Senate Standing Committee on Housing

The Senate Housing Committee will start. Not formally, because we don't. Well, we'll start, but we will not take roll yet, because we do not have a quorum. But we can begin to hear our bills, though we will not be able to take any motions on those bills until we have established a quorum. But we can still begin to hear them. So, let me see here is in the room I saw Mr. Becker. So, the first Bill that we have up is SB 1095. Senator Becker. So, Senator Becker, you may come and present. Yeah, we'll do that. But when we have a quorum, we have all that.

Thank you. Good afternoon, Chair. I'm happy today to present SB 1395. This is bill we believe will save lives by bridging the gap between unsheltered and finding permanent housing. We all know California has a large homeless population. What people often don't know is that 67% of our homeless population is unsheltered. Nationally, that's about 20%. New York state, for example, is 5%. And every night in our capitol, I see people sleeping in doorways. I walk past people sleeping in doorways to where I sleep.

And people are suffering on our sidewalks, in encampments. And we know there are high rates of domestic violence, substance abuse, and death in these encampments and on the street. There was just a very large study in the Journal of Health Affairs. In the past 10 years, there's been a 238% increase in mortality rates for homeless communities, unsheltered homeless communities, due to exposure and lack of access to care. So this is a horrifying and unacceptable situation, and it is a crisis.

It's one of the things this bill does say, this is a crisis and extend the Shelter Crisis Act, and it requires a statewide solution. That's why I'm really excited to present this bill, the Interim Housing Act, which fills, really a missing gap on the ladder between, again, unsheltered homelessness and permanent housing. This bill will empower local governments who want to invest in interim housing and put a roof over the heads of our unhoused neighbors, quickly, safely, and at scale.

Specifically cuts the red tape for local governments and empowers them to build interim housing by expediting approvals through CEQA. Simplifies the process for streamlined housing, thus reducing construction time and costs, and builds on current law. Importantly, it extends the Shelter Crisis Act and the Lowberry Navigation Center Law by expanding and extending their ability to streamline projects and provide locals more assurance than they can through the current timeline for these bills to sunset. Lastly, makes funding available for interim housing as a necessary component to our strategy.

Senator Becker, it's okay. Our agenda had the Cozy Homes Cleanup 1095 on, but you've already gone, so you are actually presenting SB 1395.

I apologize.

So. It's okay. I just want it for the record. This is item two, so you may proceed with item two.

Thank you. Thanks for that clarification.

I know.

Okay. I apologize.

Long lead up.

Yeah. That's why we need cozy homes. No. Anyway, I apologize. So, yes, for 1395. These are all things that 1395 will do that I just mentioned. And by doing so, 1395 will let us quickly and inexpensively construct modular, non congregate units on underutilized land at low cost. And today, I have with me two experts: witnesses Adrian Covert from the Bay Area Council and Elizabeth Funk from Dignity Moves.

Good afternoon. Thank you, Madam Chair. Thank you, Senator. California today provides fewer than four shelter beds for every 10 homeless Californians. That is the second lowest rate in the United States and far below the national average of eight beds for every 10 homeless residents. And the chronic shortage of shelter options in California directly contributes to the stat the Senator mentioned of California having the highest rate of unsheltered homelessness in the United States. And the proliferation of unsheltered homelessness in California costs thousands of lives every year needlessly lost to the elements, to accidents, and to criminal violence.

The longer a homeless resident is warehoused beneath our streets, beneath our overpasses, on our streets, or in our riverbeds, and our watersheds, the more trauma they endure and the more likely they are to develop a substance abuse disorder or a psychiatric disorder. SB 1395 will help address this crisis by empowering cities with additional tools to quickly scale high quality, non congregate interim housing to help bring people indoors and save lives with dignity. And I respectfully ask for your aye vote. Thank you.

Good afternoon. My name is Elizabeth Funk. I'm the CEO of Dignity Moves, a nonprofit that is focused on ending unsheltered homelessness. So I'm honored to be here today to talk about the Interim Housing act and why it's so essential. Interim housing is a space that has emerged recently between shelter and permanent housing, and it's emerged out of a necessity, because shelter has been found to be it's required to keep people out of the elements, but it's not a place where people are really rebuilding lives.

Permanent housing is, unfortunately, so expensive, and it's taking so long that for every one person who's getting permanent housing, three, you're falling into homelessness. There's a very obvious missing gap that interim housing can fill. Municipalities have figured this out, and they're doing it. They're doing it on their own. And yet the laws are confusing. They're scheduled to sunset. This act will formally validate interim housing as one tool in the toolkit for addressing unsheltered homelessness. It extends the laws that these housing projects rely on.

It is a pivotal moment on our struggle to end unsheltered homelessness for the cities that are taking this seriously. Understanding that unsheltered is only one component of a very complex issue, but it's the most visible, the most humane, and it is the part that is solvable. If we lean in and decide to do it, this model works, and I hope that you'll vote to support it.

All right, do we have others in support? And this is name and just the add ons. Go ahead.

Michael Lane with Spur Bill, co-sponsor in strong support.

Hi. Catherine Charles with Housing Action Coalition of Housing California in strong support.

Good afternoon. Sylvia Solis here on behalf of the City of Goleta. In support. Thank you.

Any others in support? All right, do we have any opposition? All right, seeing none. Members, any questions or comments? Go ahead, Senator Caballero.

Thank you very much, Madam Chair. I just want to say that I support this 100%. I had the opportunity to visit a site that is really fantastic. It creates an opportunity for stability and really provides an opportunity for people to change their lives. And so when we get a quorum, I'd be happy to move this bill, and I'd like to add on as a co-author.

All right. Without any comments, we'll let you close, Senator Becker.

Thank you. Thank you for those comments. And, yeah, encourage anyone else who wants to come and visit some of these newer interim housing projects. We'd invite you to do so and respectfully ask for an aye vote.

Great. So you can now move on to your Bill number one. Okay. Which is SB 1095, the Cozy Homes Cleanup Act.

Well, thank you. I would like now to move to my other Bill, I apologize again. For 1095, the Cozy Homes Cleanup Act. And I start by saying I will accept the amendments on page five of the analysis to avoid conflicting with the federal Manufactured Home definition. 1095, this Bill is a permissive Bill.

They'll make it easier for homeowners to convert from gas to electric appliances, making it easier for California, therefore, to achieve our emissions reductions goals right now, legal ambiguities or delays in approval of installation from a common interest development such as a homeowner Association or HOA can add time or cost the process of allowing residents to make that switch from gas to electric appliances.

This is particularly burdensome in case of changes of appliances at end of life, where family will not wait and take cold showers for three to six months for their HOA to approve replacement water heater installation. There are also code ambiguities at Department of Housing and Community Development that make it challenging for manufactured home residents to convert from gas to electric. This will clean up those code ambiguities.

This Bill will by making it easier to transition by first avoiding any policies within a common interest development that prevent their placement of a fuel gas burning appliance with an electric appliance. Second, that requires the Department of Housing and Community Development to update guidelines to facilitate the transition from gas to electric appliances. It does require that. With that, I have two witnesses here today, Alan Abbs from the Bay Area Air Quality Management District and Sam Samuelson on behalf of the building decarbon coalition. Thank you.

You may begin.

Good afternoon, Chair Skinner and Members of the Committee. My name is Alan Abbs and I'm the legislative officer for the Bay Area Air Quality Management District, which is the local air regulatory agency for the seven and a half million people of the nine county Bay Area region and the sponsor of Senate Bill 1095.

SB 1095 seeks to eliminate barriers to homeowners wanting to transition from natural gas to electric appliances, which will assist California in its goal of having 6 million heat pumps deployed by the year 2030, reducing fossil fuel consumption, resulting in reducing greenhouse gases and air pollution, and providing health benefits to the public.

SB 1095 does this in two ways, the first by ensuring that homeowners associations in common interest developments can't prohibit or unduly delay the installation of electric heating devices in place of natural gas appliances, and the second is by directing the State Housing and Community Development Department to update guidelines for appliance installations and permitting at manufactured homes and mobile homes to give the same discretion to electric appliances as currently exists for natural gas appliances.

Ensuring access not just to single family houses in Non HoA communities, but to all homes, including manufactured and mobile homes, is key for equitable decarbonization across the state. The Bay Area AQMD strongly supports this goal and plans to be involved in this issue in the years to come. And in closing, I'd like to thank Senator Becker for his leadership on this issue.

I'd also like to add that staff has done a great job capturing the issues in this analysis, and with that, I respectfully ask for your aye vote great.

Good afternoon, Chair Skinner and Members of the Committee. My name is Samantha Samuelson on behalf of the Building Decarbonization Coalition, otherwise known as BDC, in support of Senate Bill 1095. BDC is an association of manufacturers, utilities, local governments, and environmental nonprofits, all focused on eliminating pollution from buildings to improve people's health, prioritize high road jobs, and ensure that our communities are more resilient to the impacts of climate change.

