Senate Standing Committee on Housing

Okay, the Senate Committee on Housing will come to order. Good afternoon, everyone. The Senate continues to welcome both in person public testimony as well as remote public testimony for individuals wishing to provide public comment today by phone. The participant number is 877-226-8163 and the access code is 3308805. We are holding the Committee hearing in our street building, and I would ask Members of the Committee to come on down so we can establish quorum. We have 30 bills on today's agenda, seven of them are on consent, and I want to just make one announcement before we begin. Item number 15, AB 531 by Assembly Member Irwin has been pulled from the agenda and we will not be hearing that Bill today. We do not have a quorum, so we will start as a Subcommitee.

In addition, I need to step out to another Committee, and so I'm going to first welcome Mr. Ramos up to present AB 42, and I'm going to hand the gavel over to Senator Seyarto. Thank you. And I will see. You.

Assemblymember Ramos, whenever you're ready.

Thank you, Mr. Chair and Senators, AB 42 aims to help programs across the state when it comes to assisting those experiencing or at risk of experiencing homelessness. As chair of the Select Committee on Youth Homelessness in San Bernardino County, I understand that homelessness requires unique solutions and AB 42 aims to provide one. As it stands, the current requirement of having to install fire sprinklers in temporary sleeping cabins proves to be a significant cost burden. This Bill exempts a temporary sleeping cabin from the requirement of fire sprinklers, but also adds various mandatory provisions to ensure the safety of the occupant. To alleviate fire safety concerns, we have lowered the square footage, changed the definition of the units, as well as added alternative fire and safety requirements. To ensure safety and address opposition's concerns, we also require the unit to be made of non combustible materials. Additionally, each lot would be able to hold a maximum of 50 units, each unit situated 6ft apart with fire alarms, fire extinguisher and 24/7 Firewatch. I understand there is still some opposition, but we're making our way through and addressing those concerns, but we have been able to engage in those conversations and will continue. AB 42 is a unique solution to allow for the creation of new temporary sleeping cabins to serve the state's homeless population, especially for youth experiencing homelessness. With me today to testify in support of this Bill is Vida Pasarian from the Family Assistance Program located in San Bernardino County.

Good afternoon. My name is Vida Pasarin and I represent the Family Assistance Program. We're a nonprofit agency that serves families and homeless youth in San Bernardino. County. I'm here today regarding Assembly Bill AB 42. This Bill is important because there are thousands of temporary sleeping cabins throughout the State of California. These temporary sleeping cabins were built to help get people off the street as quickly as possible. The temporary sleeping cabins have always been a temporary fix to help address our homeless crisis in the state. They are meant to be built quickly in a cost effective manner to help get folks off the street and begin their transition into housing and self sufficiency as quickly as possible. Across the state, there are thousands of temporary sleeping cabins that were built and are working under the emergency declaration that many cities adopted. When this emergency declaration ends, and it will end, they will have to tear down thousands of units. And where will all these people go? They must go somewhere. And unfortunately, I'm not confident that we will have enough units with the proper support system to help everyone find a roof quickly. Now, some cities have not been able to make this emergency declaration. In our region, for example, very few cities have made them. And so we turned inward to experts to learn how we could help address this housing crisis while keeping our community safe. We met with our retired fire chief in our region, and he shared with us that a fire sprinkler system would not impact the safety of a person who lives in a temporary sleeping cabin. Fire sprinklers are meant to keep a person safe as they exit through a large building. These housing units that we're working with are under 200 square feet, so it defeats the safety purpose that the fire sprinkler systems were meant to intend, and it doubles the cost to build them, which, of course, means that our community has to stay on the streets longer. When we talk to our officials about this, they say that they have to follow the state Building codes. We have to add something that our fire chief states is not required, and we have to keep our people on the streets longer. We don't want to boil down on the cost too much, but it is something that we as a provider have to consider. The cost of these temporary sleeping cabins is about $15,000 per unit, and the fire suppression system is also about $15,000 per unit, which means that we are building one unit for the cost of two and keeping about half of the people waiting for a unit on the streets where they are living a harsh life and unsafe life and with far fewer safety standards than we could ever put them through. Speaking of safety standards,

Can you start to wrap it up? We're only supposed to allow two minutes for each speaker. And so, yeah, if you can get their wrap up.

Yeah, absolutely. This Bill has far higher safety standards. Thank you so much.

Thank you so much. Sorry to throw you off key there, but, yeah, I didn't get the chance to announce that our primary speakers will have two minutes each, and then the opposition speakers will also have two minutes each. And we have two speakers for each one maximum. So you had the one primary witness?

One primary witness.

Great, do we have anybody else in the room that would like to add on support for this Bill? There's nobody else. Is there anybody in the room that will speak in opposition to this Bill, sir? Come on up. State your name.

Good afternoon, Chairman, Members Brady Guertin, on behalf of the California Building Officials, in respectful opposition to the measure as currently written, wanted to first thank the author's office for their continued dialogue on the Bill. The bill's been improved considerably from when it was first introduced, and we appreciate that. We do still have some safety concerns for the fire sprinkler issue. We think that there's some common ground we can find with that, and we'll hope to work with them for that. But we wanted to highlight two of the importance of it. So, two examples of fire sprinklers being useful for public safety. In March 2023, the Petaluma People's Village, a community of 25 homes for the unshiltered, caught fire in the afternoon. Fortunately, no one was injured or killed, and the local fire marshal in the community gave credit to the fire sprinkler and suppression system from giving residents a feasible time window to escape the units and reduce the spread of fire to other units. Had these fire sprinklers not been in place. There is a valid concern that more people would have lost their lives or been injured in this unfortunate event. A second example occurred in the City of Los Angeles in September 2022, where a tiny home village of homeless veterans that valiantly served our country caught fire. Again, luckily, no one was injured or killed, but residents noted in interviews that the fire extinguisher did not work to extinguish the fire, and smoke alarm systems went unheard for some residents in the village. Had fire sprinklers been present in the village, 12 tiny homes may not have been destroyed and 10 may not have been damaged if they were present. Calvin and our Coalition of building safety groups have concerns that this Bill could result in even worse event if it passed into law. These are just two examples of how fire sprinkler systems can provide the strongest protection for residents, which is the goal of our coalition. We're concerned that removing the ability for fire sprinklers could result in further injury or death for homeless or at risk individuals. We look forward to a continued partnership with legislative leaders in the author's office to find common ground about this and believe that there's some common ground in letting local agencies choose between the alternative fire life safety measures in this Bill or fire sprinklers at the discretion of the local fire marshal. And for those reasons, we respectfully ask for a no vote today. Thank you.

Thank you very much. Is there anybody else speaking in opposition to this Bill? Yes, ma'am.

Faith Borges, on behalf of the California Association of Code Enforcement Officers, opposed for the same reason. Thank you.

Are there anybody else in the room? If not, we'll go to the AT&T operator. ATT operator. If you can get anybody on the line, would like to add their support or opposition, please. If you're on the line and you're calling in, just state your name, the organization you represent and whether you are for or opposed to the Bill.

Thank you, Mr. Chair. For those who wish to speak in support or opposition to this Bill, press one, then zero. Press one, then zero. Only one time as pressing one, then zero. A second time will remove you from the comments queue. And we're going to go to line 49. Line 49, your line is now open.

Good afternoon. My name is Denny Choicelock, calling on the behalf of California Coaltion for Youth, calling in support. Thank you. Have a great day.

Mr. Chair, there is no one else who signaled that they wish to speak.

That'll bring it back to the dais here for any questions. Ms. Blakespear?

Yes, thank you. I really very much support this Bill, and I would be happy to be a co author if you are looking for more or one. I just wanted to share that as the mayor of my City of Encinitas, we really struggled to help illegal ADUs or ADUs that were unpermitted come up to code. And one of the issues was the cost and the burden and hassle of the fire sprinklers. And so finding alternative ways to reduce the cost and the administrative Burden is really important if we're going to actually provide opportunities for people to sleep inside and not be homeless. So all of the things that you've done in this Bill, the size, the testimony from your speaker, your supporter, talking about the fact that fire sprinklers are really not needed. If someone's leaving a 200 or 250 square foot space, they're not going through a large apartment complex or office building, I think that makes a lot of sense. And it's just important that we're creative about solutions to get housing built faster, especially homeless serving housing. So doing the streamlining on this topic is just critical. And I'm really grateful that you brought this Bill forward. So thank you.

Thank you so much. And we're happy to add you as a co author.

Thank you. And I will move the Bill.

Okay. We don't have a quorum yet, so we're just operating as a Subcommitee. So we'll take that into account when we do have enough people. Anybody else? If not, I'll add my two cent. Actually, this is a really good Bill because it kind of finds the sweet spot between life safety and practicality. If we were going to add the costs that we would add for fire sprinklers themselves to each of these, it puts it beyond the help for a lot of people. There will be a lot of people that can be helped that we won't be able to because we're putting it all into this one life safety thing. A lot of the mitigation measures that you have taken address the life safety issue. You're talking about a one room domicile, and generally smoke detectors and a fast exit is sufficient for the life safety part. One of the other aspects that people don't talk a lot about is the other part of sprinklers is most of the damage from sprinklers is from them getting knocked off and creating a flood instead. And so there is that as far as when we're looking at the cost for damage. So when you have a fire in a one bedroom place or one room unit, whatever damages is going to be, you're going to have to renovate the whole place that you're not ever going to get around that, whether it's a sprinkler head getting knocked off or a fire, and with all those mitigation measures, you've done everything you can to find that sweet spot. And I think you have. And I'll be supporting the Bill when it comes up. And I want to thank you for it. And if you had any other things that you'd like to add.

Thank you, for the co authorship and the kind words. And it is a number one issue in the state and all of our local agencies. And this Bill is meant to be a component not to bring permanent solution, but a component to getting people into housing and getting people where they need to be. So I ask for your, aye vote when the time is appropriate thank you so much.

All right. Thank you very much. So that brings us to my computer went. That brings us to item number three, I believe. I think we have. Assembly Member Lee is here to present. Come on up. Assembly Member, this is AB 309. When you're ready, go ahead. Thank you.

Thank you, Chair and Members, I have some visual aids being presented here for you as well. So thank you, Chair and Members. Today I'm presenting AB 309, the Social Housing Act, which will produce and preserve affordable housing across California. The housing will be publicly backed, sustainable, collectively owned and affordable for all income levels, and financially self-sustaining in the United States, in Montgomery County in Maryland. They are building social housing. They have already built one development with 268 units and have 1,000 more units in the pipeline.

The picture on the left hand side, which is more typical of American architecture, is that site in Maryland. And they are, in fact, the leaders in the United States when it comes to implementing social housing. But we still have a lot to catch up. Seattle, Washington just passed a ballot measure to do so to create a social housing developer in February of this year, becoming the first jurisdiction in the nation to do so by ballot.

And other states like Hawaii, New York, Massachusetts, Rhode Island, have introduced their own social housing bills. All of these places are landing on social housing as a solution because of its demonstrated success and universality and treating housing as a human right. Various other countries have also faced housing crises of their own and found successes through social housing. Today, 62% of residents in Vienna, Austria, live in social housing.

And right here on the left, this is Alt Erla, one of the more atypical structures in Vienna, but much more aligned with Asian social housing structures. And in Singapore, in Asia, which began its leasehold ownership scheme in 1964, 87% of its residents live in social housing. So to give you some of the prime or some of the contract examples, is we have American social housing developments, which look very typical to much of the developments that we see across our own state.

And then, of course, we have much older examples, but perhaps a little different in architectural style that we see across the world. AB 309 builds on the success of social housing internationally and its rapidly growing support in the United States. In California, schools and roads are for everyone, but housing is not viewed the same way. Social housing will allow us to take a major step forward in addressing the housing crisis. And we have so many successful models to draw upon.

With that, I would like to introduce my lead witness in support, Jordan Grimes from the Greenbelt Alliance. And I will respectfully ask for your Aye vote, when the time comes.

Thank you. Welcome, Mr. Grimes, you have two minutes. Please. Thank you.

Thank you. Good afternoon, Chair and Members, my name is Jordan Grimes. I'm here on behalf of Greenbelt Alliance. We are an environmental organization which has, for the last 65 years, worked to further the protection of open space and promote sustainable growth patterns across the nine-county Bay Area.

For decades, we at Greenbelt Alliance have recognized and championed the understanding that shifting our harmful land use patterns from sprawl to urban infill is essential to preserving open space, protecting habitat and biodiversity, and providing, importantly, enough housing for all of those who want to call California home. Unfortunately, significant barriers to infill housing have persisted. This has resulted in skyrocketing housing prices and statewide displacement, pushing people to the fringes where they must endure grueling super commutes.

California's development patterns are thus wreaking havoc not only with housing affordability and our environment, but are fueling the climate crisis as well. 38% of California's greenhouse gas emissions come from the transportation sector, a direct result of sprawl. If we are serious about meeting our climate goals, it is imperative that we shift how and where we build. In order to address our housing and climate crises, which are inextricably linked, we must be innovative and willing to embrace new ideas.

The California Housing Authority Chief among them. Augmenting our housing production with a public sector model is, in fact, one of the most potent potential tools we have to advance progress on all of our greatest challenges at our feet at the same time. Our diverse and significant needs require diverse and innovative solutions.

By giving the state the ability to produce new, sustainable, mixed-income housing, both rental and ownership, we can provide homes for the most vulnerable as well as the middle class, keep the construction workforce intact and new units flowing during economic downturns and supercharge the infill housing growth our state so badly needs in the right places to ensure that California remains a prosperous and accessible state for all. Thank you so much for your time.

And thank you. And you're right on the time. Do you have a second witness or just the first witness? Okay, do we have anybody else in the room at this time who would like to come up and just state your name and your support for the Bill and the organization you represent? Thank you.

John Chavan, California Nurses Association, in support.

Peggy Bernardi, California Indivisible State Strong, a coalition of over 80 activists, grassroots organizations across the state, in support of AB 309.

Good afternoon, Mr. Chair and Members. Andres Ramirez, on behalf of the City of Berkeley, in support.

