff have put a lot of work, especially the last four or five days, into the Bill in particular as we were preparing for the Committee. I have no doubt you as author can get this into a really good place, and I'm happy to support the Bill today and obviously a big supporter of adus. And thank you for your work, both now and in previous years in this space.

And with that, that the motion is do pass, as amended, to the Assembly Committee on Local Government. Weeks, aye.

Weeks, aye. Patterson. Not voting. Korea. Korea. Aye. Zbur. Zbur. Kalra. Aye. Cork. Silva.

Aye. But really.

[Roll Call].

Six to one; that bill is out.

Thank you very much.

And let folks add on. Thank you. Okay, next we have Ms. Boerner. I believe you are presenting two bills today: AB 589 and AB 812?

Yes. Which one do you want first?

Whichever you prefer.

812.

812.

Good morning, Madam Chair and Members. First, I'd like to thank your Committee staff for working with me on this bill. This is another Tasha B. Special, so I really appreciate all the work you and your staff have put into it. And AB 812 would allow a city, county, or a city and county to set aside up to ten percent of very low, low, or moderate income deed-restricted housing within a state or locally-designated cultural district for artists.

Artists are the lifeblood of our cultural communities and help preserve the cultural footprint of those regions. Last fall, I toured a number of cultural districts throughout the state, and we saw time and time again--Ben Allen and I went on this cultural arts district tour.

Several of you joined us at various places, and we saw time and time again, all these cultural districts are in some form of gentrification because when you get a culturally-designated cultural arts or state-designated or locally-designated cultural arts district, automatically, you start pricing out the artists who make that community special. It's very, very different than any other demographic because we're creating the gentrification through the designation, which the cultural arts district designation has an economic benefit, so you want to have that.

And so we've seen San Francisco has basically lost most of their artists related to their cultural arts district. Other places like Nevada cities are right on the cusp. San Pedro is a little far behind. Balboa and Barrio Logan, you know, probably Barrio Logan's experiencing it now. Oceanside's at different--probably two years out. So you're seeing a range of problems that are an externality from this designation, and that's what AB 812 is trying to solve.

Many cities and counties don't think they have the authority to set aside deed-restricted units for artists in cultural districts. AB 812 would provide local governments the flexibility necessary to set aside affordable units for low-income artists to help prevent further displacement of the artists that make these communities special. April is Arts, Culture, and Creativity Month, and it's imperative that we support and preserve the culture that has historically been present within our cultural communities. I respectfully ask for an aye vote. With me here today is Julie Baker from Californians for the Arts.

Thank you.

Good morning, Madam Chair and Committee Members. Julie Baker, CEO, California Arts Advocates. There's a clear need to increase access to affordable housing for artists, cultural workers, and arts organizations within cultural communities. Nationwide, artists are rent-burdened in 80 percent of cultural districts, pushing out the very core of a cultural district itself. In California, survey by the City of Berkeley in 2021 highlighted the need for affordable housing among artists and cultural workers who are experiencing displacement pressures due to increasing housing prices in cultural communities.

The survey revealed that while most working artists and cultural workers are highly educated, 60 percent have low, very low, or extremely low-income. 77 percent of respondents indicated they are rent-burdened, with 68 percent having different sources of part time work to make ends meet. While low-income is prevalent across a group of artists and cultural workers, the rate is disproportionately higher among Black, indigenous, and people of color respondents.

In fact, in the same year in Los Angeles, surveys found that 27 percent of respondents who identified as BIPOC, as the acronym goes, were more likely to experience food insecurity, housing instability, and increased debt compared to White respondents. Cultural districts are a tried and true way to increase economic vitality while strengthening the cultural fabric of communities. They promote cultural equity, boost tourism dollars, encourage more local visitors, increase property values, and generate more money for the region and state.

And if I can add, the cultural districts in Nevada County where I happen to live, which is a rural district, generates 46.9 million dollars in total economic activity per year, 25.7 million by organizations, 21.2 million in event-related spending by their audiences, supports 869 full time equivalent jobs, generates 20.9 million in household income to local residents, and delivers 5.1 million in local, state, and government revenue. So it is critical that we keep the people who create cultural districts in them.

Surveys across the state indicate the huge demand for affordable housing for artists. Keeping neighborhoods affordable to the cultural bearers in our local communities and avoiding the displacement of artists protects our cultural heritage, and it creates robust economic zones. Without them, the special culture of the place leaves with them, dispersed and diluted. A cultural district is no longer a cultural district if those people who made it cannot afford to live and work there themselves.

AB 812 will require that ten percent of affordable, deed-restricted housing in cultural district be reserved for artists. While this in no way matches the need, it is a crucial step in the right direction at no cost to taxpayers. This is an easy remedy for a big problem. We urge you to support AB 812. Thank you.

Thank you. Any additional folks who would like to express support?

Madam Chair and Members, Alex Torres, here today in my capacity as a Board Member for the California Capitol Venue Coalition, a unification of the brick-and-mortar independent venues and festival promoters in the Sacramento region, in support. Thank you.

Thank you. Any primary witnesses in opposition? Any additional witnesses in opposition? We'll bring it back to Committee. Mr. Ward then Ms. Carrillo.

Thank you. I'm very excited that you brought this bill forward, Assembly Member Boerner. We wanted to make sure that this was tailored in a way, just like we're looking for teachers or for other professions, that we're thinking about great middle-income Californians that make our community special. And I have one of the first cultural districts in my district, of course, Balboa Park, which doesn't have housing because it's a park. So I would maybe think as this bill goes forward, about even being more expansive.

It's surrounded by very dense neighborhoods, and so if this is something that can be permitted to be within one mile of a cultural district, that could be something to improve the sighting opportunities for affordable housing, and then wherein we could actually have more opportunities for these artists within reach of the cultural districts.

So for clarification, it allows any city or county that has a local or state-designated cultural arts district to set aside up to ten percent of its housing. So the City of San Diego, having both Barrio Logan and Balboa, could set aside any part of housing. There's no tie to the proximity to the cultural district, so you could go ahead and do that.

Okay. Good clarification. Thank you.

Ms. Carrillo and then Mr. Patterson.

Thank you. Thank you, Madam Chair, and I just want to commend the author and our primary witness for all of the work that they're doing for the arts. In Los Angeles, the Arts District has become massively gentrified, where you no longer see the artist community that once existed. They have been incredibly priced out.

This is a community where once abandoned warehouses created incredible arts and sculptures and just beautiful things in Los Angeles, and they are no longer able to afford to be in what is the arts community in the Arts District in Los Angeles. They're moving away to other communities. In my district, in the district of El Sereno, right, in the community of El Sereno, right behind Cal State LA, it's an old warehouse district also that is now--artists are coming into it because it's a bit more affordable than what the Arts District traditionally has been.

But it's caused massive displacement of culture and arts in Los Angeles. In addition to that, the Governor's proposal to eliminate 20 million dollars for new arts districts to be recognized across the State of California is also damaging to what could be really important art communities, especially as we exit out of a pandemic, we often talk about how the arts are so important.

Well, it doesn't matter if we don't have funding for them, right? We can talk about it, but if there's no funding and there's no opportunities and there's no legislation and there's no housing, we miss out on really supporting our artist community, which make our communities thrive and really are the identity to many communities across the State of California. I'm happy to support the bill, and would love to be a coauthor when the time is appropriate. Thank you.

Thank you, Ms. Carrillo.

Thank you. And Mr. Patterson.

Thank you very much. I've said in this Committee before that my mother lives in a senior-affordable apartment unit in Napa where she's a waitress to this day and she works at basically kind of the local diner, I guess you could say. And paying for that really wouldn't be possible unless it was affordable. I mean, she couldn't afford housing on her own with what she makes. But that's why, honestly, I really struggle with this one.

And I understand what you're doing for your district and things like that, but somebody like my mom isn't going to qualify for an artist. She isn't going to qualify for a firefighter or a teacher, and so the more units that come offline for somebody like my mom, that just makes it more difficult for her. So I'm respectfully going to oppose this bill.

And I know you're trying to get me to support one bill someday, but just from my experience, this is why I have concerns with this one. But I do appreciate you representing your district and what you're trying to do, but I do have concerns with it. Thank you.

I actually don't represent a cultural arts district. This was done as something as capacity as my Chair of Arts Entertainment last year, and we saw the need up and down state. It didn't matter if it was rural or urban. It didn't matter where it was, Republican or Democrat. Cultural arts districts, local or state, have an externality that displaces the people who create the special space and that undermines the economic development potential of those areas.

So this is only for areas that have--like Napa doesn't have--Marin has it, but Napa doesn't have a local or state-designated cultural arts district, so your mother wouldn't be affected. This is only for the places that have this specific economic externality of having something that's so amazing and great art comes out of great struggle. And we have all struggled so much over the last couple of years that I think it's really important.

And I'm glad we have our Budget Sub Four Chair here who is advocating for the arts because channeling all of that struggle into great art will create great economic development in our state. But we have to keep the people who create that and give them a place to be or we're undermining our own economic potential. But I respectfully ask that--I understand, and I'm sure there's another TB Tasha Boerner Special that you can support one day, Mr. Patterson.

