Assembly Standing Committee on Housing and Community Development

All right. Good morning, everybody. I want to welcome you to the Assembly Housing and Community Development Committee hearing. We have 11 items on our agenda today. Item number 12, SB. SB 1339. Allen, has been pulled at the request of the author. And that leaves us with five items on consent. Item four, SB 1108. Ochoa Bogue.

Item five, SB 552. Newman. Item six, SB 1187. Mcguire. Item eight, SB 1512, the Committee on Housing. And item nine, SB 1361, Blakespear. And while I don't believe we have a quorum yet at the time, we'll be able to entertain a motion on the cassette calendar.

Each Bill can have two main witnesses in support and opposition, and each main witness gets two minutes each. Please feel free to submit written testimony through the position portal on the Committee's website. This will become, of course, a part of our official record of the Bill.

Our hearing room will be open for the attendance of this hearing this morning. We are in room 437 at the capitol, and all are encouraged to watch the hearing from the live stream on the Assembly's website. With that, I think we are awaiting Senate authors, so I would welcome anybody on the agenda. We, of course, have an order, but we will begin as soon as we have an author present.

At this time, I believe we have a quorum. I'm going to ask Madam Secretary to please call the roll.

[Roll Call]

With that, we have a quorum. I'd be happy to entertain a motion on the consent calendar by Mister Grayson. Second by Mister Kalra. Madam Secretary, please call the roll.

[Roll Call]

And with that, we have five votes. The consent calendar is adopted, and we'll hold the roll open for absent Members.

Maybe at this time we can actually add a few Members onto our consent calendar. Miss Reyes, we're going to take on add ons for the consent calendar. Madam Secretary.

[Roll Call]

We're up to 7-0 it. All right. Just wanted to make a public service announcement. We are at 9:20. We all have busy schedules. There's a lot going on. But we also have six bills and five authors that could be presenting right now. In the interest of respecting everyone's time, this Committee will adjourn at 930 if we have no authors present. Thank you.

Thank you, Senator. Appreciate it. You are our member present, so we would invite you when you're comfortable and ready to begin presentation on file item seven. This is SB 735.

I'll take it. Thank you. In all seriousness, thank you very much for the opportunity to present SB 735. This is a bill that's critical to the San Francisco Bay Area. I'd like to begin by accepting the committee's proposed amendments to delete the provisions limiting the program projects of 40 or more units.

By striking page six, lines eight through 12. SB 735 will place labor requirements in the Bay Area Regional Housing Finance Act, also known as BAHFA. BAHFA is a nine-county housing finance authority that was created in 2019 by the legislature to fund housing production in the Bay Area.

This November, there will be a historic 10 to $20 billion housing bond on the ballot in those nine counties. This is not setting new precedent. In 2022, AB 679 was passed by the legislature to provide a similar authority to Los Angeles County, which is comparable in size and population to the nine county barrier region.

AB 679 included an important labor standard project, labor agreements for projects funded from LA County's local bond, which too will be before voters in November of this year. PLAs are truly a win-win with a massive backlog at the state Labor Commissioner's office. It simply isn't realistic to expect the state to be able to provide the level enforcement that will be needed with such a large amount of public dollar investment.

In fact, a recent audit for the State Auditor found that the Labor Commissioner's backlog of unresolved cases has more than doubled in the last five years, from 22,000 claims in fiscal year 2017-18 to 47,000 in fiscal year 2022 to 23.

A PLA provides for alternative enforcement mechanisms without having to wait for potentially what often is, years, if ever, for an investigation to begin and be completed. PLAs are beneficial to contractors by the inclusion of no strike or lockout provisions, which means contractors do not have to fear work stoppages, nor does anybody else involved with the project.

PLAs also provide for local hire provisions that ensure that the workers who work on these projects are from the communities where the projects are being built, and that's something very important to folks in the Bay Area directly or indirectly involved with this.

In addition, PLAs include apprenticeship requirements that create opportunities for new workers who reach the middle class through a career in construction, and I think most here are familiar with that. PLAs are the only way to ensure equity on construction projects.

This Bill requires the use of an existing BART PLA that has been in place since 2016 and has covered a number of successful Bay Area housing projects. Equity is a key component of this PLA, and its use on BAHFA projects will ensure opportunities for disadvantaged communities, women, veterans, and people of color.

Specifically, the PLA I'm referring to as percentage goals for federally targeted workers, which include opportunities for minority and women workers. A 25% requirement of all apprentice hours worked on the project shall be done by the national targeted workers and a requirement that a minimum of 10% of all national targeted worker hours shall be performed by disadvantaged workers.

Some have argued that PLA is at cost. The evidence, however, is lacking. The Committee analysis points to a RAND study that stated PLA's add per unit cost to housing projects funded by LA's Proposition However, a recent study by UC Berkeley contradicted this analysis when accounting for total development costs for completed projects.

It shows no evidence that the PLA caused an increase in per unit cost for affordable housing projects under Prop HHH. The Berkeley study also concluded that projects built under PLAs are more likely to be completed on time within budget, a factor that cannot be considered in studies comparing projected versus actual costs.

Again, appreciate the help of the chair and the committee and working through this and getting us the amendment that we're taking. And now I'd like to turn over the microphone to my witness from the state building Construction Trades Council, Jeremy Smith. When the opportunity is right, respectfully ask for an aye vote you got it.

Thank you, Mr. Chair, members of the committee, Jeremy Smith here on behalf of the state Building and Construction Trades Council of California, here in support of this important piece of legislation. Senator Cortese took a lot of my, took a lot of my hits in his statement, which is great because there's a lot of great things to talk about when it comes to project labor agreements. He mentioned apprenticeship utilization.

I wanted to note for everybody that between 2005 and 2021, according to the Division of Apprenticeship standards, nearly 140,000 apprentices completed their programs in California. Those are due in no small part to project labor agreements and apprenticeship utilization requirements under the prevailing Wage Act. I wanted to share a few facts about PLA's as well.

The BART PLA and the project. It's actually a project stabilization agreement is a public PLA and all public PLA's, according to public contract code Section 2500 must contain five items.

First, a prohibition on discrimination on all the protected classes that we all know about that exists in article six of the BART PSA, permitting all qualified contractors and subcontractors to bid for and be awarded work on a project without regard to whether they are parties to a collective barring agreement.

That is also an Article Six of the BART PSA. Continue an agreed-upon protocol for drug testing. Also an Article 17 of the BARTPSA and then containing guarantees from workshop, which is lockouts and strikes in Article four of the PSA.

Make no mistake, it is entirely up to a contractor whether they choose to bid on a project with a project labor agreement. They do work. It's important to talk about triple h done. In Los Angeles County, there have been 6817 affordable and supportive homes built since 2016, leading to 8669 affordable units.

This is all built under a project labor agreement. This also led to 4.1 million work hours employing 17,610 workers, with 1 million of those hours being apprenticeship hours. The BART PSA goals has similar goals as the Senator laid out. I won't go over those again. I'll just say that the same thing. It's an analog.

What we're voting on today is an analog to what's existing in LA County now. We think that project labor agreements work. We know they work. We urge your aye vote today. Thank you.

Thank you. Are there any other witnesses in the public who are here in support for name and position.

Martin Vinduel, on behalf of the Coalition of California Utility Employees, the California State Pipe Trades Council, the California State Association of Electrical Workers and the Western States Council of Sheet Metal Workers, we'd like to align our comments in support with the state building trades. Thank you.

Thank you. Good morning, Mister chair and members. Yvonne Fernandez with the California Labor Federation and support.

Thank you. Good morning. Kevin Ferreira, Executive Director of Sacramento-Sierra's Building & Construction Trades Council in support. Thank you.

Mitchell Bechtel, on behalf of the District Council of Ironworkers in support.

Thank you very much. Seeing no others approaching the microphone, are there any members of the public here in opposition for testimony?

Welcome. You have up to two minutes each,

Mister chair and members, Scott Govenar, on behalf of the Construction Employers Association. They are the largest city building contractors in California. They build quite a bit of affordable housing in the Bay Area. Kind of two items I want to speak to is this notion of PLAs as panacea. PLA's can be good.

You know, when they're negotiated properly, they can work. The problem is oftentimes they ignore the existing collective bargaining agreements. The legislature tells our members, we want you to negotiate with unions, we want you to do that. Those CBAs contain kind of the jurisdictional issues as to who can do what. Well, PLAs supersede that.

So you can imagine when we have an agreement with the carpenters or laborers and the PLA says something different, it puts us in a bind. CBA should supersede PLAs. It shouldn't go the other way around. We negotiate in good faith. We should honor those agreements as it relates to cost.

I'm just going to talk about what's going on in the real world in the Bay Area today on projects that my members work on. As you know, developers have to apply for the tax credits with CDTFA. CDTFA is a competitive process based on project cost.

In practice today, developers often tell my members it's difficult to use signatory MEPs because they are more expensive. These are prevailing wage job. The wages are the same, but the markup is different. Different. So they tell us we can't use them because if we do, what they say is we're not going to qualify for the tax credits, in which case the projects won't get built.

Our concern here is if you limit the pool of qualified bidders, those costs will go up and those projects in the Bay Area won't come to fruition. The legislature has done a lot of great things over the past few years to increase the production of affordable housing.

By increasing prices in this segment, you're actually going to decrease project development. I think if the author has issues with the CDTFA process and that competitive process that exists today, kind of disadvantaging union subcontractors, then we should fix that.

But simply increasing the cost for these projects won't help, and it will result in a decrease in affordable housing production. So for these reasons, we are opposed.

Mister Chairman, member Danny Curtin with the California Conference of Carpenters. I want to start off by thanking this committee and the Senator for the work you're doing on housing, which is the number one crisis in California, probably the most disruptive issue in the state, economically, socially, and more and more politically.

I also want to thank the Senator and all of you for recognizing that a portion of the housing crisis has to do with the wage issues associated with the housing industry.

Housing industry is half of all construction, essentially, and that's where most of the crime, the wage theft, almost half of that workforce in the housing industry is certified as poverty. Wages, low, very low, or extremely low wages. So we are here fighting for better wages and better conditions, and I thank all of you for that.

I do want to point out our concerns with this issue, though. PLs are very, very helpful when, there's an agreed upon, mutually agreed upon program. There's two issues here that we are concerned with. One is the carpenters are the largest craft, particularly in the housing industry. We are not in the building trades.

