Assembly Standing Committee on Housing and Community Development

Okay, great. Well, thank you and welcome everybody. We're going to go ahead and start this. We do not yet have quorum, so we're going to start this Committee meeting as a Subcommitee. And welcome to the Assembly Housing. On the Assembly Committee on Housing Community Development. We have five items on the agenda today. Welcome.

We're going to have each bill can have two main witnesses in support and opposition. 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 part of the official record of the bill.

We will not permit conduct that disrupt, disturbs or otherwise impedes the orderly conduct of today's business. So please keep that in mind. We're in room 437 at the Capitol. The hearing room is open for in person attendance of this hearing. All are encouraged to watch the hearing from its live stream on the Assembly's website.

Thank you for your patience and understanding. So seeing that we only have three Members here, like I said, we'll start as a Subcommitee and we have first step AB748 and looking forward to your presenting the item.

Thank you Mr. Vice Chair. Hello to the Chair. No, no offense to him by starting early but these are the, these are the folks that I was, I wanted to target anyway with, with the bill. And just a reminder, this Bill may be some deja vu was in the Committee last year.

It passed out unanimously and it's probably offensive to go to this Committee and say that we're in the midst of a housing crisis. But of course we are. And people remind you probably every time that they bring a bill that we are, each of us are trying to do big and small things to address that.

This bill just takes the pre approval program for ADUs and applies it to single family and small multifamily projects. Since I introduced it, one thing to note, LA County and the market really has asked for this solution.

In Altadena with the Eaton Fire, a nonprofit called the Foothill catalog has actually come out with and you and I talked about this has come out with a pre approved catalog for fire survivors to actually use which has been very successful. People are using it, they're using it with LA County's program.

And I think it shows us that this solution is something that we in Sacramento and when we come up with ideas that local government and our local communities don't necessarily like, this is the opposite of that. You know, I think it's a good idea.

I think that people in communities, whether they have gone through a fire or Whether they've gone through a catastrophe, they want solutions where they can actually build housing more quickly, more efficiently and save cost and money. And so I think that if anything, the bill has improved since the last time we talked about it.

I do think that we have worked with local government quite a bit to assuage concerns. When we were here last year, there was still some opposition from League of Cities because they felt like it impeded too much on some of their local control.

I will say that we've done a lot in terms of delaying implementation, making sure that we are including everything in the bill to make it very apparent. And Mr. Patterson, you had some questions last time that this will not apply to big developments, pre planned track home developments.

This is just really for single family and small multifamily developments under 10 units. And we want to make sure that everyone knows that the designs and what is approved is up to each local jurisdiction. This is, this bill would not dictate what designs or what plans need to be approved. It is whatever the local jurisdiction wants.

And so I think that this is a small, yet very consequential and smart solution for every community, but especially communities that need to help residents save time and money on building on their property.

I don't think that a lot of people have the money to necessarily come up with bespoke architectural plans and then the time and the money to go back and forth with planning departments on things that most people probably don't care about. And this is trying to address all that.

And I do think that last time this died in Senate appropriations. I think that there's a very limited impact here fiscally. We do have a reporting element that we built in because we do want communities to tell us how the programs work and we want that feedback. However, we think that's pretty minimal.

We think that where we are now, we should be able to get this back to the governor's desk. I'm gonna stop. I have a celebrity here to testify. The CEO of Habitat for Humanity, Debbie Arkel, who will say a few words. And Debbie, thank you for being here.

Thank you, Vice Chair. Good morning, Vice Chair and Committee Members. Thank you for the opportunity to share. My name is Debbie Arakel with Habitat for Humanity California. And I'm here representing the views of our Habitat chapter statewide, where, as you probably know, provide affordable first time homeownership opportunities for lower income families.

And we're doing that in 41 counties. We are proud to be able to support AB748. We believe in using all the tools in the toolbox to help build affordable homeownership. And this legislation calls on local governments to really partner in that effort along with us.

Habitat is uniquely positioned in this space as a nonprofit affordable home builder, as well as a lender as well as a community builder. And this legislation will help expedite the first phase of home building, the architectural design and the often lengthy review process. So this phase can often be time intensive and also very costly.

And Habitat's always looking for ways to reduce costs and make the process of building homes more efficient. So the model envisioned with this bill has already been successful for communities, as was referred to. And Habitat for Humanity specifically has been using this to help rebuild after natural disasters in Altadena most recently.

So we strongly believe that the rest of the state should be able to apply the streamlining legislation as well. As the author stated, the bill would require local agencies to develop programs for the pre approval of housing plans for single family and smaller multifamily developments, which would include condos and townhomes like one of the Habitat chapters.

We may be able to even submit some of our already naturally affordable designs that would be part of this catalog. So I also just wanted to highlight that even modest, sometimes smaller projects really face these significant delays of the back and forth on the. On the approval process. So the preapproved catalogs that have been mentioned would.

Would traditionally incorporate some of these streamlined processes for lower cost. This bill provides the predictability and also allows individual home buyers who. Or home builders who may have a vacant lot, but they don't have the resources to move through the process or pay for custom designs.

So we urge your support and we thoroughly think that this is smart legislation that will help streamline the. The process and help individual homeowners as well as the industry. Thank you very much.

Great. Thank you for being here. Are there any other witnesses in support? Any #MeToos? All right, we'll take that as everybody here. Are there any primary witnesses in opposition? Seeing none. Are there any other witnesses in opposition? All right, there are none. Are there any questions from my colleagues up here? Yes, Assembly Member Tangipa, Just a.

A quick one. So I actually spoke to League of Cities earlier today and it. They are not in opposition. They are not. Okay.