Thank you. Ms. Quirk-Silva.

As the current arts and Chair in entertainment, tourism, sports, I do support this bill. I do have some questions on--you said ten percent of the units to be affordable for artists. What would be the criteria, I guess?

Because even though we all know of and have seen very young working artists that are at a very low-income because we know that when you go into the arts, you're not making--unless you're Hollywood or selling paintings at major exhibits, you're probably not having high-income. But I guess one of my things is, who is going to get into these units, how long would they stay, and is there a criteria for their income to be considered? Being an artist is one, but what would be other criteria?

So there are two criteria. One--and we put in the bill specifically two criteria. One: that they meet the income level of whatever the deed-restricted level is. So there's very low, low, and moderate included in the bill. So that determines the AMI--and that's determined by AMI--and the other thing is a yearly checking of that income and a yearly checking of their status as working as a cultural or artist--or artist or cultural worker.

And that is because you could see people, you want to keep the pipeline of creativity coming through. So once you have artists that are living there and they're successful, they should move on, and you should create space for something else. And that's the yearly checking. And what the bill does is it creates the possibility and creates the clarity in law that a city or county can do this. It doesn't require any city or county to do that.

They would have to pass a local ordinance, and they would have to come up with their local process to do a yearly income and artist working verification process. And each city could do that themselves.

That clarifies, gives a lot more confidence because, as you know, there's a huge amount of, if you want to say, competition for these very slim amount of inventory related to affordable units. So making sure there's processes to check in, making sure that they indeed still qualify--and again, we also are hoping for them that they graduate out of that so somebody else can come in to the units that really are in that place. But I'm not sure if the bill was moved. I move the bill.

I think we have a motion and a second.

So the one thing I would say is we say up to ten percent, so depending on the need in a city or county, or city and county, they can set it at the appropriate level. And depending on the need that they see outside, you're going to have some places like maybe Nevada City, like Truckee, that might go up to that ten percent level because that is one of their big economic drivers and they need to have that.

You might see a place like Oceanside go at like, five percent because they're not there yet. What they're trying to do is prevent the gentrification, so they might choose to do something else. But the bill doesn't dictate that. We just put a ceiling at ten percent so cities and counties can determine within their own local needs what that would be, and that does keep a large degree of the housing stock available for other types of workers.

We didn't want to really go too far and say 50 percent or whatever because you can see that that could cause negative externalities with something else, which you don't want to do.

Thank you. Any other questions? We have a motion. A second. Ms. Boerner, would you like to close?

Respectfully ask for an aye vote.

Great. Thank you and happy to support the bill today. I appreciate your work on it, and I know you did the tour recently, which was probably pretty illuminating. I know we see some of these challenges in my district as well. The amendment is: 'do pass the Assembly Committee on Arts, Entertainment, Sports and Tourism.'

[Roll Call].

That is six to two; the bill is out.

The bill is out. And next you have AB 589.

Thank you so much, Madam Chair, Members. First, I'd like to accept the Committee amendments and would like to thank your staff for her work on this bill. AB 589 would, upon appropriation by the Legislature, establish a five year pilot project of the Unicorn Homes Transitional housing for the homeless LGBTQ youth program in the counties of San Diego, Los Angeles, and Sacramento.

LGBTQ centers within each county would administer the program, providing crisis intervention with a traumainformed approach to house eligible youth and LGBTQ affirming host homes. In 2020, the US Department of Housing and Urban Development, HUD, reported that there are over 12,000 youth experience homelessness in California, accounting for 36% of the national homeless youth population. People who identify as LGBTQ and are experiencing homelessness have greater difficulty finding shelters that accept and respect them.

Oftentimes, the LGBTQ community is at greater risk of assault, trauma, and early death compared to their heterosexual peers. Transgender people are particularly at risk due to the lack of acceptance and are regularly turned away from shelters. Addressing the housing crisis is a key priority for the state, but there are no state housing programs targeted directly at LGBTQ youth experiencing homelessness.

Unicorn Homes is a program within the North County LGBTQ Resource Center that aims to provide crisis intervention and transitional housing to LGBTQ youth who are experiencing homelessness due to family rejection, with an ultimate goal to reunite families when possible. Many times, North County LGBTQ Center is the first contact for LGBTQ youth who are experiencing homelessness in North County San Diego.

Having staff who identifies LGBTQ creates a safe space and allows for service delivery with trauma informed approach for LGBTQ youth during this vulnerable time. Due to the resource constraints, the Unicorn Homes program is a volunteer only program that allows host families to open up their homes for LGBTQ youth experiencing homelessness. Similar programs called Host Homes exist in downtown San Diego LGBTQ Community Center, LA LGBT Center, the Sacramento LGBT Community Center that help house LGBTQ youth experiencing homelessness in LGBTQ affirming homes.

The downtown San Diego and LA programs provide some type of financial support to the host family to offset the costs associated with youth staying in their home, critical to making host homes sustainable over time. Unfortunately, due to challenges attributed to the pandemic, the host homes program at the Sacramento LGBT Center had to end its operations a few months ago. They made the difficult decision to divert the funds from the host homes program to continue operating their youth shelter.

Young LGBTQ adults want to be accepted and seen as holistic and valuable human beings with multidimensional identities and stories of both struggle and resilience. Establishing a Unicorn Homes pilot project would not only provide stable housing for LGBTQ youth experiencing homelessness, it'll also provide a path to mental health resources, job readiness, and independent living skills through LGBTQ centers. The Unicorn Homes program does not require the development of a new built infrastructure, making a low cost, flexible, and valuable stepping stone while youth wait for more permanent solutions. I respectfully ask for an aye vote and I have with me here today Craig Pulsipher. Did I get that right? Legislative Director with Equality California. Thank you.

Good morning. Craig Pulsipher on behalf of Equality California very proud to be here today in support of AB 589. According to data from the Trevor Project, nearly a third of LGBTQ youth reported experiencing homelessness or housing instability at some point in their lives, and these rates are even higher among Trans and nonbinary youth and LGBTQ youth of color.

Many of these youth have been disowned by their families or escaping emotional and physical abuse because of their sexual orientation or gender identity, but family rejection is certainly not the only cause. Aging out of the foster care system, poverty and shortages of shelters and housing programs can also leave many of these youth with nowhere to go. LGBTQ youth who experience homelessness experience higher rates of mental health issues, including depression, PTSD, and suicide.

They are also at even greater risk of violence, trafficking, and further emotional or physical abuse in shelters or on the streets. Low barrier housing programs are desperately needed to support LGBTQ youth across this state, especially those that are welcoming, affirming, and include access to other support services. Several LGBT centers across the state, including in San Diego and LA, currently have programs that provide transitional housing and support services for LGBTQ youth, and AB 589 would help to build on and evaluate these existing programs.

The five year pilot would provide funding to LGBTQ community based organizations to help identify and train volunteer families who could provide youth with a safe and affirming place to stay. The program would help to promote housing stability for LGBTQ youth, with an ultimate goal of reuniting them with their families whenever possible. Over the past several years, the Legislature has rightly made homelessness one of its top priorities. Yet programs to address the specific needs of LGBTQ youth remain far too limited. AB 589 is an important step to help address the unique challenges facing these vulnerable youth, and I respectfully urge your aye vote.

Thank you. Are there any primary witnesses to testify today? I'm sorry, Craig. Are there any other statements in support of AB 589? Okay. And we have no opposition witnesses. Any members of the public here in opposition to AB 859? Seeing no one. We'll bring it back to Committee. Mr. Zbur.

I have to leave it shortly, but I was staying because I love this bill. I know my colleague from Orange County has told me about it a number of times. I think it's really important for all the reasons that Craig and you indicated. One of the things that has been a huge priority in the LGBTQ community is really sort of breaking this cycle of homelessness, breaking a cycle of all the disparities that the LGBTQ community faces in health and well being.

And we know what's sort of happening. We've got either kids being bullied in schools or we have family situations that are not supportive. And basically these kids--I didn't realize that the statistic is now up to a third. It wasn't that high when I was at Equality California, but that a third of LGBTQ youth are now facing homelessness. And this is the kind of program that's tailored to LGBTQ youth.

One of the problems with sort of the standard programs related to homelessness and housing is that often they're hostile. They're run by religious organizations that are hostile to LGBTQ youth. So just wanted to, if I could vote for this 10 times, I would do that. I just want to thank the author. I want to thank Equality California. I have to leave to go to something else, but when I come back, I'll be voting as many times as they permit me to.

One person, one vote.

Thank you, Mr. Zbur. And I'm from San Diego, not Orange County, but I really appreciate it. And when we look at this program, we look at the impact. It's just so important. And this is another Tasha B. Special, so I respectfully ask for your aye vote. Oh, I didn't do closing. Sorry. Maybe other people want to speak, so.

That's right. Was there any further comments? Okay, seeing none. I'd like to add comments on my own. This is really timely. Just last weekend in Hillcrest, we had a chance to open up the Hillcrest Youth Center. And while that's a day youth center for drop in for a lot of important conversations and social services that our San Diego LGBT center can provide, one of the subjects that comes up, of course, is housing opportunities.