A mandatory building trades PLA gives us no legal standing. We can sign an agreement if we find that it's useful or helpful. But not being at the negotiating table in the process really makes it very complicated for a PLA to represent our interest. And a lot of these things have to do with disputes on the job.

Scott mentioned some of the issues. PLAs are going to be decided by a group that the disputes are not. We're not in that group, so we are very, very anxious about that. The dispute resolution issue is something that can be worked out in the long run, but not with a mandatory situation that we're looking at now.

And I also want to say the mandatory PLA's. The reference to LA was interesting. They have a PLA down in Los Angeles, but this is nine counties. Maybe it's the same size as LA, but it's not the same as LA.

There are counties that have a very, very small presence of the labor movement in those counties, particularly in housing. We find ourselves in agreement with the building trades more on the industrial and commercial side than we do on the housing side. There is very, very little penetration, market penetration by unions at the housing. Am I getting close?

Okay. Sorry about that. A couple of quick points. We could have one final sentence. Okay. We did work out some labor standards in the housing area because things couldn't go forward. We are saying that those are the standards you should be looking at.

We're willing to work further on this bill, but we definitely are not happy with the situation. As a mandatory situation, we don't think that's good for government either. Thank you.

Thank you. Are there any other members of the public here in opposition for a name and position statement?

Good morning, everybody. Honored to be here. Jay Bradshaw, Executive officer of the Norcal Carpenters union represented just under 38,000 hard working men and women throughout the construction industry, including residential, opposed to the PLA mandate in the Bill. Thank you.

Good morning. Melanie Perron on behalf of the Associated General contractors, in opposition.

Thank you.

Good morning. Chair and members. Kathryn Charles on behalf of Housing California, in opposition.

Thank you.

Good morning, Mister chair and members Graciela Castillo Krings on behalf of the California Housing Consortium, in opposition.

Thank you.

Andrew Dawson, the California Housing Partnership, in opposition.

Thank you. You see no other members of the public wishing to be recognized? I'll turn it back to the dais for any member questions or comments.

Thank you to the author. As part of the nine-county Bay Area delegation, I recognize why you're pursuing this endeavor. So how do you reconcile the comments made by opposition in regard? How do you reconcile that with the bill?

Well, we're still trying to recognize, I'm sorry to reconcile those. We have met with Mister Curtin and Mister Bradshaw. We've had some communications, they've had some communications sit down with building trades.

They haven't been productive enough yet to get us the amendment that we would need to get their support or to get them to neutral, but we're going to keep working on that. And I know their letter says opposed unless amended.

So that's a great challenge for us all, especially since the end game here that I mentioned in my comments, and I won't get deep into this, obviously in the building, but when, when you're going to go out on the ballot in the Bay Area, as you well know, assemblymember, we have to have a united labor front.

And so really the challenge here is to try to find enough common ground here to move forward so that we have building standards, but we're not essentially creating an opposition group later on as this thing is moving toward ballot, which is coming very quickly. And we have a short time to do that. So, yeah, not reconciled yet.

The reason we picked the BART PLA as a starting point is to talk to everybody else about, including the carpenters, is because the carpenters are signatories to that one.

And it has, what is, to me, being a Santa Clara County person, a little bit of what is the unusual is basically an off-ramp in it already for folks that are not signatory. So you don't create this problem where you don't have enough signatory workers that's built right into the BART PlA.

It doesn't mean necessarily that the opposition likes that or not. We need to keep talking about that, but we think it's a great starting point.

One thing we do know in the conversations that we have is that all sides here are interested in things like local hire, you know, access to healthcare, things that they've been fighting for themselves can be included in an agreement that would govern all of this.

We need to figure out just how to get there in the next couple of weeks. So I hope that answers some of your question.

Thank you. And I appreciate your willingness, and I know you as an author, your willingness to be able to, you know, navigate difficult issues and work with the other to get there. My concern around it is when it comes to housing, how there's not enough unionized labor within housing in general.

And it's such a big bond and it's key for our area that we might be hindering ourselves in some way, especially when you can fight at a county level to get PLA's right. And I know there's that effort and I've been supportive of that effort.

And so I worry that it might be too much too soon in the sense that not having that. And then I also worry about the fact that this is a primary area where the carpenters who are union are primarily working.

And then to the point of them not having a seat at the table is really concerning to me. So I'll give you the vote today. I trust you as an author to continue to have, you know, those discussions. I think they're important and key.

And I would say if they don't come to the table, it'd be hard as it gets to the floor, because this is a big thing. And I think it is important that we're united. And if we're not united, I think then there's no point for all of this. Right. And so I think that's extremely important. Thank you.

Thank you.

Thank you, Miss Wilson, Senator Reyes.

Thank you, Mister Chair. I think recognizing you as a champion for labor makes it easier to go through this and to try to find a way that is going to make it work. But the analysis does talk about the increased cost per unit in LA that had covered by the PLA.

And I understand there was a Berkeley study. We don't have, we're not privy to that. We have just what the analysis has shared with us. The pool of good union workers in LA is much greater, and that was noted also in the analysis.

Compared to the Bay Area, which has a smaller labor pool in comparison, there's no question we have a housing crisis we have to build.

And with this bond coming up to set everything up that needs to be set up so that we can get everybody who can work to work on these projects and to be paid at the highest rate, that's extremely important.

Now, our colleague, the former author for the former housing chair, Assembly Member Wicks, did author a Bill 2011 not too long ago. Without a doubt, I'm going to vote, as my colleague has mentioned, I'm going to, to vote in favor of this, to allow that opportunity to continue.

But the opposition's comments are extremely important, and finding a balanced approach and finding an inclusive approach is going to be key to this. But I'm certain that you're going to find that way to bring everybody to the table to make sure that they specifically hear that the carpenters and the building trades are both working on this project.

And we don't exclude, though we don't exclude a pool from such a small pool. So with that, I would move the bill.

Thank you. Miss Reyes is some Member Kalra.

I'll second. I want to follow up. I think that there's already been some constructive comments that have been made by my colleagues, and obviously I've of all people to author this, to try to find a path to collaboration and deal with some of the issues. I've seen your work for over two decades and that's how you operate.

And so I'm confident that you can continue to do that here. Look, there is, there's traditionally been a lack of incentive of labor workforce in the housing space.

And in recent years, as mentioned, a previous housing shares ill and others, Senator Weiner's bills and what have you, the bills that require prevailing wage provided health care benefits, much of it spearheaded by our carpenter friends, has really laid a great foundation, I think, to build upon.

And this particular bond, we're talking about it being as much as $20 billion. This is not housing that's going to be built in one or two years. We're talking about many, many, many years.

And this will, by the moment, the bond, if it passes, if it were to pass, the moment it passes, particularly if it has a PLA element in it, will instantly create greater incentives. We already have wonderful apprenticeship programs, wonderful training sites, whether it's our electricians, our plumbers, our carpenters.

We have some of the best state of the art training sites in the Bay Area that you can find anywhere.

And so I think when the bond of this size is passed, that in itself, just in terms of the economics and the incentives, is going to push for even more folks to go through these apprenticeship programs and create more jobs for all of the trades and so on.

Some of the issues that were raised, I'm confident you will continue to work. As was mentioned, there's nothing in this that prevents our carpenter friends from getting these jobs.

But I think that there are some legitimate concerns about being at the table and being able to have a voice in terms of how the PLAs may be set up. But I think that this will absolutely, this can absolutely lead to greater local hire, absolutely. To kind of a flourishing in our apprenticeship programs.

You have to create that incentive. And $20 billion is a heck of an incentive to get folks into these training programs. And over the next several years, many years that I think there's an opportunity to create jobs for all of our wonderful union brothers and sisters.

And so I look forward to continued conversation and hearing updates as it gets towards the Assembly floor. But we'll certainly support it today with your continued work.

Thank you. Thank you, Mister Colran, Mister Vice Chair.

Great. Thank you, Senator. Appreciate it. The underlying policy in the first place had concerns with, I'm from Napa. I don't know, is that considered a Bay Area? You know, people from Napa say no, you know, I don't know. But yeah, it's, it keeps getting further out now, like Vacaville is too.

So, but anyways, you know, this is sort of implementation of the underlying policy. And, you know, one of the statements you made was, you know, obviously trying to bring people together. So, because that will facilitate the passage of the policy in the first place.

And I look at the opposition and it's not insignificance, you know, a collection of both contractors and the carpenters as well and others. And so, you know, I hope you can continue to work on this.

I guess we're all kind of saying the same thing, but being from what I guess is part of the Bay Area, a lot of people from Napa would commute to, because would commute to the actual Bay Area, San Francisco and other places.

But I understand that there are a lack of labor there in that area and it makes things difficult for the entire economy over there, especially if we're putting in many, many, many dollars into housing to make it happen. So hopefully you can work. So I'll probably lay off today, but I'm hopeful that you can come together.

So when this does go on the ballot, that it'll be smooth sailing from there. So, and feel free to respond, but no need to. I just get on my soapbox, so that's what I get paid to do, I guess. So. Thank you.

Well, thank you very much for the presentation here today, kind of following the lead of our Bay Area members and those that are Bay Area adjacent. I appreciate this conversation because we hold very strongly the connection between to have very responsible labor standards and the housing work that we're doing.

I do have one question, and that is with the, I think ABAG is at the Association of Bay Area Governments and they have a adopted bond measure that is out for, potentially out for voters this November with labor standards included. How might these intersect or conflict?

Anything, to my knowledge, anything that, you know, ABAG and MTC have a Joint Legislative Committee and their staffs are merged now thanks to some work we did a few years ago. So that organization together, BAFA is the Bay Area Finance Authority, is put together under that staff with another joint governing board.

So they should be all on the same page. There should be one Bay Area housing bond, up to 20 billion at this point, which is significantly more per county divided by the nine counties than anything that we've done. Even in Santa Clara, we got close to a $1 billion bond, but this is rarefied error.

So everyone's on the same page there. Ultimately, we need that legislative committee to endorse what we're doing. We need all the folks in this room to endorse what we're doing. Some of that will come through the legislative effort.

And I want to be very clear, I'm most concerned about the folks sitting at this table in opposition and the folks sitting at this table in support, bringing them together. And then I think the regional entity and the political folks who actually run campaigns, you know, it's their job to pull the rest of everyone together.

But we need to fix this issue first, if it can be fixed. Otherwise, the whole house of cards comes down.