Just wanted to make sure they. We, we worked hard. They were originally in opposition to the bill last year, and we worked quite a bit to make sure that they came off of their opposition, which is great.

Yep. And that's something I wanted to say. I appreciate, you know, some of the work that you've done in coordination with them. Local control is a big thing for me. I know a lot of our cities, especially when I have such an eastern portion where some of the smaller cities need some help.

So I just want to say thank you for working with them and look forward to supporting. Appreciate that.

Thanks. Any other questions or comments?

Move the bill.

We don't yet have. Thank you, though. Yes. But I like how excited you are. I remember that. Move that forward. Okay. Well, just. I appreciate the work on the. On the bill. I think, you know, one thing, even just in the last couple months, is when, you know, very. Actually the same exact design for one home.

You know, the planners had a different in one city, a different on the internal structures than in another city. And I think that could be kind of frustrating, you know, for. For the developers.

But this gives a lot of flexibility, I think, to the cities to choose their own path on what they want those designs to look like to make sure it works with the community. And so I appreciate your work on this bill. So we don't yet have quorum yet still out, so.

No, And I appreciate your feedback when we. We first started talking about this, and I know how interested you were, so appreciate that. Appreciate the committee's work on the bill and everything that's gone into it. Well, thanks for.

For bringing the bill forward, and I'm sure we'll vote on it in the near future when we have enough Members to do so. Thank you so much. Thank you. Okay.

Thank.

Oh, great. Assemblymember Jackson, good to see you. Happy New Year.

Happy New Year.

We have, as mentioned, we're still in Subcommittee mode here, but welcome you to present AB 739.

Thank you very much, Mr. Vice Chair, Committee Members. This is AB 739 that aims to provide transparency to homeowners on fees charged by managing agents and common interest developments.

This summary would include a breakdown of the total amount billed and paid by the association to the management company.

By requiring a managing agent to provide a summary of fees charged, this bill will ensure HOA board members and homeowners have summarized information on the fees charged to homeowners by the managing agents.

With me today is Paul Herrera on behalf of the Inland Valley Association of Realtors to speak on the impact of this Bill.

Good morning, Mr. Chair, Members of the Committee. On behalf of the Inland Valley Association of Realtors, the Inland Gateway Association of Realtors, the California Desert Association of Realtors, and the Greater Palm Springs Regional Association of Realtors, I'm here today to speak in support of AB 739.

The California Association of Realtors, our state association, has also authorized me to deliver a message of support. AB 739, with its amendments, creates a very simple disclosure requirement to give the elected leaders of homeowners' associations a summary of what they as an organization and the collective members of their communities have paid for management services.

It's essentially a receipt that summarizes what the community has paid to be represented by a professional managing agent. About 15 years ago in Coachella Valley, we noticed that HOA management firms were increasingly turning to a fee-for-service structure rather than an all-in management fee.

That trend has expanded beyond high cost golf course communities to include more middle class communities with HOAs. Much like your cable television bill, airline tickets, and hotel reservations, we've seen the trend move toward keeping basic fees low, but covering fewer of the services needed to complete the tasks.

In our conversations with owners and managers of a number of these firms, they have been clear that this approach is necessary to be able to competitively price their services. Some of these fees are paid by the HOA through a fee schedule that they've negotiated with their service provider. Some flow directly from homeowners to the service provider.

Ultimately, all of these revenues should be recognized as the complete cost of management to the community. California is certainly blessed to have some highly professional firms who provide clear disclosure of their billing to the HOAs they serve. Unfortunately, it's not universal.

AB 739 turns an industry best practice that supports informed decision making and makes it an expectation in case in law. We'd like to extend our appreciation to Assemblymember Jackson for his work to bring AB 739 forward. Thank you for your consideration this morning, and we respectfully ask for the Committee Member support.

Thank you. Great. Thank you. Before we move forward, we have enough Members to establish quorum, so we're going to go ahead and do that now. Would secretary please take roll?

[Roll Call]

Great. Perfect. We have established quorum. Just clarification, you were taking the Committee amendments?

Yes, I am. Correct.

Okay, great. Thank you so much. Are there any other witnesses in support? Are there any primary witnesses in opposition to this measure? Great. You will have two minutes. Thank you.

Good morning, everybody. Mr. Chair and Members, my name is Ralph Crocker and I'm a member of the California Association of Community Managers, an association dedicated to enhancing professionalism of the community management industry. We provide education and certification to professionals, managing common interest developments throughout California.

We currently have an opposed unless amended position on AB 739, but we'll remove our opposition once the Committee amendments are in the Bill. We'd like to thank the author and the Committee for working with us to find ways to enhance transparency in a way that won't increase cost for homeowners.

The amendments strike this balance by clarifying what fees must go to the board and allow homeowners to receive the same information upon request, but without a blanket mailing that imposes all costs—those costs—on homeowners. Managers are oftentimes the through line for boards of directors in the state of California.

They're the only professionals that exist solely to serve the Association and implement the board decisions for all homeowners. They provide notices, assist attorneys, work with insurance adjusters, maintain the physical plant, they collect assessments, maintain general accounting, not to mention facilities.

All of this without community managers, you'd have more self managed communities run by small groups of volunteers with no training in CID or housing laws, yet managing millions of dollars of real estate, not to mention the property values of the people's homes and their quality of living. Managers serve a critical role in making the HOA structure work.

Again, I'd like to thank the author for working with us and with the Committee amendments, we will remove our opposition.

Well, great. Thank you for that. I'm going to make your day really good in a second here. Is there a motion on this Bill?

Motion to move.