Mr. Chair and Members, Rand Martin, on behalf of the AIDS Healthcare Foundation and Healthy Housing Foundation, in strong support. Thank you.

Mr. Chair and Members, Michael Gunning here, Lighthouse Public Affairs on behalf of Valley Water District, in support.

Good afternoon, Chair and Members D'Artagnan Byrd, Ask Me California, in support.

Very good. At this time, if there's anybody that is an opposition witness, primary witness that would like to speak, you have two minutes. Yes, sir.

Mr. Vice Chair, Members, Bob Naylor, representing Fieldstead and Company, that's Howard Amundsen, Jr., an Orange County philanthropist who opposes eminent domain on social equity grounds. And I am here to oppose unless amended to exclude eminent domain. I cite as authority for the atrocities that eminent domain has wrecked on minority communities over the years. The Reparations Commission, which has a chapter on eminent domain.

And among the worst atrocities was San Francisco, which in the 1950s essentially bulldozed large areas of the Fillmore District, which theretofore was known as Harlem of the west, destroying 4,500 Victorians' homes, and 4,883 businesses, and displacing 4,500 families.

We have asked the author to accept an amendment, as has been accepted by other authors prominent in this Legislature, Senator Kamlager and SB 679 for Los Angeles County Regional Housing Authority, Assemblymember Chu and AB 1487 in 2019 for the San Francisco Bay Area Regional Housing Authority, and most recently, Senator Skinner in SB 440 has accepted the amendment. We ask the author to accept such an amendment. Otherwise, we urge you to oppose the Bill. Thank you.

Thank you, Mr. Naylor. Is there anybody else who would like to speak as a primary witness in opposition? If not, is there anybody in the room would like to just add their opposition, their voice to the opposition in the room? None? Okay, so we're going to take it to the phone lines. ATT operator. Anybody on the phone lines would like to call in and express your opposition or support only. Please state your name, your organization, and whether you oppose or support the Bill. Thank you.

Thank you, Mr. Chair. For those who wish to support, to express their support or opposition to this Bill, please press one, then zero. We're going to go to line 52. Your line is now open. Line 52, your line is open. We're going to move on to line 47. Your line is open.

Mr. Chair, Members of the Committee, Jennifer Speck, on behalf of the California Association of Realtors here and respectfully opposed, unless amended to specifically focus the measure on creating new supply and not on the acquisition of existing units that will only serve to drive up home prices. Thank you.

And final call for anyone who wishes to speak in support or opposition to this Bill, please press one, then zero. Mr. Chair there is no one else who signaled they wish to speak.

Great. Thank you very much. We'll bring it back to the dais. Any questions from any of my colleagues? Ms. Blakespear, go ahead.

Yes, thank you. Well, I want to thank the author for bringing this forward. It's a really bold and ambitious idea, and I'm grateful to you for bird-dogging it over a couple of different years, and I'm excited that you're putting it out there and generating the support and socializing the idea. I'm happy to support it. And I was also very excited to see Jordan Grimes doing your testimony. He is one of the most entertaining chroniclers of local city council meetings.

I love to watch him on Twitter talking about what's happening related to housing. And so I'm sort of a fangirling him. So the fact that he was here talking was really fun. So thank you very much. And I will be supporting you today.

We're bringing out all the big celebs for you.

Thank you.

Senator Caballero.

Thank you, Mr. Vice Chair. Assembly Member and I've had a discussion about this Bill, and actually, it's for this Bill, and the next Bill will come through Gov and finance. And I know my predecessor used to not vote on bills in committees where the subsequent Committee would be, he'd be chairing. But I do things a little bit differently. I'm going to support your Bill today, but we had a discussion about some of the amendments and changes that we may need to make in gov. and finance.

And our role is to protect local government and make sure that the interface between the state and local government works as much as possible without resentment, and also to make sure that we're building a sufficient number of affordable units and working at maybe starting off with some projects that are surplus projects. So I really appreciate what you're trying to do and want to make sure it works within our existing system. What other countries may do may not work, given that we have a different history.

But if it can, I want to work with you on it. So appreciate the discussions that we've had up to this point, and I will support your Bill today.

Thank you.

Mr. Padilla.

Thank you, Mr. Chairman. And just briefly, I want to thank the author. It is bold, it is comprehensive, it's thoughtful.

I would echo the sentiments of my colleagues, and be interested in tracking some of the collaboration that occurs as it moves through the other policy Committee and particularly how, when we get to, if you get to a floor situation, how we look at dealing with the acquisition side, a couple of fine-tuning that may need to happen there in one person's opinion, and then the harmonizing with the local government process.

But on a very broad level, we need every tool in this crisis, and I appreciate your leadership on it. Thank you, Mr. Chairman.

Ms. Blakespear.

Thank you. Sorry to go. It's a very short question, but I just wanted to ask about the eminent domain. Can you just address that concern that we heard?

Yeah. As an aspect of state agencies, especially when it comes to land use, they typically have the ability to acquire property. Right. I would say in the Bill, especially today, a necessary aspect is to acquire land, to develop properties. Right.

But also part of the Bill is to then also save affordable housing that might be at the end of its deed restriction. And that's something we work with a lot of activists and folks, that this could be a component of preserving affordable, existing affordable housing that could, their covenants could expire. You could imagine, say, in the '20s, '30s a bunch of affordable housing and their covenants back expired, they could be all privatized and they could become for sale.

So we want to preserve that option in which we could save deed restricted housing and keep them affordable in perpetuity, but also have that same power to also, and we have some criteria in the Bill about purchasing property land that's underutilized, not exactly like there's people on it, but so that we can expand the mission of building more affordable housing units, because there will come a day when we run out of excess sites, hopefully.

And then we'll have to start thinking about, well, how do we buy property from a school district, or how do we buy some private land that's suitable, that someone wants to sell. Right. We'll have to think about how do we acquire land, too, in the future.

So basically what you're saying is buying land is different from eminent domain, but what you're saying is you don't want to take it off the table, is that what you're saying?

Yeah, and there's historical examples in my district that sometimes it's a useful tool to save residents. There's examples even in my district where there was affordable housing complex that was about to have all their deed restriction go away, and the county said, hey, if you don't, work on agreeing with us, we're going to do this. Right. I think it can be used for positive benefit. I do want to acknowledge, obviously, in this country, there have been some ugly instances in this country that have happened.

In the San Francisco case, I think those neighborhoods were plowed, overturned into freeways. It's a different land use from turning one housing place into another or keeping the same people housed. It's a tool that has been used, misused in the past, but it's a tool that can be used for good as well. So that's why right now I continue to think that in this construction of the Bill, that it's part of it.

Okay, thank you.

Okay. Thank you. Of course, I respectfully ask for an aye vote, when the time comes, when there is a quorum. But alluding to some conversations I had with Senator Caballero in the next Committee, I really hope to strengthen this proposal and really make sure that we are demonstrating success to the people of California. I think there's a lot of potential existing programs and potentials, especially with these excess surplus sites that we can start with. And I think there's a lot of potential to demonstrate it. Right. But of course, being cognizant that we are in a race to demonstrate which state will be most successful in social housing first. Maryland is up and ahead of us with a lot of construction happening right now and a lot of other states, they just passed their proposals to do so. And Seattle is an interesting one to do as well because that was the first time they took it to the voters to do so, not initiated by legislators, but by activists and by people in the community. And as some have stated, there's plenty of work to go around. We need our private sector to step up. We need our nonprofit sector to step up. But just like in European, Asian countries, we need a strong public sector to also be in the loop. And I really hope that with all these tools in the tool belt, we can solve our housing crisis. So respectfully, ask your aye vote when the time comes. Thank you.

Great. Thank you very much. When we get a quorum, we'll put that out there for everybody. And in the meanwhile, we're going to go on to AB 1490. Mr. Lee, Would you like to go ahead with that one?

Yes. Thank you so much, Mr. Vice Chair and members.

AB 1490 will encourage adaptive reuse affordable housing projects by providing incentives, such as providing an expedited review of process while respecting local control. Adaptive reuse is when we repurpose an existing building to create affordable housing. As the Governor did with Project Roomkey, AB 1490 will move barriers to these projects by ensuring they are eligible for affordable housing funding. And don't get stuck in the entitlement process for years. Adaptive reuse is much faster and less expensive than building new housing from scratch and will help address the housing crisis. With that, I'd like to introduce my witness in support, Rand Martin from the AIDS Healthcare foundation, and respectfully ask for your aye vote when the time comes.

Mr. Martin, welcome. You have two minutes. Thank you.

Thank you. Mr. Chair Members Rand Martin here on behalf of the AIDS Healthcare foundation and its Healthy Housing Foundation, which was created about five years ago in order to develop affordable housing opportunities for very low and extremely low income people, primarily across the City of Los Angeles so far, hopefully in other parts of the state as the future presents itself. What we have found from adaptive reuse, as Mr. Lee has indicated, is that there is a substantial speediness to it, as well as a reduced cost in terms of achieving the same kind of affordable housing opportunities as ground up construction. One of the challenges that we found is that cities are not always as accommodating of that speedier process. And so we have run into challenges with entitlements taking longer than they should. We've run into some zoning requirements that also add time. We've also run into problems with certain local housing programs where there's funding available that does not accommodate adaptive reuse. And this Bill is intended to deal with each of those. It's very modest in terms of its breadth, but it would be very helpful to an organization like AHF in terms of expanding on the 1425 units of low income housing that we've already been able to develop. So with that, I'll leave it and ask for your aye vote when the time is right. Thank you. Great.

Thank you. Did you have another primary speaker? Okay, is there anybody else in the room who would like to come up and add their support for the Bill? If not, we'll go over to opposition. Is there anybody who would like to speak as a primary witness in opposition to the Bill? If not, then I would ask if anybody wants to just come up and say they oppose the Bill. And if we're not going to do that, since I don't see anybody scrambling to the mic, we're going to go ahead and go to the phone lines once again. Mr. AT&T operator, if you can get people on the phone to express their opposition or support for the Bill, Member, name, organization, and whether you oppose or support. And that's all.

Thank you, Mr. Chair. For those who wish to speak in support or opposition to this Bill, please press one, then zero. Mr. Chair, no one has signaled that they wish to speak.

Well, then it'll come back to the dias do we have anybody, any of my colleagues would like to ask questions, have expressed concerns.

I have to comment on every Bill, please.

I was going to say, Ms. Caballero, would you like to say something?

There's no one else here.

Blakespear, go ahead.

Who wants to speak. So I really like this Bill. Thank you.

Mr. Lee, would you like to close? Oh, I'm sorry, Ms. Caballero.

No, this is another Bill that'll come to governance and finance. And I really appreciate what you're trying to do here, which is to provide an opportunity to create housing to get people off the street. And I think if there's one thing that in every single hearing that I've been involved in, in the Assembly is we've had this discussion over and over again, which program works the best and how can we house people in a respectful and a quick manner, and using existing resources is really important. What I was worried about in this, and I'll take a look at it a little bit more carefully over at governance and finances, is the whole issue of industrial, moving into an industrial area. What I do appreciate is if there's industrial right next door, then you can't do the housing. And I think we've been working with adaptive reuse in commercial and retail and not allowing it next to industrial. And the reason this becomes important is in rural communities, you have a mishmash mix of industrial and housing and commercial because the communities are a lot smaller. I just want to make sure it works well in communities that I represent that don't have such a definitive line on here's our industrial area, which is entirely separate from our residential area. So I will support the Bill today, and thank you for thinking outside the box on this.

Mr. Lee, would you like to close?

Yeah. Just to say, you know again, this is another Bill where we hope to give more tools to local governments to meet the needs of the community. Right. Where especially we need to house a lot of unhoused people. And through the success of Project Roomkey and now a lot of private actors who are trying to adapt, especially when it comes to hotels and motels, those are readily, easily converted places to become new apartments, essentially. And we should really be doing all our best to be able to encourage folks to think creatively, using hotels and motels that perhaps aren't necessary anymore. The sellers want to sell them and turn them into fit housing for folks. So we just want to lower the barriers in order for local communities to be able to house the folks and house their neighbors that don't have homes. So respectfully ask your aye vote when the time comes.

All right. When the time comes, we'll open the roll for that.

If you want to open the gate for Miss Addis, that would be awesome. And then she can come up and present her Bill. The next Bill up on the docket is AB 318 by Assembly Member Addis. Welcome.

Thank you. Thank you. Well, thank you honorable Chair and Members of the Committee. I'm here with you to ask for your Aye vote on AB 318, which extends the deadline for the Mobile Home Residency Law Protection Program, or the MRLPP, by three years.

Doing so extends protections for mobile home residents across the state who have encountered violations in their parks. It would also enable a self-funded program to continue to operate without incurring additional cost pressures for the state. And it would allow a vulnerable and often ignored population of Californians their right to seek justice when it comes to their housing. And I do want to emphasize three points on this Bill.

The Bill merely extends the deadline for the program, a program which this Committee previously voted on and passed twice. By extending the sunset, we are following the original intent of the law to fully evaluate the success of this program. And by supporting this Bill today, we would allow a much-needed program to continue. So the inception of 318 In 2018, the state established the Mobile Home Residency Law Protection Program, a five-year pilot program to coordinate the resolution of complaints from homeowners.

And this program is funded by residents across the state who pay just $10 for this additional protection annually. However, the program is set to expire in 2024. This would seem like five years has passed, but really it hasn't. And this is because the program was not really statutorily permitted to accept complaints until July 1, 2020. And HCD did not start referring complaints to the legal service providers until June 2021. And much of that delay had to do with issues related to COVID.

So really, the program has only been active for two years. Additionally, there are remaining funds from the existing $10 fee that mobile home residents have already paid into the program. So most recent reports show that the revenue collected is about $9,894,656, with total expenditures at about 3.5 million. This is due to the short time frame that the program has been active.

So with the program solvent, we really want to do everything we can to protect and preserve this type of housing for seniors, for working families, for veterans, and for other community members on fixed incomes. So with that, I'd really like to turn it over to our witnesses to share why this Bill is needed. We've got two witnesses today. Roger Johnson, a mobile home resident, and Bruce Stanton, counsel for GSMOL.

Thank you very much for attending today. And both witnesses, a reminder, primary witnesses are two minutes each to present their information. Thank you.