Okay. I just want to make sure that Bora bond that has language, which has probably already been adopted will be out there, that there's not going to be some kind of a conflict between legislative direction and what voters might be voting on right now.

And so all that to be reconciled, also very supportive of the direction that's going. I understand there's been very good conversations underway, and so I expect that those would continue as well.

Ultimately, I think where we've been able to break through, I think some past conversations as well that have resulted in positive legislation have been finding the ways that make sure that options are available. So I do have tentative concern with the mandate that might not be the best situation for each one of the nine counties there.

And given some of those very localized dynamics that might go into what their needs are in their decision making and as well, some of the other concerns. This is, unlike Los Angeles, a nine-area, nine-county area, that just might have different considerations as well. It's almost apples to apples, but not truly.

And so I know you're going to continue to work on that through conversations and negotiating negotiations, and very much appreciate that. With that, I do support the bill moving forward today and invite you to close.

All right, thank you so much again, Mister chair and all those who spoke and who put some time into considering this bill and the confidence entrusted in me by those who expressed that to go forward here that you've thrown down the challenge. We kind of knew what it was before we came in here, obviously, today.

But I appreciate the committee elevating that some more and indicating what you all feel needs to be done. I think we're in agreement on that. We'll see if we can pull it off here. I do want to just make two real quick points in the close, and I'll make those quick.

These labor standards attach to the $20 billion. There's no requirement in this bill that the nine counties adopt PLAs. My understanding is seven of the nine counties have PLAs relative to whatever public work that they're doing. Santa Clara County, for example, has put $1.0 billion out on housing bonds, Eli housing bonds, all under labor standards.

So if you don't have that in some part of the Bay Area, it's just that your builder's nonprofit or for-profit and your labor team would be coming in building these particular projects with the labor standards in this bill because we're attaching them to the money, you know, not forcing them or mandating them on county government or city government.

Lastly, you know, I know there's been, first of all, I supported 2011, the Wicks bill that's been referenced here a couple of times. And I was labor chair in the Senate at the time. So I want to make it clear I'm not, I haven't picked sides here as far as who's right or who's wrong.

We're just trying to get to the right point. And lastly, at least in the Bay Area, and I think all sides agree to this, labor union labor shortages have not been a problem. The projects that BART has built under this PLA haven't been slowed down by labor shortages.

The $1.0 billion in Santa Clara County has never been slowed down by labor shortages. It may be something in other parts of the state. We haven't really experienced that. I think the real issue is we can provide the workers with all these folks that have spoke today.

We just need to get on the same page in terms of how they govern themselves and make sure they agree to that. But I think once we do that, we won't have to worry about worker shortages. They'll provide the workers. And thank you, with that, I respectfully ask for your aye vote.

Thank you, sir. Madam Secretary, please call the roll.

Motion to pass, as amended, to the Assembly Committee on appropriations. [Roll Call]

At the moment that has four votes to one oppose, and we will hold the roll up in for absent members. Thank you. I see. Next in order, here is Senator Padilla. This will be file item three, SB 1032. And when you're ready, you may begin presentation.

Good morning, Mister Chairman and Members. I'm pleased to present SB 1032, which would provide the Department of Housing Community Development with the authority to forgive loans provided by housing providers if the loans are impeding the borrower's ability to maintain and operate. Project for affordable housing and senior housing.

As the Committee is probably well aware, in the 1980s and nineties, HCD provided several loan programs for affordable providers to preserve existing units across the state. While it's easy to obtain funding and financing, repaying the loan is often proven difficult.

The premise was that developers would be able to repay these loan balances through profits made obviously on affordable developments. However, there is often no profit, as you know, to be made, and the housing providers then, in turn find themselves in an endless cycle of debt.

SB 1032 will help address this shortage by allowing HCD to forgive these loans to help affordable providers continue to operate and to improve their ability to access additional capital for infrastructure and operating.

The bill would also place guardrails on the loan forgiveness that to qualify, a borrower must be a nonprofit entity at the end of their loan term, and that the repayment of the balance of the loan would indeed impede their ability to maintain the project as affordable production.

Loan forgiveness for these providers is critical, as many of the housing agencies it would benefit serve as the main or sole affordable housing providers in their respective regions and markets.

This bill will maintain the affordability of these units and increase access to capital so that developers can maintain the supply they already operate and potentially build more affordable housing options. We'll just note, Mister Chairman and Members, we know that existing authority provides the ability for restructuring, but.

But there remains the questions of the obligation of nonprofit borrowers to carry unsatisfied obligations on their books. And there is a great distinction between the restructuring and loan forgiveness, which has an offset of balances. So that's the point of the Bill.

And with me today testify and support is Inyo County Supervisor Jeff Griffiths and Mister Jeffrey Morgan, who is the CEO of Chispa. Thank you.

Good morning, Mister Chair. Thank you for allowing me the opportunity to comment. My name is Jeff Griffiths. I'm Inyo County supervisor representing the town of Bishop and also the first Vice President of CSAC, California State Association of Counties. I want to tell you about valley apartments.

This affordable housing project in my community was converted from a motel in 1980 with an HCD loan, and it's been owned and operated by the Inyo Mono Advocates for Community action, and it has been maintained for the past 43 years at a super Low below 30%. AMI affordable housing 19 units for disabled and seniors.

It was the understanding of the agency at the time of the loan that it was a no recourse loan and the loan would be forgiven at the end of the term if it were maintained as affordable housing.

In fact, at the Low rents that are charged, required to be charged for 30% AMI, there's not even enough income to pay for the maintenance and the operation of the building, much less paying back the loan.

So no payments were requested or paid from HCD until 2011, which was the end of the term, when HCD sent the community action agency a bill for $1.1 million, the amount, entire loan interest and principal. What followed were 10 years of negotiations that didn't go anywhere.

What was offered was rolling over the loan with a similar process, which one doesn't work because it just creates the same problem 25 or 30 years down the line. Two, would be an illegal, predatory loan if it were offered on the private market.

And three, it maintains that bad debt on the the balance sheet of the agency, which prevents the ability to acquire additional financing, financing for new affordable housing projects and makes the balance sheet look bad to grantors both in the federal and state government.

So in 2021, HCD put it into default, and this resulted in the agency losing its ability to provide any homeless programs, any new affordable housing programs, and many of the other programs.

And this bill would allow HCD to forgive the loan, which would, in a tight budget year, preserve more than 4000 units across the state, both urban, suburban and rural. Thank you, supervisor, and thank you for your time.

Thank you. Hi, my name's. Is this one? Yes, I think it is. Okay. My name is Jeff Morgan, President of Chispa. We represent the Central Coast, 4000 residents. We built about 2500 units of multifamily rental and for sale housing. I've also had about 20 years of experience doing preservation.

And the simple fact is a lot of these older loans, there was one property in Oakland, for example, I worked on, had a chirp r loan, which is one of the kinds that we're talking about and getting to a point where we have this is one more tool that essentially allows us to have access to capital, keep our communities, as community driven nonprofits, more economically sustainable.

A lot of these loans, they're really not going to be repaid because the funds aren't available. And I'm seeing that, especially in the rural areas, we're already short on funding. We're coming into a season where budgets have been cut to the point where we didn't even have the supernofa issued.

So we're trying to look at preservation as a way of preserving this is a great time to do that if without having this debt, without having to repay this. First of all, it allows us to do more programs.

So in many of the projects, I wouldn't have had to make the hard choice between do I do this renovation to be more sustainable, or do I have more debt and therefore have less funds for the programs that we need to improve the quality of life of the residents. So I think this tool is really helpful.

I don't think there's a major impact, really, because the properties we're talking about, many of them are already troubled, and this is a way to keep not only that community sustainable, but in turn, the nonprofit sponsors that are already community based and already trying to get this done. Thank you very much.

Thank you. Are there any of the Members of the public here in support that wish to register their position?

Mark Neuberger, California State Associate of Counties, proud sponsor of this bill.

Thank you.

Louis Morante, on behalf of the Bay Area Council and strong support. Thank you.

Thank you.

Mister Chair, Members, Paul Yoder, on behalf of the counties of Fresno, Tulare, Stanislaus and Marin, as well as Burbank housing in support. Thank you.

Thank you.

Good morning. Michelle Gaba with Nielsen Mercsmir, on behalf of the County of Imperial, in strong support.

Thank you.

Good morning. Elizabeth Espinosa. On behalf of the counties of Colusa and Santa Barbara, also in support. Thank you.

Thank you.

Mary Ellen Shay, California Association of Local Housing Finance Agencies in support.

Thank you.

Rachel Muller. On behalf of Rural Community Assistance Corporation, in support. Thank you.

Thank you.

Good morning. Chair Members. Galen Dobbins. On behalf of the California Coalition for Rural Housing, strong support.

Thank you.

Good morning. Graciela Casilla Krangs here, on behalf of the California Housing Consortium, in support.

Thank you.

Good morning. JT Harishmack of the Nonprofit Housing Association of Northern California, strong support.

Thank you. And I see no Members of the. No more Members of the public approaching the microphone. We have no registered opposition on file. Are there any Members of the public here? But we do. Are there any Members of the public here in opposition that would like to either provide testimony or a statement of opposition?

Okay, seeing none, we'll turn it back to the dais. Any Member comment? Mister Vice Chair.

Thank you. I just have some questions on this in another Committee, we were doing legislation to, or there was legislation to essentially not have certain types of debt count towards a credit report. And so it just made me think, I guess I have some discomfort with waiving essentially taxpayer money.

And I'm kind of conflicted because I understand, by the way, you know, I have family, I've said this all the time, family Members who live in affordable housing, and I understand the difficulty for the owner, in these cases, nonprofits, to pay those off.

But I'm just conflicted with the precedent of waiving debt and tax, especially with taxpayer dollars. And so when these loans were obtained initially, was that kind of always the intent, or that they would just never be paid off or that they would be forgiven?

Hopefully, or you kind of alluded to it a little bit in your testimony, but I was just wondering if you could add some more, if that's all right, Senator, or you can answer it, whoever would like to, whatever is helpful.

I'm happy and happy to have that. First and foremost, I think with respect to the initial issuance of the lending and given the market at that time, I think the evidence is pretty clear that some of the assumptions that existed in the market then were very different than what has evolved to today.