And we particularly know, and I'll underscore what we already know as the Vice Chair of the LGBTQ caucus here, the legislative caucus, that the incidence that we see of youth that are at risk or are homeless is disproportionately high and is unacceptable. We have a transitional facility in East Village now in your district, and it's Sunburst. It's a wonderful facility, really one of the first groundbreaking ones of its kind in the entire state, largely privately funded.

And so we can use this kind of a program, I think, to build on those kinds of models. And I appreciate you're incorporating housing first elements as well into this kind of a program. I don't want to forget the other end of the age spectrum as well.

Being able to figure out affordable housing solutions for our seniors, our LGBT seniors as well, that don't often have family support systems to be able to support them is something that we have helped champion. Los Angeles has now been championing. So we have to work on both sides, I think of the age spectrum here, and I'm really grateful that you're doing that here through this bill here today. With that, I'll turn it back over to the chair for closing comments.

Thank you. And would you like to close?

I accidentally might close earlier, but I respectfully ask for an aye vote.

I'm sorry I missed that. No, I'm sure it was brilliant. Well, I want to thank you for bringing this bill and for working with my staff as well and taking the amendment to clarify that this program must comply with housing first. Our state is a housing first model because we believe in evidence based policy making. So with that, I'm happy to support the bill. It's do pass to the Assembly Committee on Human Services.

[Roll Call]

There's four votes. We'll leave that on call for folks to add on. Thank you, Boerner. And next we have Mr. Jones-Sawyer and I believe Mr. Jones-Sawyer, you have two bills, AB 86 and AB 1734.

City of LA is here and I would like to do 1734 first.

Great. And please, speaking to the mic because the construction is a little loud.

Okay.

Thank you.

I know what it's like to have construction. Wow, I emptied the room. Okay. Chair and Members, I would like to start by accepting the Committee's amendments. I present AB 1734, which amends the Surplus Land Act to enable local government agencies to dispose of publicly owned properties to develop much needed emergency and supportive housing. Members, as we all know, California has the nation's largest unhoused population, yet only a fraction of the needed affordable housing is constructed.

Like most of the state, the City of Los Angeles is experiencing a housing crisis. In 2019, LA had a higher percentage of cost burdened renter households than any other major American city, nearly 60%. Just last year, there was nearly 24,000 unhoused individuals in Los Angeles alone. Since assuming office, Mayor Karen Bass has taken critical steps to address homelessness and expedite affordable housing production.

Under her leadership, the City of Los Angeles declared a local State of Emergency on homelessness and moved to streamline approvals for 100% affordable housing projects, as well as maximizing the use of city owned properties for temporary and permanent housing. Unfortunately, the Surplus Land Act has proven to be a barrier to utilizing publicly owned property for homeless relief.

Despite current law providing some exemptions for affordable housing projects, negotiating deals that meet SLA requirements offer prolonged the process in the City of Los Angeles, the projects rarely come to fruition. As such, AB 1734 amends the SLA to allow pro housing jurisdictions that declare a local emergency on homelessness and are compliant with state housing law more quickly dispose of publicly owned land to develop emergency shelters and transitional support of or affordable housing.

Under this bill, local agencies who meet the criteria could dispose of surplus land for these purposes in less than six months, half the time it can take today. Ultimately, AB 1734 will empower good actors like the City of Los Angeles, who seek to address the housing crisis, with tools to expedite affordable housing production. With me to speak in support of this Bill is Jenna Hornstock, Deputy Mayor of Housing for the City of Los Angeles Mayor Karen Bass.

Thank you.

Hi. Good morning, Madam Chair and Members. I heard a move in approval. Should I still provide my testimony?

Yes.

Okay, great. My name is Jenna Hornstock, and I'm the Deputy Mayor of Housing for Los Angeles Mayor Karen Bass. She's the sponsor of this legislation. We all know that the State of California is facing a housing and homelessness crisis, and nowhere is this crisis more apparent than the City of Los Angeles.

The City of Los Angeles represents almost 10% of the state's population, but nearly 25% of the state's unhoused population. Mayor Bass has made confronting this crisis with the urgency it requires her top priority. On day one, the mayor declared a State of emergency on homelessness, and the weeks that followed, the mayor issued three executive directives. The first executive directive streamlined approvals for 100% affordable housing and temporary housing projects. The second launched Inside Safe.

Our new citywide proactive housing led strategy to bring people inside from tents and encampments, which I'm pleased to say has already brought inside 1,100 people. Actually, more. And our third executive directive maximizes the use of city-owned property for temporary and permanent housing. That final executive directive is the impetus for the bill before you today.

The directive requires that the mayor be provided with an inventory of unused and underutilized city property that could be used for temporary or permanent housing that a formal assessment of each site follow. That based on the assessment, the mayor's office designates what type of housing should be built on which locations the city departments prioritize temporary and permanent housing and eliminate unnecessary reviews, paperwork, and red tape to save lives, restore our neighborhoods and house Angelinos immediately.

We must urgently prioritize underutilized existing city owned property. In order to maximize the efficacy of this directive and ensure the City of Los Angeles can act with urgency to meet the moment we must amend the Surplus Land Act. The Surplus Land Act was designed to promote an increase in the supply of affordable housing. Unfortunately, implementation of the SLA in some circumstances has proven to be an impediment to utilizing city owned property to address homelessness.

First, before a local government can transfer ownership of surplus property, it must offer the property to certain other government agencies and a list of qualified affordable housing developers. Also, before a property can be transferred, even if the city determines the property exempt from the SLA, the transaction must be reviewed by the state's Department of Housing and Community Development. This process is staff intensive and very time consuming.

Finally, the current law does not permit the use of surplus property for interim housing, which is desperately needed to get people stabilized off the streets and on a pathway into permanent housing. AB 1734 enables pro-housing jurisdictions that have a compliant housing element and have declared a local emergency related to homelessness to dispose of land for the purposes of developing interim housing, supportive housing, and 100% affordable housing without adhering to the requirements of the Surplus Land Act.

This legislation will give recognized good actor local governments additional tools to address housing and homelessness crisis. Like the emergency that it is, it allows us to act with more efficiency and urgency. And importantly, it is consistent with the spirit of the Surplus Land Act. In a year where additional state investments in housing and homelessness will be hard to come by, this legislation offers an opportunity to meaningfully address California's homelessness crisis with no additional cost to the state.

We appreciate the Committee staff's assistance to ensure appropriate accountability and oversight provisions are incorporated into the bill. Finally, we thank Assembly Member Jones-Sawyer for authoring this important legislation and strongly urge your aye vote. Thank you.

Thank you. Any other folks want to express support? Any primary witnesses in opposition? Any additional folks in opposition? Okay, we'll bring it back here to Committee. Any questions? We have a motion, and we have a second. Great. Would you like to close?

I respectfully ask for your aye vote.

Great. Well, appreciate the bill. Big fan of the new mayor and excited about her leadership. And with that, the motion is do pass as amended to the Assembly Committee on Local Government.

[Roll Call]

That is on call.

Thank you.

And we will go to your next bill, AB 86.

Thank you. First, Chair, Members, I would like to start by accepting the Committee's amendments. I present AB 86, which will strengthen California's response to homelessness by establishing a statewide homelessness coordinator as the lead entity for ending homelessness in California. Today, over 170,000 individuals experience homelessness in California, a roughly 6% increase since 2012, I mean since 2020. The state has invested billions of dollars to assist local governments and support housing programs that shelter unhoused individuals.

Yet we continue to have the nation's largest homeless population. In part to the state's disjointed approach to addressing homelessness, in 2017, the California Interagency Council on Homelessness, formerly known as the Homelessness Coordinating and Financing Council, was established to coordinate funding and build partnerships with stakeholders to develop strategies to end homelessness. The council is one of many agencies that receive information on homelessness in the state. However, with no real one person in charge to ensure true accountability, we continue to be disconnected.

Given the magnitude of the crisis in California and the amount of funding invested, we truly need the system in place to tackle homelessness at both the state and local levels to be consistent and effective. That is why I have introduced AB 86. This bill will ensure intergovernmental coordination to end homelessness by requiring the governor to appoint a statewide homelessness coordinator.

The coordinator will oversee homelessness programs, data, services, and policies between federal, state, and local agencies, as well as coordinate the timing of the release of state funds and funding applications for housing and housing based services. AB 86 allows the coordinator flexibility to identify a local leader and the appropriate jurisdiction to serve as a liaison to the state. Lastly, in collaboration with local leaders, the coordinator will provide annual recommendations to the Legislature and the governor.

This bill is about putting a person in charge that people can look for guidance, not about creating a new bureaucracy. Members, homelessness is an issue that impacts every corner of the state. We must ensure a coordinated approach to addressing this crisis, and AB 86 will help us get us there. Thank you. And I respectfully ask for an aye vote.

Thank you. Do you have any primary witnesses in support?

No, I'm the primary witness.

Great. Any additional witnesses wish to express support?

Madam Chair, Members, Rand Martin, on behalf of the AIDS Healthcare Foundation, in support of this bill. Thank you.