We thank Senator Becker for his leadership in authoring SB 1095, which will clean up outdated building and safety codes, language inhibiting or delaying building and home electrification. BDC's Members find real benefit to this legislation. Sean Armstrong of Redwood Energy reports that most manufactured homes built before 1980 and many built since then have multiple barriers to installing heat pump units inside the building. Covenants that restrict installation can leave occupants without access to the cooling benefits of heat pumps.

Frequently, existing water heater closets can only accommodate 30 to 40 gallon units, limiting the ability of home occupants to take advantage of demand response programs that improve affordability of the unit to the occupant and the grid. BDC has also heard from an existing mobile home occupant who cites an existing HOA limitation keeping their park from allowing external installation of mobile homes, a covenant that would require more than 70% of HOA Members to agree to change.

The occupant emphasized that it is almost impossible to get this number of owners to participate and then vote to change the CCNRs, leaving HOA Members who would like to install a heat pump without the option. As buildings are responsible for roughly two thirds as much NOx pollution as the state's 16 million passenger cars. We must reduce barriers to electrification and encourage equitable building decarbonization to ensure our state's most vulnerable communities are not left behind.

SB 1095 builds upon California's leadership in reducing fossil fuel consumption and will allow more Californians to opt for cozier and healthier zero emission homes. Thank you, Senator Becker, chair Skinner, and Committee Members for the opportunity to testify in support of SB 1095. I respectfully ask for your aye vote.

Great. Anyone else?

Great, thank you. Let's see if there's any add ons.

Good afternoon, Chris Rosa on behalf of NRDC Action Fund and Sierra Club California in support.

All right, so if that's all in support, do we have any in opposition?

Good evening, Madam Chair Members. My name is Chris Wysocki representing WMA, and we appreciate the author's intent to move towards electrification of home appliances in existing mobile home parks and mobile homes. But there's a few practical issues that we have concerns with the Bill on, and until those are addressed, we must remain opposed unless amended. The first thing that we need to talk about is the amperage of the mobile home park itself. Currently, a lot of the parks are older and only have 30 amp systems.

If you move to an all electrification of all electric system, of moving gas heaters to electric heaters and all electric appliances, our concern is that it will require an expensive utility upgrade of the entire park, up to 100 or 200 amp system. As many of you might know that these upgrades are not cheap. They could run well over a million dollars.

And who's going to actually pay for the upgrade of the park. Further, the only other significant issue that we have is installing appliances outside is a big issue for HCD and park managers and park owners alike. In fact, the Mobile Home Maintenance Inspection Program Task Force meeting just came out and released a report and that two of the top four resident violations were one, outside appliances and two, which was interesting, was faulty weather protection and extension cords being used for permanent wiring.

So until those issues are dealt with, HCD, and we look forward to working with the author as this Bill moves through the process. But those are two of our biggest concerns. Basically, who's going to pay for the upgrades? I'll tell you, in 100 space park, amortizing a million dollars over 100 residents can be very expensive, and passing that on through rent may not be practical, so who's going to actually pay for it?

And two, HCD's got some major work it needs to do to re up and revamp its codes. So, Senator, thank you and thank you for the opportunity.

Good afternoon, Madam Chair, Members of the Committee, John Moffatt, on behalf of the California Manufactured Housing Institute, we represent, we're the trade Association for the Builders and Sellers of manufactured homes in the State of California. We appreciate the author working with us and taking the amendments as they're outlined in the Committee analysis.

And once those are in print, we're prepared to move to neutral on the Bill, although we do want to echo the concerns that have been raised by the park owners, parks that are built with, generally speaking, manufactured homes, we don't have a problem with the intent of the Bill, what they're trying to do. We have and can build all electric manufactured homes, but most of those homes have 100 amp panels in them corresponding with what we're seeing at the parks.

And so there are going to need to be some major upgrades both to the home, to the infrastructure. We believe HCD has a role in that and should have a role in that moving forward. But again, we appreciate the amendment on the manufactured home definition, and once that's in print, we'll be moving to neutral on the Bill.

Great. Any other opposition? All right, seeing none. Comment back to the dais. Go ahead, Senator Caballero.

Thank you very much, Madam Chair. I'm glad we're on the right Bill. This just. I want to make sure I understand the process, and then I want to talk about the HCD code issue as I see it. You're not asking the CIDs or the HOAs to do anything necessarily. Right?

Right.

So that's important to me, just in terms of understanding. But I was concerned about the date that's in the analysis, and I was looking for it in the Bill, and unfortunately, I couldn't find it. But it was August 15, 2025. You give HCD eight months to issue regulations. It doesn't say specifically in the analysis that they can do emergency regulations. I don't think this qualifies as a process that would allow emergency regulations.

So they have to comply with the APA, which the fastest you can do regulations is a year. It usually takes about a year and a half, and that's probably appropriate because these changes, I think, have to go through the Building Standards Commission in order to be approved, that there's safety issues involved in electrical access, and there is probably a reason you don't put the equipment on the outside of the trailers, probably for security, but also. Well, who knows?

I'm guessing at this point. I'm going to support your Bill. I think it's a good Bill. I really appreciate you bringing this forward. I just think there's some technical issues, may make sense to meet with HCD and find out. They like emergency regulation authority. Frankly, I don't think it's the way to go. We really want to make sure that we're doing it right, because we are talking about a lot of money, and this doesn't address the new equipment that may be required at the parks.

And I think we need to figure out what's the solution. You don't want to pass on a very expensive upgrade to the electrical capability of the park, to the park residents who we want to be able to continue afford living there. But it is an electrical issue. We've got to take it seriously.

And it may be that we might, in another Bill, need to set up a Fund to help parks so that they're not, as they do the right thing and as people do the right thing and switching out their old appliances that they then don't get socked with a great big cost because of the increased amperage that's required. So that's just my two cents worth on some of these. I think this goes to Judicial next.

And so we need some of the answers for that for my vote in judiciary.

Okay.

But I thank you for doing this because it's the right thing to do. We want everybody to be able to take advantage of the new technology that's available to have green appliances. But there are consequences.

Senator Ochoa Bogh.

So my concerns lie sort of along the lines. As Senator Caballero, I'm kind of curious, as in your mind, as you were working through this Bill with regards to the concerns that were expressed about the cost of the impact that it would have on the electrical systems, and this could go for anything else with the older parks. Right. The water systems, the sewer systems that at some point will have to be updated in many of our parks, especially the older ones.

But in this case, in your mind, how did you see this being worked out financially, especially when you take in consideration that some parks have rent caps, and when you look at the cost of what it would entail, most of the improvements are passed on to the inhabitants of these homes. So in your mind, how did you work that, in your mind that we could make this work?

Well, thank you. And I think Senator Caballero knows she had to know we'll have some of that for her in judiciary. I appreciate the comments. I mean, this is a permissive Bill, right? This really about letting people be able to make these upgrades. I think there probably are some conversations ongoing. I mean, some of this will be figured out with the CC and other bodies as they look to more General to hit our state goals. Right. We already have goals of 2030, 60% clean energy.

We have other goals that were mentioned earlier. So some of that in terms of the financial piece will have to be a part of an ongoing discussion. But this is really meant to be a permissibility to basically say, hey, we want people to be able to take advantage of this technology, as was mentioned. So it's silent right now on the financial piece, but that could be part of some ongoing discussions.

So, through the chair I'm concerned about. My district has quite a bit of manufactured home, mobile home parks in the area. And as I see many of our goals that we have as a state and much of the policy that we're currently supporting and passing on, all well intended. All well intended, of course. I see the financial impact that it has on everyday working California, especially when it comes to my mobile home seniors.

And so though I see the need to be able to be permissive, and I'm always looking forward as to the impact of every policy that we have five, ten, twenty, thirty years from now. And with this, I am concerned about the financial impact that it will have on the mobile home parks, which then will have an impact on our homeowners or our renters in our mobile home parks. So I'm going to lay off on this Bill in great concern on what it will eventually cost our residents.

There are many, many items that we've implemented and passed in this Legislature that are towards our goals for 2045. But I'm looking at the financial impact on the cost of living for California, especially when it comes to costs for parks in those areas where we have cap fees and how they're going to be able to resolve that. So based on that, I'm going to respectfully lay off. But I do commend you on working towards helping our families upgrade their systems.

As a realtor, I completely appreciate that, but I want to see more. I actually thought it was very interesting, Senator Caballero's comment with, regarding maybe placing a fund, but with the deficit that we currently have, I'd like to see how that would work in reality. But thank you for bringing this measure forward.

All right, any other comments? Not yet. And we don't have quorum, so we won't be able to make our motion, but you can close.

Well, thank you. I appreciate the discussion. And we look forward to an ongoing discussion on the financial piece of that along with some of our other, maybe some input for some of our other regulating bodies. I just do hope that we can move forward. I was actually, I can't remember why. I think it was around flooding, I knocked on the door of a mobile home resident and I kind of smelled something and like, your gas is on. His gas stove was on.

And he was like 'Oh, that's how I heat my house, because furnace had gone out and he couldn't replace it. So we heated it by having the gas stove on like 8 hours a day. And we all know how harmful that now can be. So I think we do have to kind of figure this out. And I look forward to continue working with the industry because as you said, we don't want to have a significant cost burden now on the residents. So look forward to continued discussion.