Great. Thank you and good afternoon. My name is Roger Johnson with GSMOL, in support of the Bill. The Mobile Home Residency Law Protection Program helps seniors, veterans, and immigrant families with modest incomes to resolve violations of state law. These violations include evictions from our homes, park owners taking residents' electricity to power their equipment, unauthorized fees for water and utilities, elder abuse, housing discrimination, and more.

The program was signed into law in 2019. However, the first complaint could not be filed until July 1, 2020, in order to give HCD time to set up the program. And it was only until June of 2021 that HCD started referring complaints to nonprofit legal service providers. AB 318 extends the MRLPP by an additional three years, giving mobile home residents the benefit of the full five years originally intended by the five-year pilot program.

To fund the program, we self-imposed an annual $10 space fee that we pay. Thank you for your consideration.

Thank you, sir. Next speaker, please. Thank you so much for staying on the two-minute limit.

Yes, good afternoon. I'll do even better than that. Bruce Stanton, Corporate Counsel for GSMOL, here in support, asking for your Aye vote as well, and here to answer any questions. Thank you.

Thank you very much. Okay, so at this point, we'll ask for anybody else in the room who would like to come up to the mic and just express their additional support. Name and that you support it and any organization you may represent.

Gary Kiddey, I live at Mudger Home Park in Citrus Heights, Lake Road Village, and I'm in favor of this Bill.

Thank you, sir. Next up.

My name is Joanne Lewis. I live in Citrus Heights Lakeview Village, and I'm in support.

Thank you.

Good afternoon. Lynn McKim, Lakeview Village, Citrus Heights and I support the Bill.

Thank you Mr. Vice Chair and Members, Jason Eichert, on behalf of the California Mobilehome Park Owners Alliance, regrettably still with an opposed unless amended position.

Thank you. Anybody else? If not, we'll go to opposition witnesses. If there's any opposition witnesses that would like to talk as a primary witness. You have two minutes, sir. Welcome.

And I say regrettably because I think we're actually quite close on this Bill and it would be very easy for us to be neutral on it. We do not disagree that the program should be extended at least for another year. But that is where we differ, is that we believe that it is important that it only be extended for one other year, because, as you know well, Senator, the Joint Legislative Audit Committee approved an audit of this program.

It has not performed as it was expected to perform to date. Perhaps some of that's due to the pandemic, perhaps some of it's due to the program structure.

But the results of that audit will be available at the end of the year, and we believe that it would be far more appropriate to have that in hand to weigh the recommendations from the State Auditor and negotiate and debate together on how the program should proceed, if it should proceed, what form it should take, the fee structure in it. To date, the program has collected more revenue than is needed. It seems premature to do a three-year extension when an audit is still pending.

And so for that reason, we regrettably remain opposed. And unless the Bill could be amended to just be a one-year extension, we have to request your no vote today.

Thank you for your comments. Next speaker, you have two minutes. Thank you.

Andrew Govenar, on behalf of WMA, echo the same comments as Mr. Eichert. We're simply asking for a one-year extension. There's a 7.3 million surplus of non-general funds.

If this program goes on for another three years, you'll be looking at upwards of $10 million now in surplus, with residents and owners paying $10 a space. The Joint Legislative, the Audit Committee and the State Auditor has assigned certain hours and certain amount of money to get the audit done. That will be done by December of this year. So why wouldn't we simply introduce a Bill next year, fine-tune whatever it is with the program? Maybe a $10 fee is too much based on the surplus.

Maybe it should be a dollar. Maybe the program shouldn't exist. But why don't we look at what the Auditor comes back at the end of the year and not simply go for another three years of having the money add up and the complaints not really being dealt with, because what we've seen is no matter how many complaints the program gets over three years, only 77 complaints were referred on to a legal service provider that is 95% below HCD's own expectations.

HCD expected almost 4000 complaints to be referred on. We believe the program is broken. We're not sure that it should be renewed. But having said that, the State Auditor is looking at it. And why wouldn't we just come back next year and fine-tune or reevaluate the program and not just simply build up a surplus for another extra two years upon that? Thank you.

Thank you, Mr. Chair. For those who wish to speak in support or opposition to this Bill, please press one, then zero at this time. Mr. Chair, no one has signaled that they wish to speak.

Thank you for your comments, sir. Is there anybody else in the room that would like to come up and add on opposition to this Bill. If not, we're going to go to the phone lines. Mr. AT&T operator, if you can go ahead and open the phone lines for anybody who wants to express their opposition or support for this Bill. Remember, name, organization and whether you support or oppose the Bill.

Well, then we will bring it back to the dais and any of my colleagues have any questions? Ms. Caballero.

We'll go back and forth on this one. So the opposition makes a cogent argument about doing a one-year extension of the sunset, and I read the Bill because you said there were three things it does, but really all it does is it's a sunset extension. Now, there's a lot more going on in the original Bill, I didn't have a lot of information because I wasn't part of the JLAC hearing that talked about whether the program has been successful or not. So I'm really interested in seeing the report in December.

So could you answer why a three-year sunset at this point, rather than a one-year sunset, so we can take a look at the program and decide what changes might be appropriate?

Sure. And you know, at its core, the Legislature approved a five-year program. The Governor signed a five-year program. In essence, the program has really only had two years. The first complaints were referred in 2021. We'd like to have time to get through that audit to see what those audits find.

We're not sure if that audit really will take the amount of time that we think it is supposed to take. And the other piece of that is that the program may not have had the publicity that it needs to get to enough residents so they know that the program exists. Given what happened in COVID, many people were distracted by the COVID crisis and really faced serious, serious issues during the COVID crisis, may not have had time to bring their complaints forward.

So there's sort of a number of reasons, and at its core, we want to be able to give this program the time that we originally set out to give it, which was those five years. So by extending it the three years, we'd get that five years to be able to make those decisions.

Thank you.

Are we sure?

No pressure. No pressure.

Okay. I like this Bill and I'll support it.

Thank you.

Any other comments? Questions from my colleagues? If not, you may close Miss.

Well, I really appreciate your time and your attention to this very important matter. In my own district, I've really witnessed the challenges that mobile home residents face, especially coming out of the storms and the floods. And we see this as a valuable and important mechanism to ensure the goals that all of us have, that the community has dignified and safe living spaces. So I respectfully ask for your Aye vote.

Thank you. When we get a quorum, we'll open the roll and take a vote on it. Thank you so much for today and bringing the Bill forward. Mr. Ting. Assemblymember Ting, welcome. I believe you have two bills you'd like to discuss.

Yes, I think I have three.

One's on consent.

Perfect. Which one's on consent?

I believe it's AB 932.

Yes. So why don't you talk about AB 976?

AB 932?

You're doing all three of them. So you have four bills up.

Great.

Got it. Okay, perfect.

So AB 976 is quite simple. Refers to ADUs. There is a requirement for owner occupancy coming up as of January 2025, meaning that if you want to build an ADU, you have to be an owner-occupant. This Bill would remove that provision. We think that we want to continue the success of ADUs and allow everyone to keep building ADUs, whether you're occupying it or not. So I respectfully, I vote on AB 976.

Very good. Did you bring any witnesses for us to listen to today? There's a primary witness. You have two minutes. Thank you.

Thank you. Good afternoon, Chair, Members of the Committee. My name is Jordan Panana Carbajal, legislative advocate for California YIMBY, here as a proud sponsor in support of AB 976. California YIMBY is a statewide organization of over 80,000 neighbors dedicated to making an affordable place to live, work, and raise a family for all Californians.

Especially dwelling units, ADUs, our homes are built on existing property to expand the supply of housing. While ADUs can be built in both single and multifamily neighborhoods, they cannot be sold as separate units, meaning they are most often used as low-cost rentals, playing a key role in increasing the affordable housing supply in neighborhoods across California. Not only do ADUs offer affordable housing for the tenant, but they also create sustainability for homeowners as well.

For many, this rental income can serve as an important source of financial security, in many cases, providing sustainability for low-income elderly homeowners. According to a research from the UC Berkeley Turner Center, ADUs produce more affordable homes, typically occupied by low-income families and individuals. AB 976 is a straightforward solution. By permanently extending the existing law which eliminates owner occupancy provisions. ADUs are a proven tool to address California housing shortage, and we should do all we can to ensure their continued success.

We believe this measure strikes the right balance, and for these reasons, we respectfully request your support for AB 976. Thank you.

Thank you very much. Do we have any other witnesses? No. Okay. Do we have anybody in the room who would like to come up and express their support for the Bill? Just MeToo's name and organization you represent? Something like that.

Good afternoon, Mr. Chair, Members. Lewis Morante, on behalf of the Bay Area Council and the Casita Coalition, here in support. Thank you.

All right. At this time, we'll take anybody in opposition. Primary witnesses in opposition? There are nobody speaking in opposition. Anybody in the room who would like to just come up and say, I oppose this Bill and tell us your name, and then you go sit down? No? All right. Then we're going to go to the phone lines again. Once again, Mr. AT&T operator, get people on the line if they want to support or oppose this Bill. Name, organization and whether you support or oppose.

Thank you, Mr. Chair. For those who wish to speak in support or opposition to this Bill, please press one, then zero. We're going to go first to line 47. Line 47, your line is now open.

Mr. Chair and Members of the Committee, Jennifer Speck, on behalf of the California Association of Realtors and respectfully opposed, unless amended to AB 976. Consistent with amendments requested on a related measure, we're seeking amendments that would permit local governments to retain the ability to limit streamlined ADU lot splits to owner occupants by ordinance. Thank you.

Now go to line 61. Line 61, your line is now open.

My name is Lisa Dance. I live in Fremont, California, and I support this Bill.

Mr. Chair, there is no one else's signal that they wish to speak.

All right, then we're going to bring it back to the dias. Mrs. Blakespear.

Yes. Thank you. How did you know? So we all know that ADUs are one of the great bright spots in our housing policy in this state, where we have seen tremendous growth due to the liberalization of a lot of different laws that previously constrained ADU development. So this seems like another in line with that, and I will be happy to support it today. But I wanted to just ask you a question about whether there's a concern about increasing corporate ownership of homes.

So whether they're large tracks that are just corporately owned and bought up, or more of these individual homes that would potentially have ADUs attached or unattached, but do you see that as a concern or what would be your response to that?

Well, I think that we've been watching that issue, I think very closely. Not so much around ADUs, but around corporate ownership, buying single family homes. I don't think that this is something that's in a corporate plan to do ADU development.

It's not really easy to scale. Again, what this is doing is allowing somebody, if they owned a home, or maybe they inherited their family home to build an ADU. We think this is one of the best ways to build property values, especially for owners who just own their home or own a piece of property that they don't reside in.

Right. So you're saying your expectation is it's more the second home or the vacation home where someone would build an ADU on that property?

That's right or for me, my father passed away. My brother and I inherited that home. If we had kept it, that's something that we could have done with it. That's really what I would see. Or someone keeping a family home and doing this, or some people. Again, that home had always been a rental property in my family, so we could always do that. It was never purchased to sell, but always for income.

Yeah. Okay. Thank you.

Thank you.

All right.

With that, you may close.

Just respectfully ask for an aye vote on AB 976.

Alright, thank you. And you want to go on AB 1033?

Sure.

Is that your next bill?

AB 1073 is also...

1033.

1033, yes. Let me just thank the Committee for the amendments. Happy to accept the amendments on the bill. AB 1033 is another ADU. What it does is it would allow separate conveyance of ADUs. And so for me, this is very, very common. I've in the past purchased a duplex.

You go through a condominium conversion process. If you go through a condo conversion conversion process, you can sell each of those units separately. This would follow that very same format. The bill has made sure that it is in line with the same way that you would do that condominium conversion process. We've had a number of stakeholders raise concerns, whether that was the Association of Realtors, the California Bankers Association, Mortgage Bankers Association, California Credit Union League. They have proposed amendments.

We have accepted and worked out every substantive amendment that they have asked us to take. And just so you understand what they were in the past, it was clarifying language around consumer protection disclosure, clarifying that any modification to a condo map created as a result of this bill will require consent of the lien holders, and clarifying that parcels with an existing mortgage receive lender consent under applicable federal guidelines.

Again, this practice was already done in Washington, Oregon, and Texas, and this just further unlocks the power of property and homes. So I believe we have two witnesses here to speak, if that's okay, Mr. Chair?

It is okay as long as they talk for two minutes each. Welcome.

Good afternoon, Chair and Committee. My name is Mark Neuburger, representing the California State Association of Counties. So we were in strong support of AB 1033, and we view it as a key component to address the state's homelessness crisis, which the state is currently facing. CSAC has developed a comprehensive plan which we believe AB 1033 aligns with this plan to effectively address the state's homelessness crisis. A key element of the state's homelessness crisis is the lack of housing of affordable housing in the state.

ADUs have shown themselves to be an effective method to reversing and increasing the production of the affordable housing in the state. However, currently the current law prohibits ADUs from being conveyed separately from the primary residents, except in narrow circumstances. AB 1033 would repeal the state's prohibition against selling ADUs and allow local governments to choose how and if the sale of ADUs will be allowed through a local ordinance. Local governments that want to allow starter homes for sale will take the chance to amend the ADU law to create a more affordable for sale options in their communities. It's for these reasons that CSAC supports AB 1033.

Thank you very much. Next speaker.

Good afternoon, Mr. Chair and Members. Louis Mirante on behalf of the Bay Area Council here in support of AB 1033. I want to keep it short, but I just want to emphasize that this is an optional opt-in bill for local governments. It repeals the state's ban on separately conveying ADUs, which then lets local governments decide how or if to opt in to the bill under pretty prescriptive rules. I want to thank the author and his wonderful staff for working through lots of opposition on this bill. I think a bill has gotten to a much better spot. I'm happy to answer any questions that are related to some of the technical lending concerns still outstanding with the bill.

Happy to take any other technical questions, but we are working through making sure that the federal government will confirm that these loans made to these separately conveyable ADUs are legal, that they'll buy them on the secondary market, which is critical to the success of lending in the state. I'm confident that we're going to get there. We've already got an initial confirmation from FHFA that this is something that they're willing to buy.