Second, I would say to your point about waiving debt, and it's a great question, assemblymember, and that is, in terms of public investment, this tool is very important because ultimately, the forgiveness then, in terms of its impact on the portfolio and the disclosure required by the nonprofit, not only allows them to be in a better position to achieve additional capital, but that translates into additional product and the maintenance of product in the market of affordable product, and the maintenance of important programs in very distinct and unique markets.

So in terms of the public's investment here, frankly, in a situation where most of these outstanding balances are not going to be collected anyway, this tool will allow us to actually achieve more value and validate the investment we've made, because these unique circumstances mean that if this tool is not available, some of that product goes away.

And so the public investment is for not.

And I think if you look at the particular project in my community, we're talking about, one, it would be impossible with collecting the rents to be making any payments. So what the intentions were almost a half century ago, I can't really speak to.

But as far as the public investment, we're talking about $1.2 million at this point, that would, the only way to be collected would be evicting 19 elderly, disabled people, effectively making them homeless, and selling it at market rate.

And you compare that $1.2 million for preserving 19 units versus the investments that are being made, and building new affordable units at, you Know78, $900,000 per unit I think you can justify the investment that's made.

Yeah. And I would just say, just to add to this, it's just the opportunity cost in a market where there's less funding and we could use half of the funding, let's say maybe there's twice as many units that we can preserve in a time where there's less funding.

And what was also brought up is are we at risk of actually, what's the opportunity cost of actually losing the affordability of some other entity requires it that's capitalized in a way where they actually eventually displace those residents? So I would say that's the reason.

So I think there's good reasons and it's also something, I think HCE, there's still conversations that happen, but having the right to be able to do that to preserve affordability, I think is a good policy.

Thank you. When did these loan programs exist? The bill seems to be pretty broad on just loan programs. Or do those still exist or is this going to apply to loans right now that are being given out?

Again, the timeframe that these loans predominantly affecting these particular discrete markets, the nature of this product, were in a different era when the assumptions were that the receipts were going to be sufficient to cover debt or at least maintain a better ratio. That did not prove out to be the case because of other elements.

And I don't know if the CEO wants to address that or not.

Well, one example, for example, property called Westlake east, which was in Oakland, that had a trip r loan, and this was from the 1990s, and there was no chance that this wasn't going to get repaid.

It was just something that was getting in the way of being able to do a lot of critical seismic repairs and other things. And I think it'll get even more amplified in rural areas where there's less funding, so that the money, a lot of this money was put out a long time ago and hasn't been repaid.

So I get that. But the language of the bill, does it apply to those older legacy programs? It seems to be broader than that, I guess is what I'm getting at. Like it could apply to future loans that maybe the state decides to give out. And I think that's maybe a concern I have.

I would just sit, Mister Chairman, the experts can also add on here. Assemblymember, respectfully, I think that the language is permissive and I think the circumstances that it's designed to address exist very discreetly in certain situations. And so obviously if there aren't circumstances that would apply, then the authority wouldn't be utilized.

It's just that we have to give that discrete authority because right now we have a restructuring capability, but we don't have discrete authorization to do the forgiveness.

The forgiveness, I would submit, is going to apply to a discrete set of circumstances where, as was just noted, some of this is a lot of time has passed on the original issuance and that has not been made whole.

And I think that the passage of time and the circumstances prove the point that these are likely not to be paid in full and that the impacts to the projects and operations are pretty severe if they aren't able to clear that.

Okay, thank you. Thank you. Senator Wilson, thank you to the.

Author for bringing this forward. I think it's extremely important, and as you noted at the end, that it is permissive language. It authorizes HCD to do this where they feel it is best necessary and utilized, whether in the past or potentially, you know, in the future, given the back and forth.

I had only one thing that I was concerned about before as it relates to the comments from testimony and being familiar with something that we did in my own city, the recorded deed restriction notes for the period of the remaining useful life of the project.

As you noted in testimony, that a lot of times with these projects, because of the marketing conditions not existing like they were intended at the very beginning when they were created, that a lot of the buildings go unmaintained, not a lot of investments in them, and so could be dilapidated or blighted in some nature.

And so it seems to be that the useful life of the project might not be that long. And there is no deed restriction on the land itself for a certain number of years.

And so I think that may be something that the author may want to consider as you continue to navigate the legislative process, something we did in our own city to ensure that it extended beyond the building as put a deed restriction for a number of years on the land so that it couldn't, once the building was gone, then be sold for profit to a market rate developer, and so that we knew that particular land for a certain amount of period would have to be used for affordable housing.

In our case, it was senior housing. Thank you.

Thank you, Madam Chair. See no other Members wishing for questions or comments. Senator, I want to thank you for bringing this bill forward.

Something that I have been working on as well, too, to be able to really try to open up and provide that option for HCD, to be able to think a little more creatively, equity that's out there, and the ability to repurpose that without additional appropriations is just the smart way to do for the government to do business.

And so you're finding another complimentary but a standalone important bill that's able to do that as well. So very supportive of this and would invite you to close.

Thank you very much, Mister Chairman. I appreciate the collaboration with the Committee in our office and I would respectfully ask for an Ivo.

Thank you. Do we have a motion? We need a motion by Mister Kalra, second by Miss Wilson. Madam Secretary, please call the roll.

Action do pass to the Assembly Committee and appropriations. [Roll Call]

At the moment we have three votes. We will keep the roll open for absent Members. Thank you, Mister Chairman. Next on file, we see Senator Blakespear with item number 10. This is SB 1077, and when you're ready, you may begin presentation.

Thank you, Chair and colleagues. Hello. Good morning. I would like to start by saying that I accept the Committee Amendments on SB 1077. As you all know, California is in a housing crisis of unprecedented magnitude. Since 2010, homelessness has skyrocketed 50%, and last year, 180,000 Californians did not live inside.

We in the Legislature have passed hundreds over 100 bills to address the root cause of this crisis, which is the underproduction of housing. One of the most notable successes we have seen so far has been the state's loosening of restrictions to adding accessory dwelling units, or ADUs, to residential properties.

Despite these changes, homeowners in the coastal zone face significant administrative challenges to permitting ADUs and JADUs. These challenges make projects cost prohibitive. Cities and counties in the coastal zone report that the ADU Design Review Standards enforced by the California Coastal Commission conflict with the minimum ADU Ordinance Standards enforced by HCD, the Department of Housing and Community Development.

What SB 1077 does is it directs the Coastal Commission and HCD to develop, solicit public feedback, and publish unified guidance for local governments on how they may update their ADU ordinances and local coastal programs, LCPs, to comply with the Coastal Act and the Government Code.

This exercise will allow HCD and Coastal Commission to examine and resolve conflicts and how they enforce the law. This will address the logjam in ADU permitting and promote production of naturally affordable housing stock in the coastal zone.

I'd like to introduce my witness with me here in support, Louis Mirante, Vice President of Public Policy at the Bay Area Council.

Good morning, Mr. Chair and Members. My name is Louis Mirante. I work for the Bay Area Council. And I'm also here today in my capacity as a board member of the Casita Coalition, which supports this bill and aims to convene all the ADU policy advocates in California.

As Senator Blakespear mentioned, ADUs are a tremendously successful policy intervention the Legislature has implemented. They now account for about 25% of all housing production in California. By 2030, ADU, the ADU industry is going to be a $10 billion industry.

And everything that we're learning from the Turner Center seems to indicate that most of these ADUs are affordable to low-income people in the metropolitan service areas in which they're built.

Research from the Turner Center also seems to indicate that ADU construction in the coastal zone suffers for a confusion with how to interpret ADU law and the Coastal Act together.

The Turner Center released research earlier this year that showed that ADU permit times are twice as long in the areas they studied for ADUs, about twice as long on average. And that just indicates the need for more clarity on how to interpret the coastal act and some of the mandates of the, of the ADU Law. All good genesis for this bill.

In the past, guidance from the Coastal Commission has been inconsistent. There's a court case pending in the Supreme Court right now where the Coastal Commission interpreted an exemption as. As something that should be granted to the ADU.

They then flipped on that mid-litigation and don't have a consistent set of policy guidance for how to interpret the Coastal Act and the state's ADU law together, they just issue guidance ad hoc.

This bill would require them to issue guidance that's general, that allows homeowners to decide how to build or move forward with an ADU in a way that's faster, but importantly, also how to preserve the natural resources and protect the natural resources, Coastal Act, I'm sorry, coastal access, that are the mandates of the Coastal Act.

All this clarity is going to make it easier to build and easier to protect those natural resources. I strongly urge your support for SB 1077.

Thank you. Are there any other members of the public here in support? Thank you.

Mr. Chair and member. Paul Yoder on behalf of the City of Santa Monica in support. Thank you.

Thank you.

Brian Leahy, AARP volunteer, on behalf of our 3.2 members in support.

Thank you.

Catherine Charles on behalf of the Housing Action Coalition in support.

Thank you.

Amy Brown on behalf of the City of Long Beach in support.

Thank you.

Good morning. Moira Topp on behalf of the City of San Diego in support.

Thank you.

Mark Neuburger on behalf of the California State Association of Counties in support.

Thank you.

Good morning. Brooke Pritchard on behalf of California YIMBY in support.

Thank you.

Holly Fraumeni de Jesus with Lighthouse Public Affairs, on behalf of Fieldstead and Company, SPUR, Eden Housing, San Diego Housing Commission, and Habitat for Humanity California in support.

Thank you. Are there any Members of the public here in opposition to provide testimony or a statement of opposition? Okay, seeing none, we can turn it back to Committee Member questions or comments. Mister Vice Chair?

Gosh, I swear this is not what I'm intending to do. But first of all, great bill, amazing bill. And I will use my 30 seconds to say that this is yet another bill that the Coastal Commission decided to get involved with. They're totally out of control. They need to be checked by this Legislature as soon as possible.

And I don't remember how many pages it was, but there was an ADU being put on somebody's private property, and they did like they didn't decline it. They always say, oh, we don't deny projects. Well, they made it so difficult.

They put together, I don't know, 30 some odd page report on why this ADU blocked about a half inch of your view from 500 yards away. They're totally out of control.

And I hope next year this Legislature comes together to put them back in check while at the same time protecting the environment in their original intent and what they should be doing, not blocking state policies like ADUs. So, thank you for the TED talk.

Would you like to make a motion?

Oh, I am very happy to move this bill.

Thank you. Is there a second by Miss Sanchez? Thank you, Senator. I appreciate you working on this. We all know that in recent years, ADU construction has been responsible for 1 in 5 new housing starts in California.