Alyssa Silhi on behalf of the City of Redwood City, also in support.

Any witnesses? Primary witnesses in opposition? Any additional witnesses in opposition? Okay, we will bring it back to the Committee. Mr. Ward.

No, I appreciate, certainly, as we've been trying to over the years, really fine tune responsibilities and streamline decision making. Coordinated decision making around homelessness has been where we absolutely wanted to get to go. And the advancement that we had last cycle, as you'd mentioned, to be able to create the Interagency Council on Homelessness is another great step forward as well. And I'm just kind of curious if you've thought through, this is ultimately the governor. You asked who's really responsible?

We want to make sure that our governor is successful in reducing homelessness in this state. Through that, we have BCSH, and we've got the health and human services that co-chair this. But largely the administrative functions are empowered through BCSH, and there's a deputy secretary of homelessness. How would a statewide coordinator then, how would the delineation between those roles exist?

We were deliberate using the word coordinator. Part of the problem is we have all these entities, and I will always say we have enough resources, we have enough money, we have enough programs, but no one's really talking about how you mesh them all together. A lot of times when you deal with corporations with government, you got to have one person in charge, the governor, you got to have a mayor in charge.

You got to have one person that is ultimately responsible, but most important, someone that is accountable. And I don't think any of these entities will ultimately be accountable for doing that. And so, as I talked to the governor, accountability was a really important factor in that. And this will one help him be able to pull all this together. And ultimately we can go back to that one person, that one entity, to talk about how we can bring that all together.

Fantastic. I wouldn't want to see something that was duplicative and where we're having now somebody else, that we're stepping on the jurisdiction of somebody else's toes. We want that coordination. We want that accountability. As you were referencing. Probably a better question for the governor then, to continue to work with your office and make sure this is helpful and collaborative as opposed to the opposite. But I'm happy to move this bill forward towards closer to him so he can work with you to make that decision.

And again, I was very deliberate. We went through a lot of different terms, like czar, director, manager, coordinator. Just seemed to be the best fit for what, ultimately, I'm looking for.

Great. We have a motion. And do we have a second? A second by Mr. Kalra. Would you like to close? Were there any other comments? No. Oh, sorry.

Now I missed most of the discussion.

Great. Would you like to close, Mr. Jones-Sawyer?

Respectfully, ask for your aye vote.

Well, thank you. Happy to support the bill today. And thank you for taking the Committee amendments. I know this is a plexing issue that we are all trying to deal with. I wish that it's do pass as amended to the Assembly Committee on Appropriations.

[Roll Call]

That bill is on call.

Thank you very much.

Thank you. And, yes, he did two bills. Yes. With that, we have. Ms. Pellerin, I believe you are presenting 1334. AB 1334.3

So thank you, chair and Members, I'll start by accepting the Committee amendments. Mobile home parks provide hundreds of thousands of housing units in California, often at more affordable prices than other options. Because manufactured homes are less expensive and faster to construct than traditional site built houses, they can be a key component of addressing our housing crisis.

However, in some areas, local permitting processes and excessive fees charged for adding spaces in existing mobile home parks, which can reach the tens of thousands of dollars per space being added, make the addition of mobile homes cost prohibitive. AB 1334 allows California's existing mobile home parks to apply to local government agencies to increase their spaces by up to 10% for single family and duplex multifamily manufactured homes.

This bill also incentivizes an increase in mobile home spaces by exempting added spaces from additional business taxes and local fees. Safeguards in the bill ensure that additional spaces do not substantially impact the provision of water, sewage, electrical, gas, and other utility services within the park. Additionally, the Committee amendments today will ensure that poorly maintained mobile home parks with noted health and safety violations cannot expand their parks under this bill before addressing those violations.

By enabling these modest extensions, AB 1334 will provide housing that is more affordable to many more Californians. With me to testify in support today is Jeff Neal, representing the California Manufactured Housing Institute.

Thank you, Jeff Neal, representing the California Manufactured Housing Institute. I want to thank the Committee for their thoughtful engagement on this bill. Obviously, California is in a housing crisis, and manufactured housing is an important piece of California's housing picture. This bill will help remove the disincentive to add additional housing spaces in existing parks. As assembly Member Pellerin said, the fees in some areas can reach tens of thousands, $40,000 per space that an existing park wants to add.

So this bill is similar to some of the recent ADU streamlining that the Legislature has undertaken on existing residential already developed parcels, just adding a modest number of new units and we think this Bill is part of an all of the above approaches to California's housing crisis. We request your aye vote.

great. Any other folks want to express support?

Good morning, Madam Chair Members. Chris Wysocki with WMA, and I'm proud to say that this is the second bill we're supporting.

Great.

We want to thank the author. We think it's a very good start to creating more mobile home spaces in California and we asked for an aye vote.

Great. Thank you. Any additional support.

Madam Chair. Members of the Committee. Jordan Perana Carvahad. On behalf of California YIMBY in support.

Thank you. And any additional primary witnesses in opposition? Any additional folks in the room? No. Okay. We'll bring it back here to the Committee. Any questions? We have a motion by Mr. Ward, a second by Mr. Cholera. Any questions? Comments? Would you like to close?

I respectfully ask for your aye vote.

Great. Well, I appreciate you bringing this Bill forward. As someone who grew up in a mobile home park, I understand the tool it can provide for combating our very expensive housing costs here in California. So with that, I'm happy to support the Bill. It is do passed as amended to the Assembly Committee on appropriations. [Roll Call]

Yeah. Great. And, Ms. Carrillo, thank you. You are presenting AB 1617.

My goodness. We have a motion and a second. Is my witness here?

Thank you, Madam Chair and Members. I'd like to begin by accepting the Committee amendments and thank you to your Committee staff for their hard work on the analysis. I am proud to present AB 1607 which is a follow up legislation, to SB 679, which I was a principal co-author on from last year, which established the Los Angeles County Affordable Housing Solutions Agency, otherwise known as LACAHSA.

Housing for low income people across Los Angeles County is severely overcrowded, racially segregated, and often not linked to high quality resources like transit, jobs, schools and parks. As a result, 79% of extremely low income households in LA County are paying more than half of their income on housing costs, compared to just 3% of moderate income households. LACAHSA was created for the purpose of addressing this housing crisis by facilitating the prevention and construction of affordable housing across Los Angeles County.

The agency was also given the authority to acquire land for affordable housing. AB 1607 expedites the construction of affordable housing in LA County by exempting land transfer to, purchased by, or leased by LACAHSA for the construction of affordable housing for use consistent with the Surplus Land Act, SLA. It also clarifies the selection process for choosing the eligible small city representatives to the 21 membered board of directors.

AB 1607 will further the goals and mission of LACAHSA of construction and preservation and preserving affordable housing in the region. This is a regional Bill that we're hoping to move forward today. I'll let my witness introduce herself. Thank you.

Thank you.

Hi. Holly Fraumeni de Jesús with Lighthouse Public Affairs, here today on behalf of the United Way Greater Los Angeles, the sponsor of SB 679 and just here for technical support. And we urge your aye vote.

Great, thank you. Additional folks wish to express support? Any primary witnesses in opposition? Any additional opposition? Bringing it back to the Committee. Any questions? We have, I think a motion, right? Yeah, motion and a second. With that, would you like to close?

It's a super amazing, awesome bill. Respectfully request an aye vote

Well on that note, happy to support it. The motion is due passed as amended, the Assembly Committee on Local Government.

[Roll call]

That bill is out. Thank you. And with that.

Okay, so we're moving swiftly along here. We'll do vote change at the end, is that okay? Or unless you have to leave? Okay. We'll do entertain a vote change for AB 86. Jones-Sawyer.

That's item number one. [Roll Call]

Great. Now we'll go to Ms. Quirk-Silva.

We are going to be speed racers here. All right, we are back today, Members and Madam Chair, to present AB 346. This bill was a bill we moved forward last year, but we are very hopeful this year. With the governor's approval of AB 101 of 2019, the state budget has increased its investment in the Low income housing tax credit program by $500 million per year.

AB 346 provides a bigger bang for the buck and helps maximize our production of affordable homes by allowing the tax credit allocation committee to pair these state tax credits with either 4% or 9% federal credits as conditions best dictate. I'm going to limit my remarks as we have an expert witness here, and he will be providing testimony and answer any questions we have today. With us, Mr. Mark Stivers, Director of Legislative and Regulatory Advocacy with the California Housing Partnership.

Thank you. Assembly Member Mark Stivers with the California Housing Partnership. And we are consistently looking for ways to reduce the cost of developing affordable housing, for getting a bigger bang for the state's buck, and for just being more efficient with the state housing programs generally. That's especially important this year when we are facing budget deficits. This bill has four separate tweaks to the Low income Housing Tax Credit Program that achieve each of those goals.

So I'm here happy to answer any questions that you have, and we look forward to your support.

Marina Wiant with the California Housing Consortium and support. Thank you.

Thank you. Any additional folks, express support.

Hello. Connie Chan. On behalf of the state treasurer's office, no formal position today, but we appreciate this author and her staff for working with us towards the support. Thank you.