There's a motion and a second. So, just a minute. All good. Be very happy, I think with the outcome. Are there any other witnesses in opposition to this measure? All right, seeing none. Any questions from my colleagues? All right, seeing none. Would you like to close?

Second.

Sure. As someone who is a member of an HOA, I can—I even know even more how complicated this stuff is, but I really appreciate the realtors and community managers coming to the table to really go through details.

We are still working on some additional language to help provide making sure community managers are well supported and well trained and to making sure that board members have all the support that they need to be able to do the tough work as volunteer board members, as well. And so, I'm looking forward to continuing to fine tune this.

We are almost there, baby. We're almost there. But we have made some great progress. So, with that, I respectfully ask for an aye vote.

Great. Well, thank you very much. Appreciate that. The Bill has been moved as proposed to be amended and the motion is do pass as amended to the Assembly Committee on Appropriations. We have a motion and a second. Would you please take roll?

[Roll Call]

All right, well, that motion passed seven to zero, but we'll leave it open so, so people can add on. And happy New Year to you.

Thank you. You as well. Appreciate this.

So, thank you very much. Okay, great. Since we have a quorum here, we will—we had a motion, although I think we gotta do it again.

A motion on AB 748, the prior measure. Okay. We have a motion and there's also a second. So, we'll go ahead and call the roll on that as well.

[Roll Call]

That's also seven to zero. That bill will be out, but we'll leave the roll open for the rest of the hearing. And next up we have Assembly or AB 939 by Assembly Member Schultz.

Good morning, Mr. Vice Chair. Members.

Just. We'll do two minutes per witness. When. When they start going as well. So just wanted to remind you on that and thank you again for your time.

Well, thank you very much Mr. Vice Chair and colleagues. I'm pleased to present AB 939 this morning. I want to thank Committee staff for their hard work on this bill and I will be accepting all of the proposed amendments as further described on page 6 of the Committee analysis.

Right now some lower income designated home ownership units are remaining empty and going unsold for extended periods of time of 180 days or more. Nonprofit home developers like Habitat for Humanity, Self Help Enterprises and others are prohibited during the entitlement phase of a project from partnering with market rate homebuilders to ensure compliance with density bonus law.

They are also prohibited from acquiring and selling to qualified buyers for six months after certificate of occupancy. Existing law can cause these units to sit vacant for months, generating unnecessary carrying and marketing costs to the developers before they can transfer the title to a qualified nonprofit to manage the initial sale to a low income buyer.

AB939 provides a targeted no cost fix to streamline affordable home ownership by removing the 180 day resale restriction in state law if the developer is under contract with a nonprofit affordable housing organization for the transfer of units to be sold to low income individuals.

Directly under this bill, income restricted ownership units could be sold immediately to qualified nonprofit affordable housing organizations rather than sitting vacant after construction for 180 days. This allows developers to reduce holding and marketing costs while ensuring that homes reach income qualified families much more efficiently than currently under state law.

I look forward to working with the opposition if the bill moves out of Committee today with the hopes of resolving their concerns. And you have my commitment to a good full faith conversation with them to attempt to do that.

With me today to speak in support of AB939 is Debbie Arakel, Chief Executive Officer for Habitat for Humanity California and Audrey Rodejusak on behalf of the California Building Industry association. And I probably mispronounced their name, so I do apologize to them. Been there before, so.

Thank you. Good morning again Vice Chair and Committee Members. Thank you for the opportunity today. I am Debbie Ariel with Habitat for Humanity California and I am representing our Habitat Chapter statewide who are providing affordable home ownership opportunities for lower income families in 41 counties.

And I also wanted to emphasize that 80% of our habitat homeowners are Black, Indigenous or communities of color who are purchasing these homes.

We're grateful to Assemblymember Schultz for his leadership in addressing this challenge facing the building industry and future affordable Home Buyers in California Habitat for Humanity California is Proud to sponsor AB939 to help ensure affordable for sale units are built and sold to lower income qualified buyers who will own and occupy these homes.

I'd like to emphasize a couple of key messages today. This bill preserves and strengthens the original intent of the two year old bill. There is a challenge currently with the law and there is a solution.

Private large scale builders came to Habitat for Humanity asking for our help in serving lower income home buyers because we have expertise in this area. The building industry is working to solve the problem they face with the challenge of the density bonus law for for sale affordable units.

The issue is their inability to find qualified buyers in a timely manner and this results in added time and cost Due to the 180 day requirement delay before they could work with a bona fide nonprofit like Habitat or other nonprofit ownership providers. I also want to emphasize that the bill does not strike out the waiting period entirely.

The intent is still there for General nonprofits or others who might be trying to abuse the law, only legitimate organizations with the express purpose of serving lower income home buyers. These nonprofits must meet strict IRS requirements and tests and also offer below market interest rates.

The bill only applies to the community of extremely low, very low and low income buyers so the moderate units would still be susceptible to the 180 day restrictions.

Three years ago Habitat for Humanity supported the original legislation of AB323 and in collaboration with the California association of Realtors we worked to help ensure the units would be sold and occupied by lower income buyers and tried to work to help prevent investor owned corporations from bulk purchasing the units or potentially.

I don't know how prevalent this is, but potentially from fake nonprofits trying to abuse the law. The current legislation has had two years to work and unfortunately it's fallen short.

It's adding to builder costs and resulting in vacant homes that could be providing the dream of affordable home ownership to a low income family at least six months sooner.

AB939 adds an additional option to help achieve the goal of protecting the units from being flipped to rental or getting sold to investors rather than individual buyers and it will help prevent the units from sitting vacant.