And the opportunity through this bill to be able to provide that option for more coastal Californians, I think, is certainly one to look forward to. I invite you to close.

Yes. Thank you very much. I'll just say in closing that ADUs have such potential in the coastal zone because they add gentle density in a way that allows more people to be spread across areas of development. And they don't create the types of discussions about housing that higher-density housing sometimes does.

So, making it easier to build ADUs in the coastal zone should be a top priority of the Legislature. And unfortunately, this conflict between HCD and the Coastal Commission, and I know this from having been a coastal mayor, creates tremendous delay. And so, we have individual project delay and we also have city-level delay.

So, having them work together on guidance is a really important streamlining effort, and hopefully, it will move the needle on the speed at which ADUs can be built in the coastal zone.

Thank you, Madam Secretary. Please call the roll.

Action do pass as amended to the Assembly Committee on Appropriations. [Roll call]

And right now, we have four votes. We will hold that roll open for absent members. Thank you.

All right, great. We have Senator Ashby. No worries. All right. Thank you for your patience and for being here. And we welcome you to present file item 11. This is SB 1439.

Thank you. Thanks, colleagues, for having us grateful to be here today. I can't track everybody today. All right, Chairman, you want me to start? All right, well, first of all, thank you for being here.

I know it's the end of a rough couple of weeks for all of us, so, you know, we'll just get through the next few days and then enjoy a bit of summer.

SB 1439, at its heart, is a district bill, and it allows Sutter Health to build a state-of-the-art cancer center on a regional transit property here in Sacramento. Sutter Health is a nonprofit hospital that has established itself as a reputable provider of quality healthcare across our entire state.

You guys know that. Many of you have Sutter hospitals in and around your districts. Cancer is the second leading cause of death in our state, with 189,000 new cases and over 60,000 deaths every year.

According to a study from UC Davis, Sacramento County has a higher cancer mortality rate than the state average, indicating a great need for the facility that I am here to fight for today. There is also a great need to increase accessibility to critical, life-saving care for people who use Medi-Cal and Medicare.

Of its 3.2 million patients served annually, Sutter serves over 1.2 million Medi-Cal and Medicare patients. Sutter Health is heavily invested in our local, federally qualified health centers, such as WellSpace Health and the Sacramento Native American Health Center care for cancer patients from our most underserved populations.

Both are supporters, and you will hear from at least one of them today. Through these partnerships, Sutter Health has provided low-cost medical care to 440,000 low-income patients, absorbing the reimbursement costs for their care.

I know that the issue here on this Committee has been one of concern around precedent, and I want to talk about that very directly today.

First, I want to assure my colleagues that this bill is so narrowly tailored that it only applies to one hospital that is landlocked in a non-residential, two-block radius in the heart of my Senate district.

It is intended only to meet the very specific need of treating cancer in a county with a higher mortality rate than the state average. And the bill does not cut short the existing SLA process in play on the nine properties in that process now.

Like all of you, I, too, am a housing advocate, and I have earned my stripes at the local level and here. In fact, as a young single mom in this city, the one I now represent.

I lived in low-income affordable housing while raising my young son on my own, using food stamps, working full time, and putting myself through UC Davis and McGeorge Law School. I am very aware of the need for housing.

And while the Surplus Land Act is an excellent tool for housing and one that I support, it also puts many things in line ahead of housing. It prioritizes corp yards, administrative buildings and other civic buildings not only ahead of healthcare, but ahead of housing. There have been many changes to the SLA over the years.

Sacramento is an outstanding actor on housing stock. I know some of you received a letter from our mayor this morning to reiterate this point. We were the first city in the State of California to receive the pro-housing designation. That's from HCD. We received it several years ago.

We were the first city in this state to eliminate single-family housing. We did that this year. These are record-breaking things. There are 25,000 low and very low-income units in our Sacramento Housing Authority's portfolio.

They built 640 new very low-income units last year alone and there are another 2,218 in the immediate pipeline for this year and next. Sacramento County also provided the greatest reduction, the greatest reduction in unhoused population in the entire state at 41% this year in the point-in-time count.

I repeat, there is nothing in this bill that would interfere with the surplus land process currently underway. And I did offer a further amendment to this bill to clarify that point and would be more than happy to take that language today.

This bill was heavily amended in the Senate to include safeguards that ensure that this land is used for critical healthcare, remains accessible for marginalized communities, and provides a necessary community benefit. I am so proud to have the support of WellSpace Health, the Sacramento Native American Health Center.

My mayor, Mayor Steinberg, Sacramento City Councilmember Eric Guerra, California Black Chamber of Commerce, Cal Asian Chamber of Commerce, California Professional Firefighters, the Western State Council Sheet Metal, Air, Rail, and Transportation, California State Pipe Trades, California State Association of Electric Workers, California Medical Association, California Realtors, the California State Building Trades, the Sacramento LGBT Community Center, the Steinberg Institute, California Hospital Association, Sacramento Regional Building Trades, Sacramento Area Firefighters Local 522, dozens of other businesses, including Make a Wish Foundation, all of whom believe that this cancer treatment center is a lifesaver for the people who live here.

I will finish with just this one question that I ask this Committee to consider this morning with an open mind and fresh ears. There is no doubt that the Surplus Land Act is a good and noble policy. No one debates that. The question is for every good and noble policy, can there ever, ever be an exception?

And if so, what is the appropriate measure? I submit today that nine of these properties will have completed the SLA without interference.

I also submit today that it is the highest of bars to say that a landlocked hospital that would provide the highest cancer treatment service in a region where cancer is a greater risk than in the rest of the state is a high a bar as one could possibly hope to achieve. Today, colleagues, you are under pressure.

I know. But pressure is a privilege. A privilege that we have earned by being in this building. And today, the Housing Committee in the Assembly, in the State Legislature, holds in its hands the fate of 3 million people in the greater Sacramento region and whether or not they will have access to critical life-saving cancer treatment care.

I ask you for an aye vote, and I am very proud to have with me at this table today two witnesses and one person here in case you have questions for Sutter. Joe Gregorich is representing Sutter. He'll be here for technical questions.

My two lead witnesses are Brian Rice, who is the President of the California Professional Firefighters, and Jonathan Porteous, who is the CEO of WellSpace Health.

Thank you. We have up to two minutes per witness.

Good morning, Mister Chair and members. My name is Brian Rice and I'm the President of the California Professional Firefighters, representing over 35,000 firefighters, EMTs, and paramedics in California. And I'm pleased to be here in strong support of SB 1439, which, as you've heard today from Senator Ashby, expands healthcare access in Sacramento.

I come before you today as a Sacramento resident who served 30 years as a firefighter in the Sacramento Metropolitan Fire Department. 12 year, excuse me, served as President of the Sacramento Area Firefighters Local 522 and as a resident of this community and a representative of firefighters.

This proposal is personal for me as it will help facilitate the development of the Sutter Cancer Center here in Sacramento. This type of enhanced care is needed now more than ever, especially for firefighters. The International Agency for Research on Cancer classified firefighting as a group one carcinogen meaning the job of firefighting will give us cancer.

But I did. Will likely give us cancer, but I didn't need. I didn't need the international agency to know that cancer is an epidemic in the fire service. Cancer is the number one killer of firefighters across this nation. On the very grounds of this capitol stands the Firefighters Memorial.

Fully one-third of the members on there have died from job-related cancer. Every firefighter has had their lives touched by cancer in some way. And just this year, Sacramento Metropolitan Firefighter Anthony Ben Alicia, from my home agency, died at 32 years old from occupational cancer.

He did his last two years at Metro Fire doing a job that he loved. Every time I attend a funeral, I ask myself, what more can I do to protect my members and the community they serve?

I've had the honor to work with all of you to strengthen cancer research, improve access to care, and reduce toxic exposures for my members. I thank you all for your partnership. I'm here today because SB 1439 is another piece of the puzzle.

It creates a pathway for Sutter to build a cancer center that will improve health access for the community of firefighters. And I'll just finish with this from the heart. I've spoken at two firefighter funerals, Anthony's and a young man named John Martinez, 34, in Contra Costa, earlier this year.

And all that to say, over the years, we have concentrated on cancer care for men because this is a dominated profession by men. But we are having inroads for women into our service. We do not have enough information about women in the fire service to make the differences that we need.

And one more cancer center, one more research center, a place that we can go for treatment, expand our knowledge, and potentially find a cure and focus on the thing that is killing us most is needed. Sacramento is developing as a medical community, and I just urge your strong yes vote on this. Thank you, Chair Ward.

Thank you.

Good morning, Chair. members. My name is Doctor Jonathan Porteous. I'm the Chief Executive Officer of WellSpace Health. We are a federally qualified health center and low-income community health system across Sacramento region.

We have 130,000 Medicaid beneficiaries in our care and about 12,000 uninsured persons, the majority, the largest provider of healthcare to the unsheltered populations in the region, is WellSpace Health. To that end, I'm the chair of the SAC Steps Forward Board, and we hold the HUD Continuum of Care Advisory Committee. We hold the point-in-time count.

I am actually here with a lot of people. I consider my colleagues on both sides of this issue. So, this is a difficult decision for you. But for me, as a psychologist, it's a no-brainer, or I'm not sure if I can say that as a psychologist. But it seems simple in many, many ways.

Building a campus for a hospital is hyper-local. It needs to be contiguous. It allows for an infrastructure, but importantly, it allows for chain of custody and the integration of care. And that requires contiguous construction. Disaggregating a hospital campus, which would happen, or maybe Soto would not be able to build a campus, disaggregating that disaggregates care.

And the first people to lose out are my people. They're the ones with the least access to transportation. They're the ones who are most likely to not follow up if they have to go somewhere else.

When I worked in a hospital in Brooklyn, the tunnel between two buildings broke and we had to transport people across the street in ambulances. And the least fortunate, the people I served there as well, were the ones who were least likely, literally to get across the street.

That's where that continuity and chain of custody is critical housing, which is a great passion of mine, doesn't have that need. It's not restricted in that way.

So, for me supporting this, there is no issue this should be supported because it gives me access for many of the people I serve, because Sutter is one of the health systems that's actually figured out how to work with our Medicaid population. So, I would urge you to support Senator Ashby. Thank you.

Thank you. Are there other Members of the public here in support that wish to register their name, position, and organization?