I respectfully ask for an aye vote at the appropriate time.

Great. Thank you, Senator Becker. We've done both your bills, so we will now move on to. Okay, we could do either one. Okay. While we are, we'll use one of the Committee Members, but in the meantime, I'll announce that SB 1357, item eight, is on consent. So again, when we get quorum and all that, we can act on those. So, Senator Padilla, are you ready to present? Okay, go ahead.

Afternoon, Madam Chair and Members of the Committee. I'm here to present SB 1032. And first begin by accepting the Committee amendments and indicating acceptance and a commitment to working the balance of amendments that may be taken at appropriations. SB 1032 would provide DHC, the Department of Housing Community Development, with authority to forgive loans provided to housing providers if the loans are impeding the borrower's ability to maintain and operate project for affordable purposes or senior housing purposes.

In the 1980s and the 1990s, HCD provided several loan programs for affordable housing providers to preserve existing units across the state. While at the time it was fairly easy to obtain loans, repaying them has been difficult because of changes in economic circumstances and later regulatory developments. The premise there was that housing developers would be able to repay the loan balance through profits made on affordable housing developments.

However, there is often little to no profit at the end of the day to be made, and providers often find themselves in an endless cycle of debt. SB 1032 will help address our housing shortage by allowing HCD to forgive these loans in order to help affordable housing providers continue to operate and to be in a better position to access capital.

This is critical, as many of these housing agencies who would qualify here and benefit from loan forgiveness, serve as a main or sole source of affordable housing as a premier provider in their regions. If these loans are not forgiven, providers continuing to operate with them on their books would have a more difficult time accessing capital, could have to close developments as well as operations, and leave more Californians on the street.

This bill would maintain the affordability of units and increase access to capital as indicated so they can maintain supply that they already operate and potentially qualify for additional capital to provide more product. With me today to testify in support is Inyo County Supervisor Jeff Griffiths.

Thank you, Senator, for introducing this bill, and thank you, Madam Chairwoman and Members of this Committee. My name is Jeff Griffiths. I'm a Inyo County Supervisor. I'm also the first Vice President for the California State Association of Counties, and I'm also a Board Member for Inyo Mono Advocates for Community Action. It's a community action agency serving in Inyo, Mono, and Alpine counties in eastern California. And Amaca in 1981, took a $500,000 loan from HCD in order to convert a hotel into low income housing.

And for more than 42 years now, that property has been maintained for below 30% AMI very low income affordable housing for seniors and disabled people in my community, 19 units. While it was a very long time ago, it was everyone's understanding that that was a forgivable loan. In fact, there has been no payments required or paid for principal or interest during that time.

So after 30 years had gone by, in 2011, it was a surprise when HCD presented Amaca with a bill for $1.1 million for principal and interest on this. Now, for the rents that are required to be charged in order to maintain, that is below 30% AMI very low income affordable housing. That does not even cover the cost of managing the property and the utilities, much less have any money left over for repayments of the loan.

After a decade of negotiations and attempts to find some sort of workaround on this, HCD presented this community action agency with a notice of default in 2021 during the pandemic which led to the downfall of the organization, which was the COC for the entire region, was providing all of the homeless services for the entire region.

And through that process and the negative effect on the balance sheet of this nonprofit, it led to an end of all homeless services in the area, an end to the Head Start program, an end to weatherization, and lots of other projects.

As of today, even though this project has been maintained as intended from the beginning, the State of California, through HCD, is threatening foreclosure and the eviction of 19 elderly and disabled people for amount of $1.2 million that was never intended to be collected in the first place. This bill would give HCD the instrument of being able to forgive that loan. It's a revenue neutral position in that that money was never intended to be collected in the first.

We weren't one of the first projects that were affected by this, but there are projects throughout the state, dozens of them, in rural, urban, and suburban communities, that affect thousands of our most vulnerable residents. And so for the 19 people that are my constituents and friends, I urge the support for this bill, but also for the thousands of other Californians. Thank you.

Thank you. Other add on supporters to this bill?

Madam Chair, Members. Rand Martin, on behalf of the AIDS Healthcare Foundation and its Healthy Housing Foundation, in very late support of this important bill. Thank you.

Rebecca Marcus, representing Leading Age California in support. Thank you.

Good afternoon, Madam Chair, Members. Elizabeth Espinosa, here today on behalf of the Boards of Supervisors in the counties of Colusa and Santa Barbara, in support. Thank you.

Good afternoon, just ran from 1100. Michelle Rubalcava, on behalf of County of Imperial, in support.

Good afternoon. Bruce Gibson, San Luis Obispo County Supervisor, and as president of the California State Association of Counties, a proud sponsor and in strong support.

Great.

Good afternoon, Madam Chair and Members. Karen Lange, on behalf of the boards of supervisors in Stanislaus, Fresno, and Tulare counties, in support. Thank you.

Great. Before we go further, I'm going to establish quorum. Can we take the roll?

[Roll Call]

All right, we've established quorum, which means we can, at the appropriate point, entertain motions, but we'll keep going. Any other add on support for this bill? All right, then let's see if there's a key opposition. Any opposition? Tweeners? All right, seeing none, let me look to my colleagues for. Go ahead, Senator Ochoa. And then Senator Cortese, you wanted to comment or you want. You wait? Okay, go ahead, Senator Ochoa Bogh.

Thank you, Madam Chair. I was wondering if I could ask a question of the supervisor that spoke with regards to. What was it in writing that we had that said these payments were not going to be repaid? And how is it that HCD can actually enforce that right now, when it was it in writing?

I will give the caveat that I was in second grade when all of this started, but there's documentation that in minutes of organizational meetings back in the 80s, that it was the understanding of the community action agency that it was forgivable. But there is nothing in writing that says that it was forgivable.

So no MUs, nothing in writing and contracts? Nothing. Just in the minutes?

That's correct.

And in the court of law, how does that play out?

No, it plays out that the money is due.

Interesting. And I'm kind of curious as if we were to pursue this course of action with this particular bill, and I'm not sure if this is for Senator Padilla or if the Chair consultants have any answers to this, but if we were to do this and move forward with this particular bill and forgiving these loans, that we had nothing in writing except for in the minutes as we look into affordable housing projects moving forward, would that have any impact on the financing or on how these programs are structured moving forward?

I'll allow the author to answer that question.

Thank you, Madam Chair and Senator. Yes, they would. They would enable existing organizations that are both developing and operating various product designed to satisfy this market and provide access to housing, to be in a better credit position, to access future capital and to keep either the doors open and the housing affordable through the typical full term or longer terms, or to produce more product. Some of these types of loans were underwriting that occurred many decades ago.

And the theory at the time was that the residual receipts or profit, after all was said and done, would go towards more principal on these initial underwriting than was thought. The reality is with the passage of time that has not been the case. And so you have very successful producers and operators that are carrying this debt on their books.

But because of various change circumstances, it actually has put them in a less capable position to access new lending, to build more product, and to keep the product through full term or beyond that, that has covenants on it to make it remain affordable for typically 55 years or more.

So the short answer is this flexibility on the part of the implementing agency HCD, to be able to engage in this type of evaluation and forgiveness actually helps keep this product or makes it easier for affordable housing developers to be able to produce more product. Did that answer adequately?

That helps quite a bit. And then my follow up question would be, I'm just kind of curious. I'm just a little nervous about moving forward on this, on incentivizing the wrong behavior, moving forward practices moving forward. Do we know when it comes to affordable housing, what the profit margin is for the developers and the builders? I just want to make sure that we're not creating a system in which we are creating a system where we are going to be defaulting, moving forward on any market or affordable housing projects, the unintended consequences of something of this.

You want to respond?

This is typically often public underwriting and the agency would have authority that it doesn't currently have to go ahead and write off some of the residual debt that's on the books. So it makes it easier for them to access new lending that may or may not need the same kind of subsidy. So I don't think that would be a typically tremendous issue that would be presented.

And typically the broader question, the answer is, there's not a lot of margin left in the production of these units the way that they're financed today. And with the advent of both local and statewide rent restrictions, et cetera, the kind of margins that were anticipated in the 80s and 90s simply weren't realized and we don't have it. Which is the point of underwriting here for affordable product is not that is to get the product on the ground so people can have homes. So not much. And that is part of the problem and why I think it is wise to give HCD this flexibility.

Let me just clarify also, and the author in his opening indicated he was taking the amendments. If you notice in the analysis comment six, that the amendments include that the loan forgiveness would only be used for legacy HCD programs that are near an end of term and that there would be monitoring and affordability compliance concerns in order to again make sure that such loan forgiveness is being done for the type of affordable housing that the bill indicates it is trying to address and to minimize those type of the unintended consequences that might affect the funding of other HCD programs. One second before I call anyone else. Senator Ochoa Bogh, did you want to ask another question or make another comment?

I think, just out of respect, I think I want to see what the language is going to look like at the end, before I actually support, so I'm going to lay off on the bill. But I am keenly aware that we don't have any opposition on the bill. It's just my mind just thinking of the long term unintended.

But I appreciate the clarification by the Chair with regards to the amendments and how narrowed and focused the bill would be entailed. So I appreciate that. Thank you.