It ensures homes are purchased and occupied by low income qualified buyers who will earn equity and who will enjoy a below market interest rate and affordable mortgage. Doing nothing ignores a proven problem and AB939 would alleviate that issue.

This is no cost legislation and it's a smart fix to adding additional options to promote construction of affordable units for lower Income Californians. I'm grateful to the chair and for the. The vice chair and the Committee for your consideration on this important bill. And we urge an aye vote.

Great. Thank you.

Good morning everyone. AB9, Audrey Ratajczyk from Crew Strategies. On behalf of the California Building Industry Association, we are here today also in support of AB939 because the bill would allow for families to have more options in homeownership opportunities while working along with a nonprofit entity such as Habitat who offers below market interest rate loan programs.

AB 939 is specific to nonprofits who offer loans to families to start building generational wealth and in areas that require inclusionary zoning. An organization who offers these type of products assist home builders like ours make projects. Pencil.

Due to their expertise in building and selling products in this income category through partnerships with Habitat, many home builders have been able to continue meeting the needs of the community by getting these projects built to serve the housing needs of the community.

This refinement to existing law will not only help ensure our housing is brought online, it'll assist families who might not be able to buy the product with a traditional loan, especially in today's high interest rate climate. So for these reasons, we're here today in support as well. Thank you.

Thank you. Are there any other witnesses in support of this measure?

Public affairs in support today on behalf of Abundant Housing Los Angeles. Circulate San Diego and SPUR.

Thank you. Good morning. Paul Schaefer with the California Council for Affordable Housing here in support. Thank you. Thank you. Are there any primary witnesses in opposition to this measure? Okay, great.

Good morning. Amy Garrett with California Association of Realtors.

Just side note, you're welcome to sit up here if you'd like.

Thank you. No, I appreciate that. I'm good to go. We are in respectful but continued opposition. To AB 939 as proposed to be amended. The bill would set a dangerous precedent. By empowering nonprofit corporations to establish a right of first refusal sales process. This erodes private property rights by statutorily.

Allowing nonprofit corporations to dictate real property and lending terms and in fact would deny those seeking to buy affordable housing with the same independent representation from A. Licensed real estate professional that buyers of. Unrestricted housing rely on to avoid predatory and lending practices. Sales and lending practices.

We're very concerned that AB939, as written and proposed to be amended, ensures that California working families will never be given the opportunity to bridge the state's wealth gap. And we ask for a no vote. Thank you.

Thank you very much. Are there Any other witnesses in opposition to this measure? All right. Seeing none, we will bring it back to my colleagues. Assemblymember Quirk-Silva.

Yes. Can you address the opposition?

Yeah, happy to do so. First I'll ask if either of my witnesses with your expertise have any initial response, and then I'm happy to close with a comment. But neither of you have any initial response.

Yeah, I'm happy to comment. I believe one of the the statements was a concern that around the first right of refusal. So with these units, there is a deed restriction that it needs to be sold to another affordable income qualified buyer in the future. That's part of the existing.

The Habitat for Humanity Nonprofit Affordable Homeownership Program has feed restrictions as well and part of the intention to make sure that when affordable homes are built and that increases the stock for California that we want to retain those homes in that pool rather than those those investments going into the market rate.

So Habitat for Humanity has a first right of refusal to with the intention of hopefully purchasing that home and offering that to another qualified income buyer. So that is the intention, which is also consistent with the deed restriction that local municipalities put on the homes.

I think there was a comment also about maybe I need a reminder, but I think there was maybe an inference around predatory lending. So I think I need to learn more about that. But we're very, very happy to work with the Association of Realtors to try to clarify any concerns. Do you have anything to add?

Yeah, I would just add that it's actually bringing them online quicker to be able to get to the families that need it the most to help them start building generational wealth, because sometimes it's hard for us to find. We don't usually market to that income category. So they have that expertise.

So it's actually it's for a very specific group of people and a group of nonprofits based on their tax code and everything. So it's not for everyone. It's very limited in who would it apply to to ensure that those are actually brought online quicker.

So thank you. And the only thing I would add, Assemblymember, is that while I respect the opposition's perspective and again, should it pass, would fully engage with them, I have to fundamentally disagree. I don't view this as a, quote, dangerous precedent.

I view is a relatively narrow exception to existing law, really with the aim of getting these units, which are designed for low income households to actually have the opportunity of real home ownership. This is about filling that need. We have vacant units certainly sitting in my district and across the state of California.

This is really about actually following through if we're serious about getting more homeownership opportunities online. This is a fix. And I'll just echo as my closing remark one thing that one of our witnesses said. I think the only wrong answer here is to do nothing, in my humble opinion. Thank you, Assemblymember.

Great, thank you. Any other Assembly Member? Tangipa.

Thank you and thank you for coming. Well, I wholeheartedly understand the intent of this bill. Just looking at it from a market standpoint, having worked in the real estate industry, you know this, all this will do will expand the amount of competition out there for individual family owners as well.

What we have seen both across the United States too. I do believe that there has to be a larger look at the nonprofit complex that has really been built, especially when government money is actually injected into a lot of these areas.

You know, this is only going to create more competition for people who want to buy some of these entry level vacant homes. This is something I've worked with personally where it comes to flipping. My former boss, used to be the CEO of Cure Care, would come in and they've done over 140 affordable housing units.

But we use this term affordability all the time. But we're just saying the words. You know, we've looked at government units and other units before that are at $900,000 a door, $1.1 million a door, we'll throw in $50 million and build 40 units. You know, that's something that we can't just say the words affordability.

But we don't have an affordability crisis. We have an availability crisis. And this increases the competition for families when right now the conversation on the large scale is we don't believe that corporations should buy homes because people are now competing with corporations.