Joe Gregorich, on behalf of Sutter Health.

Thank you.

Symphoni Barbee on behalf of Planned Parenthood Affiliates of California in support.

Bishop Chris Baker, long-term community advocate and board member of WellSpace Health. And glad to say, I reiterate what Mister Jonathan said, and I ask your strong support in this bill.

Thank you.

Jay King, President and CEO of the California Black Chamber of Commerce. We're in support.

Thank you.

Doctor Karen Grossman, Chief Medical Officer, Sutter Medical Group. On behalf of my 1300 physicians and APC's, we're in support.

Thank you.

Michele Welcava. I'm a resident of the Pocket Greenhaven area of Sacramento in strong support.

Thank you.

Jeremy Gardella of Sacramento Area Firefighters Local 522 in strong support.

Thank you.

Mister Chair and members of the Committee, Jennifer Speck, on behalf of the California Association of Realtors. We apologize. We were a late addition yesterday as the result of the Sacramento Association of Realtors. They've adopted recent policy in order to support the bill with significant concerns about the health if we were to use that particular parcel for housing given its located under a bridge. Thank you.

Carrie Stuart, expert oncology nurse with California Advocacy for Oncology Nursing, in strong support of the bill. Thank you.

Thank you.

Good morning. Luis Sumter. I am a full-time realtor here in Sacramento. I also serve on the board of directors for the Sacramento Association of Realtors representing 7,300 members and the California Association of Realtors representing 190,000 members and we stand in support of this bill.

Thank you.

Good morning. Chair and Members, Martin Vindiola, on behalf of the California State Association of Electrical Workers, the California State Pipe Trades Council and the Western States Council of Sheet Metal Workers, all in support. Thank you.

Thank you.

Good morning. Angie Manetti here on behalf of the California Apartment Association, in support.

Thank you.

Thank you. Chair and Members, Ryan Pierini, on behalf of the California Ambulatory Surgery Association, and real quick, if there is a precedent we're setting, it's one that provides critical care services for members of this community. Thank you.

Good morning. Michelle Smira here on behalf of the Greater Sacramento Economic Council, representing 35% of employees, lawyers in the six-county region, here in support.

Thank you.

Dion Dwyer, representing the Sacramento Metropolitan Chamber of Commerce, representing the six counties of the area. Thank you.

Good morning. Philip Norton, Chief of Staff to Sacramento City Councilmember Eric Guerra, on his behalf in support.

Thank you.

Chris Bollinger, on behalf of the California Asian Chamber of Commerce and the Sacramento Asian Chamber of Commerce, here in strong support. Thank you.

Ida Dharnidharka, on behalf of Central Valley Health Network and the California Partnership for Health, in strong support.

Katie Pettybone, cancer patient of Sutter and also on behalf of the Leiomyosarcoma Patient Group.

Mark Smith, on behalf of the Sacramento Regional Builders Exchange, in support.

Mister Chair and members, Kirk Kimmelshue, on behalf of Guardant Health today in strong support.

Good afternoon. Jamison Parker, on behalf of the Midtown Association in strong support.

Vanessa Gonzalez with the California Hospital Association, here in support. Thank you.

Nanette Starr, on behalf of the California Consortium for Urban Indian Health in support. Thank you.

Good morning. George Soares with the California Medical Association in support.

Terrence Leonard on behalf of TMP for Life, a high school youth organization that mentors football players in sports and academics. And I'm here in strong support.

Good afternoon, chair Members. Ross Buckley, on behalf of Sacramento Mayor Darrell Steinberg, in support.

Good morning. Ryan Ojakian with the Sacramento Regional Water Authority, in support.

Good morning. Mitchell Bechtel, on behalf of the District Council of Ironworkers in support. Thank you for your leadership.

Kevin Ferreira, Executive Director of the Sacrament Sierra Building and Construction Trades Council, in strong support. Thank you.

Thank you.

Jeremy Smith here on behalf of the state Building and Construction Trades Council, also in support.

Thank you.

Good morning. Dennis Cuevas-Romero with the California Primary Care Association Advocates, Statewide Association of Community Health Centers and Clinics, in support.

Thank you.

Scott Ford, on behalf of Downtown Sacramento Partnership, serving the heart of California's capital city in strong support of this bill. Thank you.

Thank you.

Fortino Curiel. I'm a representative of Heat and Frost Insulators Local 16. We are here in strong support. Si se puede.

I'm Enrique Villanueva. I represent healing process insulators. I'm in strong support of this bill.

Thank you. Any other Members of the public in support? Okay, with that, I'll invite anybody that's here that wishes to provide primary opposition testimony.

Thank you. You'll have up to two minutes each.

Good morning. My name is Nora Kostra and I am a business development manager with EAH Housing and a resident of Sacramento on the neighborhood of the sites and the bill. I also sit on the Sacramento Housing Alliance Board of directors representing Sacramento area nonprofit housers, service providers, funders and residents.

EAH is a nonprofit developer with over 55 years of affordable housing experience. We serve more than 25,000 Low income residents in California in the rental homes that we operate. EAH is currently in the Surplus Land act process in Sacramento for all of the sites already deemed surplus by the Sacramento Regional Transit that are listed in SB 1439.

Should the other sites listed in the bill that are not yet surplused by SAC regional transit b list or plus EH would like to take a first look in case they could work for co locating housing and potentially healthcare access on the ground floor and in the neighborhood.

EAH does not take lightly the process of determining if we should submit a proposal for a site, especially in Sacramento's high resource urban core, where prices are high and where interest rates currently are still prohibitive in today's financial climate.

We only put in offers for sites that we know will be competitive for Low income housing, tax credits and other state and local funding, and sites that we think will work for the families we serve. Here in Sacramento, for example, we would be serving households earning 24,000 to 60,000 a year depending on family size.

We also consider what mixed uses might work, such as a health clinic on the ground floor. These regional transit owned sites are high resource and are in a difficult to develop area that gives us a tax credit boost, and we appreciate having the right to make that first offer.

EAH has been in conversation with the local housing authority, Shra and the city's housing staff, so they know we have proposed here and what level of support we will be asking of them, including partnering on permanent supportive housing units with SHRA and on bike and pedestrian infrastructure needs and improvements in the neighborhood within the city.

The funding programs to develop affordable housing on these sites all prioritize family projects in high resource areas through their point scoring. The tax credit program would reward this site for being in both a high resource location with extra points for affirmatively furthering fair housing and for being on surplus land, among other point categories.

As for zoning, the zoning for the downtown grid where these sites are located has changed the newly adopted City of Sacramento General Plan 2040 to prioritize dense housing. The goal was for a diversity of housing to be built and to remove obstacles to building that housing.

The City of Sacramento's very Low income regional housing need from 2021 to 2029 is 10,000 units, and they have so far permitted 1000.

EAH understands that the SLA that SAC regional transit doesn't have through the SLA, the SAC regional transit doesn't have to take our offer, but we want to see that negotiation process through and be allowed to provide a first offer on future sites.

Thank you.

I urge your no vote here so we can continue to see the SLA process through. It's working across the state to bring more affordable homes to our communities. Thank you.

Thank you.

Good afternoon, Chair and Members. My name is JT Harishmack with the Non Profit Housing Association of Northern California. We represent nonprofit affordable housing developers across the San Francisco Bay Area region. Many of our Members, like EAH, are active across the state, including here in Sacramento.

We've been working hard on the surplus Land act since its modern revision in 2019 with AB 41486 which included a lot of strengthenings but also a lot of allowances for local governments to comply more easily. With this, we remain respectfully opposed to SB 1439 for two main reasons.

The first is that we don't believe that this bill is necessary for Sutter to achieve their objectives here. And the second one is that we believe that it creates a set of bad precedents for the rest of the state if it were to go through first one.

We don't believe that Sutter needs to do this to achieve their objectives. Many of these sites will be done with the surplus Land act in the coming weeks.

Three more who have yet to been declared surplus will go through a similar process, but with the surplus Land act, the agency remains with SAC RT on what they would like to do with their land, who they would like to sell it to.

If they would like to sell it to Sutter, they are allowed to sell it to Sutter. The surplus Land act does allow for this.

When we brought this up in the last Committee, there were concerns about delays that the project might incur, and there were examples locally here at the site at 15th and I, between 15th and 16th here in Sacramento. This is an example that is not under the Surplus Land Act. This is state owned land.

It is under the excess site program, which is administered by dgs. This is a different process, and I would caution us against conflating these two things when discussing an exemption to the Surplus Land Act. Surplus Land act, like I mentioned, has new allowances for compliance for the locals as per 487 to 47 from last year.

We're also very alarmed at the precedent it might set first, that it would invite another stream of one off exemptions which weaken a bill that is at its core is here to provide a priority for affordable housing. Priority is weekend, which each successive exception to this bill.

It also puts all of you in a difficult position on this Committee to be hearing all of these one off exemption bills and why they are important. They're difficult.

Thank you.

Thank you.

Are there any other Members of the public here in opposition wishing to register their name, organization and position?

Good morning, Chair and Members. Brian Augusta, on behalf of The Public Interest Law Project, in opposition.

Thank you.

Katherine Charles. On behalf of Housing California in opposition.

Thank you.

Galen Dobbins. On behalf of the California Coalition for Rural Housing, in respectful opposition.

Thank you.

Andrew Dawson, the California Housing Partnership, in opposition.

Thank you.

Sahar Soltani with Mutual Housing California in opposition.

Thank you.

Thank you.

Jonathan Cook, Executive Director of the Sacramento Housing Alliance in opposition.

Aniel Aller, on behalf of the California Rural Legal Assistance Foundation in opposition.

Thank you.

Mary Ellen Shay, California Association of Local Housing Finance Agencies in opposition.

Thank you.

Rachel Mueller, San Diego Housing Federation in opposition,

Thank you.

Thank you.

Shaussen Solor, on behalf of Public Advocates in opposition.

Last call. Any other Members of the public wishing to stay in a position? Okay. With that, we're gonna bring it back to Members comments, and I'm gonna take a little prerogative to maybe begin conversation and kind of really try to tease out some of the circumstances, the facts, the conversation.

I think it's important because this has really been something that we wrestled with for the better part of an hour in local government Committee and tried to kind of like tease out, I think, what many of us feel are a very strong allegiance to the surplus Lands act for the intents and purposes that it is.

We know it's undergone a couple of more broad revisions and discussions, and it's also had some bills that have been presented to exempt certain lands, and I'm happy to talk about some of those examples.