Certainly. Sorry, Senator Menjivar, one moment. I'm about to give you the mic, excuse me, the gavel, but I would need to ask a question first.

Apologies for the delay that some of us, including yourself, have to go down to Budget to vote, but maybe we will finish your Bill before we run down there. Okay. All right. Sorry to interrupt you, Senator Ochoa Bogh. Okay, good. But, Senator Menjivar, you had a comment or question? Go ahead.

Thank you so much. And I missed the entire beautiful conversation. So I apologize if this is repetitive, because I got the last part of Senator Ochoa Bogh's comments and the analysis. I am a little concerned that it's not fully, fully cooked. But one of my questions is, are we intending to forgive loans that the state, loans that the state anticipates never are going to get paid back anyways?

In this case, we're addressing a lot of legacy underwriting loans that were typically in the '80s and '90s, that remain on the books for extended periods of time that have actually had the effect of constraining either the completion of the original covenant period for the affordable product or being able to qualify for new capital by these agencies to build more product.

It actually is sort of an unintended consequence because over the years, the changes in rent restrictions and other state and local policies have actually reduced the amount of receipts or profit to the agencies that they really have not been in a position to pay principal. So they're carrying these loans on their books.

And the effect of that is if, in fact, and the Bill would address it, as you see in the analysis, that if it is in fact, a circumstance that's inhibiting the continuation of affordable product or being able to qualify for new capital for product, then they are able to forgive the loan.

But, I apologize, Senator, but is there an assumption that these loans, these legacy loans, are not going to get paid back either way?

I would think, yeah, in the circumstances we're seeking to address, because the assumption initially was that there would be principal paid in addition to the interest or virtual, even though it was loan, very low, the receipts that were typically received were not sufficient to make payment.

And on the Committee, on the amendment that you accepted, regarding that they're towards the end of their term, does that come with an actual number of how close to end, or is that something that you're going to continue working on?

I will continue working on the specificity, but we are making commitments in Committee to be sure that we maintain consistency with the number of affordable products being maintained or being renewed, that we are making sure that this is the only narrow purpose for which the value of the loan forgiveness can be utilized, and we're making sure that we're maintaining the ability to monitor the program and the project more closely. And so that wasn't as narrow or clear in the original language, and so I've committed to narrowing that language and taking that up in Appropriations.

Senator, did you, maybe I missed this part. Did you also commit to, when we're talking about the requirements for loan forgiveness, to ensure that those units remain affordable?

Correct. Initial language is 50% at a minimum, but we've committed to 100% or the same amount, the same number of affordable units.

Thank you, sir.

Thank you, Madam Chair Senator.

All right, Senator Caballero.

Thank you, Madam Chair. So I appreciate what you're attempting to do with this Bill. I had some issues. I think they're very similar to the questions that have been raised. So let me just say that whenever you give discretion to a department, it's a dangerous thing. And I say that having been agency secretary over departments, is that, number one is it encourages inconsistent application, and it also encourages what looks like favoritism, even if it's not favoritism.

And so I want to be careful that we set the parameters specific enough so that it pertains to this, but it's not seen as something that a Department can do on their own without having to come back to the Legislature. And let me just say that the fund that we just set up, the distress hospital loan program, that's a loan, and already the checks are still fresh, they're asking for the loan to be forgiven. On no basis other than, "we just really can't afford this."

And that becomes problematic. The HCAI will be setting up the regulatory framework under which those loans may be forgiven in the future. But you want to make sure that there's been some action taken. In other words, that the commitment that they made in getting that loan is fulfilled for a period of time. So on this, the way I envision it is that they have a loan.

It can be turned into a grant as long as certain conditions, they agree to certain conditions. And that would make me feel a lot more comfortable. And the definition of when that can happen becomes really important, so that this doesn't become precedent for other loans where other organizations go, "Well, you gave me a loan, and we thought maybe because you did it here, we could do it there as well."

That may make sense in the long run, but I think the reason these are payback a lot of times is because it keeps the fund solvent and on a rotating basis. I'm going to support your Bill. I think it's going in the right direction. I like the 100%. I thought that was really important, but it should be for another period of time so that we know it'll be 100% for 25 years with the monitoring by HCD to make sure that that's the case.

So, in my mind, it's not quite as egregious as just saying, "Okay, we're going to forgive a loan that would have been nice if you had paid over time, even though that may have been impossible. It's more like a grant now, because we'll turn it into a grant and you don't have to pay it back."

Madam Chair, we're certainly willing to look at clarifying that language. And I would just know, I think we've put a pretty clear and stringent threshold to address a very, very small minority amount of circumstances here, and as well as with the Committee amendments, both with respect to the number of affordable units, but also with respect to the covenants and commitments for the product to begin, which would cover many of those elements you articulated.

That's great. Thank you. I do appreciate that.

Yes, Senator Cortese.

I'm willing to move the Bill at the appropriate time.

Great. Go ahead. I'll let you do that. You can move it. As with the committed amendments.

Do pass as amended.

All right. No other comments. You may close.

Madam Chair and Members, I respectfully ask for an aye vote.

Excellent. So we can do a roll call on the Bill. Okay.

[Roll Call]

All right, that Bill will be on call. And, Senator Padilla, you and I have to go to Budget. Senator Ochoa Bogh, I'm handing you the gavel. We will be back. We've not even had other. That was the very first even vote because until just then, we didn't have a quorum. So we haven't even. We have to start. Yeah. No, I think you should proceed.

So we will continue with item number six, SB 1079 from Senator Menjivar. When you're ready.

Madam Vice Chair, fellow Committee Members, I'm here to talk to you about my SB 1079 Youth Housing Bond of 2024. By creating a dedicated funding source for youth housing projects, SB 1079 will help to combat housing insecurity for one of California's most vulnerable population, the transitioned aged youth, which, moving forward in this conversation, I'll just refer to as TAY population. In 2023, California accounted 10,173 youth experiencing homelessness on their own. And another 2219 who were homeless and parenting on their own.

Those numbers put the state in first place across the nation, across the country, in youth homelessness, accounting for 29% of the cases countrywide. That is why the youth housing bond of 2024 is so critical, because one in four foster youth who have extended care will experience homelessness. African American youth have an 83% increased risk of having experienced homelessness over youth of other races. 50% of chronically homeless population had their first experience of homelessness when they were under the age of 25.

And in the last point in time count that happens at the beginning of each year, over 68% of youth were unsheltered, meaning they were sleeping in locations not meant for human habitation. SB 1079 will create that dedicated funding source, allow both public agencies and community based organizations with specific youth expertise to be able to apply directly for these youth bond funds. Californians continuously rank homelessness and the lack of affordable housing as the number one issue, the most pressing issue facing our state.

It is time for California to commit to our youth and their need for safe and supportive housing, because, unfortunately, oftentimes, in this grand scheme of homelessness, they are forgotten in the conversation. As we continue to rank homelessness, like I mentioned, as one of the most pressing issues, let's let Californians decide if we should make this very important investment in the future of our most vulnerable youth. So, madam Vice Chair, with your permission, I'd like to turn to my witnesses, who would then testify on this Bill's behalf. First, I'd like to welcome CEO of Home Start, Laura Tancredi-Baese. Probably butchered it.

Got it. Perfect.

Oh, boy.

Thank you so much. Good afternoon, distinguished Committee Members. My name is Laura Tancredi-Baese. I am the CEO at Home Start, which is in San Diego County. We're a nonprofit organization that's been there for about 52 years, and we provide services for transition age young people, individuals, pregnant or parenting, and former foster youth. We know that many youth are facing homelessness, and I've been doing this work for over 30 years. I'm very pleased to say that I have started seven capitol projects myself in San Diego. County. I welcome you to come visit, and we know that this work is important, and I'm here to speak in support of Senate Bill 1079 with Senator Menjivar. I just butchered your name, Menjivar.

It was payback. It's okay.

We're even. Why is funding capital projects for agencies so important? These seven projects that I completed were done quickly. They were done with the mind and heart about young people and how do we serve them, and we can turn these around really quickly. Nonprofits, we have to be nimble. We have to do more to make things happen for these populations. And so these projects were all completed within a year or less time.

Often, nonprofits can sometimes leverage philanthropy, which we have been able to do through local foundations, individuals, corporations, because they like seeing change, and they like seeing change quickly. And they know that they're helping to stem youth pipeline of homelessness to prevent them from becoming adult chronic homeless population, as was mentioned. Nonprofits are in neighborhoods, and with these projects, we often and mostly purchase blighted and neglected properties. We fix them up. They're the best looking property on the block, and our neighbors are very happy about that.

The importance of Bond Fund is critical in adding very desperately needed youth specific front doors and warm beds for our youth. And that's the only way to combat youth homelessness. By allowing nonprofits like us and many others to apply directly for these funds, it will really quicken the streamline and the process for ensuring more beds for this crisis and to do it quickly. 10 years ago, we applied for an EHAPCD Capital Development Grant, which is a 10 year forgivable loan.