And they do buy the loans on the secondary market from at least four other states that have separately conveyable ADU condos. Again, urge your support for AB 1033. I think it's probably going to be one of the state's most successful strategies for increasing homeownership among especially low and moderate income families in the state. And again, happy to answer any technical questions. Thank you.

Thank you. Is there anybody else in the room would like to come up and just support or express their support for AB 1033? Just your name and organization you represent.

Holly Fraumeni de Jesús with Lighthouse Public Affairs on behalf of Spur and Civic Well, in support.

Thank you. Anybody else? Going once, twice, sold. Okay, we're going to go to opposition. Is there any opposition witnesses in the room would like to come up and speak as a primary witness in opposition? You have two minutes. Thank you.

Thank you. Mr. Chair, Members of the Committee. Louis Brown here today on behalf of Community Associations Institute, the California Legislative Action Committee. We represent the homeowners associations in the State of California. We've been in active conversations with the Assembly Member's office but have not reached agreement yet on amendments. While the bill does provide a process for the local governments to go through before they would actually permit this, we've asked for a similar process for HOAS. We believe that it's important that not only a board of the association elect to make this happen, but the actual association members vote to allow this to happen as well.

The bill would authorize the creation of a condominium association within a master association. We think that this would create significant disruption, and without education and outreach, and without understanding of everyone within the community, could create some very interesting neighborly issues. And so we believe that, yes, while it is permissive, we think it should also state, actively, that in order for that association to move forward and provide this, it's first a board vote, and then secondly a vote of the members. If that occurs, then the association could move forward and allow for the separate conveyance of these issues. Happy to answer any other questions you might have. Thank you.

Thank you very much. Are you coming up as a opposition primary witness? Okay. Just opposition. Okay.

With a couple comments.

Well, that sounds like a primary.

Okay, I can be a primary. Sure.

Alright.

Jennifer Wada on behalf of the California Association of Community Managers. We would align our comments with those of the Community Associations Institute. We also believe that issues related to associations and sub-associations being created inside of larger associations needs to be addressed. There are issues such as how do assessments work? What are the voting rights? How are maintenance responsibilities delineated? Issues such as that. We have been in conversations with the author's office. Look forward to continued conversations, but at this time remain opposed unless amended.

Thank you very much. Alright. At this time, we'll go to the room. Is there anybody else would just like to come up and state that they opposed the bill? Tell us your name. No? Going once, twice, sold again. Alright. That's going to take us to the phone lines again. Mr. AT&T operator, can you get drum up some people on the line that would like to express their opposition or support for AB 1033? And a reminder again, just your name, your organization, and whether you oppose or support the bill would suffice.

Thank you, Mr. Chair. For those who wish to speak in support or opposition to AB 1033, please press one, then zero. Mr. Chair, we have at least one person who signaled that they wish to speak. Just a moment, please.

And we're now going to go to line 56. Your line is now open.

Ethan Nagler, on behalf of the City of Eastvale, in respectful opposition.

Mr. Chair, there is no one else.

Thank you very much. We'll bring it back to the dais for Senator Blakespear. Go ahead.

Thank you. So I just wanted to understand what's happening here. So is there a new parcel number that's created?

I don't know if you're familiar with how condos are created or how units can be created into a condominium. So there's a new parcel number. There would be a new assessment. You have the same property. There is a specific set of laws that we don't touch about how the property would be subdivided into two separately owned units and it falls according to current law.

Okay, so the buyer of the new ADU would pay property taxes.

Correct.

And would have a separate utility sewer hookup. It's basically creating additional density for cities' general plans. And all of this would be an addition.

Okay. So it would be a Homeowners Association of one. Or, I mean, when there's this discussion about the HOAs and if there's one ADU.

Right.

There's a Homeowners Association of two. Because you have the house and you have the ADU, you could have a Homeowner's Association of two. So I've, in the past, again, purchased a duplex. I lived upstairs, my brother lived downstairs, formed it into two condominiums. The Association was the two of us. And you have CCNRs that you write just to be safe.

You don't have to, but you generally should have CCNRs just to make sure that once they are separately conveyed and you're no longer family, which is what we eventually did, you actually have a set of rules governing the Association.

Right. Okay. So the realtors opposed, and there's some other opposition. So has that been taken off now that you've taken the amendments, or does the opposition remain?

We think we've satisfied the lenders, but we're still waiting for official notice. But again, everything substantive that they've asked us to do with the Bill, we have done. The one thing that they had asked was to get a response from the FHA. From the federal FHA, in terms of making sure that any loan would be purchased by Fannie Freddie and of course, you know, getting a response from the federal FHA takes a little bit of time.

Right. Okay.

Even from California, FHA it would take time.

Okay. Thank you.

Yeah. All right, we're going to take a break right now and establish quorum, since we have it. So if you could call the roll.

[Roll Call]. We have a quorum.

Great. Now that a quorum has been established, were there any questions from the Dias? Senator Caballero.

Assembly Member, your Bill will come to governance and finance after this Committee, but I have some concerns, and I guess we'll see whether you get a letter from the lenders indicating that the issue has been resolved to their satisfaction. Here's my concern, is that although some people may put ADUs on a separate sewer and a separate electrical line and a separate water line, I doubt that everybody will do that. And if that's not done, then it inextricably joins the two units.

Even if you separate them and sell off, you're receiving your services from the main unit. And my concern is, although I understand what you did with your brother, and that's great. In rural California, people are not going to be as sophisticated and know how to be able to set up the contractual obligations that will make it clear as to what they're selling and what their rights and obligations are in regards to that sale and the ability to get a loan.

So I'm concerned, and so we'll take a look at it at governance and finance. I'll support it today. But some of the questions and the answers make me more worried than I was when I first read this. So we'll have an opportunity to have a conversation about how that all works.

I don't want to set up a situation where people are suing each other because it didn't work out how they thought, because they sold a piece of the property, and the buyer that got it didn't get what they thought they were getting. So I appreciate what you're trying to do here, but I'm a little bit nervous about it.

So, again, Senator, this process is no different than existing law. I mean, you have existing law. There are duplexes, fourplexes, all of our state, rural California, urban California. You may have more duplexes in your district than me, to be frank. And there is a process statewide to turn them into condominiums. And there's a process at your local governments, your local cities, to govern that process. This law does not change any of that. So, however, cities in your jurisdictions would govern a condominium process.

That is how it would be governed in any of your cities or unincorporated counties. That does not change. All this says is if a city or local jurisdiction is interested in opting in, then they could allow the residents of that jurisdiction to separately convey the ADU. And again, it's an opt-in. So again, your rural California districts and cities would have to opt in. And I'm assuming that if that's something that was of interest, that's what they would choose.

And of course, they would do so, I assume, thoughtfully. Right. So we're not forcing anybody to do something that they don't want to do. And most importantly, we're not forcing the property owner to do something they don't want to do. This is all additive, and we think this is a helpful first step to creating more homeownership opportunities. We see many times for a lot of ADUs, quite frankly, we know how expensive it is to purchase homes.

I bet, my guess, is a lot of these will be conveyed to children, frankly, because it's almost impossible, depending on how wealthy you are or where you live, to see your children be able to buy property anywhere near you, especially in, anywhere along the coast in the state. Right. So again, this is something that cities would opt into. So if that hopefully would help with. Obviously, if the cities did so, they would do so knowingly.

I appreciate that the opt-in is really important. We just had some really bad experiences with condominium developments that were built by private developers and sold to low-income residents who then, because they had no management experience, the HOAs suffered and didn't build up reserves and they fell apart and the city had to come in and private streets that weren't maintained. It was a disaster.

And so I just want to make sure it's an opt-in proposal, because those projects were not city-sponsored, they were privately sponsored. Good ideas, but it didn't set up the infrastructure necessary to be able to maintain the viability of the privately owned pieces of the project. So I appreciate what you're doing here as an opt-in.

Thank you.

All right, any other questions from the dais? If not Assembly Member Ting you may close.

Ask for your Aye vote on AB 1033.

All right, so this is a do pass to housing and finance. This is a do pass and a re-referral to governance and finance. So if you want to take roll. Oh, yeah, I guess I could use a motion. Ms Blakespear. We have a motion by Senator Blakespear. Go ahead and call roll. Thank you.

[Roll Call]. That is four to one.

All right, we'll hold that open until the other Members can get in and add on. Okay, let's see. Next up, we have Assembly Member Ting.

Chair. May I ask a question? Would it be possible for us to do, since we have a quorum for us to do, the ones that we've already heard?

But then you'll want to escape.

Well, when it ends, I'd rather be able to leave instead of waiting for all the stragglers.

Yeah, I was actually hoping to get Mr. Ting done, and then we were going to do roll in between while we change.

Okay, perfect.

Mr. Ting, if you'd like to go ahead with your AB 1633.

Thank you, Senator. AB 1633 strengthens the Housing Accountability Act, and it really helps provide a little more certainty for developers trying to build much-needed housing across our state. The Housing Accountability Act was written by the state to ensure that local governments acted properly when they were rejecting or allowing the developments to go through their process. This law really became needed.

Very famous case in my city, as well as our Chair city, around 469 Stevenson, which was a valet parking lot for a Nordstrom that was a block away. This project was passed, approved by our planning Department, but then held up by our San Francisco Board of Supervisors under CQA. Unfortunately, it was held in CQA, but really did not allow the developer any feedback to address the situation or figure out how to have a path forward.

You might have all heard the Governor himself had to intercede in this project to move it forward, however, because he did so at such a time that the economy has sort of changed. The developer at this point is not moving ahead with the project, which is very unfortunate because we need housing in San Francisco just like we need housing in the rest of the state.

This Bill would create a remedy for critical projects that are unfairly denied and ensures that they are not held in an endless cycle, to be held in purgatory. Local agencies would have a certain amount of time to make decisions, and then should there be any concerns, the developer does have the ability to take them to court. This allows the developer to have a certain amount of certainty. The projects that are limited to certain areas are limited to urbanized zones.

They have a minimum density requirement of 15 units per acre, and they meet the requirements for an exemption or has gone through legally sufficient environmental review. So this does not circumvent the secret process. This process just allows a certain level of certainty once the secret process is done, so that the developer would be told if the project was being held up that they could actually remediate or do something to address whatever the City Council Board of Supervisors concerns might be. So with that, respectfully ask for a Aye. vote on AB 1633.

Okay, and did you have any primary witnesses today?

Yes, two of us.

Okay, so each of you have two minutes. Thank you.

Mark Stivers with the California Housing Partnership. And thanks to you all at the Legislature, we have a number of exemptions that apply in secret to affordable housing. There are also clear processes for under which local governments can adopt mitigated negative declarations. However, those exemptions and processes are only so good as the paper they're printed on if local governments are not willing to recognize them or utilize them in individual cases.

And so we at the partnership who work with developers of affordable housing have run into this often where a development is clearly eligible for an exemption and the local government just will deny it and put you through an environmental review process that can take a long time, is then subject to legal challenge. And so what we are trying to do here is create certainty.

We're trying to create certainty that when the development meets the actual eligibility requirements for an exemption, that we can utilize that exemption and move forward with the development. This Bill essentially codifies the position of the California Department of Housing Community Development that has been in place for some time. And so we think that just strengthens that position of the state to ensure that affordable housing and all needed housing can move forward when it complies with the rules. Thank you very much.

Good afternoon, Mr. Chair and Members. Lewis Bronte with the Barrier Council. As Barrier Council proudly represents many of the firms that were involved in trying to build 469 Stevenson and are here to support AB 1633. Too many bills today, sorry. In large part because of a response to that project. The state's Housing Accountability act is perhaps the state's most important law that relates to housing.

It establishes penalties for local governments that willfully deny or willfully fail to follow both their own laws and state laws with regards to housing.

San Francisco very creatively discovered that if you wrongfully deny a project via the CEQA documentation process that the HAA claims are not reviewable, the Superior Court in San Francisco found that those claims are not reviewable under the State's Housing Accountability Act, meaning that there's free range to deny a project for any reason as long as you do so by failing to adopt the CEQA documentation. This Bill does not affect CEQA, the statute.

It simply decides that local governments have to make a decision in a timely manner and respond to the facts presented about CEQA determinations or wrongful denials, especially those that are willfully made wrongfully, are reviewable under the State's Housing Accountability Act. Again, just creating that penalty, applying that penalty so that there isn't a way to evade state law or local law in this sort of creative fashion. Happy to answer any other questions you have about the Bill, but strongly urge your support for AB 1633 today. Thank you.

Very good. Thank you. At this time, we'll take add-ons for people that are in support, just your name and the organization you represent.

Holly Fraumeni de Jesus with Lighthouse Public Affairs, here today in support on behalf of SPUR and CivicWell.

Thank you. Next speaker.

Good afternoon, Mr. Chair and Members. Andres Ramirez on behalf of the Nonprofit Housing Association of Northern California, in support.

Thank you.

Marina Wyatt with the California Housing Consortium, in support.

Bob Naylor for Fieldstead and Company, Howard Domason, Jr., in support.

Chair, Members of the Committee, Jordan Panana Carbajal here on behalf of California YIMBY here as a proud co-sponsor in support of 1633. Thank you so much.

Steven Stenzler with Brownstein, on behalf of the Housing Action Coalition, in support.

Very good. Thank you. So now we're going to go to opposition. Is there any primary opposition witnesses who would like to come up and speak for two minutes? We have one. Welcome.

Good afternoon, Mr. Chair, Members of the Committee. My name is Christina Caro. I'm here on behalf of the State Building Construction Trades Council respectfully in opposition to AB 1633. I first do want to acknowledge Assembly Member Ting and his staff and the sponsors for meeting with us earlier in this session to hear our concerns about the Bill. However, we've not been able to resolve those and remain respectfully in opposition today. I would note that AB 1633 is not going to accelerate housing production.

Contrary to some of what you've heard today, the Bill actually creates a litigation tool for developers to circumvent the CEQA process and skip the administrative process that applies to all land-use projects by challenging the environmental review process for their projects in court before that process is complete. This directly undermines the environmental and public participation mandates of CEQA by penalizing agencies for responding to evidence in order to mitigate the harmful effects of projects. And that is precisely the purpose of environmental review.