I did want to open and really say for everybody in the audience that you can't have a better representative to fight for Sacramento than Senator Ashby.

She has been completely available and forthright and thoughtful and defensive and a champion on this issue for the community's needs and certainly for those in healthcare and all characteristics that sit very strongly with me as I'm thinking with my housing hat on right. And through that defense of the surplus Lands act.

And when I think the question was raised, do we start to think about allowing exemptions to occur.

First of all, as this bill pertains to these particular sites, one thing that is confusing to me is that first we've talked about, we would want this to be able to be crafted in a way that does allow for the nine. So we're talking about nine plus three properties here that are subject. Right.

The nine properties that are currently going through process soon to be concluded by RT, that there's a commitment that we don't, if there's a successful bid, that they would want to choose it. That's not. That's not interrupted.

Correct.

Okay. So we have those nine, which are one block away from the main campus. And then you have the three parcels that currently house the bus maintenance facility operated by RT right now that are within this Bill but are not declared surplus. Right.

With the exception of the part about being one block away. Yes. Everything you stated is correct.

The other nine parcels are one block away. The three parcels are the block across the street and adjacent to the hospital.

Yeah. The nine parcels represent the contiguous component. Yes. And the three other parcels are across the street. They're the maintenance unit. Yes.

The nine parcels. You have to hop over those three parcels to get to those nine parsers. On both sides of that block. They're on both sides. So there is existing presence there. So we have processes that are about to conclude. And should this go forward, and if this were to be in effect on January 1. Right.

The operative elements of this Bill, that would be after the SLE process is even concluded for those nine parcels. Correct. And so now we're back to the three parcels here that aren't. We don't even know from RT if they have an interest in relinquishing these.

We know that RT at some point wants to vacate that area down there. We don't have a timeframe. That is correct.

When they do, though, it would also, you know, absent any changes, be subject to the surplus land act.

Yes.

Okay.

Except for under this bill, it would not. Right. Those three parcels then, would allow in this bill.

Right. Would be exempted from the get go. So in our discussion for, I guess, both of these situations, and let's focus on the nine as well, you know, there's a concern that there would be additional administrative delay through the surplus Lands act.

But everything that I have triple checked is telling me that beyond approximately a September 1 timeframe, when RT has concluded the process, decided to accept a bid or not, HCD has had a 30 day statutory deadline to be able to review that their SLA is done, and RT could then just go forward and entertain bids, say, from Sutter, any, any private offer.

That is how the code is written. And if nothing went wrong and there were no delays and there were no administrative holdups. That is correct. Let me just also say that the Chairman has been very attentive.

We, Assembly Member Ward and I have spent many hours together this weekend and for the last week, and you have been very generous with your time. And what I appreciate most is your incredibly open mind. And you've taken a lot of phone calls, and I know you're under pressure and I appreciate you greatly.

It's very difficult to do these things. And I know you love Sacramento. I know you have made that clear to me, even though you represent San Diego, I know you have an affinity for this city, too. And I want to state at the outset that I appreciate that very much.

So, yes, these, you're right that if everything went smoothly, we are talking about government. So I ask you to keep that in mind. Yes. Ourselves included. That, yes. By September 1 there would either be one of the bidders, which, you know, we've discussed. We have one here that's a housing developer.

We know that the city put in a bid as well for some fire services, ironically. And so one of those bidders could be successful. Yes. And we would know that by the, actually, I think the end of July. And then that process would in theory finish out in August.

What we do have, though, and there's more than one, I did bring up one last time, but there are many examples of times that projects have been held up for a variety of reasons in the process of review to look back and see if all the t's have been crossed and the I's have been dotted.

And while I appreciate that we don't have that kind of time.

Right.

And so the amendment that you and I talked about was to say that once this process is completed, the part that we know to be true and accurate, so somewhere around that September 1, that then RT would be able to move forward and there wouldn't be any bureaucracy that could hold them up.

And we did have ledge council review that language and put it all together for us and it is loaded and ready if you would like to add it. And if it adds the clarifying component that gives people a level of comfort that for the nine parcels currently in the process, there will be no interruption to that.

Well, two points. So one, the only other potential timeline that would be added under existing process is after that 30 day review of each CD. Right. That takes us to just before September 1.

Correct.

They just have to rule whether or not RT exercised SLA correctly or not. Rt believes it is complying with SLA right now.

Yes. And I believe HCD thinks that RT is complying.

Right. So if they didn't, or if something came up during that 30 day review period, then there would be up to a 60 day addition to. Correct. So as late, if somebody missed something, which they don't believe they have, as late as possible would be November 1 still before the effectiveness of this bill.

Correct.

And so what, that what this bill then becomes is a backstop to any bureaucracy that would delay us beyond that date.

Right.

But nothing in the technical support, if I could. Yeah.

So is from our consultants have also indicated that after the deadlines have stopped, HCD, RT are the bidders, if they believe they are close, can add additional time to continue to negotiate, and those additional times can go on continuously. There is no time. There's no deadline that HCD can stop.

So the process continued to go on and on and on. If the Department believes that the parties are close to an agreement.

But if there's no finding of violation of SLA, the window closes. I mean, that's statutory.

Well, what he's saying, though, has happened in Sacramento many times, is that one of the parties, let's pick on the City of Sacramento, let's say they feel aggrieved in the process. They can ask for extensions to review. They can, they can delay that process themselves. And so that has certainly happened here.

And by the way, the property that's at 16th and I is what we call voluntary surplus Land act because the state exempted themselves from the surplus Land act. So the state themselves, when they have property, they don't have to put it into the surplus Land act. They can do what they want through excess sites. Correct.

And so this piece they put into the land act, which is why HCD put out the RFP on the property. And the bidder from San Diego, who is a developer that has designed a beautiful building for that site, has been in purgatory for two years waiting.

That is absolutely through the exact same HCD RFP process that we're talking about right now.

But it's not.

Yeah, it is because HCD's RFP process.

For states, but that doesn't apply to the SLA parcels that RT is working on.

No, that's through different projects. I'm just giving you an example of a time that the exact same process has delayed extensively, which is why the backstop for the, for this, for these nine parcels is so important to us. But I agree.

For the housing advocates, I don't believe that it would matter because their process would be over with. Either they would have successfully earned the RFP or they would not have, and it would be over with. I don't think it makes any difference for them.

But for the next group of people that would want access to that, in this instance, Sutter, for a cancer center, it can be delayed for technicalities over an extended period of time. So the backstop is critically important at a local level.

One of the things that's been difficult, and we've had this conversation, too, is that approaching this subject, and I believe it's a very worthy subject of thinking about healthcare as a very critical community need, and we don't have enough of it broadly.

And revisiting that as a kind of, you know, a thematic or a categorical conversation in SLA is certainly worthy. My understanding is that's where you began. We did say, and the Senate went in a different direction.

We did. We did. And, you know, I think that. Look, I think the surplus Land act is worth protecting, and I'm not here to convince you that we should add a whole other category to surplus land Act. I don't think that's right.

Like I said, Sacramento is an extremely good actor on affordable housing, and I'm really proud of my city. But in this instance, my job is to fight for the things that the people in this district need most, and their death rates for cancer are higher than the counties represented by my colleagues.

Right.

And I have to do something about that. You do, but I'm trying to do it in a way that is the least disruptive and allows a process to complete prior to Sutter being able to step in. I'm also trying to create a scenario where Sutter won't be delayed, but where.

I still am having trouble connecting the dots is whether or not this is a product. This is an opportunity site that is still going to make itself available irrespective of the bill. And so then I'm back to just a question of just pure rote policy. Right.

Do we take a moment to enshrine through a piece of legislation, another exemption? What might that do in the future? And so I'm looking back as well to some of the previous conversations where Members have brought forward site specific or regional specific examples. You talked yesterday about one in San Diego. county. Right.

And that was for a University at the behest of a city who owned the land. And that did I remember that coming forward.

It's my colleague from down from south of me who brought that forward at the time I had in the first house also expressed very strong reservations about undercutting surplus lands, act on a site by site basis or something that essentially the way it's crafted particularly affects one site.

But the distinctions there is that public agency was requesting it. It was meant for public purpose, and it was also in a Low resource opportunity area. And it received a amendment that would still enshrine a minimum 25% residential minimum, I think, 10% Low income residential component for any development on that site.

And it was held up and Senate local government Committee. So we have been thinking very critically between our houses about very specific situations, about when to or to not go after a tool that is important, has been very successful for the production of affordable housing across the state.

And I am struggling with that and want very much to be able to recognize what ultimately, you see what the community sees as an. As a potential use for this site, but for there still is a way to achieve that end. And so it's just all the dots that I'm connecting.

I want to maybe open it up to other Committee Members as well, to not dominate this conversation, but that's the focus of my hesitation about using this.

Yes, and I understand. I mean, I think you're doing, as a Chairman for housing for the Assembly, you are doing a fantastic job of asking critically difficult questions, conveying the concerns of your staff and of people who've been working on this for a long time.

I know you've been doing this for a very long time, and I think that's great for the State of California. But I also think we are remiss as legislators if we can't look holistically at communities and identify really critical needs.

As you know, one of the early supporters of this bill was Scripps in San Diego, because they have a very similar concern coming forward in the future. I think it's just important for us to protect housing and to create such a high bar.

You would literally have to go through all of this that we are doing, have, I mean, that kind of support, this kind of fundamental health care need to even get the kind of consideration to talk about it.

And even so, nine of the 12 parcels will have finished the SLA process in total before this Bill would even come into play, no matter how we slice it. And I'm committed to making sure that that happens. The other 12, the other three of the 12 would follow, but that makes sense.

So, you know, I've also committed to you. One other thing that we can do here is if you all would pass this out of your Committee, you still retain the right to call it back in August, if you wanted to, you could bring me back to this Committee to discuss it again.

And at that time, we would know more about what has happened with these bids. I have offered that as well as the amendment, and I've done everything that I can think of to try to address your concerns and provide this Committee with the support that I think you rightfully deserve to continue to protect affordable housing.

And I also think that Sacramento deserves to be rewarded for their extraordinary behavior in this regard.

So they do.

And I appreciate for each day that we've been communicating over the last 10 almost, that have been giving it that fresh look and that kind of open mind and just going back to square one and really still kind of arriving at, you know, very much, you know, kind of the same tension point and conclusion through my housing lens that I'm at right now.