And we just completed that 10 year project. We've done additional renovations and upgrades, and we continue to use this property for helping young mothers, pregnant or parenting young women, which is the program I started for Home Start 13 years ago. Over that 10 year period, we've served over 100 families who are now successfully independent, and we provide a core range of services.

We know case management, counseling to deal with their trauma, parenting education for our parents, and social skills training, and as well as employment, we actually have a social enterprise thrift boutique where these young women can work and build their confidence. A young woman recently speaking to a local foundation that a tour came for. Her name is Aria. She was in and out of the foster care system most of her life. She had her little daughter at the age of 19.

She's now 21, living in our program, and she said, I finally feel like I have a family. I never had one. Your staff here really care about me. They wrap all these services around me. They support me and my daughter, and I'm so grateful to finally be in a place where I feel safe that I can call home. She's just one of many, many. We mentioned the pregnant and parenting over 2100 young women like her in the State of California. And I just ask on behalf of her, Aria, and the many other young people who are waiting for a safe, warm place to call home that you vote yes and vote aye on SB 1079. Thank you.

Madam Vice Chair. I have one more witness here to testify. If we could welcome, from California Coalition for Youth, Kim Lewis.

Yeah. Good afternoon. Kim Lewis from the California Coalition for Youth. Madam Vice Chair and Members of the Committee, thank you for having me today. We had a formerly young person who was experiencing homelessness who was going to be here, but unfortunately sick, so we told them to stay home today, thankfully.

Just want to share a brief bit about his story. Zach, at 15, lost his mother on Christmas Day in a car accident, and after a period of instability, spent many time on the streets and found Larkin Street and spent two years in their transitional living program, which was very transformative for his life. And their dedicated case management team was able to holistically support his goals, connect him to the resources he needed to achieve them.

Their compassionate behavioral health team provided them with therapeutic resources and tools to cope with his trauma, and he developed meaningful relationships with his peers and neighbors that he still has to this day. And he has an environment that supported him and the financial freedom he needed to achieve positive exploration and professional growth. Zach's story is really just a testament of the power of these transitional housing programs and what we hope to do today with SB 1079. And with that, we respectfully ask for your aye vote. Thank you.

Those concludes my witness.

Any other add ons for support of this Bill?

Good afternoon again. Karen Lange on behalf of the California Academy of Adolescent and Child Psychiatrists in support.

Good afternoon. Kristin Power with the Alliance for Children's Rights, a co sponsor. Ask for your aye vote.

Good afternoon. Magaly Zagal with Greenberg Torrig, on behalf of Equality California in support.

Seamus Garrity from Lighthouse Public Affairs on behalf of Power California in support.

Great. All right. Do we have any opposition to this Bill? All right. Seeing none. Let me bring it back to the dais. Senator Seyarto.

Thank you. And thank you for tackling one of the issues that's affecting our youth and especially kids. Making that transition from foster care and into all of that makes a big difference. But it's also something that should be a California priority when we're doing any of our budgets throughout the year. My question is, how big is this bond? Because we have a lot of bonds this year that are going to be competing.

We're still working on the exact number, and I'm very aware of the competing bonds and still having conversations with other bonds that perhaps match this one. So we're not at that number just yet.

Okay. Do we have any idea how much per year these agencies need to be able to build? Because you can't do $5 billion and then build it all in one year. Is there an allocation that can be spaced out over several years that we can commit to through our General Fund spending and be able to enable them to build the facilities they need without going down the bond path and increasing our bonded debtedness past $109,000,000,000 like it is now?

Senator, I wish. That would be ideal. Right. But when we're facing a budget that is essentially almost cutting every single homeless project, and even in foster programs, cutting two instrumental housing programs for foster youth to stay housed are being proposed to be cut, it's going to be even hard to add this within the General Fund.

I understand, but when we're spending $500 million on electric buses and then a program like this that we could actually fund and get some things on the ground, and then two years later, we'll still have money, more money to spend on those buses, it just seems to me that this should be a priority over a lot of the things that we're spending money on from a bond perspective, my concern is that most bonds are going to fail because they're all competing against each other and people are starting to see.

We had this discussion earlier about a bond, and they have a distrust in bonds now, and we have to rebuild that trust. The only way we can rebuild that trust is to actually deliver on something, and we've had trouble doing that. And so I don't want to put all our eggs of helping the youth and building these youth centers and things like that into a bond basket.

I would rather make the commitment from the Legislature because we can do that, to spend the money from here, however many years it takes, a certain percentage of money every year so that they can get their projects done without the arduous process of going through this bond process and also the uncertainty of a bond. So that's where my issue lies. It's not about do we need it or not.

We absolutely need it. But it's about if it's a priority, then this Legislature can make it a priority. If they don't want to, well, we don't go back and say, let's put it into the bond basket and hope it passes. So I would like to see us make these things a priority, figure out how much money they need over the next five years, and then budget that into our budget the right way and not this way.

Senator. And I agree with a lot of the points that you've mentioned, and I think I've committed, at least in my Subcommittee, that I Chair, that has some of the housing programs that are being proposed to delay for foster kids committing to hold the line on that. And I think a lot of the concerns that you've brought up are going to be hopefully handled within the budget process, where we're really going to figure out how we're going to prioritize our priorities, essentially. Right.

And as those negotiations continue to happen, and this budget this year is so volatile, it's just different numbers left and right. I want to make sure this Bill as a whole right now moves forward and still is a vehicle that we can look at if what we want can't be accomplished all within the budget.

Right. And I thank you for that. Please. This is our opportunity to be involved in this discussion at all, because as we go on and you guys have the negotiations, we are not involved in those. And that's why I have to bring it up now.

And I welcome that 100%.

Senator Ochoa-Bogh.

Appreciate it. Thank you.

I'm supportive of the Bill, so thank you very much. And I agree with my colleague from Temecula. Just wanted to do just one technical attention to line, page nine, line 22. It states, any money that has been awarded to housing for homeless youth or current youth or former youth. We all been former youth, so we're going to add foster youth, I'm assuming. I don't know if it was caught. Or not on that end, but this.

Might be the first time we're hearing of that line. I think we were shaking our heads there. I think that was a good catch right there.

I didn't catch it. It was pointed out to me. I can't take credit for that, but I just wanted to make sure that because we've all been former youth, so we should make sure that we add or former foster youth on that end. So if we could just have that clarity. But other than that, I'm supportive of the bond. I think we've worked quite a bit in supporting a lot of our foster youth and understanding the issue with their housing in our state. And I know for a fact that in our county, my San Marino County, Riverside County, especially in San Marino County, we have a huge population of foster youth. So anything that we can do to help on that endeavor, I'm with you.

As all former youth here. I am so glad that we're all on board with that. But thank you, Senator, for catching that. And 100% we're going to be looking at that. And Senator Seyarto, I actually read a little bit more, and while there is, I was right in saying there is no dollar amount right now in the text, we are anticipating something closer to $1 billion that we're looking at maybe adding into the, that we're looking at adding into the text.

I'll be happy to move the bill.

Great. So, we have a motion on the bill, and it's do pass as amended to Judiciary. No, sorry, sorry. Due pass to Appropriation. Excuse me. I was reading from the wrong line, and without seeing further comments by the dais, Senator Menjivar may close. Then we'll take a vote.

Thank you so much for engaging with me on this conversation. With your support, we can move forward in trying to eliminate housing insecurity for our youth. I respectfully ask for an aye vote.

Okay, so let's take a roll call.

[Roll Call]

All right, that bill has - the vote is eight to one, but we are going to leave it open, on call. We have some other members who are going to come, so thank you. And now we will move over Senator Seyarto to your presentations, and we'll start with SB 9680.

Thank you, Madam Chair. We have two bills that are very helpful. One of them is a helpful bill for local governments. SB 968 offers a solution to the housing crisis our state faces by allowing local governments to roll over surplus units from their current regional housing needs allocations, which is arena assessments, cycle to the next year's cycle. So when they go over the amount, they can credit those, just like when they're under the amount, those get stacked onto their next year cycle.

So this does it the opposite way, and the reason for doing something like that is to incentivize cities to continue to allow growth and building while the building is good and the environment and the economy is good, and then they'll be able to apply those to their next arena cycle. So, in California, factors such as lengthy litigation processes, high labor costs, and interest rates disincentivize further production after achieving the arena goal.

Furthermore, due to the ever-changing state requirements, local jurisdictions face a daunting task merely to submit a compliant housing element. Noncompliance with the state housing element requirements can lead to loss of state funding, which ultimately hinders the jurisdiction's ability to meet the arena. Some argue that SB 968 may lower housing production, yet by carrying over surplus units from the current cycle to the next arena cycle, cities are incentivized to surpass their housing targets.

Incentives like these help foster the collaborative relationship between state and local governments that is necessary to effectively meet our state housing goals. And today, I do not, as is my custom, did not bring any witnesses to testify. I let the bill speak for itself. And so with that, Madam Chair?

Well, let me check and see. Are there any witnesses either first to starting in support of this bill? Okay. Are there any witnesses in opposition to this bill? Okay. Let me turn to the dais and see if there have any comments from members. Go ahead, Senator Caballero.