I understand that positioning, but now we're introducing another entity to come in and buy homes as well when we can't build fast enough. And it's a supply and demand market.

When I've worked with some of the most low income individuals, I worked with Union bank on a grant called the Wish Grant that would help somebody if they put $5000 up. The wish grant would match it one for $1 up to $5,25,000 pay for their down payment assessment and their down payment and cover the closing costs.

Their requirement was that they had to live in the home for five years as their primary residents.

So by expanding the market into non profits now the people who are trying to enter living into the home will now have to compete against corporations, against nonprofits, which is really large scale from other nonprofits, not specifically speaking about Habitat for Humanity, against government money. And that will massively increase the amount of competition that's out there.

Where you know, I just in a time again where we can't just say the words affordability. Increasing competition does not help the average everyday family, the middle class family who can't get into it. None of that will help at all.

So the big question that I have is a lot of these nonprofits get money allocated from them from both California budget. Will a majority of that money be used to purchase these homes?

Thank you for your question, I appreciate it. And I would, I would like to clarify. So the last question. Habitat for Humanity does not receive any direct funding. I also understand with the density bonus law that these homes, these lower income homes are not eligible for any public dollars.

So that's, that's one factor I would really, with all due respect like to address the implication of competition. So Habitat for Humanity exists to provide affordable homeownership opportunities to low income families. Those who can purchase individually on their own is wonderful. We would never compete with that. That is why we exist.

So the known problem is that those buyers are not being found. Realtors are doing their best, as I understand, to try to help with that, but it's not enough. So that was the expectation with the original legislation. Let's make sure there's due diligence for six months. Unfortunately, that is not working.

So Habitat for Humanity and other nonprofit home providers are not looking to compete. We're looking to immediately. We know there are buyers, we know there are qualified buyers. So when we have people who are waiting desperately to purchase a home and then we see them sitting, we would love to help make that match.

And so this bill just allows that to happen as opposed to waiting. So if there are enough low income qualified buyers to purchase direct, the issue wouldn't exist. So we're just adding another alternative, not a competitive factor.

But having the ability to buy homes is automatically a competitive factor.

Having it's, it's an alternative. It's still up to the private developer. So we would like, I said we would, would not intentionally try to compete. We're not, this is not our model to try to acquire homes. Need an opportunity to partner, as you had mentioned. We really want to increase the supply.

And so if it doesn't pencil to be able to build the affordable units and make sure that they're owner occupied and purchased by the households that are, that are lower income families, then it doesn't work. So we want to help, help strengthen the opportunity.

And like I said, I understand the intended goals of it. But when you increase the amount of buyers out there, it automatically drives competition in the market. Like, that's, that's just the basics of the economics. And that's where again, it.

So in the legislation as well, any funding that comes from or, you know, allocations from the California budget or government grants, is any of that allowed to use to buy homes? Does the legislation here allow government grants and money to be allocated from nonprofits to purchase homes? Is that the, that's what I believe that this legislation is?

I don't believe so. I'm happy to look into that. That's not how Habitat would not work that way. I don't think that that's even eligible. But we can, we can certainly look into that and address that issue.

The only thing I would add, Assemblymember, and I understand that we might be of a different mind on this issue, and I respect that. The only thing I'd push back on is, respectfully, I think those buyers exist. They're already out there. This is about better connecting them to homeownership opportunities.

I don't think that it's adding more buyers to the marketplace. They exist. And organizations like Habitat for Humanity, with all due respect to our talented realtors across the state of California, they know who they are and they can better connect them faster and more efficiently with these purchase opportunities.

And you're saying your low income families exist to buy homes, Is that what you're saying?

What I'm saying is those who are able and qualified, they are out there. The issue is that they aren't able to get into these opportunities because as our witness said, despite the best of intentions, there is an information gap in getting those opportunities connected with those qualified buyers.

And again, I understand that it just from, again, the expansion in the pool.

And what I would really love clarity on is, you know, if we're going to give nonprofits a lot of money, and again, it's not specifically Habitat for Humanity that has a long term track record, but that doesn't mean that there are other nonprofits up there out there that can work in the housing situation and then specifically go in and become a competitive market out there.

You know, especially when in a lot of our counties, low income qualifications start at about $112,000 and below. You know, the family I come from, my mother makes $24,000 a year. I am very aware of what a low income family looks like.

But if the qualifications Right there start at around $112,000 and below for counties like San Francisco, Alameda, some of the Southern California counties, then other bad acting nonprofits or maybe just bad from the outside. We're looking at entering those groups into the market that does that will drive a massive amount of competition.

It's the same thing that happened from and I've talked to others about this, the Dream for All program. I understand the positive things of where the Dream for All program. I had a lot of friends that were qualified for the Dream for All program.

But that additional injection of funds of $25,000 when the supply didn't rapidly increase from building actually massively increased in appreciated values mainly because we increased the competition because a lot of people who hadn't saved up to buy a home now all of a sudden got qualified for an additional $25,000.

And they're in the bidding come they're in the bidding process amongst all of the other qualified buyers.

So I would really prefer if we have a lot of clarity, if we're granting funds to nonprofits and then nonprofits now have the ability to purchase homes, are we also making it to where the competition pool will only drive costs even higher?

I can't support the bill, especially without that type of clarity in this type of housing crisis. Thank you.

Thank you, Chair Haney. Thank you to the bill author, Assemblymember Schultz, my counterpart. We both represent the city of Glendale together. And first let me give my thanks to the bill sponsors as we celebrate the one year anniversary of the Eaton and Palisades fires.