Recent amendments to the Bill focus on dense housing in urbanized areas, and while that is a laudable goal. Those factors may actually increase impacts which require mitigation under CEQA, because when you construct housing projects in dense urban areas, the construction impacts tend to have acute impacts on local residents and workers who live and work near the project site.

This Bill would also result in litigation costs, in attorneys' fees, and in fines being levied against agencies simply for complying with CEQA before the project is even approved or denied. Now, that's contrary to the purpose of both the California Environmental Quality Act and the Housing Accountability Act, and it does not increase housing production. Now, recent studies have shown that CEQA is actually not a major obstacle to housing.

A 2023 study just found that, of all the projects undergoing environmental review in the state, only 1.9% of those are subject to CEQA challenges at all. And of those, only a quarter of them are housing projects. So that's less than one-half of 1% of all projects in the state that are housing projects undergoing a CEQA challenge. That is not a statewide problem. On the other hand, the Bill is very expensive and may actually delay the projects, which it involves.

Last year, the Assembly Appropriations Committee found that the Bill would cost about $800,000 in taxpayer funds for just 10 new lawsuits filed under the Bill. And each of those lawsuits in the courts is likely to be delayed for a substantial amount of time, potentially years. So for all of these reasons, criminalizing environmental and public health protections is a bad idea for California. So we urge you to vote no on AB 1633. Thank you.

Thank you for your testimony today. Is there anybody else who would like to speak as a primary witness in opposition? If not, we'll go to. Anybody in the room who would like to come up and add on their opposition to AB 1633? If not, we're going to go to the phone lines. AT& T operator. If you can get some people on the line who would like to either testify in support or opposition to AB 1633.

Remember, just your name, your organization you represent, and whether you support or oppose.

Thank you, Mr. Chair. For those who wish to speak in support or opposition to this Bill, please press one, then zero at this time. Press one, then zero.

Mr. Chair, it appears there is no one who signaled that they wish to speak.

If there is no one who wishes to speak, I will bring it back to the dais, and we'll see if anybody up here has any questions or comments they would like to add. Senator Ochoa Bogh?

I just would love to give the Member an opportunity to address some of the concerns that were brought up from the opposition.

Thank you very much, Senator. Again, this bill doesn't touch any of the CEQA statutes at all. What you heard from the opposition is that this allows the developer some opportunity to insert themselves if they are stuck in an endless CEQA loop. So what the opposition talked about was, before determinations made, whether it is affirmative or a negative determination, quite often what we see with a number of housing developments is that no decision is made, and you're just held there in sort of government bureaucratic purgatory waiting for a decision to be made. So what this bill does is set a certain time frame. Asking the government agency to make a decision, either affirmative or negative, doesn't prescribe by the decision.

And, also, that if there is a decision around in denial of CEQA, that you have to articulate why under CEQA, it was denied. You can't just deny it because they felt like it. They have to deny it for certain environmental reasons. So again, giving the developer an opportunity to remediate this. Again, we try to keep it narrow around urbanized and slightly more dense, frankly, because that's where there should be a lot of focus to get more housing built in our denser areas.

In our areas that are a little more urbanized, you can have that kind of density. So again, this provides a certain level of certainty without touching the CEQA statute. And it also forces local jurisdictions to make a decision. Now, again, the decision could be to deny the project. That's fully in that local government's purview. But again, I think right now we have a housing crisis.

We can't force every developer into this unknown situation forever. And we want to make sure that they have a certain level of certainty so that they could either figure out what to do with that property or move on to the next project. I think it's rather unfair.

Again, I think that was one of the tactics of the opponents of this project was that they were just going to delay, delay, delay, and they finally allowed the approval to happen because by then it didn't matter because the economy had turned. They knew the developer wasn't going to build it because it just financially didn't pencil. That, to me, is not how governments should react when we have a statewide housing crisis. So, again, this is something that doesn't just impact my city, but so many other cities all across the state.

Thank you.

Any other questions, comments?

Again, I'll just...

Allow that to be your closing.

I will. I was just going to say that. Thank you, Senator.

Alright, let's see. This is a do pass and then re-refer to Committee on Environmental Quality. Do I have a motion? Moved by Senator Cortese, so you may call the roll.

Senator Wiener? Ochoa Bogh? Aye. Ochoa Bogh, aye. Blakespear? Aye. Blakespear, aye. Caballero? Aye. Caballero, aye. Cortese? Cortese, aye. McGuire? Padilla? Padilla, aye. Seyarto? Seyarto, aye.

[Roll Call]. Six to zero.

All right, at this time, we're just going to take a couple of seconds to go through the roll and catch up so that other Members that might have to go testify on another Bill may do so. So I guess we'll be starting with item number one. Okay, so if we can call the roll on item number one. That's AB 42. We have a motion on item number one. AB 42. Motion by Blakespear. Go ahead and call roll.

This is AB 42 by Senator Ramos. The motion is do pass and re-referred to the Committee on Governance and Finance. [Roll Call] Six to zero.

All right, that takes us to item number three. That's AB 309 by Lee. Do you have a motion?

I'll move it.

Moved by Senator Cortese. Go ahead and call roll.

This is AB 309 by Senator Lee. The motion is do pass and re-referred to the Committee on Governance and Finance. [Roll Call] It's four to two.

We'll hold that open. That brings us to item number four. AB 1490 by Lee also. Do I have a motion? Motion to move the Bill by, was that--Senator Padilla.

Motion is due, passed and re-referred to the Committee on Governance and Finance. [Roll Call] That's five to one.

Okay, we'll hold that open. That takes us to item number five. That's AB 318 by Addis. Do we have a motion?

I'll move.

A motion by Blakespear, go ahead and call Roll.

The motion is due pass and re-referred to the Committee on Judiciary. [Roll Call]. That is four to one.

All right. And then that takes us to item number 21. And that is AB 976 by Assemblymember--You have a motion for that? Motion by Senator Cortese.

The motion is due pass and re-referred to the Committee in Governance and Finance. [Roll Call]. That is five to one, six to one.

Seyarto, aye to no.

Seyarto, aye to no.

That was 976, correct? Yeah, thank you.

That's four to two.

Okay. Thank you, I want to thank Senator Seyarto for presiding while I had to step out. Okay, so we are going to now take up the consent calendar, which is item two, AB 1508. Item seven, AB, 323. Item 10, AB 430. Item 14, AB 1764. Item 20, AB 932. Item 27, AB 1334--excuse me, item 29, AB 1386. Can I please have a motion on the moved by Senator Seyarto? And we will call the roll.

[Roll Call]. Seven to zero.

Okay, the vote is seven to zero. We'll put that item on call. We'll now ask Assembly Member Connolly to come up to present Item six, AB 319.

Good afternoon, Chair and Members. Pleased to present AB 319 today, which codifies important conflict of interest policies for mobile home inspectors, as recommended by the California State Auditor. In 2020, the State Auditor released a report on the Department of Housing and Community Development, or HCD, finding that they had not taken adequate steps to determine whether mobile home park inspectors had potential conflicts of interest related to the parks they were responsible for inspecting.

The report also found the Department had not properly reported certain complaints of Inspector misconduct. AB 319 requires HCD to adopt strengthened conflict of interest policies for mobile home park inspectors, establish a better system to process complaints, and extends a sunset on the Mobile Home Park Inspection Program by one year to ensure inspectors are allowed to continue to perform health and safety checks. This bill has no opposition. With me to testify in support is Andrew Govenar from the Western Manufactured Housing Communities Association.

Chair, Members of the Committee. Andrew Govenar, Governmental Advocates on behalf of WMA in support of the measure. Adding a conflict of interest provision for the inspectors we think is a good idea. I will just note that we would support more than a one year sunset on the Mobile Home Program, especially considering that in our previous bill, AB 318, we're talking about a three year sunset for a bill that has an audit due in December, and yet we're only extending a permanent program by one year. But with that, we support the bill. Thank you.

Is there any other? Anyone else? Okay, we'll now go to the phone lines.

Thank you, Mr. Chair. For those who wish to speak or support our opposition, please press one, then zero. We're going to go to line 69. Your line is now open.

Hi, good afternoon. I'm Nina Weiler-Harwell with AARP California in support.

Mr. Chair, there was no one else who signaled that they wish to speak.

Okay, thank you. We'll bring it back to the Committee. Any questions or comments, colleagues? Okay, motion by Senator Cortese. And you may close.

I don't think we did oppose.

Oh, I'm sorry. I got confused because we had a little bit of a tweener there. Is there any opposition in the hearing room? Okay, now we'll bring it back to the Committee. We have a motion by Senator Cortese. You may close.

Thank you. Respectfully ask for an aye vote.

Okay, we will call the roll.

Motion is do pass and re-refer to the Committee and Appropriations. Senator Wiener? Aye. Wiener, aye. Ochoa Bogh? Ochoa Bogh, aye. Blakespear? Blakespear, aye. Caballero? Caballero, aye. Cortese? Cortese, aye. McGuire? Padilla? Padilla, aye. Seyarto? Seyarto, aye. Skinner? Umberg? Wahab? Seven to zero vote.

Seven to zero. We'll put it on call. Thank you, Assembly Member. Okay, we'll now ask Assembly Member Wicks to come up, who has three bills to present. We'll start with item 11, AB 440. Unless you'd like to go in a different order.

Can I start with AB 1319?

Okay. Item 12, AB 1319.

And I'm also presenting at the end, I'll do some Member Alvarez's Bill as well on behalf. Okay, AB 1319. AB 1319 enacts targeted modifications to state law governing the Bay Area Housing Finance Authority, also known as BAFA. BAFA was created by AB 1487 in 2019, authored by David Chu, of which I was a proud co-author. It was created to help the Bay Area to take a regional perspective to a regional problem, which is, of course, our housing affordability issue.

Since BAFA was created, it has hired an Executive Director and staff, developed a business plan, received $20 million from the state to implement pilot programs, and begun preparations for a ballot measure to raise funds to support the creation and preservation of affordable housing. BAFA is governed by MTC and ABAG, who are the sponsors of this Bill, along with regional advocates for affordable housing.

In getting BAFFA up and running, they and partners in the affordable housing community noticed that there was a handful of places where the law lacked clarity, made implementation challenging, or didn't reflect recent evolutions in best practices such as the homelessness prevention techniques we learned during the pandemic. The Bill includes the modifications necessary to address these existing issues so that BAFA can best fulfill its mission to help ensure housing affordability for lower-income residents in the Bay Area.

Here with me to talk in support of the Bill is Julie Snyder, a principal legislative advocate for MTC and ABAG.

Please come forward.

Good afternoon, Mr. Chairman. Members Julie Snyder with MTC and ABAG. The Bay Area Housing Finance Authority is our affiliated entity. It's charged with developing region-wide solutions to our housing affordability challenge, a challenge that heavily impacts whether or not we'll be able to meet our climate goals, mobility, and equity goals. AB 1319 gives us additional tools to carry out the state's mandate as Assembly Member Wicks outlined. We're preparing to place a 10 to $20 billion housing bond on the November 2024 ballot.

And in order to maximize the impact of this funding, AB 1319 makes a series of targeted modifications. I'll stop there, answer any questions about specific provisions, and we respectfully ask for your Aye vote. Thank you.

Thank you very much. Is there any additional support for AB 1319? Please come forward. Say your name and your affiliation.

Good afternoon, Mr. Chair and Members, Andres Ramirez, on behalf of the Nonprofit Housing Association of Northern California, All Home, the City of Half Moon Bay, all in strong support of the Bill. Thank you.

Hi there. Mark Stivers of the California Housing Partnership, in support. Thank you.

Graciela Castillo-Krings, on behalf of Enterprise Community Partners, in strong support.

Good afternoon, Chair and Members. Jordan Grimes, on behalf of Greenbelt Alliance, in strong support.

Great. Any additional support in the hearing room? Seeing none. Is there any opposition in the hearing room? Seeing none. We'll go to the phone lines.

For anyone who would like to speak in support or opposition, please press one, then zero. Press one, then zero. There is no one who signaled that they wish to speak.

Okay, we'll bring it back to the Committee. Colleagues, any questions or comments? Yes, Senator Cortese.

Thanks, Mr. Chair. And this, perhaps this is a question for the witness. First of all, I'm very familiar with the background on this, and I appreciate the author bringing it forward and helping BAFA and the Commission that's essentially behind it to keep moving forward on this. Some of the provisions laid out in the analysis I could have sworn were already in the authorization, but maybe there's just a restatement, the one that caught my eye.

And I apologize for not having an opportunity between the briefing and now to ask this question. It says item six in the analysis on page six specifies that BAFA's powers. I'm sorry, picked up the wrong item here. I'm looking for the item that says BAFA is. Here we go. It's item five. Enables BAFA to create one or more California Limited Liability Companies LLCs, in other words, of which BAFA is the sole member in exercising the powers granted through those limited liability companies.

So it's basically allowing BAFA to delegate to an LLC all of its powers. It does say that BAFA would be the sole member, but has there been discussion at the Commission? My recollection is that the Metropolitan Transportation Commission is, in effect, the board for BAFA. And would they continue with the LLC to be the governance of the LLC? That's really my only question. Or have they discussed that?

That's a great question, Senator, and you're exactly right. The MTC Board does sit as the board of the Bay Area Housing Finance Agency. And then the Association of Bay Area Governments has additional governance authority over our expenditure plan. In this case, the MTC Board would stay as the board. This particular provision was requested by a number of the local governments that we work with. It will enable us to issue revenue bonds to finance moderate-income apartments with the bonds repaid by rents.

So it's a technical change for that particular type of corporation structure, but that's the only space in which we envision utilizing that authority.

That's an excellent explanation. Thank you very much. I appreciate the information. Thank you, Mr. Chair.

Thank you. Any additional questions or comments? Seeing none, we have a motion, I think, by Senator Cortese. And that is to pass the bill to governance and finance. You may close.

Respectfully ask for an Aye vote.

Okay, we'll call the roll.

[Roll Call]. Five to two.

The vote is five to two. We'll put it on call. And which vote would you like to take up next?

Let's go to AB 440.