Senator, I have one community in my district that I'm caretaking that has done a yeoman's job of building housing, and they've met by far every single category, even down to the extremely low. So that one community really likes this bill because they've been really focusing on housing. It's a farmworker community located in the Salinas Valley. I know that there's controversy over this because there's bad actors out there, and we end up doing things because of the bad actors. That's, quite frankly, what, what happens.

I think that the bill - I don't think the bill is in. I think it needs some, some additions in terms of protection so that we make sure that they're actually doing what they need to do. But I appreciate what you're trying to do, because this community really went above and beyond in terms of approving housing and building what their residents have been demanding, which is truly affordable housing and to their detriment.

So I would suggest, in terms of thinking about this, that we create an incentive so that they're first in line for grants because, as you know, when you build housing, you build a deficit in your infrastructure. You don't have enough parks, you don't have enough libraries. Police services suffer. And so I would support you moving in that direction in addition to whatever else needs to be done to make sure that we're incentivizing. Because in most of these jurisdictions, they have no say in the number. Right?

It's a local entity in that area. It's an ambag that divides up the numbers. And they got quite a hefty number for a small community, significantly under 20,000 residents. And so I like what you're trying to do. They would like it as well. I think it needs some work.

Thank you.

All right, Assemblymember Menjivar?

Senator, the RHNA numbers, I feel like, are the floor and this crisis that we're dealing with. I think we shouldn't remove our foot from the pedal, from the gas pedal. I think as a state as a whole, we just haven't met the numbers that we need to meet. I'm just worried that this isn't moving us in the step towards more housing but rather giving breaks and potentially maybe moving back because, again, for me, they're just the floor. I think they should be superseding them.

So I'm concerned with this bill. I'm just concerned that it's not moving us in the direction that we need to move towards.

We'll leave it at that. She didn't ask a question, so we're just going to. Senator Ochoa-Bogh, go ahead. I do have a question.

So I'm going to sort of talk a little bit about, first of all, thank you for bringing this measure forward. I will be supporting and be happy to move it forward when the time is appropriate, and I do understand that the arena numbers are considered to be the floor, but more often than not, it's because there aren't enough initiatives to build housing. Just today I met with one of my cities in my district today, and they've been apro housing city.

They've earned their designation. They've been incredibly effective in doing all of their housing. However, just recently, they started losing builders for moving forward in building their homes and building the homes that had been approved because they lost their financing because of interest rates. They couldn't get the loan. So many times, we blame our cities for not being able to build.

But a lot of the times there are many other circumstances that actually come into play that even though the cities are willing and able and have been very productive in meeting their RHNA numbers, things happen beyond their control. And so it makes me a little nervous to think that we're going to continue to penalize those cities that are acting, that are good actors rather than incentivize and say, hey, kudos for doing that and moving forward.

So I think because I just literally had this conversation this morning with one of my cities that has been, and we do, we have amazing cities throughout the state that actually have been incredibly, or Senator Caballero mentioned, that have been effective in doing their work. But I don't want to see, and we have been very punitive on our cities in their inability to be able to meet their RHNA numbers, which, by the way, is the arena numbers per city becomes very relative.

It's not like an exact science that is going on. And I'm looking into that as well. So today, having said that I'm actually going to support your bill today. And thank you so much for bringing that forward. And I hope that we have more measures that really incentivize and commend and protect those cities that are good actors within California. Thank you.

Thank you. Okay. Go ahead because I was going to make my comment, but I'll let you go first. Go ahead.

Thank you, Madam Chair and Senator, appreciate your initiative and putting a lot of thought to your bills, as always. And I just wanted to add my comments on the record. I'm not going to be in a position to support the bill, and here's why. Because it may appear on the surface to, in quotes, reward a jurisdiction that meets a standard or arena number for a given cycle.

Crediting that forward actually will create periods of time where they're on the hook to produce less in the following year because they have to do less to meet the same standard. And it is a floor and I have to tell you, I spent many, many years in local and regional government before then working in other areas of state government. And I'm going to be blunt, the perpetual debate around regional planning agencies concerning affordability in housing.

I came from a region where the predominant amount of production for workforce housing, affordable housing, low-income housing was in communities of color that were underinvested and wealthy. More homogeneous communities in my county consistently every year fought and resisted and found ways to get around the requirement to build housing that was affordable, frankly, largely because they had certain social assumptions, stereotypes about the kinds of people that needed affordable housing and they didn't want that in their community.

I had an employer, 70% of the employees in their North County community, homogeneous, wealthy community, came from my community in the south, San Diego County. And I used to argue with that mayor every year about why he wanted affordable housing in his community, and he didn't have an idea why he did or should, except to house his workforce. This debate is old, and there are continuous, creative ways to try to get around an obligation to produce product on the ground.

And let's remember, the arena standards not too long ago only required designation and not production. And that was a problem for a long time. And so I just have to say that I echo my colleague; this is a floor.

While I do not believe that we will just simply build our way to affordability, that crisis is not just a function of scarcity; it is an important element, and we have to do everything we can to encourage communities to go above and beyond, but not count that towards their floor. And so, for those purposes, I can't support the bill.

All right, I will entertain the motion, but I will state for the record that I am not in support of this bill, and I will be voting no. And it almost seems like a broken record to even state it. The housing crisis, the incredible housing crisis that California is in, which is due to an undersupply so to even think that there's an overproduction, it's just we don't have an overproduction anywhere.

Whether somebody has produced, whether some local jurisdiction has produced a little higher than their RHNA number required could still not be considered an overproduction when you consider the supply crisis that we are in. So, as has been commented by other people, RHNA is the floor, not the ceiling. This kind of adjustment, in my opinion, is not appropriate this time. But let us see if there's a motion. So we have a motion by Senator Ochoa-Bogh, and you may close.

Thank you very much. So part of this issue is actually brought up by council members that are going through in various stages. But I, too, have a long history of being involved in communities and also being the chair of a cog that had to do the RHNA numbers and developed those through the 1990s, then also the 2020s. So the 2010 RHNA numbers that they all set up, nobody achieved those. And there's a reason they didn't achieve them.

It's because we were in the middle of a recession. You guys will all recall that there was a recession, and nobody was building anything. There were very, very few things that were being built. And that recession, the builders didn't have confidence in the economy until 2016 or 17, and that's when we started to see the beginning of the processes to start building again. And you know how long that took? About seven years.

So now you flash back to 2022 after those RHNA numbers got piled into the 2020 RHNA, there were some astronomical numbers that communities were faced with, and all of it was because of recession and then the inability for people to get through our process. So, that was a state-made process that slowed down housing. Now, a lot of communities, if you'll go out there and look, and you go out and look in my district, you will see lots of apartments being built right now.

But they don't all fall into very well. They fall into different categories because that's how RHNA is set up. You have the low-mod, the low-low, the low-mod, all of those different categories. Some of them are doing better than others. And the reason they do better is because our economy is such that builders are able to build them right now. If we have another recession at the beginning of 2030, well, I would have rather had them build more units now because people are incentivized.

I don't know what. I'm not understanding the floor argument. They're incentivized to build them when you can get them built. If we had done that in 2010, we wouldn't be so far behind in our housing production as we are now.

It also enables cities that have a lot of growth in the market rate units to be able to focus more in the next decade on the other categories of units that were not being built or were not as favorably built by the development community because that's who builds those. Cities don't build those, but then they can focus on those, and it doesn't create a false floor or ceiling for any of that.

So, it enables cities to take advantage of the economy and the times when it's right to build versus having a recession and a down economic cycle and not being able to get anything done. So this actually can result in more units being produced, not less. So with that, I ask for your aye vote. I ask you to think over this carefully because this is actually a helpful bill for cities and for housing production, and simply ask for your aye vote. Thank you.

Thank you. All right, we will have a roll call on the motion.

Motion is do pass the Preparations Committee. [Roll Call]

All right, the vote now is two to four. We'll leave the roll open for the absent Members, and now we will move to SB 1052. Senator Seyarto, you have the floor.

Thank you, honorable Chair. I'm here to present SB 1052. Last year, I requested an audit of the Mobilehome Residency Law Protection Program to confirm some of the alleged inefficiencies I had heard about the program. In audit 2023 112 the State Auditor confirmed these issues by finding instances in which legal service providers were inappropriately denying services to eligible complainants. This bill implements the State Auditor's recommendation of allowing HCD greater access to information necessary to ensure that legal services are provided to eligible complainants.

The Auditor also found in multiple rounds of financial projection models that this program had a sufficient balance to fund the program through the end of its sunset date without the $10 per lot fee applied to park residents. There has been some concern that the elimination of this fee would have removed the ability of the park residents to fund the program. To be clear, the bill does not do this.

In fact, the bill specifies that the fee can only be removed as long as sufficient funding remains in the program's balance and there is sufficient funding to be able to take this program right through to its sunset clause. I understand that this program is implementing new changes from the AB 312 which passed last year. However, none of the provisions of that bill address any of these auditors findings. The State Auditor very clearly identified two issues.

The program is unnecessarily taking money out of residents wallets and applying it into a fund that's already overfunded, and some residents are being denied program services that they are eligible for. This bill addresses those two issues. The alternative is to do nothing and let those problems persist. I would rather save residents time and money by doing something right now. And when the time comes, I would respectfully ask for your aye vote. And I do have a proponent who will speak as the primary witness. Mr. Chris Wysocki.