Thank you. Any additional or any primary witnesses in opposition? Any additional witnesses in opposition? Great. Any bringing back to the Committee any questions for the Committee? And do we have a motion? We have a motion and a second. Great. With that, Ms. Quirk-Silva, would you like to close?

Just would respectfully ask for an aye vote.

Great. And with that, happy to support the Bill. The motion is due passed. Assembly Committee on Revenue and Taxation weeks aye.

[roll call]

[roll call]

[roll call]

That has six votes. It is out. And your next bill, AB 468.

Yes, thank you, Madam Chair and colleagues. Today I present Assembly Bill 468, which extends existing inspections and code enforcement to buildings used for human habitation regardless of zoning, and improves tenant protections when buildings are deemed unsafe. California State housing laws are some of the most comprehensive in the nation, establishing health and safety protections through building standards to assure decent, safe, and sanitary housing for all.

However, the reality is individuals and families who are unable to find affordable housing are taking up shelter in buildings that have not been zoned residential. This has enhanced a problem where both warehouses and factory spaces are being converted to residential use without the knowledge of local officials and without being habitable.

As we know, in December 2016, a deadly fire at a two story warehouse in Oakland known as the Ghost Ship killed 36 people, the highest death toll for a structural fire in the United States in over a decade. The Ghost Ship was a warehouse that was illegally being leased to artists who lived and worked in the building and periodically using it for events. Unfortunately, this tragedy is not an isolated incident.

The recent shootings in Half Moon Bay that took the lives of seven farm workers living in shipping containers cast more light on the grim realities of unsafe housing conditions that hard working Californias are living with. Unhealthy and unsafe housing has served as affordable housing for far too many people and for far too long. We need to better empower local and state agencies to deal with dilapidated commercial industrial buildings being used as housing.

With me today to provide testimony, we have Mr. Brady Guertin, public affairs manager of the California Building Officials, and Faith Borges, on behalf of the bill sponsor, the California Association of Code Enforcement Officers.

Good morning, Faith Borges on behalf of the California Association of Code Enforcement Officers, proud sponsors of AB 468. Very briefly, code enforcement officers are the men and the women on front lines enforcing housing safety laws in California, ensuring that there's dignity for all Californians. Census data has shown that approximately 2 million Californians are living in substandard conditions, and Covid has only exacerbated those conditions.

Under existing law, a building is deemed substandard when an enforcement officer determines that specified conditions exist that endanger life, limb, health, and safety of the public or occupants. This bill is clarifying an ambiguity in existing law by clearly stating that a substandard building for purposes of state housing law applies to any building, regardless of zoning, particularly those that are being used for housing. This bill also defines residential rental unit for those purposes of relocation assistance to include any unit rented for human habitation that's a substandard building

Despite being rented as housing factories, commercial and industrial buildings, and warehouses such as the Ghost Ship that are not residentially zoned and therefore have evaded much needed safety inspections and code enforcement. Following the horrific shootings that took place in Half Moon Bay, the San Francisco Chronicle reported that substandard housing conditions that 27 farm workers and their families were living in in those converted trailers with no records of housing permits or inspections.

Those conditions were a contributing factor to the mental health challenges that the shooter used, and he took the lives of those seven farm workers. Those were husbands and wives, fathers, daughters, brothers. We could think of no better close than asking for you to support this bill today in their memory. Thank you.

Thank you.

Good morning, Chair, Members. Brady Guertin on behalf of the California Building Officials. Thank you for the opportunity to speak today to discuss how AB 468 can further promote public safety in the Built Environment. CALBO members are responsible for enforcing building code requirements in an estimated 95% of California's buildings. Our mission is to promote public health and safety in building construction, through responsible legislation, education and building code development.

AB 468 will provide further opportunities for local enforcement agencies to better enforce building code requirements and protect not only the occupants of the building, but also nearby residents and members of the public, regardless of the zoning ordinance or approved use of the building. This is an important measure to further promote public health and safety to California residents.

Under existing law, buildings that have not been properly maintained per the California Building Code, or buildings that lack the necessary fire life safety regulations can be deemed substandard and further require necessary upgrades by owners to further protect public health and safety. These regulations are necessary to reduce death or injury from fire when these regulations are not complied with, events like the Ghost Ship warehouse fire can cause undue harm or death as a result of the lack of compliance with safety regulations.

This bill would further provide code enforcement, building officials and other safety officials, such as fire prevention officers, the ability to respond and enforce the necessary fire safety requirements in buildings that are being used for habitable space so California can avoid incidents like what occurred in the City of Oakland in 2016. CALBO respectfully asked for an I vote on AB 468 and thank you for the time today to speak to you.

Thank you. Do we have additional folks want to express support? Any primary witnesses in opposition?

Madam Chair. Ron Kingston. I represent the Escrow Institute of California and several apartment associations. I want to thank Faith and the sponsors to working with us early on, which is kind of unusual these days, even before the bill was basically introduced. And thank you to the author for working with us and we have removed our opposition. Thank you.

Great. Thank you. Any additional folks in opposition? Okay, we'll bring it back to the Committee. A motion by Mr. Zbur, second by Mr. Kalra. Any questions? Great. Would you like to close, Ms. Quirk-Silva

Just respectfully ask for your vote.

Great. Appreciate you bringing this bill forward, Ms. Quirk-Silva. Happy to support it today. With that, the motion is due pass to the Assembly Committee on Appropriations.

[Roll Call]

Eight to zero; that bill is out. Ms. Quirk-Silva, your last bill: AB 1308.

Thank you, Members and Madam Chair. Assembly Bill 1308 prohibits a public agency from imposing a new minimum parking requirement on a project to remodel, renovate, or add to a single-family residence as long as the project does not exceed maximum size limits such as height and floor to area ratio. Current regulations in the majority of cities and counties require any single-family resident owner to add two covered parking spaces for any remodel update or add on.

This rule creates an inequity for homeowners seeking to build additions that often do not generate any additional parking demand. Under current law, local governments cannot impose any parking requirement for accessory dwelling units. However, parking structures on single-family residents can also cost upward to 25,000, take up vital land space on the property, and yet families may not own any additional cars. AB 1308 does not prohibit property owners from building parking.

It would simply give them the flexibility to decide how much parking to build based on their need and affordability instead of requiring them to comply with the one-size-fits-all mandate. Here with me today to testify in support is Mr. Jordan Panama Carbajal, Legislative Advocate for California YIMBY.

Thank you. Thank you, Assembly Member. Good morning, Chair and Members of the Committee. My name is Jordan Panama Carbajal, Legislative Advocate for California YIMBY, here to speak in support of AB 1308. California YIMBY is a statewide organization of over 80,000 neighbors dedicated to making California--making our state an affordable place to live, work, and raise a family for all Californians.

California is in the midst of a housing crisis, and while there is no singular reason for this, the undersupply of housing, due in large part to excessive barriers to production, is one major factor contributing to the high cost of housing barriers, such as burdensome parking requirements. Local ordinance in many cities and counties across the state require a single-family homeowner to add two covered parking spaces for any remodel, update, or addition.

This rule creates inequity for homeowners seeking to build additions that usually do not generate additional parking demand. To roll back these excessive parking requirements for homeowners, AB 1308 will prohibit a public agency from imposing a new minimum parking requirement on the project to remodel, update, or renovate. These exceptions are not new. In fact, current law exempts accessory dwelling units, ADUs, from the requirement to build covering parking altogether if the ADU is part of the proposed or existing primary residency or any accessory structure.

Parking regulations for remodels, renovations, or add ons should be consistent with those mandated by state law for ADUs. Eliminating significant cause barriers for homeowners looking to modernize and improve their property is an essential method to tackle the magnitude of California's housing crisis. It's for these reasons we respectfully request your support for AB 1308. Thank you.

Thank you. Any other folks wish to express support?

Holly Fraumeni de Jesús with Lighthouse Public Affairs, on behalf of SPUR and Habitat for Humanity California, in support.

Great. Thank you. Any primary witnesses in opposition? Any additional folks in opposition? Let's bring it back to the Committee. Any questions? Do we have a motion? A motion by Mr. Ward; a second by Mr. Zbur. Would you like to close, Ms. Quirk-Silva?

Yes. I just wanted us to think of this in the sense of aging families. I mean, we talk a lot about ADUs, and that's a whole 'nother structure, but this is--perhaps you have a mother-in-law or a mother who needs to live inside your home with an extra room. In fact, with the current law that would require these two additional parking spaces, this would say that those would not necessarily be needed if the owner chose to bring them forward and provide those. That's one thing, but to require is another, so I would respectfully ask for an aye vote.

Thank you, and appreciate your work in the space. Happy to support the bill today. With that, the motion is 'do pass to the Assembly Committee on Appropriations.'

[Roll Call].

Six to one; that bill is out. Let's just do that one. We're going to do one quick add on for one bill, and then we'll go to Mr. Zbur after that.

And that is Item Number Six: AB 589. [Roll call].

Okay, that is out; six/zero. We'll do more add ons later.

And we have--

And we'll do 1734. Yeah, we'll do 1734, and then we'll go to Mr. Zbur.

Item Number 18: AB 1734. [Roll Call].