But I want to open it up to other Committee conversation as well, because I know how important this is. Some Member Grayson.

Thank you, Chair Ward. And I just want to say, Senator, you are a champion for Sacramento. You are exactly what they need as a representative to be able to go to the mat and fight with all your might.

I recall having gone on the housing tour, Chico to San Diego, 22 nights on the road, and then hearing the numbers that come out.

I believe, if I understand or remember correctly, California is in need of building 100,000 affordable units annually for 10 years in a row, just to keep status quo and not really even make headway in the crisis that we're in. As far as housing, we've never built 20,000 units annually.

And here we have this monumental task of trying to address our housing. However, at the same time, we have a health crisis when it comes to cancer, unprecedented numbers.

So we're in a very, very difficult spot because there's a part of us that really does appreciate the passion that you have brought and the fight that you're rising with to help those and to help a medical facility be able to provide something for Sacramento that is very much needed.

At the same time being on the Housing Committee and bearing that burden of trying to figure out how do we provide a means for more housing. One of the best means we have out there is utilizing the SLA process to be able to facilitate affordable housing where otherwise we wouldn't have it.

And so with that, just going back once more for clarity's sake, this bill is a backstop but it is not. But whether it moves or not moves is not an end all to the medical facility's ability to press forward and obtain that property.

In other words, this Bill is a great way to assure, but it is also not the only way to facilitate the ownership of that property by a hospital. Is that correct?

As you know, we are legislators, yes. So it's the only way I can help them is to provide them with legislation that gives them support for a cancer center. Is it possible that this bill goes away and we end up with a cancer center there anyway? I sure as heck hope so.

But is that a guarantee without this bill? No. Is it a better guarantee with the bill? Yes.

I hear you loud and clear. And then I also heard one person in support make the comment that housing wouldn't be good health wise under a bridge.

I haven't seen a site plan of the 12 parcels, but I would surely hope that in the process, the SLA process, that part of that bid process is looking as to what is more appropriate for the use of this land.

And I'm also hoping that the locals are weighing in on this and are participating in the process of the SLA. I just have as a burden on me as a Committee Member of housing to make sure that we preserve as much as we can the tools that housing has to have first right to make a proposal.

But that doesn't mean it guarantees that they, their proposal is accepted.

So two things on that. First of all, thank you so much for your comment and your dedication. The group that said that they had taken a position that it was an unhealthy location for housing is the realtors.

And secondly, the site does have before all of this, we all know this, our housing authority, Sacramento Housing Authority, had a right of first refusal to the land and did not take it for the exact same reason they came to the same determination that the realtors did.

Now, that doesn't mean that an ambitious private developer, which is who's here today and whoever else might have bid, doesn't see something different through their developer eyes, that they could build a wall between themselves and the freeway or deal with the hospital noise differently.

What I can tell you is that in that two block radius that we're talking about, there is no existing housing. There's just hospital and business. There is housing not too far away. There are some good things about the site there. There are good things about every part of Sacramento.

You will never convince me to say otherwise, but this is by far the best and highest use, which is why I know you received a letter from the mayor today. Even though he's in Scotland, he's doing what he can to advocate for this project too.

Because we know that we need the healthcare in that particular site more so than we need housing in that site.

Thank you very much. And again, I just want to commend you for your passion and the hard work that you put into this Bill. I appreciate it. Thank you. I may have more questions in a minute.

Thank you. Mister Grayson, Mister Vice Chair.

Well, thank you. I have friends on both sides of this discussion and I think you brought out all of my friends and support also everybody I know.

But you know, and I also want to say to the firefighters, Local 522, you know, many, obviously they, a lot of them work down here and also some in my district as well. And. But many of them live in my district.

So always say that, including many of my neighbors who talk about, you know, the concerns around cancer and things like that. So I understand, you know, the importance to firefighter community.

So also Sac state grad, former Sacramento resident and I've seen Sutter, you know, the hospital grow over the years and the importance of healthcare in this community, the greater Sacramento region. Actually, you know, just a couple questions on the bill is, is I don't think the language specifically talks about a cancer center. Or maybe it does.

And so I just wanted to get your thoughts on that.

Sure. I don't remember if it does specifically name the cancer center or not, but it is widely known that Sutter's goal is there's a cancer center component. There's also a. That's the main component. And they, they really want to build it. If we don't.

If we can't build it adjacent, they can't build it there, which means it would likely be built somewhere else in the state. And by the way, not in Roseville. I asked. That's a great place. Yeah.

Yeah.

It apparently has the same problem I have. So it wouldn't be there either. So it would be farther away than anyone in our, you know, county, region here would be able to access it. So we would just fall back to not having the resource. But they have been vocal about what they intend to build there.

And it's widely known that that's their next project.

And then as far as the process of surplus land, it seems as when all these bids come in and there's negotiations back and forth, at what point can rt say we're not accepting any of these and then we're going to sell it to somebody else? How does that.

Well, first I'd like to say that regional transit is just an amazing organization run by some very high quality folks who have been tremendous, and I feel kind of sorry for them because they've gotten calls from every Committee staff along the way here and done their very best to protect that process and to protect the bidders in that process as well.

And I know they'll do what they can to choose either an appropriate and responsive bidder or move on to the next discussion, whichever thing makes the most sense for them. RT is required by law to do the SLA proposals all the way through, and they need to see if there's any responsive bidder that meets their requirements.

The only real rule set up for protection for them is that they do have the right to ask for fair market value, which I know they do need for this because they're not going away. They have to go somewhere else. So they need the resources to build elsewhere, which is also true with the other three parcels.

So they can't do anything until this project on the nine parcels, until the project have been fully vetted, which we anticipate would be sometime in late July.

No. You know, this is a difficult bill, and I think my perspective on the SLA is, and I understand it's been an interesting thing, supporting housing and helping also affordable housing developers, including nonprofits, especially them. I mean, we just did a Bill a little while ago.

Actually be competitive in this space in Sacramento is unlike any other city, as you said, in terms of approving housing. I've never seen anything like it. And so that's complicated or interesting component to all of this.

But when it comes to the SLA, I think I did have a bill last year, an exemption Bill for a lease for a public purpose. So it was a little different. And then the reform went through, and so I actually withdrew it off the governor's desk, and it's some other vehicle.

I don't even know what it is anymore. But I think the SLA, we do pass exemptions in this body for various bills, and I think the SLA lends itself to exemptions, actually. And I'm not saying all of them should be supported. And I know that's kind of a hot water to talk about, but it is a very.

There are, I kind of like the point where there are community needs that need to be addressed at sometimes, and the ability to get those exemptions out of the Legislature, it's not going to be for anything. It's going to be for very specific and nuanced issues like a hospital or cancer treatment facility.

And if this was somewhere else, maybe the cancer treatment facility wouldn't get an SLA exemption. But I kind of depend on my colleagues to tell me what is best in their district.

I think, you know, something to consider is that I do, I think for us on this Committee and if I'm on this, well, first, if I'm here next year, and secondly, if I continue to be on this Committee, that we really do have to come up with whether we want exemptions or not.

And I think there's probably differing opinions on this Committee if there should be. But I do like that this is a very specific issue, actually. I would have supported, by the way, a broader discussion on whether hospitals meet that, I mean, I'm on Health Committee, too, and we're talking about hospitals closing down all over the state.

And so I think that's a worthy conversation to have. That's not the one we're having here today, although this has kind of opened the door to talk about that. But I do think the exemption one off, it's not necessarily such a bad policy. And I understand why it raises concerns. And I totally, I respect all those opinions.

But actually it kind of, it says, hey, look, if there's a need for the community, allow the Legislator to bring it and say why this is important for the district and then we can judge it. And some people up here might say it's a bad one. Some people might say it's a good one.

And, but it has been a difficult issue. I've talked with many Members on this Committee about it and, well, a couple, and I've had conversations with you as well. I've talked with proponents. I've talked with opponents. And so it's been a lot more conversation than I thought it was going to be. So, but thanks for bringing it.

And, you know, I do understand the concerns. I'm willing to support the Bill today. I would be interested to see how this works out in August. You know, it's not going to pass through the Legislature in July.

And so I would encourage conversations to continue through August depending on where that process is should this Bill get out of Committee today.

Thank you.

Thank you. Assembly Member Lee.

Yeah, first I want to thank the author. I know a lot has been already said and a lot of my questions were already asked today. But I just want to say to the author, Senator, you are really fighting for your district, and I really commend that. And that really is incredible to do so.

But we find ourselves in this weird situation of between talking about finite resource, which is land, and whether we use it for housing or hospital. And since my colleague, the Vice Chair, is bringing up bills that he worked on, I'll bring up this fact.

The reality is that our peer nations in Europe and in Asia, when they have, they're confronted with this situation of whether you're housing or health care. They say, why not both? Because they have robust social housing developers that will say, we will do both. We'll build a housing and a hospital together on the same site.

And that's why I've been fighting for make sure that we have the resource to do that. But I think right now, especially in housing Committee, to make sure that as we figure out our finite resources of surplus land, we need to really let this process play out.

And I know we have sub, a little bit of discussion yesterday about this issue, but I trust that as we continue to look at this one and this issue, maybe we'll have continued further discussions. But I know it's a very live thing that's happening literally as we're speaking.

So I just want to again, thank you for your incredible commitment to your district and thank you for that. Yeah, thank you.

Miss Quirk-Silva

Again concur with the remarks from my colleagues. And this is a difficult bill in the sense that we all have our own districts that.

There are competing interests, and when we look at healthcare and cancer and so forth, of course, that is something that we all support. But when we look at the Surplus Lands Act, in its body of when it was implemented, it really has not been that long since these pieces of legislation have not only been signed into law, but put into action. And if we look at related legislation, we see already several exemptions for excellent reasons. So there is no discrepancy.

And do we support those projects, whether, I see right here, Surplus Lands Act for Alameda Naval Air Station. I don't think there's any argument that that's an important use. But when we go back to the Surplus Lands Act, why that initial legislation was brought forward, and what are we doing with our surplus land, we can see competing interests, and we can also see the urgency of why this legislation was brought forward in the very beginning, which has not been that long ago. I mean, in my tenure here.

And I think that as we start to take these slices out of it, it really can in many ways start to derail what we want to do, which is a top priority of Californians. And in every poll that we have seen, housing and homelessness combined are a critical need.