Okay, that's item 11. AB 440. You may proceed.

Thank you, Mr. Chair. Last year, I carried AB 2334, which changed the definition of maximum density, or base density in Density Bonus Law. To make clear that the maximum density is calculated based on the greatest density in any of the underlying zone documents, the zoning ordinance, the land use element of the general plan, or a specific plan.

When amending the definition, we left in a sentence that says, if there is inconsistency between the land use element of the general plan and a specific plan, the greater density of the two prevails. That has created confusion because it is more specific than the prior sentence. This Bill corrects that confusion respectfully asks for an aye vote, and Marina Wiant is here to answer any technical questions, should we have any.

Okay. Are you here for questions or do I speak?

I can speak, too.

You can do it. Whatever you'd like.

Marina Wiant with the California Housing Consortium. We were a sponsor of 2334, and this is really quite minor of a Bill to clarify some of the confusion that has arisen in practice of the definition over the last year. Happy to answer questions, and urge your aye vote today. Thank you.

Thank you. Any additional support in the hearing room? Okay. Seeing none, is there any opposition? Are you support or opposition? Please come forward.

Thank you, Mr. Chair. Michael Gunning, Lighthouse Public Affairs, in support on behalf of Civic Well.

Okay, thank you. Any additional support? Any opposition in the hearing room, please come forward. Okay, we'll go to the phone lines.

Thank you, Mr. Chair. For those who wish to speak in support or opposition, please press one, then zero. Press one, then zero. Mr. Chair, no one has signaled that they wish to speak.

Okay, we'll bring it back to the Committee. Any questions or comments? Senator Blakespear?

Yes. Thank you. I thought your previous Bill clarified any of the problems, so I was surprised to see that this created even more inconsistencies. I'm happy to support it, and I don't know if you want to give a little bit more information about how that created the confusion, but I wasn't clear on that.

Sure. I mean, Marina might be able to give a better example because she's more of a practitioner in the space.

There came up an issue where HCD was providing technical assistance on a particular project, and because there was sort of a duplicative reference of greater, the attorneys were disagreeing about whether the prior sentence that we're keeping in was the determining sentence, or if it was the greater than that's in the second sentence. And the attorneys were, like, leaning towards the lesser of the greater, and we want to clarify that it's the greater of the greater.

Okay. With that, I will move approval. So I'll move this Bill.

Thank you.

Okay, a motion by Senator Blakespear. Any other questions or comments? Okay, seeing none, you may close

Respectfully ask for an aye vote.

We'll call the roll.

Motion is due pass. [Roll Call]. Seven to one.

Okay. Seven to one, we'll put it on call, and then we will now go to item 13, AB 1657. You may proceed.

Thank you, Mr. Chair and Members. AB 1657 authorizes the Affordable Housing Bond Act of 2024, which would place a $10 billion housing bond on the March 5, 2024 primary ballot to fund production of affordable housing and supportive housing. I think we all know and all can agree that the need for more money for affordable housing is critical. We are due to run out of our funds by the end of next year, of our previous bond monies, the bond that was voted on in 2018.

So this will hopefully help backfill. In my opinion, this is a small piece of a larger problem of figuring out sustained, ongoing funding for affordable housing, which I think we haven't fully committed to as a body yet, which I think we should. So this is a step in the right direction. I'm also cognizant of and recognize the fact that there are other ballot measures out there.

The Governor is obviously part of that conversation, as are some of my colleagues, and I will obviously work with them to ensure that we don't have a multi-housing bond ballot situation on either the March or November ballots, but ensure that we are fulfilling what I view as our moral obligation to fund affordable housing in the State of California. And with that, would respectfully ask for an aye vote. I also have Marina Wiant here as our primary witness to also discuss the need for this measure.

You may proceed.

Thank you. Marina Wiant with the California Housing Consortium. This bill comes at a really crucial time for the State of California. Counter-cyclical investment in affordable housing is one of the most important ways that we can close the housing affordable supply gap because it allows affordable developers to take advantage of lower costs and to keep the construction workforce employed as market redevelopment slows. Additionally, as Assembly Member Wicks mentioned, we are about to run out of all of the bond funds that were authorized in 2018.

While we are currently having an oversubscription for the state Housing Department funds of four to one, and in particular for the multifamily housing program, which the majority of these bonds would be designated, to are oversubscribed 10 to one. In this moment today, we have over 15,000 units that are shovel ready and entitled and are just awaiting funding. And that's why this is such a critical measure, and I urge your support today. Thank you.

Thank you. Additional support. Please come forward and state your name and affiliation if any.

Yeah, Mark Stivers with the California Housing Partnership, and I will just add one brief comment which is that in order to draw down the maximum amount of federal low-income housing tax credits, we need those state funds to fill in the financing gaps. And if the HCD programs that we rely on to do that no longer have funding, we will actually then lose access to a significant amount of federal resources as well. So we urge your support. Thank you.

Next speaker.

Julie Snyder with MTC abac in support. Thank you.

Good afternoon, Mr. Chairman, Members. Graciela Castillo-Krings on behalf of Enterprise Community Partners in support.

Next speaker.

Good afternoon. Lizzie Cootsona with Shaw, Yoder, Antwih, Schmelzer, and Lange here on behalf of the Cities of Beverly Hills, Santa Monica, and West Hollywood, as well as the California Faculty Association in support. Thank you.

Amy Brown, on behalf of the City of Camarillo, in support.

Jonathan Clay on behalf of the City of Encinitas in support.

Cynthia Castillo, on behalf of Western Center on Law and Poverty in support.

Steven Stenzler with Brownstein, on behalf of the Housing Action Coalition and Housing California, in support.

Andres Ramirez on behalf of All Home as well as the Cities of Fremont, Concord, and Soledad, in support.

Abram Diaz with the Nonprofit Housing Association of Northern California, in support.

Marwa Abubakr with the Greenlining Institute, in strong support.

Sochea Chhay is on behalf of the Greenlining Institute, strong support.

Ariana Nieves also on behalf of the Greenlining Institute, in strong support.

Sedrick Brown also on behalf of the Greenlining Institute, in strong support.

Jordan Grimes on behalf of Greenbelt Alliance, in strong support.

Mitch Mankin on behalf of San Francisco Housing Development Corporation, in support.

Holly Fraumeni De Jesus with Lighthouse Public Affairs, on behalf of United Way Greater Los Angeles in support and Habitat for Humanity California, in support. Because of the inclusion of homeownership and not just rental housing. Thank you.

Any additional support for AB 1657, please come forward. Okay, we'll now move to opposition. If there's any opposition to AB 1657, please come forward. Seeing none, we'll go to the phone lines.

For those who wish to speak in support or opposition to this bill, please press one, then zero. Press one, then zero. We're going to now go to line 58. Line 58. Your line is now open.

Good afternoon, Mr. Chair and Members. Lauren De Valencia representing the American Planning Association, California Chapter, in support.

Now go to line 47. Line 47, your line is now open.

Mr. Chair, Members of the Committee, Jennifer Speck, on behalf of the California Association of Realtors, we are in an opposed, unless amended, position seeking to exempt the acquisition of one before housing and respectfully request consideration of the amendments before the Bill moves forward. Thank you.

Line 72, your line is now open.

This is Sandra Nakagawa with the California Climate and Agriculture Network, also known as CalCan, in support.

Line 71.

Good afternoon. Caroline Sorencioni, on behalf of the League of California Cities, in support.

Mr. Chair. There is no one else.

Okay. We'll bring it back to the Committee. Colleagues, any questions or comments? Senator Blakespear.

Yes, thank you. I think this is a really well drafted affordable housing bond Bill, and I just want to recognize that the 5.25 billion for the multifamily housing program is really critical, as well as the supportive housing administered through the MHP, 1.5 billion for affordable preservation and rehabilitation, 1 billion to Cal Home and MyHome down payment assistance programs, 500 million for farmworker housing.

All of that strikes the right balance from my perspective, of the problems that we're facing in California when it comes to really ending our homelessness problem. And we know that we are not seeing, I feel, we are not seeing the sufficient political or societal will to finance that at the effort that is needed. And so having this type of a bond is just really critical right now. So I'm an enthusiastic supporter, and I hope that it's able to make it all the way. Thank you.

Okay. Seeing a motion by Senator Padilla, I just want to comment. Thank you for moving this forward. I'm proud to be a co-author of it. We need a much, much greater government investment in housing to complement private sector investment, and this will help us move in that direction.

I do want to make two comments, and I know you and I are aligned on this, but I will say this because you will notice that there was essentially no opposition, as the realtors have a very specific, partial concern, but they're not opposed to the bond as a whole. And there's no, just, like, general opposition.

And there are a lot of cities and groups that are very excited about having more money, but they're not as excited about actually making it easier and less expensive to build housing. As we invest more public money in housing, we need to be more efficient in how we deliver that housing, and it's way, way too expensive to build. And some of the factors are market conditions beyond our control. We can't always control the supply chain or the cost of construction materials.

But we can control the obscene impact fees that some cities, including my own city of San Francisco, outrageously place on new housing. In San Francisco, I think it's pushing $200,000 a year, $200,000 per unit in exactions, almost $200,000 just in exactions by the City of San Francisco. And there are other cities that do this as well with outrageous park fees or other fees. There are cities that just make it really expensive for both market rate and often for affordable housing.

Not all of those fees apply to affordable housing, but a bunch of them do. We also make it way too long and arduous and unpredictable to build housing. And so we've been doing obviously a lot of work, and the author has certainly been a leader in that realm as well to try to make it faster. If we're going to put this public money into new affordable housing, it should be approved in a matter of months, not years, months.

And that means that some of the supporters of the Bill today who are not always aligned with that acceleration of permitting, I hope will reevaluate and not just support the money, but also support efficiently implementing that money. So we're building the housing quickly, getting people off the streets, stabilizing people who are at risk of becoming homelessness or becoming homeless. And it's a complete package. But with that said, thank you for doing this, and you may close.

Thank you, Mr. Chair. I agree with everything you said. I think the way I think about it is we have to do everything we can to create a streamlined environment to make it easier and quicker to build the housing that we know we need. That includes the fees. It includes how developers access these funds, making that a streamlined process, streamlining the CEQA reforms that we need to do, all of the above.

That is a big bucket of work that the Legislature, in big part to your leadership, has been working on over the last, say, six or seven years. And I think we've achieved a lot. There's more to do towards that end. And then the other piece to your point is then we have to invest, right? We have to make sure that we're doing both of those things.

And frankly, this bond is important, but it's a fraction of what we need to actually be investing if we're really going to get out of this and we're going to have real structural change on solving the homelessness crisis that plagues our communities, its significant investments coupled with the streamlining and the ability to build more quickly, I know it's what I'm committed to and I think everyone here in this Committee is as well, so happy to work in partnership towards that end and respectfully ask for an Aye vote.

Thank you very much. We have a motion by Senator Padilla, and we will call the roll.

Motion is do pass and rerefer the Committee on Governance and Finance. [Roll Call]. That's six to zero.

Okay, six to zero. We'll put that Bill on call, and then I know you'll be presenting item number 26, AB 1287, for Assembly Member Alvarez.

Yes. So, presenting on behalf of Assembly Member Alvarez. So I might not be the expert on this Bill in the way that he is, but I'm going to give it my best shot. Thank you for allowing me to present his Bill. AB 1287. AB 1287 requires a city, county, or city and county to grant additional density and concessions if an applicant agrees to include additional moderate income units on top of the maximum amount of units for low, very low, or moderate income units.

We all know that the cost of housing is exorbitant in California. In addition to it being challenging for our very low income and low income communities, it's also difficult for our middle income families as well. The cost burden has continued to grow as we have failed to build enough middle income housing units to reduce prices and release pressure on the overall housing market.

By giving developers an additional incentive under Density Bonus Law to build more moderate income units, AB 1287 is a critical step towards providing relief. As noted, I firmly believe in supporting the development of very low and low income housing, which is why Mr. Alvarez wrote the Bill, so that existing incentives must be maxed out before you can take advantage of this new one, and have added amendments that would include an additional incentive for very low income units.

Therefore, AB 1287 not only incentivizes the creation of moderate income units, but also creates new economic reasons to maximize deeply affordable unit production. Appreciate you all hearing out this Bill today. Respectfully asked for an aye vote. And here to testify in support of the Bill is Colin Parent, Executive Director of Circulate San Diego, and Rammy Cortez from Rammy Urban Infill.

Great, thank you very much. Good afternoon, Mr. Chair and Members of the Committee. My name is Colin Parent. I'm the vice mayor of the City of La Mesa, which is in the 39th Senate District. For reference, in the 79th Assembly District, I'm also the CEO and General counsel of a nonprofit called Circulate San Diego. We are one of the co-sponsors of this Bill, and as has been mentioned perhaps a few times in this Committee, we have a housing crisis in California.

Definitely a severe shortage of very low income homes, as well as a shortage of moderate income home. In the state of California, We have State Density Bonus Law. We actually, Circulate was one of the co-sponsors of one of the enhancements in 2020 to get to a 50% bonus. My organization, Circulate San Diego, published some research a few years ago showing that it's really working great, like it's producing all sorts of very low income units, and that's terrific.

And what this Bill does is that it says that if you maximize out the affordable production and density bonus and you choose to build additional units that are deed restricted at moderate income, then you can get an additional bonus.

So it takes into account both the need for both affordable for both very low income and moderate homes, and also takes into account that we need to make to prioritize the very low income that are the most severely rent burdened and making sure that the existing policies are maxing out production in that front. So it strikes that right balance and makes sure that we can have a real win win. So we really appreciate your consideration of this Bill and request, and aye vote.

Thank you, next speaker in support.

Good afternoon. My name is Rami Cortez and I'm a developer in San Diego and builder of transit-oriented housing. We find ourselves not only in a housing crisis, but a humanitarian crisis as the number of our unhoused neighbors continues to rise due to our inability to create housing at all income levels. I'm here supporting AB 1287, the Middle Income Bonus program, because it'll help build much needed housing across our state.

Without density bonus incentive programs that allow for buy right development, none of my projects would be financially feasible. That doesn't mean a smaller project with less homes. That means no project built, zero homes. 90% of all housing across the state is built by the private sector, while only 10% of housing built is built with government financial subsidy. That's why incentive-based housing programs that support mixed income projects without relying on public subsidy are so important.