That bill is out; seven/zero.

I'm also proud that this Bill is supported by the Los Angeles County Board of Supervisors and is sponsored by two cities in my district, the City of West Hollywood and the City of Santa Monica, all of which have made important strides in reducing housing insecurity and seek now to take another step. I'm grateful for the engagement of stakeholders that have made the Bill better, including the expert guidance we received from the team at Disability Rights California.

And I'd also like to thank the California Apartment Association, which we began engaging with even before the bill was submitted, for working with us. We incorporated their feedback to ensure this Bill is fair and strikes the right balance. This Bill is still about keeping people in their homes and lifting up marginalized Californians in the face of longstanding social and systemic inequities. It's about doing everything we can to address our state's staggering homelessness crisis and finding solutions that are both practical and compassionate.

Roughly 64% of Low income households are rent burdened, putting them at high risk of displacement due to an inability to afford basic needs. People with disabilities disproportionately experience poverty, homelessness, and housing discrimination. This inequity is compounded for people with disabilities who are also LGBTQ plus from communities of color or members of other marginalized populations. Older people and people with disabilities in rent controlled areas need and deserve ways to remove the roadblocks they encountered to being rehoused in an accessible and affordable rental unit.

AB 1620 removes one roadblock by simply authorizing local jurisdictions to adopt rent control rules that permit tenants with physical disabilities to relocate to a comparable or smaller accessible unit and retain their rental rate if the move is necessary to accommodate their disability. This Bill is an important step towards empowering tenants with mobility challenges who are at higher risk of experiencing homelessness to remain in their homes. I want to reemphasize one important provision of the bill, which is that it retains local authority.

This does not force communities to do anything, it merely authorizes them to take this approach at the local level. It also increases housing security and gives tenants flexibility to relocate to an available unit until they can access at a reasonable rental rate, and one that they can access at a reasonable rental rate, which we know that they can afford. Lastly, it protects landlords by assuring that they will continue to receive a fair rate of return upon the move.

Thank Y ou. Good morning, honorable Members. My name is Jonathan Hollab. I'm the rent Stabilization Manager with the City of West Hollywood, a sponsor of AB 1620. Of the reasons for the City of West Hollywood's founding and a core value is to safeguard quality, affordable housing for those who seek a community that is safe and accepting.

I ask for your aye vote at the appropriate time, today with me, I am happy that we have two folks to testify and support and to assist with technical questions. First, we have Jonathan Hollab, who's representing the City of West Hollywood, the sponsor of the Bill, and Sylvia Solis Shaw on behalf of our co sponsor, the City of Santa Monica. Jonathan

The city exists because of a commitment to the principle that all people, regardless of who they are, should be able to live and age in a city they love and where they know they are valued. To further that vision, the community and City Council have worked throughout the years to ensure that as many people as possible who call West Hollywood home can age in place if that is what they want, and so many do.

That legitimate community vision is threatened, however, by an unintended consequence of vacancy decontrol. As tenants with strong attachment to their community's age and mobility becomes an issue for them, the apartments on upper floors that were once a perfectly fine housing option are no longer accessible. Few multifamily residential rental properties in West Hollywood are high rises, so elevators are the exception, not the rule.

Yet if a mobility challenge rent stabilized tenant wants to move to a lower floor in their complex or another unit in the city, they must accept a new market rate. AB 1620 seeks a remedy. This modest common sense proposal recognizes the framework of existing law by continuing the requirement that tenants with a physical disability engage with their landlord in the interactive process set forth in the California Code of Regulations.

Once the process establishes that the tenant is entitled to a lower or other appropriate unit, local jurisdictions may require that the tenant's rent and lease terms remain the same as the vacated unit. Because the bill only permits a move to a similar or smaller unit, is limited to properties with four or more units, makes no unreasonable demands on landlords, and provides a continued just and reasonable return. It offers a balanced approach to greater certainty for a population that is vulnerable to housing insecurity.

The city is grateful to Assembly Members Bureau for introducing AB 1620 and thanks you for your consideration and requests your support on this important Bill that will help so many people remain in the communities they call home. Thank you.

Thank you, Madam Chair and Members Sylvia Solis Shaw here. On behalf of the City of West Hollywood and the City of Santa Monica. First, on behalf of the City of West Hollywood, I would like to read a statement, if it's okay, with the Committee, on behalf of Ms. Yola Dore, who's a resident of West Hollywood and she wanted to testify in person today but was unable to travel to the Capitol. And I do have a photo of our local resident.

As you can see, she lives in a building with lots of stairs and she does have some mobility issues. "Good morning, honorable chair, Vice Chair and Members of the Committee. My name is Yola Dore and I've been a resident of the City of West Hollywood since 1991. I've resided in the same unit in the east side of West Hollywood since that time. Climbing 18 stairs several times a day when you have disabilities like I do becomes very challenging.

It affects my ability to participate fully and gracefully age in place. This Bill being presented to you today by my Assembly Member highlights how important accessibility is to persons with disabilities like mine. As you support this Bill today, you will be giving me the best prescription that I have ever known. Opportunity. In my case, it is an opportunity to serve. Thank you. Advance for your support"." On behalf of the City of Santa Monica, I'd like to express their strong support for this measure.

Santa Monica rent control was adopted by voters in the city in 1979, and since then, the city has prioritized creating new housing opportunities, preserving existing affordable housing and helping residents keep their existing homes in the city. AB 1620, alongside local programs such as our city's preserving our diversity program, which provides cash assistance to low income, long term Santa Monica residents, will help our senior and disabled residents to continue to live and thrive in the city. And we thank the Assembly Member for authoring this measure.

Additional folks wish to express support in the room.

We ask for your aye vote. Thank you.

Good morning, Madam Chair and Members. Gregory Cramer. On behalf of Disability Rights California, we will move to a support position as amended and just appreciate the Committee, the author and the stakeholders for ensuring that disabled tenants are protected. Thank you.

Thank you. Primary witnesses in opposition.

Good morning, Madam Chair and Members. Kareem Drissi, on behalf of the California Association of Realtors here today in opposition to AB 1620. My apologies. I'll wait for Mr. Kingston to get situated here today in respectful opposition to AB 1620 for the reason stated in our letter, which is based on concerns that we received from Members of the authors district last Thursday.

Current law includes regulations promulgated over a number of years by the Civil Rights Department that includes an interactive process that governs how housing providers and tenants engage with respect to reasonable accommodation requests. And included in those regulations is the fact that a housing provider cannot refuse a reasonable accommodation request unless there is an undue financial and administrative burden or a threat to health and public safety.

Unfortunately, AB 1620 introduces an alternative process in lieu of the interactive process that's currently in regulations and does not fully address the undue burdens that are often placed on small housing providers. So for those reasons, we must respectfully request a no vote here today.

However, we do look forward to working with the author and we appreciate his leadership sincerely with respect to the intended goal of the Bill and would also respectfully note, just for the Committee, in addition to the related legislation that's listed in the analysis, there also was AB 1399 by former Assembly Member Bloom, which did seek to make changes to the cost Hawkins Rental Housing act. And we're able to work in a collaborative spirit with Assemblymember Bloom.

And so in that same spirit, we do sincerely look forward to working with the author and the sponsors on this Bill, but at this time must respectfully request a no vote. Thank you so much.

Thank you. You may begin.

Thank you, Madam Chair, Members of the Committee, Ron Kingston I represent several apartment associations, but one I want to provide particular focus. The Affordable Housing Management Association Pacific Southwest that we represent, provides housing exclusively for the disabled, for seniors and Low income. They serve approximately 560,000 Californians in this space. They we they have looked at this measure very carefully and I want to make sure that we properly focus this bill.

This bill applies for those local governments that want to enact an ordinance, as the author is proposing, to ask us to give a notice to those already housed in our rental developments that are in second or higher floors. Here are the considerations which we believe that should or have to be addressed in this Bill. Number one, on the first floor, when that unit becomes available. If a person is already disabled, what happens? We don't know.

In this bill, we don't know if the first floor unit, it has a superior location. I guess, as the realtors usually like to say, location, location, location. Everything has price associated with that. This bill doesn't address that. Perhaps the disabled is on the second floor overlooking a parking lot, and the superior unit is overlooking a pastoral appearance. Usually there are different pricing. Usually in almost every case, when a unit is vacated. There will be massive improvements, replacement of cabinetry and appliances and things like that.

And if you could wrap up.

we believe a superior solution would be a notice to all tenants. If your mobility challenged, let us know. We'll accommodate you. One is consistent with state and federal law, and we would be pleased to do that.

Thank you.

Thank you, Madam Chair. This Bill doesn't take that into consideration. It forces us to rent at the rental rate. What the uh disabled tenant already has doesn't make sense. And finally, among other things, and I'll give you our solution. There are no formal notice requirements of how we give it, when we give it when the mobility tenant is challenged. The solution,

Thank you.

But that's the superior solution. And I thank you for your time.

Thank you. We will now bring you back to the Committee. Mr.Kalra.

Thank you. Additional folks wish to acknowledge opposition.