I know that Habitat for Humanity was on the ground doing a lot of work and continues to do a lot of work in my district. I know you do a lot of work to expand homeownership opportunities for folks in the El Serino area, for instance, around the 710 homes.

And know that you have also taken tremendous amounts of risk to look at what's happening in our housing crisis and trying to find solutions to a lot of problems that we're seeing on the ground. So let me appreciate you for your work on that.

I don't think I have a question, but I just wanted to acknowledge the concerns from my colleague, Assemblymember Tangipa and know that the bill author has already expressed and acknowledged the opposition and some of the concerns that they've raised that as we try to solve the housing crisis that we also want to make sure that we don't unintentionally create other situations that cut out, for instance, licensed professionals like realtors who are typically involved in transactions like this.

And I believe that's what I heard from the opposition. I know that we heard that from the bill author already, that he was committed to bringing them to the table. So just wanted to appreciate you for doing that and for all your work on this. So I don't have any question.

Just wanted to give my thanks and happy to move this bill. Thank you. Thank you.

Great. Well, thank you. Enjoyed the discussion. I think the, you know, kind of got to, like, separate out Habitat for Humanity, I think, you know, obviously, because you can't, like, identify them individually at the bill. Right.

But I mean, what Habitat for Humanity does affect, you know, people put in sweat equity in the construction of these homes as well. Right. You know, the individuals who may be purchasing these homes, and then. They could. Be on hold for a while. And obviously, everybody recognizes the great work that you do and the organization does.

But I do understand the concerns of kind of creating this environment where nonprofits or any entity really has this sort of first right of refusal. I do understand that concern, given the number of people who are looking for these very limited homes that pop up in. In our communities, you know, all over the place. And so.

So I do understand that, and to an extent, and. But also recognize that really we're trying to draw something where there's kind of a unique model with what Habitat for Humanity does. And so I recognize that that's what we're trying to accomplish here.

And also with the end goal being that in the event that that does happen, because the builders also, you know, property rights fundamentally should be able to sell to whom they want to sell to. You know, that's kind of an important component of this discussion. And that could be Habitat for Humanity as well. Right.

With the goal being people in there that qualify for these. These homes. So I understand sort of the. The mixed. The mixed the competing interests here.

And what I would say is, and it sounds like you're willing to do this is, you know, we definitely want a very limited and narrow exemption to the law that passed a while ago. Right.

Because if these homes that Habitat for Humanity has not only invested in, but maybe even helped construct, you know, are waiting for six months, that's. That is problematic. And it kind of makes it also difficult for the ultimate builders and sellers of the homes in the first place. So. So I'd like to see the bill move forward.

And. And, you know, I trust you, obviously, to continue to work on this, as you said you would. I think I'm doing the. What everybody says they don't like about this place, you know, where it's like we vote for a bill that we're not totally comfortable with.

But I think that's part of the thing is we develop a level of trust. You continue to work on it and we reserve to change our votes at any given time. Right. So.

But I think this is an important issue to do because we can't have these homes where people need to live in them, you know, kind of waiting for six months where the intent of where the home is going to go has been there the entire six months.

So I'd like to see obviously if we can resolve those differences before this bill comes to the floor because I think it is an important issue, both the opposition but also just what you're trying to accomplish. And so I don't know if you have any response to that. Those were just my comments, obviously.

Well, all I would say, Mr. Vice Chair, is maybe next time I'll ask you to present my bill. I thought you did a really nice job with your comments, arguably better than I did.

But no, I think that would be my only ask to my colleagues is we're in the second week of this legislative session and the opposition just notified us of their opposition and we want that opportunity to work with them and find that middle ground. I think it can be found.

And the only thing I would ask you today is to give us the opportunity to move this bill forward today so we can continue that conversation. Because right now we have units that are sitting vacant and as you said, Mr. Vice Chair, we know who they're designed for. The issue is we're not getting them filled.

I simply ask, of course, asking for the aye, but asking really for the chance to have that conversation and hopefully resolve those differences and put a really impactful piece of legislation forward and get you all a chance to vote with something maybe you will be more comfortable with on the floor.

Well, I don't know if you want to give the vice chair an opportunity to close on your behalf or was that your closing or if there's anything further you want to say, I'll give you that opportunity.

Well, thank you very much, Mr. Chair.

I'll just quickly add, I want to really acknowledge the Committee amendments which clarify that 939 will serve to ensure persons who participate in a below market interest rate loan program have a competitive advantage in accessing homeownership opportunities by clarifying the intent that the units be both income restricted and available for sale.

I just want to note that in a high interest rate environment where we certainly are.

And at a time when only one in six Californians are able to afford the median priced homes, Habitat's unique program does offer a pathway into home ownership and allows for families to begin their wealth generation journey through access to below market rate loans.

I think that in an era, in an era where we're all talking about affordability, we all understand that the lack of available and affordable homes of all kinds are one of the main drivers things we're hearing across our district. I really view this bill as an opportunity to deliver something tangible. So with that, Mr.

Chair, appreciate the hard work of your Committee staff and colleagues respectfully asking for an aye vote and the chance to continue this conversation today.

Thank you so much. And let me first just apologize to the Committee and authors and everyone here for being late. There was an accident on the freeway on our way up here from San Francisco that shut down the entire freeway. So it took us about three and a half hours to get here from San Francisco.

So I thank you to the vice chair for filling in and I apologize to the Committee Members. It seems like there was a fruitful discussion with the Committee on this Issue and a commitment to work, work with the opposition on continuing concerns.

And I want to thank you for your leadership and for working with our staff on some of these amendments. As you stated, the goal of these for sale provisions of density bonus law is to increase homeownership opportunities for income qualified households for whom homeownership would otherwise be out of reach in California.