The current affordable Housing Density Bonus program incentivizes very low income housing, but not middle income housing. Even in the City of San Diego, which has made strides in housing policy and production, in our fifth RHNA cycle that ended in 2020, there were only 37 moderate homes built of the 15,462 moderate homes targeted. This is less than one quarter of 1% of the RHNA goal. This Bill would support middle income housing and projects. I build where we need it most, along transit corridors and job centers. Thank you.

Thank you. Any additional support? Public comments, please come forward. Thank you. Please come forward.

Bob Naylor for Field Stud & Company. That's Howard Amundsen, Jr., in support.

Holly Fraumeni de Jesús with Lighthouse Public Affairs on behalf of Spur, Civic Well, San Diego Housing Commission, and Sandhill Properties, all in support.

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

Jordan Grimes on behalf of Greenbelt Alliance, in support. Thank you.

Any additional support? Public comment. Seeing none, is there any opposition? Please come forward.

Good afternoon. Lizzie Cootsona, on behalf of the City of Beverly Hills, in respectful opposition, and apologies for missing the letter submission deadline. Thank you.

Thank you. Any additional opposition? Okay, we'll go to the phone lines.

Those who wish to speak in support or opposition, please press one, then zero at this time. We're going to go to line 73. The line is now open.

Good afternoon, Mr. Chair. Lewis Morant, on behalf of the Bay Area Council, here in strong support as one of the co-sponsors. Thank you.

There is no one else.

Okay, we'll bring it back to the Committee. Colleagues, any questions or comments? Okay, great. Senator Caballero.

Could you talk very briefly, and I apologize, I didn't--I had 50 bills to read last night, so I missed the Coastal Act. Can you talk about the Coastal Act and how it relates to this Bill? Because I thought this was just a density bonus, and then all of a sudden, sudden I see Coastal Act, red flags go up. Yeah.

I believe that the provisions related to Coastal Act were removed from the Bill.

I believe the provisions related to the Coastal Act were removed from the Bill.

I'm sorry?

Were removed. Okay, good. Solves my issue.

Well, I want to just sort of comment on that because I have some opinions on that, and I'll be honest with you, I do not agree with the original version of the Bill, which is an excellent version, and I want to commend the author, Mr. Alvarez, for bringing the original version of this Bill forward. And I wish that that original version were in this Committee. I do not agree respectfully with the amendments that were the Committee Amendments in Assembly Natural Resources.

I'm not going to create a house issue by trying to strip out another Committee's Amendments. I respect that Committee, and I just have a respectful disagreement. The original version of this Bill, part of what it did was to actually make clear that the State Density Bonus Law actually applies in the coastal zone, because right now, under existing law, it effectively does not apply or very minimally applies. The Coastal Act effectively overrides the density bonus law in effect.

And we know that the coastal zone is whiter and higher income than California as a whole. And I just do not agree. I fundamentally disagree with effectively exempting the coastal zone from various pillar state housing laws. It's very, very inequitable, and the Coastal Commission does a lot of good work, and I respect the Commission and a lot of its work. I think the constant push against applying state housing laws to the coastal zone is wrong.

And I wish that the Coastal Commission would take a different approach. And we're in conversation right now on a different Bill with the Coastal Commission. And so I think that this is an area in need of significant discussion, and I hope that going forward, not in this Bill, that next year, that that'll happen on a broader level. But that's my understanding of what happens here.

Okay, I appreciate the explanation, because if in some way, it was going to exempt it, I just wanted to change my opinion on the Bill, because the Coastal Commission has been very well, past coastal commissions, because I've had conversations with them more recently, and I think they're interested in changing a little bit of how they view affordable housing along the coastal zone. But there have been too many instances where they've interfered with the development of farm worker housing in farmworker communities that move into the coastal region. And I just wanted to make sure we weren't doing this in this Bill and that I had missed it. So I appreciate what you just said, Mr. Chair, and I agree with you 100%.

Thank you. Thank you. This Bill, as amended in the Assembly, keeps the status quo in terms of the coastal zone. Yeah. In 2020, when the pro tem convened a working group of Senators across the spectrum in terms of views on housing, it was actually after SB 50 failed, and this pro tem convened a diverse working group. One of the principles that came out of that working group was not to exempt the coastal zone from state housing laws, because it is highly, highly inequitable.

So, again, he's not here, but thank the author for at least trying to say that density bonus law should apply in the coastal zone, and I hope things will turn out for the future. Are there any other questions or comments? Okay, you may close.

Just on behalf of Senator Member Alvarez, respectfully ask for an aye vote. And personally, I also agree with the sentiments expressed here.

Thank you. Okay. That is, we do have a motion. I'm sorry, a motion by Senator Cortese. And that is two paths to Governance and Finance. And we'll call the roll.

Senator Wiener. [Roll Call]. Six to zero.

Six to zero. We'll put that on call. Thank you for the marathon. Thank you for the marathon. Okay, I see. Assemblymember Quirk-Silva. Okay, thank you, Ms. Quirk-silva. Item eight. AB 346.

Good afternoon, Mr. Chair and Members of the Committee. 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 a 4%, 9% federal tax credit as conditions best dictate In 2019, California paired these state credits with 4% federal credits because the 4% federal credits were undersubscribed at the time. But, go back 2019, a lot has changed since then. As we know, conditions have dramatically changed.

4% federal credits are now oversubscribed three to one, and federal rules do not allow us to expand that program. Each 4% credit development that receives state credits simply displaces another worthy development during this housing crisis. However, there is no federal barrier to expanding the 9% federal credit program. Therefore, if under these conditions, we pair the state credits with 9% federal credits, we can fund additional affordable homes.

AB 346 does not increase taxes in any way because the amount of credits is fixed in the budget each year. AB 346 simply is a more effective and impactful way for California to deploy its scarce affordable housing resources. With me today to provide testimony and answer any questions, here is 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. Just two quick points in a year when the budget is facing a deficit, we are trying to work on making programs more efficient and putting state resources to better use. This Bill has two kind of very clear provisions. One, that allows us to use the state credits more efficiently to put them with the federal program where they are most needed, and secondly, by clarifying when developers can start claiming state credits.

It actually increases the pricing that private investors will pay for. The same dollar of state credit by $0.07. Went with 500 million in state credits. That makes for a $35 million increase in impact with no impact to the state budget. The same amount of credits are available. So we urge your support today. Thank you very much.

Next speaker.

Abram Diaz with the Nonprofit Housing Association of Northern California, in support.

Lizzie Cootsona with Shaw, Yoder, Antwih, Schmelzer, and Lang, here on behalf of the City and County of San Francisco, in support.

Marina Wiant, with the California Housing Consortium, in support.

Any additional support, please come forward. Okay. Seeing none. Is there any opposition to AB 346? Okay, we'll go to the phone lines.

For those who wish to speak in support or opposition, please press one, then zero. Mr. Chair, there is no one.

OK, we'll bring it back to the Committee. Any questions or comments? Seeing none, you may close.

Respectfully ask for an Aye vote.

Okay, do we have a motion? A motion by Senator Wahab, and we'll call the roll.

Motion is do pass and re-refer to the Committee in Governance and Finance. [Roll Call]. Six to zero.

Okay, six to zero. We'll put that on call. And now we'll go to your second bill, Item nine, AB 468.

Thank you, Mr. Chair and Members. I am here to present AB 468, which extends existing inspection 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 now being converted to residential use without the knowledge of local officials and without the building being habitable.

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 hardworking Californians must live 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 and industrial buildings being used as housing.

With me today to provide testimony in support and to answer any questions, I have. Faith Borges on behalf of the bill sponsor, the California Association of Code Enforcement Officers, and Mr. Brady Guertin, Public Affairs Manager of the California Building officials.

You may proceed.

Thank you. Good afternoon. Faith Borges on behalf of the California Association of Code Enforcement Officers. Very briefly, code enforcement officers are the men and women on the front lines of enforcing housing codes, and they deal with all aspects of ensuring safety and quality of life for Californians, and it's a privilege to represent them here today. Census data shows that approximately 2 million Californians live in substandard conditions, with the housing shortage and Covid having worsened those numbers.

Under existing law, a building is deemed substandard when an enforcement officer determines that specified conditions exist that endanger life, health, safety, and the public for the public or occupants. This bill clarifies an ambiguity in existing law by clearly stating that a substandard building for purposes of the state housing law means a residential building or any building used for human habitation that is substandard, regardless of the zoning designation.

State housing law provides for relocation assistance to a tenant displaced from a residential rental unit as the result of an order to vacate by local enforcement agencies under serious conditions that include a lack of running water, inadequate lavatories, infestations, and other serious conditions. This bill defines the term residential rental unit for those purposes for relocation assistance for lawful tenants to include any unit rented for human habitation that is a substandard building.

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

These conditions were a contributing factor to the mental health challenges of the shooter that took the lives of seven farm workers, husbands, wives, fathers, and daughters. We can think of no better closing than to ask for your support here today. Thank you.

Good afternoon, Chair and Members. Brady Guertin on behalf of the California Building officials in strong support of this measure. We, our mission is to promote public health and safety in building construction through responsible legislation, education, and building code development. AB 468 would provide an opportunity for local enforcement agencies to increase compliance with the state housing law and better enforce improvements to the necessary dilapidated buildings.

As we've seen before throughout history with the Ghost Ship warehouse fire, as was pointed out in the farm worker housing, it is really important that our local enforcement agencies can better promote public health and safety in unsanitary and unsafe housing. We're pleased to stand in support and urge an aye vote on this bill, and happy to answer any questions. Thank you.

Thank you. Next speaker. Thank you.

Good afternoon. Brandon Kitagawa, with Regional Asthma Management and Prevention in support.

Any additional support, public comment in the room? Seeing none. Is there any opposition? Seeing none, we'll move to the phone lines.

Please press one, then zero if you wish to speak in support or opposition of this bill. There is no one.

Okay. We'll bring it back to the Committee. Any questions or comments? Senator Padilla.

Thank you. Just briefly, Mr. Chairman, to the author, appreciate you bringing the bill. The analysis makes a note with respect to unlawful occupation and petition for unlawful detainer, clarifying how we might measure that as an exemption. Are you willing to take up that sort of input? Do you anticipate providing additional clarification as the bill moves forward?

At this point, we haven't had that raised, other than your comment right now. So we're always willing to work on this. I do want to make it clear it's a little bit of a tricky of an issue, as many of us here in this Committee room are working tirelessly on the housing crisis.

So we want to make sure that we don't overreach on this policy, which sometimes when you're looking at code enforcement where people are living, and it becomes an overreach where there might be units that could be fixed, and people could stay in them versus moving them out. So I'm not really answering your question. I think, but...

Just with respect to the fact that the bill language prescribes this scenario, wherein it may make a homeowner immune under the circumstances, it just points out that you may want to clarify how we measure that if, in fact, that's the case. And that was sort of the genesis.

Yes, we'll continue to work on this. And like I said, our goal is to keep people safe, but not to evict people unnecessarily.

Okay. Any other questions or comments? Seeing none. Do we have a motion? Okay. And that is a motion to pass to the Judiciary Committee. Correct? Okay, you may close.

Like I said, this is a little bit of a tricky, where we want to walk a fine balance, which means keeping people safe, not having repeat deaths that we've seen, but also, when possible, keeping people in their homes. With that, I respectfully ask for an aye vote.

Okay, we have a motion, pass to Judiciary Committee, and we'll call the roll.

Senator Wiener? Aye. Wiener, aye. Ochoa Bogh? Aye. Ochoa Bogh, aye. Blakespear? Blakespear, aye. Caballero? Cortese? Cortese, aye. McGuire? Padilla? Padilla, aye. Seyarto? Skinner? Umberg? Wahab? Wahab, aye. Six to zero.

That is six votes. We'll put it on call. Thank you very much. Okay, Mr. Haney, who has two bills. Which bill would you like to start with?

572, I think.

Okay, we'll start with item 18, AB 572. You may proceed.

Thank you, Mr. Chair and Members. AB 572 Caps annual HOA increases at 5 percent for below market rate homeowners to prohibit exorbitant HOA fee increases, which push these homeowners, often into foreclosing on their homes. BMR homeownership programs target first time homebuyers who are low or moderate income. The homebuyers have to go through a rigorous verification process to show they are income eligible and their mortgage rate can only be a third of their monthly income.

These units are usually condos in mixed income buildings with monthly HOA fees, and in most circumstances, the mixed income buildings are 80 to 90 percent market rate and 10 to 20 percent below market rate owners. Current law caps annual HOA fees increases at 20 percent for all homeowners, regardless of whether they are below market rate units or not. This is causing the HOA fees for below market rate owners to increase so rapidly that is becoming more than their entire monthly mortgage payment.

There's clearly a deficiency in our current policy where we have a maximum on how much the mortgage of a BMR unit can be, but not on the maximum of their annual HOA fee increases, especially because the benefits of HOA fee increases are not enjoyed equally among all of the homeowners. Market rate owners get to recoup the cost of HOA fees through the eventual sale of the units at a new, appreciated price. BMR units don't have the same luxury prices because sale prices are limited.

Based on the fact that these are capped units as BMRs. A 5 percent cap will balance affordability and stability for the BMR owners with the HOA's need to keep up with expenses. And I want to be clear, it sets the cap on regular assessments, so special assessments for higher one time costs or special projects are not included. I amended this Bill in the Assembly to only impact HOA governing documents signed after January 1, 2024.

So moving forward, this amendment removed the opposition from the California Association of Realtors, Bankers Association, and the Association of Community Managers. It's a timely piece of legislation to make sure folks who are promised homeownership at an affordable cost are able to remain in their units and aren't forced to foreclose on their homes. With me to testify in support are Mitch Mankin from the San Francisco Housing Development Corporation and Abram Diaz from Nonprofit Housing of Northern California.

You may come forward.

Hi, folks. Thank you, Senators, for your time today. My name is Mitch Mankin. I'm with San Francisco Housing Development Corporation. We're a community based affordable housing developer and a HUD counseling agency. We're serving the Bay Area, but especially the Black community. Over the last few years, you've heard an increasing number of complaints through our counselors from clients about high HOA fee increases.