Thank you, Madam Chair. And Members. Kate Bell, on behalf of the California Rental Housing Association and the Apartment Association of Greater LA, also in respectful opposition. Look forward to working with you. Thank you.

Thank you, Madam Chair. I appreciate the author for bringing this know we but for the grace of God, any of us can be in a situation where we have physical limitations tomorrow that we don't have today and live in a situation that makes housing, our housing accommodations, very challenging. Not to mention, as was mentioned by the author, our aging population. And we know that aging in place is really the ideal solution, especially if you have folks that have been living in a place in a building.

This would apply to fourplexes and larger, I believe they've been living in their same neighborhood. The best thing for that individual's health is to remain in their same community, ideally as this Bill allows for in the same building if possible.

But we all have to bend a little bit if we really care about not just making housing stock available, but if we care about people with disabilities and ensuring that they can live their life as comfortably as possible, particularly our elderly, our aging Californians, which we know is the largest growing demographic in our state. And some of the suggestions on noticing and all that, I think those are great things to continue to have the conversation with the author about.

But ultimately, as the bill states, this bill does not require any renovation. There was planned renovation so that the rent could be increased, 1000 a month or whatever doesn't require it, as long as the place is clean and is a place that's again, comparable to the unit that they're leaving. It doesn't require any other extra expense on the part of the owner. And ultimately, again, I get that there's a desire, whenever there's a vacancy, to try to get as much rent as possible.

But I think there's a public policy that we have to consider to ensure, again, they're going to be paying the same rent. So it's not like the owner is out. They can renovate the one they vacated and rent that for more. At the end of the day, that kind of somewhat equals out. But if we're going to tip the scales, let's tip the scales in the favor of those that need it most desperately.

And I think that's our Californians, our residents that have disabilities or those that are aging and have physical limitations based upon that. So with that, I'll move the Bill and let be added as co author.

Thank you, Madam Chair. Thank you, Assembly Member, for sharing your microphone with me. I need to have a better understanding of your bill as it impacts mall landlords. So four units and above is still a mom and pop in my district. I have a lot of duplex, triplex, fourplex.

Great. We have a motion by Mr.Kalra and a second by Mr. Ward. Any other questions or comments, Ms.Carillo? And then Mr. Ward.

I'd like to get some clarity as to if you have a tenant that lives on a second floor, then do they have the right of first refusal to get the bottom unit?

If a bottom unit becomes available and they can demonstrate a physical mobility disability, they would have a right to move. Assuming the local jurisdiction adopted rules right that would allow them to move to the first floor unit at the same rental rate, the first floor unit would have to be comparable. And the comparability definition was one that we took from the California Apartment Association directly from them. So that came from the California Apartment Association?

Not sure that answers my question. So are you saying that if the bottom unit becomes available and you have someone with a disability that lives on the second floor, do they have a right to get that unit first before anyone else?

what happens if that lower unit is more rent than the second unit above?

Yes, they would have a right to get it before someone else. Assuming that they meet the requirements that they can demonstrate a physical mobility,

So we did add things in response to the California Apartment Association. There's a standard in the Bill that basically says you're focusing on the details that we really did focus on, which would say you have someone who's been in an upfloor unit for, say, 10 years. The market rent for all the units is 2000, right? And they were paying 1500. And generally, what would happen when the bottom floor unit opens up often,

what would happen is that would be renovated in order to support a higher rent. Right. Bringing it up to market to the 2000. This would not require a renovation as long as it meets health and safety standards. One, it also, if it was recently renovated and they were getting a higher rent, there's a provision that protects the landlord where the rent control board, if they request it, has to determine that they're getting a fair rate of return on that unit.

So it does protect landlords from, it protects landlords for people that are moving into a unit that was recently renovated because they've got to get a fair rate of return on that unit.

So again, I'm not sure that answers my question. So if, say, the unit below is $2,000 and the renter above is 1500, does the renter above get the unit below for 1500 or 2000 for 1500?

For 1500, They would retain their rate.

They will retain their rate.

Right.

So how does that protect a small mom and pop landlord?

Well, they're going to be able to rent the top floor unit at 2000, one so that would go to market. And if, in fact, the market rate rent was based on a recent renovation, a recent renovation, they would actually have to determined that there was a fair rate of return still with the $1,500 rent on the bottom floor unit. Okay, so, for example, most of these things are not renovated completely.

I mean, it could be that it's the same unit on the top and on the bottom, they're moving into a comparable unit.

What if the owner of the property, and again, I'm talking about just regular people that own a fourplex. We're not talking about large apartment complexes. We're not talking about developers. We're talking about everyday people who bought a property, who have a duplex, a triplex, in your case, a fourplex or above. Right. Just regular folks in my district that aren't part of any apartment Association.

They're not part of any kind of organization that represents them, but they're looking to improve their property and they want to make renovations. So that's just kind of what I'm trying to get at here.

They would be able to make renovations on the top floor unit

but not on the bottom one.

But they could.

if they want, they can if they want to.

Not if they want to keep, not if

But they'll make a decision about whether they want to make the renovation based on the fact that they're going to continue receiving the same rent from this tenant that they did before. That doesn't change.

let me just put. It another way, if the person was not going to move. Right. You would end up having the top floor unit continuing to rent at $1,500 a month. The bottom floor unit would go to 2000 and would go to 2000. I mean, so now you're just flipping the two units. The bottom floor is at 1500. They could then move the top floor unit to 2000.

Right. but theres Okay, I understand. What if they,

So the landlord is in exactly the same place, and they have a protection that on the bottom floor unit, they're still getting a fair rate of return for that unit.

Okay.

So it's actually more protective than what typically the rent control laws do, which basically is looking at fair rate of return for all of the units together. And that was something, frankly, that I think a lot of the rent control people were nervous about in this Bill. But we gave them, at the request of the California Apartment Association, we gave them that additional protection, which is unusual in the rent control laws.

Right. Los Angeles has very stringent, very pro tenant housing policies, which is great for individuals, especially, as we face in my community, massive gentrification, where apartments are just going for a lot higher. What I'm concerned about, again, is small mom and pop landlords at four units who are just working people in East Los Angeles and other parts of my district who are not represented by any Association, who want to make improvements to their home, who want to make sure that they have good tenants.

And my other question is, if you are saying that an individual on a second floor has the right to have that first unit, if they measure to all of your standards, what if that family wants to move in a family member? Are they then not allowed?

That's something where I'd be happy to sort of take amendments to the bill if it's sort of a family member on an ownership that would allow someone to do that. I mean, I think at that point, we would think of that as not an available unit, but we don't have that specific. I'm happy to address that in the bill.

I think that would be important, especially, again, because I'm talking about just everyday people that have a property that are trying to do the right thing in their community. And like in my community, we have multigenerational families living together in one parcel of land. I would worry that if you would have someone, which I agree with you, we should absolutely create protections for people with disabilities.

But if someone is at the lower unit and say the family wants to move in, a grandmother or grandfather who also has mobility issues. Right. How do we ensure that that family is able to stay whole while also creating opportunities elsewhere.

I'd be happy to take amendments that address that situation. I think we've assumed that this applies to available units, newly available units. We can deal with the family situation. I share your concerns about small landlords, and in fact, part of the reason I think the folks from West Hollywood, which we've dealt with the longest on this, and Santa Monica came on a little bit later. I mean, I have been very focused on making sure that we have really the right balance between landlords and tenants.

And I think you'll see that there's landlord protections in this. We put in every single request that the California Apartment Association asked us to put in this Bill to protect landlords and smaller. We, and we're happy to look at this in addition to that. But when you look at it roughly, a landlord makes decisions about when they're going to do major renovations on their property. And I don't think that they're put in a different position with the Bill.

You're just sort of flipping the two units at the time. They could decide they wanted to improve the upper unit while the person is there in the unit. And this doesn't prevent them from doing that either. It basically gives them a protection on the lower unit. It has to be comparable. And frankly, what we're also hearing, I think the reason is that generally the upper units are the more desirable units because they've got views, because of other, they're farther away from the street.

So there was also on the other side of the coin making sure that these are people that are disabled, that ultimately if they can't move, what they're facing is potentially being out on the street. Because if they can't afford 2000, if they have to move, this isn't a place, and they had to move to that first floor unit, then their rent is going to go to 2000.

Or if they have to move to another market rate unit that's comparable in the same city, their rent is going to go to 2000. So it is the physical that is causing them to not be able to keep their rent controlled limit. And that's what this is. So I think it's a righteous Bill and it really is something that protects, and it's not just one person. I mean, we know many people in West Hollywood and in Santa Monica that are facing this.

And as you know, our population ages, we need to sort of figure out common sense things. The California Park Association is neutral, but they worked hard with me. I took all of their amendments and we'll continue. I think you've raised a really good point about family Members. For some of these smaller things, we will look at that and I think that we can craft a response to that that I think will address your concerns.

Thank you for the commitment on working on issues related to family. I think that's important. Lincoln Heights, El Serino, East LA is not Santa Monica. It's not West Hollywood. My community has different policies, I think related to those particular cities. And I think it's important that at the end of the day, while we try to do as much as we can for the disability community and really in General, this is also an issue that's been brought up within our veterans community as well.