It doesn't do them or any of us any good if a home is sitting empty for six months or worse, never built because of this difficulty in finding qualified buyers.

We want to restate, as you said, that the Committee amendments will help to make it abundantly clear that these homes must be used for homeownership and not rental profit and that the homes will remain affordable for 45 years and in many ways codify existing parts of density bonus law and make sure that we're fully in uniform with the other aspects of the law.

So again, thank you for your leadership and happy to have this move forward out of Committee. Assuming we had a motion and a second. We have a motion from Mr. Lee and a second from. Okay. Moved by Ms. Caloza and seconded by Mr. Mr. Lee. All right.

And this is do pass as amended to the Assembly Committee on Appropriations.

[Roll call]

All right, six to one. And we will keep that open for absent Members. Thank you. Wonderful. Thank you all very much. Appreciate it. All right. Item number four. Mr. Ward. Welcome.

Thank you Mr. Chair and Members, colleagues. Really proud to be here today and I'll be incredibly brief. This bill, AB 1070 is a reintroduction of a substantially similar bill for which this Committee has already voted with no no votes in the floor of the Assembly voted with the 79 to 0 vote.

I think it's important that we are doing everything we can do to look within at our California building code and simplify where we can the opportunities for mid scale missing middle residential style developments and as well use that opportunity to direct the Building Standards Commission to make sure cost considerations are at front as well as they're thinking about future updates.

With me to have brief presentations are Mia Kang with the Council of Infill Builders and Sylvia Aguilar, the Program and Operations Manager for Casita Coalition. When the time is appropriate, I respectfully request your Aye vote.

Thank you Members and Chair. My name is Mia Kong and I am the Director of the Council of Infill Builders and we're proud code Sponsor over the last several years this Legislature has taken important steps to expand housing opportunity.

The state has legalized multiple ADUs on a single lot, allowed ADUs to be sold separately, and passed a series of streamlining bills to make small housing possible. AB 1070 is a logical next step in that work. While land use law has evolved, our building code framework has not kept pace.

California residential code works well for single family homes and ADUs but once that third unit is added were pushed into a commercial building code, a system designed for large complex buildings. As a result, small low rise housing forms such as stacked flats, courtyard housing, small walk ups don't neatly fit into either system.

States like Minnesota and Texas already allow residential style codes for small low rise multi family buildings based on scale and building forms rather than simply on a number of dwelling units inside the structure.

AB 1070 gives California the opportunity to evaluate those proven models thoughtfully using data and stakeholder input to determine whether similar alignments would improve housing feasibility while maintaining safety. California zoning law now allows gentle density family size rentals and attainable homeownerships. Now we need the building cone to align with that intent.

For those reasons, I respectfully ask for your Aye vote today. Thank you.

Thank you Chair and Members. My name is Sylvia Aguilar and I'm with the Casita Coalition. The Casita Coalition is a California based nonprofit with a national reach. We lead a broad multi sector coalition working to advance middle housing solutions. In 2017 our founders co wrote the bill that legalized ADUs statewide and launched the ADU Revolution.

In California now considered the national model. As we know, California urgently needs more attainable home ownership opportunities and middle housing. Triplexes, fourplexes, townhomes, cottage courts and other three to 10 unit buildings can help us achieve that goal with homes that are smaller in size, have a lower land cost and fit natur within existing neighborhoods.

Unfortunately, California's building code structure makes the more modest forms of housing the hardest and most expensive to build. With small unit count projects forced into the same commercial code requirements used for large multifamily buildings, making excessive engineering and cost burdens excessive and make small projects infeasible.

AB 1070 asks the state to examine whether we can safely modernize this framework. The bill is a critical step that supports the legislative priority to bring down the cost of producing housing both for rental and ownership. It would also align middle housing rules with opportunities for FHA backed mortgages.

In addition, it directs HCD to study the question and prepare recommendations, if only supported by evidence. As my colleague mentioned, many examples throughout the United States where this has been successful. In Seattle, Utah, Rhode Island, North Carolina and Alaska, projects with up to four units can be billed using modified residential code. In Dallas, up to eight units.

National fire safety experts report no demonstrated increase in hazards with appropriate mitigation. AB 1070 is cautious, data driven and safety centered. Most importantly, it strengthens California's ability to deliver the small scale affordable homes we so desperately need. Thank you.

Thank you. Is there anyone else here in support of this bill?

Thank you. Good morning. Brooke Pritchard on behalf of California YIMBY as the third co sponsor.

Marina Espinosa with the California Housing Consortium and support.

Great. Anyone here in opposition seeing anyone? I'll bring it back to the Committee over the bill. Ms. Quirk-Silva have a motion from Mr. Lee. Mr. Tangipa. Ms. Quirk-Silva?

Yeah, I wanted to appreciate and thank the author for bringing this forward. This actually is a real issue.

I've been approached by actually a homeowner in my district who has a R3 property and on the property right now is a two bedroom, one bath and they're stuck in this zoning which says that if they want to build an ADU onto this property which is R3, then they would have to build a garage to go with this.

When we've already addressed some of these transportation issues and many of the cities across the state are confused by all of the work we have done and as you said, a revolution in ADUs.

So there certainly needs to be education for planning departments, but many planning departments interpret it the way they feel is most conservative in addition to this property, because I went out to see it, on one side is an eight unit and the other side of the property, or next door I should say, is an eight unit.

So that this R3 with a two bedroom, one bath has more than enough space. And they're being asked to add these additional parameters. It makes it impossible, really. So I think this is, I'm thinking this is what you're doing heading towards is how do you maximize.

But I appreciate exactly what you're saying.