BMR owners are being pushed to default into foreclosure or having liens behind their homes because of these HOA fees that sometimes eclipse their mortgage payments. And in conversations with other organizations, we found it's not just our clients. This is a problem that's happening across the BMR program. So the pro solution in AB 572 is going forward to limit increases in regular HOA fee assessments on BMR homes to 5 percent per year.

Thank you.

That gives BMR owners predictability and stability, and it mitigates the most difficult increases while leaving typical increases untouched. Any decrease in fees is offset with a smaller increase in fees on the market units so that the HOA as a whole maintains financing. So in a typical development, as mentioned, with 10 to 20 percent of the units below market rate, each mark rate unit would pay an additional amount that's equal to between a quarter and a ninth of the decrease in fees on each affordable home.

So we actually took this and modeled it out 30 years ahead. The increases on marker rate units are quite small, whereas the decreases in below market rate units are quite significant. And additionally, I want to mention this doesn't change the HOA's ability to levy a special or emergency assessment in case of more serious problems with the building. Happy to answer any questions or clarify, as is Abram Diaz here from NPH. Thank you.

Thank you, Committee Chairman, Members, and thank you to our author for carrying this Bill. My name is Abram Diaz with NPH representing affordable housing builders all across Northern California. So the state Legislature has consistently supported homeownership as a key pathway to build equity and generational wealth for low income Californians. Accordingly, we've budgeted and legislated to create new homeownership opportunities for all Californians, especially our most vulnerable.

We won't be able to advance those low income homeownership goals, though, if on one hand we give these families a precious opportunity to build equity and on the other hand they have to face foreclosure, default or loss of the home over HOA fees. This Bill provides a straightforward fee framework as discussed, a responsible cap that allows families to plan for increases but also ensures that HOAs can fulfill their neighborhood responsibilities.

We've worked really closely with key organizations to address their concerns and urge your aye vote on this Bill.

Thank you. Any additional support in the hearing room? Seeing none, is there any opposition? Please come forward.

Good afternoon, Mr. Chair and Members. Steve Cruz, on behalf of the California Building Industry Association, we are in an opposed unless amended position and primarily because of the cost shifts that we believe will occur if you put a cap on the below market rate homeowners. The Assembly Member did reference the, I guess, the intention of perhaps covering 10 to 20%. Right now there is no such cap in the Bill. So that is one of the amendments that we are trying to have a conversation with the SW Member about. We've had several conversations and hopefully we can get there. So, one of which would put a cap at 15% on of the homeowners in which you can provide the cap. And the second was to move the effective date to 2025. There are projects that are in the pipeline that have applied for DRE. We don't want to disrupt or delay the projects that are in the pipeline, but again, we are opposed, but look forward to working with the author.

Great. Any additional opposition? Seeing none, we'll go to the phone lines.

For those who wish to speak in support of opposition, please press 1 and 0. Mr. Chair, there is no one.

OK. We'll bring it back to the Committee. Any questions or comments? Senator Wahab and then Senator Blakespear.

One, I just want to thank the Assembly Member for bringing this forward. I often complain about HOA fees and the fact that they're more than a car. Right. They're about hitting $500 in the Bay Area, some $600, some a little less. It's unsustainable even for individuals that are looking to downsize, specifically those on fixed incomes. This is a very balanced policy. So I really do appreciate you working on this. And one thing that I do want to highlight in particular is the fact that HOAs also kind of hit individuals with out of nowhere costs as well. Right. For any damage or improvement that are not really clearly established for individuals that have just recently purchased a property, there's also no transparency or real accountability and their own local jurisdiction almost. Right. So I do really just want to highlight that for folks that we do have to actually work on some of the efforts around HOAs and really just balancing power there. But one of the things I did want to say is that besides bringing this forward, it's incredibly important to also identify that HOAs for condos and townhomes that in the Bay are over $1.3 million is quite significant for even starter homes. And it's limiting the potential of people purchasing these properties because they fear the HOA where their payment, it's almost half their payment. So I will be moving this when appropriate. But I really just want to appreciate the Assembly Member for bringing this forward and really tackling an issue that's overlooked.

Great, Senator Blakespear.

Yes, I just wanted to second many of those comments that the HOA fees are, the unpredictability of them and the fact that they can go up to unknown amounts and people are on the hook for that I think is really troubling. And it is something that, it's almost like a hidden fee, because sometimes people aren't asking that at the beginning of the discussion about whether to rent or to buy a property. So to me, when you look at the balance of the interest, if somebody's able to sell their unit for market rate, their HOA fee should be higher than the person whose deed restrictions mean that they will be selling it potentially for less or when or if they move out. So I do think that that makes a lot of sense. I'm not sure the opposition talking about the cap, I'm not sure where you are with that, but I wanted to invite you to respond if you wanted.

Sure. And I appreciate that. I think that's one of the reasons why this made a lot of sense to me, is right now, sometimes the HOA fee is going towards improving the property in a way that lifts the property values up, which I totally understand. But if you're a BMR, indeed restricted, you can't gain the benefit of those property increases in the same way. So that's one of the flaws in the system, as well as the fact we have obviously recognized that these folks have to have their mortgage capped at a certain level because they can only afford so much. And yet those hidden fees of the HOAs are making it totally unaffordable to them. So this felt fair. I also will say it doesn't necessarily need to be cost onto the market rate folks, because I agree HOA fees are often too expensive for everyone, that actually maybe this can lead them to not increase it as much for everybody and to consider it that aspect of it. We are going to come to an agreement at some level of a certain percentage within a building. Right now we have it 100%. So if it's 100% affordable, this would not apply. But I think we're just trying to find the right percentage to make this fair and balanced in that way. And so I definitely have the commitment to do that. And I also understand the issue of there are some buildings that are already moving forward, which this could create some challenges for them in the near term. So I'm also open to that amendment that CBI brought forward.

And just one more comment. I mean, one of the main issues is that the HOA fees really, do they go to improve the property in their common spaces, their landscaping, their maintenance. And so it seems like there's not any way, I don't see a way for there to be an external pressure that says that these have to be lower unless we're going to subsidize it. So basically it is a bit of a circular problem because all of the maintenance costs and all the other things that are going up around construction, inflation and everything end up hitting the HOA that's internally managed. So people elect their own HOA. So you're thinking about how is it that we can make sure that this is as fair as possible? And so that's why it does seem to strike the right balance.

I mean, the ideal situation might be that we are able to help to subsidize these in some way similar as we're subsidizing the unit itself. We haven't set up the system that way. And so we have to figure out what's the fairest way in recognition of both the limitations of income and also the benefits that are received. If you can't sell your unit, you're not getting some of the same benefits of some of those investments. And so the HOA might be making decisions to make investments that they feel are improving the property value, that if you're a BMR owner, you're going to have to pay it, but you can't sell your unit or you can't pull the equity out of your home in the same way. Yeah. Thank you.

Okay. Seeing no other comment. I'm sorry, Senator Ochoa Bogh. I'm sorry. I didn't see you.

So I understand the concern with HOAs. I know that our new place that we just bought up here, I'm surprised how quickly the prices have gone up. But I wanted to ask something about, or I wanted to address the 5% that you stipulate in this Bill. Why 5%? How did you come up with that figure and not say something that had to be relatable to the CPI?

Well, right now there's a cap of 20% for all. So we really just tried to think of what would be most fair. That would balance the fact that in some cases, the difference would be spread out amongst some of the other owners with what folks could likely afford. So we have a cap in right now. And so we thought 5% was the most fair, that in terms of some of the math that we talked about, what the actual impact would be in these buildings, fairly minimal for the other owners, but significant based on what some of the increases that we're seeing on these BMR folks who, because of, if they're getting 15% every year, if you're a BMR owner, it quickly becomes at a level where we know, based on your documented income, you just cannot afford. So we decided that it was fair, in light of the 20% that already exists, that this would be the right balance.

Okay. All right. Thank you.

Thank you.

Great. I support this Bill. I think it is potentially a big barrier to folks owning BMRs. And I appreciate, first of all, that this only applies to newly created HOAs because people relied on existing arrangements and making purchase decisions. And, of course, as Senator Wahab mentioned, a lot of people are buying condos or townhomes or into HOAs and are at market rate and are really stretching and can barely make their mortgage and HOA payments. So they're not BMR owners, but they are still severely constrained and they've really stretched. I know there's a wide variety of HOAs, and they're HOAs that are sort of massive and very disconnected, I think perhaps from individual homeowners. I know my own HOA of 39 units. We raise the dues when we have new maintenance to do or insurance premiums go up or whatever. So it is a very complicated issue, but at least making it going forward to new HOAS allows all of that to sort of settle out as people can make informed decisions. So I appreciate you bringing this Bill, and I'm happy to support it. And, I'm sorry, do we have a motion? Senator Wahab. Okay, Senator Wahab has moved the Bill, and you may close.

Thank you. I appreciate the comments and the support, and respectfully ask for your aye vote.

Call the roll.

Motion is due, passed and referred to the Committee on Judiciary. Senator Wiener, Wiener aye. Ochoa Bogh, Ochoa Bogh no. Blakespear, Blakespear aye. Caballero. Cortese, Cortese aye. McGuire. Padilla, Padilla aye. Seyarto. Skinner. Umberg. Wahab, Wahab aye. Five to one.

Five to one. We'll put it on call and we'll go to your second Bill, item number 19, AB 1485.

Thank you, Mr. Chair. AB 1485 would strengthen California's ability to enforce state housing law. It does so by giving the Department of Housing and Community Development, or HCD, and the Attorney General the ability to represent the state's interests in pending legal actions filed by third parties to address violations of state housing law. Right now, Californians are facing a housing crisis of epic proportion, which I know you all know very well.

We need to produce almost 2.5 million housing units over the next eight years to keep up with housing demand. But we are only constructing about 80,000 units per year. So we need every tool at our disposal to guarantee we meet our housing goals and to ensure that housing is actually being built. Existing law empowers the Attorney General to bring suit for a violation of a state housing law. It also allows third parties to file lawsuits to enforce state housing laws.

But under current law, when a third party files a lawsuit related to enforcement of state housing laws, the Attorney General's Office can only become a party to the lawsuit by petitioning the court to intervene. This procedural hurdle delays housing from being built because the courts can take months to schedule a hearing on the petition. Even once a court hearing is scheduled, the Attorney General's ability to intervene in the case is at the court's discretion.

The Attorney General should have the ability to enforce state housing laws and represent the state's interests in housing cases, regardless of whether the Attorney General or a private party files the action first. Important to note that the Attorney General lacks, while the Attorney General lacks the statutory authority to intervene in third party suits on housing law, they have the statutory right already to intervene on other critical issues, like enforcing environmental laws.

Housing law is just as important, and granting this statutory right to intervene will help ensure that the state's interests are represented in court and help us reach our housing goals. Here to testify and support with me today is Jana Staniford from the Office of the Attorney General and Steven Stenzler on behalf of the Housing Action Coalition. We also have David Pai from the Attorney General's Office on any technical questions.

Thank you. Please proceed us when you're ready.

Thank you. Good afternoon, Madam Chair and Committee Members. My name is Jana Staniford. I'm a Deputy Attorney General and Legislative Advocate in the Attorney General's Office. On behalf of Attorney General Rob Bonta, I want to start by thanking Assembly Member Haney for authoring the bill. And even though he's not here, thank Chair Wiener for coauthoring the bill as well. The Attorney General is proud to sponsor AB 1485. As you know, California is facing a severe housing shortage and affordability crisis.

The Legislature has passed strong housing laws in recent years to address this crisis, and those laws must be enforced. Violators must be held accountable. Attorney General Rob Bonta has made enforcement of housing laws a top priority and will continue to exercise his authority to hold violators accountable. But under many of the state's housing laws, third parties, like housing advocates and developers, are also empowered to file their own lawsuits challenging local land use planning and permitting decisions.

This bill would address a procedural hurdle that the Attorney General faces when a third party files the enforcement action first. Under existing law, the Attorney General's Office has to formally file a petition with the court for permission to intervene in pending third party housing enforcement cases. This requirement causes unnecessary delay in one ongoing case, for example, it took over seven months and several hearings and motions just to intervene in the case.

AB 1485 would remove this procedural hurdle by granting the Attorney General an unconditional statutory right to intervene in third party housing cases. The Attorney General already has this right to intervene in other contexts, including in environmental cases. We routinely use this right to intervene in environmental justice cases, for example. AB 1485 would grant the Attorney General the same right to intervene to enforce state housing laws.

California's Attorney General should have the right to represent the state's interests and enforce state housing laws, regardless of which party files the enforcement action first. Thank you for your time and consideration, Members. We respectfully ask for your aye vote.

Thank you.

Good afternoon, Chair and Members. Steven Stenzler with Brownstein on behalf of the Housing Action Coalition, a proud sponsor of AB 1485. The Housing Action Coalition is a member-supported nonprofit that advocates for building more homes at all levels of affordability to help alleviate California's housing shortage, displacement, and affordability crisis. This bill is a common sense measure to align the office of the Attorney General's statutory authority with its mission to support and uphold the state's housing laws.

The statutory right to intervene would give the AG an unconditional right to join lawsuits to enforce state housing law. The Attorney General already has this right to intervene in other contexts, including when a state statute or regulation has been declared unconstitutional by a court. The Legislature has made great strides to ensure that state law supports equitable, sustainable, and expedient development of housing, but these laws are only as good as their enforcement.

This is a straightforward solution to an issue that supports the Attorney General's ability to intervene and represent the state's interest in housing cases. For these reasons, we're pleased to sponsor AB 1485. Urge your support in the Committee today, and thank Assembly Member Haney for his work on this issue.

Thank you very much. We'll now proceed with any support witnesses here in Room 1200.

Good afternoon, Madam Chair. Michael Gunning, Lighthouse Public Affairs, here on behalf of Civic Well and Spur. Thank you.

Thank you.

Bob Naylor for Fieldstead and Company, that's Howard Ahmanson Jr., an Orange County philanthropist, in support.

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