Many Iraq and Afghanistan war veterans have come back without limbs. And so it's an issue of age and mobility and all kinds of different issues, and it's important that we craft policies that relate to that. I will say that in other conversations related to housing and all the work that we've done amid Covid relief for both tenants and landlords. One thing that we missed is that landlords were not able to put in forward their application process without the tenant signing off.

So if you had a tenant that refused to do the application for the Covid-19 protections, that landlord was left on their own. And this is something that we've been trying to figure out as well as landlords try to figure out their mortgage so that they don't lose their homes, they don't lose that fourplex that houses all of these individuals. Right. So I think a broader conversation about how we do it, I think it's a step in the right direction.

But I just want to make sure that at the end of the day, we're also protecting those small mom and pop, just regular working folks that have the opportunity at some point to be able to buy a property, which in my district and in yours as well, has just become more incredibly difficult and figuring out ways in which we can think about multigenerational families that live in these properties as well and how we.

Protect know I share your concerns. I really do. I mean, I think if you talk to the folks here in West Hollywood, I was very focused on making sure that we were fair to landlords. And I think you'll see that if you read this carefully and if you looked at the Bill as it originally started, it went in the direction of trying to make sure that landlords, especially these small mom and pop landlords, that we were striking the right balance. But I agree with you.

My brother, who doesn't have any income, owns a three unit building in New Mexico that my mom bought for him because he is not going to have income. And these are like $500 a month units. And frankly, during COVID that's like his whole income. He wasn't able to get any income for that period of time. And basically, once the moratorium, everyone left and these small landlords are facing issues.

So I see that side of the coin, and that's why I really worked hard to, I think, make sure that this struck the right balance.

But coming back to this, the people that are in these situations, these elderly people that can't get out of their apartment, they become homebound, and then they need all kinds of social services that are going to stay there, or they're basically going to be out on the street because they're not going to be able to afford a market rate rent in their community.

Thank you. Thank you. Any other questions? We have a motion and a second. Would you like to close?

Generally, I think we've talked about a lot of the issues. I mean, one know the others that were sort of raised about sort of the first floor being a superior location. Again, we got the definition of what's comparable from the California Apartment Association, the issues related to the interactive process that actually came from the apartment Association wanting to preserve that. So the intention is to preserve the interactive process that's already in place.

And we'll work with some of the local apartment associations to continue to raise that and the realtors to try to tweak that. I think it's intended to be complementary to that whole process under the Ada. And then on notice requirements, we'll look at that about whether or not we need to do more or require that the local jurisdiction put some kind know, figure out how we make the public aware of how this will work. But we'll look at the notice issues.

And with that, I just want to thank the staff. I want to thank my staff. I want to thank the City of West Hollywood and the City of Santa Monica and the County of Los Angeles, which has made this a priority. And then respectfully ask for your.

I vote thank you, Mr. Zaber. This, I believe, is a very reasonable, narrowly crafted protection that's going to help our most vulnerable folks who need it. So I appreciate it. I know there's a lot that goes into these bills. I also understand the concerns that were raised. I know you'll continue to work on those. And with that, happy to support the Bill. It's a motion do pass as amended. Weeks, aye. Weeks, aye. Parison, Korea. Korea, aye. Zipper.

Aye.

Zipper aye. Cholera. Thank you. Quirk-Silva. Quirk-Silva. Aye.

Thank you.

Sanchez. Sanchez. No. Ward. Ward. Aye. Sublime Member caller. Sorry, I didn't hear. Aye. Thank you. Seven to one that Bill is out.

Thank you very much.

Six to one. Yeah, six to one Mr. Patterson isn't here. Great. We have last but not least, Mr. Ward. Certainly not least.

Thank you, Madam Chair, Members. And as my witnesses come up forward, I'd first like to thank the Committee staff for all their hard work on this bill and gladly accept the Committee's proposed amendments. Essentially, we know that when we refinance our own properties, that we're able to use some of that equity for whatever purposes we want. But right now, the law does not allow for a lot of our state funded programs that have those funds embedded within existing affordable housing developments.

For many of those developers, those owners, to be able to do the same. This bill, AB 515, will allow sales or refinancing of loans on affordable housing projects as long as the funds are contributed to other projects that will improve or increase the supply of affordable housing. Any sale or refinancing of the loans would also include an agreement that the affordable housing development remains affordable for the duration of the original loan period.

So what this bill is able to do, it actually has the potential to unlock millions of dollars for HCD to be able to use more quickly to increase the stock of additional affordable housing units without sacrificing affordability and without new money. I'd like to present my witnesses in the support of the Bill. Erin Autry Montgomery, an affordable housing development consultant, and Pat Sabelhaus, the Executive Director of the California Council for Affordable Housing, and respectfully request your aye vote.

Thank you. Yeah, we have a motion a second, but carry on.

Okay. I was going to say good morning, but I think it's afternoon, so good afternoon, Committee Members. My name is Erin Autry Montgomery. I'm here today in support of AB 515. I've worked in the affordable housing finance field in the weeds of this for nearly 20 years.

As you know, most affordable housing projects are public private partnerships consisting of general partners who have typically developed the projects, are responsible for the ongoing operations, and an investor limited partner that has purchased low income housing tax credits. These tax credits flow to that investor over the first 10 years of the operations with a five year additional trailing compliance period. So at the end of this required compliance period, the investor wants to exit the partnership.

Additionally, at this time, most many commercial lenders require that their interest rate be reset at a new higher rate or for that loan to be repaid. This, in the affordable housing world at year 15, is a typical time to recapitalize the project or in some cases sell the project to other affordable owner operators.

If this bill passes, there are many projects that would be able to recapitalize with the new commercial debt in an amount that would allow all the following: the payoff of the existing commercial debt, the buyout of that investor limited partner, but most importantly to your Committee and the Department, the prepayment of that HCD loan. We'd also see payment of any deferred fees to the developer or General contractor that weren't paid during the 15 year compliance period or during the development.

Any general partner loans and with any surplus funds going to the general partner to use for renovations or to reinvest in other affordable housing projects. Currently, HCD prohibits this, where these surplus funds are used in that manner, this bill is necessary to allow those projects to continue to be operated feasibly with current regulatory agreements in place for the full 55 years, allow the Department to repaid principal and interest on that original loan and allow the partnership to do renovations.

The Department could receive funds to reinvest in much needed new affordable housing throughout the state. I do think there are potential areas to continue to improve the bills it moves forward through committees and by engaging with the Department, specifically allowing the regulatory agreement to be subordinated per policies currently in place in the uniform multifamily regs, as well as allowing surplus funds to flow to the general partner after the HCD loan prepayment. Thank you for allowing me to voice my support of AB 515.

Thank you.

Madam Chair, Members of the Committee. I can smell hunger pangs all over the place here, so I will be brief. My name is Patrick Sabelhaus. I'm Executive Director of the California Council for Affordable Housing, which was established in 1976, so it's been around forever as an advocate for affordable housing. Its membership is made up of for profit and nonprofit developers, general contractors, builders, and most importantly, investors in the tax credit program over the last 35 years or so.

Let me begin by thanking Assembly Ward for introducing this essential legislation to save and protect HCD's portfolio of affordable housing and to keep lenders involved in this process, private lenders that make up the bulk of the financing that's required in order to expand and continue developing affordable housing. For the past three years or more, we have urged HCD to allow refinancing of older HCD projects to satisfy all or some of the reasons that were pointed out quite accurately by Ms. Montgomery a moment ago.

Unfortunately, those conversations with HCD have not yet led to the policy change that we think is needed. More flexibility on their part as to why this refinancing is required. Rather than go through the refinancing of needs and why refinancing is so important, I will simply stress what Ms. Montgomery pointed out. Lenders don't give you a choice on this.

When lenders made these loans 15 or 20 years ago, in almost every instance, the private lenders will put a condition in the deed of trust and in the loan agreement that requires that they be repaid in year 15 or 16 or 17 or 18, even though the amortization period may be 30 or 40 years. But there's no debating here that they have to be paid off and that we have to be able to refinance the project.

And it does no harm to anyone, none of the tenants, it does no harm to HCD and it does what is expected in the lending industry today, which is to be paid off. So let me just get through this, if I may, Madam Chairman. Say there's no downside to HCD or existing projects to allow refinancing, given that AB 515 requires that rent restrictions stay in place, regulatory agreements remain in place, and no tenant will suffer or be harmed by way of refinancing.

AB 515 is all upside in that it assures thousands of units will continue to be available as needed. So I will stop there at your choice, Madam Chair, and say thank you very much, and I ask for your aye vote.

Thank you very much. Additional folks wish to register support?

Marina Wiant with the California Housing Consortium, in support.

José Lujano with Affirmed Housing Group, in support.

Elizabeth Eggert on behalf of Anton DevCo, in support.

Thank you. Any primary witnesses in opposition? Any additional witnesses in opposition? We will bring it back to the Committee. We have a motion. And a second. Great. Would you like to close?

Thank you. Respectfully request your aye vote.

Great. Thank you. And with that, it's due pass the Assembly Committee on appropriations. Happy to support the bill today.

[Roll Call]