Good afternoon.

Go ahead. You may begin.

Oh, I'm sorry, Madam Chair. Chris Wysocki with WMA. Madam Chair, Senators appreciate the opportunity to speak on behalf of the Western Manufactured Housing Communities Association. We're in strong support of SB 1052. As the Senator mentioned, last year, an audit was conducted of the MRLPP, and it found several deficiencies that this bill is basically just trying to fix. There's nothing more, nothing less than the Auditor recommendations in the bill. So it's very clean, it's very cut and dry. But it focuses down to two specific issues.

The first involves the $10 per lot fee that are paid by residents. And we understand this is resident money. But the $10 fee has built over the years to where the MRLPP has nearly an $8 million surplus. It seems to me in WMA that allowing that fund to continue to grow unchecked and unfettered just provides more money for HCD for whatever reason, they can't spend it on anything else. But why continue to let the money grow.

Further, since it is resident money, I know it's only $10 per lot, but in these economic times, wouldn't $10 in somebody's pocket make a little bit of a difference? Why collect a fee if the program is being underutilized? The Auditor in the HCD actually recognizes when the MRLPP was put into place, HCD projected about 4500 complaints per year. Well, that's been 95% underutilized, so the program doesn't seem to be working as intended, and that's what the audit clearly showed.

Further, with respect to the legal services providers, Assembly Bill 318 removed a provision that required HCD to evaluate and make decisions as to whether complaints were valid before sending them on to a legal services provider. That was taken out of the MRLPP's mission and objectives. So right now, every complaint that's filed with the MRLPP goes straight to the legal services provider. And HCD has only a ministerial function in administering the program from that standpoint.

So the other thing that was kind of mentioned was the attorney client privilege between the legal services provider and the client they were citing they couldn't share with HCD what the LSP was actually doing on behalf of the resident. It seems to me that somebody should know, because ultimately, it's the resident money that's being used to actually pay the legal services provider. So what 1052 does is it requires somebody at HCD to have some oversight about how the LSP is spending resident money.

So that actually seems to make a lot of sense to us. Keeping a program alive just for the sake of keeping it alive, that's a call that the Legislature needs to make. But if we can improve the program in accordance with the State Auditor recommendations, why not move towards that direction? You hire an Auditor to do an audit of a private sector business, and they make recommendations. And the organization or the company that hired the Auditor, they don't follow the recommendations.

You've exceeded your-

Madam Chair. Thank you very much. I appreciate it. Ask for an aye vote on SB 1052. Thank you.

All right, this is people in support. Continue.

Thank you, Madam Chair. Jason Ikerd, on behalf of the California Mobilehome Parkowners Alliance, appreciate the Senator bringing the bill forward. We're supportive of it, and we were neutral on the original statute. Think that a program can exist, should exist. But obviously there was an audit recommendation for a reason. So we appreciate the Senator bringing forward a bill to implement it.

All right. Any other people in support of this bill? Seeing none. Let's go to the opposition. Do we have a key opposition witness? Go ahead.

Thank you. Roger Johnson, on behalf of GSMOL, a resident based organization advocating for over 60 years for seniors on fixed incomes and lower income Californians living in mobile homes. We strongly oppose SB 1052. For over two years, GSMOL and mobile home residents worked to establish the Mobilehome Residency Law Protection Program. This was a five year pilot program that residents paid for out of our own modest incomes to protect ourselves from park owners who violate the mobile home residency law.

Governor Brown agreed with us and signed AB 3066 into law, and this was the first time in California history park owners opposed the pilot program over these two years. Last year was the third year of the pilot program, and we worked with Assemblymember Addis and the Department of Housing to begin making improvements based upon the comprehensive data that HCD was required to gather and publish. The improvements included expanding the program to include all MRL violations by park owners.

Governor Newsom agreed with these changes and signed AB 318 into law, which took effect just two and a half months ago in January. Park owners have tried and failed to stop Assemblymember Addis's bill, and instead they pursued a state audit for a pilot program that had been in effect for only three years and had already had enough data at HCD to begin making improvements, which we did. This Bbll is their latest attempt.

Mobile home residents want Governor Newsom's and Assemblymember Addis' bill to be allowed to take effect, including the improvements made to the pilot program. GSMOL is in strong opposition of SB 1052. Thank you.

Thank you. Other witnesses in opposition.

Good afternoon. My name is Beverly Purcell and I live in a mobile home senior park with 120 spaces. We are vehemently opposed to this bill. Thank you.

Good afternoon. My name is Lynn McKim and I live in a mobile home senior park with 531 spaces, and I too am strongly in opposition of this bill.

Good afternoon, my name is Michelle Moaning. I own a mobile home in a park of 320 homes and we are in strong opposition to this bill.

Good afternoon, I'm Linda Nye and I am also the GSMOL State President, and I am strongly in opposition to this bill and so is GSMOL.

Thank you. Any other opposition to the bill? All right, seeing none, I have a question, Senator, the staff, there had been discussion between Committee staff and your office regarding the fee section, and you had indicated, let me just clarify with staff, it was the- right the elimination of the fee and you are no longer willing to do that. Is that my understanding?

Right. We worked with the Committee to talk about that. That was something that was important to me, that they stopped taking $10 from everybody and accumulating it into that pot.

But basically, what was that issue is you are going to suspend the fee for a certain period of time, but not eliminate it. But your bill is now going to stay with the elimination?

No, it doesn't eliminate it. It still allows it to be reinstated. If there is a drawdown of the account, that's the problem. If there's a drawdown of the account, that's fine. But if this account continues to accumulate.

But the way it's written, it would have to be a statutory action, too. So it's okay. While your fine point is true, it'd still eliminate the fee unless there was a statutory action taken.

Yes. To suspend the fee.

Yeah. Just wanted to make sure everybody understood that on the record.

Increase access and suspend the fee.

All right. Let me see if anybody on the, that's the way the bill is written. Yes. And he's no longer-

Based on some of the feedback we were getting that wasn't worth.

Just trying to clarify for the record. Go ahead, Senator Menjivar.

Senator, can you clarify? Because you mentioned, one of my questions was regarding the Addis Bill, but you mentioned in your talking points that that bill has nothing to do, did not address any of the concerns that your bill is looking to address. But then I'm hearing from the opposition that they're wanting that bill to proceed because it is touching the points.

They have some different things that that bill addresses. But this particular, it doesn't have these two things in it.

One of the concerns for our mobile home park residents, and I'm not quite sure why it is that they're opposed to this, is if this accumulates and continues to do so at the end of the five year program, when we reevaluate whether we should even have a program, if it does not have the participation and it has $20 million in the account, it's more than likely going to go away because there would be no reason supporting it to continue.

What this does is allows them to increase participation by having HCD intervene with the legal services providers who are on retainer but aren't taking cases for whatever reason. And that's the problem. It's showing a lack of participation because people aren't able to access the program because they keep getting their cases turned away from the LSP, and yet they are continuing to pay the $10, which is stacking up in the bank.

So all this does is have them suspend paying the $10 if there's a drawdown on the count because all of a sudden the participation increases and they start using that money and that $10 goes back in.

We have some time pressure. So I just want to again clarify for the record while you are explaining that, in fact, it would require the way your bill is written and the way without the amendment, it would require statutory action to start it again. So, Senator Menjivar, certainly appreciate you can continue asking questions, but let me just clarify that I don't love this bill.

I had indicated in my initial recommendations that I would myself be voting no, but that Committee obviously should think about how they wanted to approach it. But now that that amendment is not taken, and it's an actual elimination of the fee. I am very clearly not in support, and I want to also be clear that the Addis Bill, and it's covered in the analysis, was cognizant of the fact that HCD-

You ought to remember that the pandemic occurred during this right when the violet started, which interrupted a lot of things. And so the Addis Bill was focused on it worked with the mobile homeowners and also with HCD to make some improvements so that this could really achieve the promise of its origin, the Stone Bill, back from 2018.

And I think, given that the Addis Bill just got signed into law last fall, that it deserves the opportunity to go into effect before we make wholesale changes at this point. So I just wanted to explain on the record where my thinking was and why my recommendation was as it is. So let's see if there's any. Either any other comments or a motion. So we have a motion. Would you like to close?

No, I've given my closing in some of my answers, so just simply ask for an aye vote.

All right, excellent. Okay. The motion now, but you go ahead and read it, would just be due pass, not as amended as originally, because he didn't accept the amendment. So go ahead and let's call the roll.

Motion is due passed to the Judiciary Committee. [Roll Call]

Okay, that vote will stay on call. It's currently at two to two. Yeah, we will not even finish the roll, but we'll talk about that one. And what we're going to do now is take a recess from the Committee. We've been told. Okay. All right. So we will not take our recess yet. We have still- Okay, Senator Ochoa Bogh, let's go.

Just be clear. This was communicated from the floor that the Committee should continue. Okay, so we are continuing because we are communicated from the floor.

Thank you, Madam Chair Members, I'd like to thank the Committee for working with my staff to improve this Bill. I'm happy to accept the recommended amendments that clarify the bill's intention to prevent as many mobile home evictions as possible. A 2023 study by Harvard University's Joint Center for Housing Studies found that manufactured homes present an opportunity for homeownership for Low income households due to their greater efficiencies in purchasing, production and installation.

In comparison to traditionally built housing, these units are often the most affordable alternative and last resort for many facing homelessness. Under current law, if a mobile home resident fails to correct a violation, such as a broken window within 60 days, a mobile home park owner is notified of the violation and has essentially no other option than serving an eviction notice. This is because a park operator has only 30 days to ensure that the violation is corrected before the permit to operate can be revoked.

The revocation of a permit to operate, and with it the ability to collect rent, jeopardizes the housing of every resident in the park. SB 1108 aims to reduce the number of mobile home evictions by extending the time to cure a violation to 90 days. SB 1108 will also codify already required duties of enforcement agencies to ensure that every alternative is exhausted before a park owner has caused to evict. With me to testify in support is Western Manufactured Housing Communities Association with the Western Manufactured Housing Communities Association.

Good afternoon again, Western Manufactured Housing Communities Association with WMA, and thank you, Senator, for introducing Senate Bill 1108. This is a common sense Bill. It's pretty simple. Nobody that owns a mobile home park wants to evict tenants. We're in the business of collecting rent, and evictions are costly, timely and stressful for not only the resident, but also for the park owner. So anything that can be done to help the process by which we can avoid eviction is a good thing.

The way the current law is written, when a resident gets a violation notice from HCD, the park is not notified until 60 days. After that violation has gone uncured. They only have 30 days then to take corrective action. And that really to preserve the PTO. The permit to operate requires us to serve a notice of eviction. We don't want to do that.

So giving us a full 90 days gives us more time to work with the residents on how to identify some of the solutions that they might need to fix a broken handrail. These are not health and safety emergency situations. It's accumulation of trash and rubbish. These are easily fixed. Sometimes it doesn't take a lot of money, but it's just easier to do if we know early on what the problem is. So for those reasons, we thank the Senator for introducing the Bill.

It's pretty simple, a lot of the amendments removed. I think some of the objectionable language, and we're proud to support, and I'm available to answer any questions in cognizance of time. We ask for an aye vote.

Thank you. Let me see if there's anybody else in support. All right, seeing none. Is there any in opposition? All right, seeing none. All right, we have a motion from Senator Wahab. Please close, Senator. Senator Ochoa Bogh.

Thank you, Madam Chair. Thank you, Senator Wahab, for moving the Bill. By allowing vulnerable residents additional time to receive assistance and cure violations, SB 1108 will ensure fewer Californians face. Will help. Will ensure fewer Californians face the threat of eviction. I respectfully ask for an aye vote. All right, we have a motion. It is do pass is amended to judiciary. Let's call the roll.

[Roll Call]

All right, that Bill is out. Say the number again. 10 to zero, and I will present and hand the gavel.

Thank you very much, Members. I'm presenting SB 1211, and I will do a speed version. Already, in existing law, multifamily housing is allowed to have a certain percent of ADUs. But interestingly, in that law. So it's that percent, 25%. It's based on the number of units in the multifamily housing. But that law put what I consider an arbitrary cap on the number of detached ADUs.

There are a number of multifamily properties up and down the state that have what you might consider surplus land, land that could be used for a detached ADU versus just one that's in, say, in a basement or what might have been a different kind of building space, internal to a building. So what my Bill does is just allow for a larger number of the detached units, again, depending on the property, but still staying within that 25% cap. It does not lift the cap at all.

So it doesn't expand the total number of ADUs allowed on any multifamily properties. It just fixes that little detached issue. And I'm taking the Committee's amendments, which clarify some language. And with that, I would like my key witness in support, Ms. Carla Guerrero from the Unity Council here.

Senator Skinner, I've just been informed. I'm sorry to interrupt. I've just been informed that the Pro Tem has asked for. We're going to take a recess.

We are going to take a recess. Okay. I think if they've asked us to go, we go. So we will indicate that we're formally on the mic, say we're going into recess.

We'll now go into recess and we'll reconvene after the State of the judiciary. Thank you.

Thank you. Yeah, just don't say it publicly. Go ahead. Okay, so, right before we were in recess, I had opened my presentation on SB 1211. So let me just quickly recap. I'm taking the Committee's amendment ends that add the technical clarifying language. And as I opened, all this does is allow for within the cap, it takes off the limit for the detached adus on multifamily housing. And with that, I'd like my witnesses in support to please present.

All right, we have witnesses in support. Are they in the room?

My main witness is probably not even here. But there are others who can testify.

All right, come on up to the mic you got. However long Miss Skinner wants to give you .

Hollywood for me with lighthouse public affairs on behalf of SPUR and Bill Costa in support. Thank you.

We have another person scrambling to the mic.

All right, Bob Naylor, representing Fieldstead and company. That's an Orange County entrepreneur who is supportive of housing and really supports Senator Skinner's fine ADU bills. All of them.

Thank you. Do we have anybody else who would like to add on their support? Great.

Brooke Pritchard, on behalf of California YIMBY in support.

Great. Thank you. Are you all scrambling the mic for support add ons?. Thank you. All right, anybody else? There are no others. We'll go to opposition. Is there anybody to speak in opposition to the Bill as a main witness? If not, we'll go to any me toos for opposition. Since there are none, we'll bring it back to the dais. Anybody? We have a motion to move the Bill. Anybody want to have any questions or anything like that? I did, but I'm not going to ask. So with that, you may close.

Thank you for your vote.

All right.

[Roll Call]

All right, we're going to keep that open until we have everybody here and we can have them add on. That's a seven to one this time.

Great. We will now start lifting calls. So let's start item one, SB 1095. We need a motion for that Bill. Great. We have a motion. It's do pass. Is amended to Judiciary Committee.

[Roll Call]

And to be clear, he accepted. Yes. Thank you. That Bill is six to one. I'm not sure. Wait. It'll be on call for right now. Okay, let's do the roll call on SB 1395. Do we need a motion on that? All right, we need a motion on SB 1395. Great. It's Becker do passt to environmental quality Committee.

[Roll Call]

What? Eight to zero on call. Okay, the Bill is now eight to zero on call. We'll now move to the third item, SB 968 Seyarto is do pass to appropriations. We already had a motion. Go ahead and roll call the missing Members.

[Roll Call]

Yeah, there were two ayes, and I had a no. I was a no. You have the wrong two to four. Okay.

Two ayes, four no.

Okay. All right, so the vote on that Bill is 2-4.

Ask for reconsideration.

All right, Senator Seyarto has asked for reconsideration. Without objection. Reconsideration is granted. Okay, so now let's go to SB 1052. Seyarto, and it's do pass, not as amended, because the author did not take the amendment. So it's just do pass to Judiciary Committee. And the chair voted no. Go ahead.

[Roll Call]

All right, that vote, was this a chair recommendation? It was not initially, because the amendment, yes, but I also left it to Committee Members, but, yeah, without the amendment, I voted no.

Cortese, no.

Yeah, he can add on or he can change.

All right, reconsideration on that also.

Okay, wait, I've not even called. What the. So that vote was 2-4 also.And Senator Seyarto

ask for reconsideration.

All right, without objection, reconsideration is granted. All right, we will move to SB 1032. Senator Padilla, that is do pass, as amended, to Appropriations Committee. And, yes, the Senator took the amendments.

[Roll Call]

All right, that vote is eight to zero. Eight to zero. That Bill is actually out. That Bill is out. SB 1079, Senator Menjivar. Do pass to Appropriations Committee.

[Roll Call]

All right, that Bill is out, and the vote was nine to one. Now we have SB 118. Ochoa Bogue.

We finished that.

Okay. We finished that. All right. And consent. We didn't vote on that yet. We need a motion on great SB. Consent item is moved.

[Roll Call]

Okay, that vote is eight to zero. Eight to zero. The Bill is out, and we'll do missing. Folks, roll call on SB 1211. Skinner? Do pass. Is amended to local government.

[Roll Call]

All right, that vote is eight to two. Okay, I don't think we're going to have any other Members returning. zero, yeah. Senator Joe bugs here. Okay. But Senator Umberg is on all. Did you get him on all. Okay, then we want to do SB 1095. Becker, correct? Yes. Okay, go ahead.

[Roll Call]

Okay. All right, that vote is seven to one. The Bill is out now. Becker? SB 1395. Current vote is eight to zero. Go ahead.

[Roll Call]

All right, the SB 1395 is out. Nine to zero. I believe you already voted on nine. Six, eight. Yes. And 1032. Okay. Padilla? 1032. Did you get to vote on that? Okay, you're here. Okay, great. Okay, and was there anything else that you missed or wanted to weigh in on? You got them all? Okay. What? I don't have SB 1108. I don't have the count on that. 1108.

That was 10 to zero.

Okay. 1108. Senator Ochobog, that Bill is out. I never said before that it was out, but that's okay. All right, it is. So with that, the Housing Committee has completed its business and is adjourned. It.