Right. To maximize the use of their property. That fits into the neighborhood as well. So I think that it seems small, but it's really big.

Yep.

Mr. Patterson?

Yes. I'm gonna say something maybe crazy, but it hasn't stopped me from saying it before. I think, you know, the building code and residential code, you know, the way I've always looked at it is like these are the things that cities and communities have to do, you know, to make sure that they're safe and.

But I think we always find ourselves in these predicaments and I would say a huge reason why a lot of projects, whether it's commercial or residential, take so long because a planner, chief building official, just straight up makes their own determinations outside of the code.

And I mean, I had this with even my own district office and I, I brought it up to our city manager, like, why this isn't in the building code? Why is the person requiring us to do this? And the, the city manager said, just, just tell them you're not going to do it.

You know, which it was a pretty ridiculous change. But the point is that slowed down the construction by six weeks. And I see, you know, that's just. Was such a. Not. There's like a conference call phone line, by the way, which has no safety, you know, mechanism at all. We didn't even have conference call line in there.

So the whole thing was crazy. But I think the thing is this is a small, you know, using something that already exists to maybe sort of like put some guardrails there.

But I think the bigger picture is, you know, I don't think the Legislature necessarily wants to should step in, but I wish that the people making these decisions on the local level are not taking such wide latitude and saying what they want to see in the property because frankly, it's none of their business what they want to see in the property.

Their job is very specific and defined by the building code or the residential code. And to go way beyond that, it really bothers me. So anyways, I'm looking forward to supporting this bill. I think it's a little. It's not. I know you're not intending to go where my whole rant went, but.

But we do have a problem in that regard, you know, so well, the.

Good news, Mr. Vice Chair, is that we have been working on this issue together last year as we were able to pass the permit Streamlining act to be able to make sure that, you know, when you're going for your perm, the bill that we worked on on AB253, that there's a shot clock really involved in that.

And as long as you want to use a third party professional that's able to examine the exact same building code, right. Not create any new restrictions or new interpretations, but just look at it and submit that report, you can get that building permit done. Because you're right.

You know, we have constituents that come and say like they believe that they're following their construction. Their general contractor is following everything to a T. And you go round and round and round with the building official, which I'll give a little bit of credit. We're doing a lot of work here in the Legislature.

It might be tough for someone to keep up with the changes in the law and how the building code has changed, but that is their job to do so. And it's important that we make sure what this bill is training it towards is can we just simplify the code?

Can we use something that like actually is working for single family homes on small scale projects that are under 10 units of residential only construction and just make sure that, you know, there's less for them to even need to look at.

Yeah, great.

Well, thank you. I just wanted to make sure. I was thanking the author for bringing this, I think pretty close to a full reformation and study and review of a lot of the codes that were from 40, 50, 60 years ago.

We actually need more and we should look at more studies on how we again, can actually make all of your comments come to fruition, you know, in the full modernization. So you know where I'm at on this.

And again, if there's more that we're able to look at, you know, it's, it's whether it's stopping housing being built from legislation or stopping housing being built from the code or stopping housing in all of these local areas that make it so restrictive, that is where we're seeing this monumental issue.

And so if this is an ability to, where we can get that ball rolling on truly streamlining the process without massively increasing the cost simply by Modernization. So thank you. Thank you.

All right. Give the opportunity to close. I just respectfully request your Aye vote. Thank you all for your attention this morning.

Thank you. Thank you again for, for your leadership. Thank you for bringing this solid proposal back and for your work to make sure we address this critical missing middle opportunity that we have affordability to get these types of buildings built and to address the, the barriers that may prevent them from being being built.

So with that we had a motion and a second already and this is a due pass to the Assembly Committee on Appropriations and we can take a roll call.

[Roll Call]

All right. 7-0. We'll leave it open for absent members, and we will now bring up our last item, item five, AB 1184, from our Vice Chair, Mr. Patterson. And this is our last item. So, if there are members or their staff who are watching who need to come and vote, please come down to the hearing room.

Well, great. Well, thank you, Mr. Chair and Members. You know, at the end of session last year, we heard a very similar bill that I was presenting and I'm hoping we have a better fate this time.

You know, as many of you know, I've had a lot of interest in homeowners' associations and really, you know, they have government-like powers in many cases. And you know, and on the flip side, I'm proud to live in one. I've lived in three of them.

They do a great job at making sure our communities remain beautiful as well. But given the government-like powers that they have, worked on this measure to hopefully add some level of additional transparency and rights for the residents who are paying into the homeowner's association.

And we've worked really hard and diligently with the opposition and appreciate them—well last year's opposition—coming to the table and working with us on this measure. But some of the things that this does, which I think is quite interesting, is that—it does several things.

There are several components of this Bill, but one of them that I really appreciate the opposition's discussion with me on and being open to this is if there is a meeting that is recorded by a homeowner's association, that residents would be able to obtain that recording, which, unless this Bill passes, won't be the case.

And so, I think that that's pretty important because, you know, on the city level, local government level, or the state level, if there's a recording of official proceeding, residents can have access to that. And that's sort of a fundamental view that I've always had.

When I was elected, the Rockland City Council, like the very first meeting we brought, brought on video streaming, and obviously, residents can access that at any time. But, you know, that was a big concern of the opposition, and I appreciate them for coming to the table and working with us on that.

In addition, I know the Committee has suggested some amendments to this Bill, and we're, we're happy to accept those proposed amendments as well. So, I don't have any witnesses in support and hopefully no witnesses in opposition. And with that, I respectfully ask for your aye vote.

All right, thank you, Mr. Vice Chair. Let's see if there are any surprises here. Anybody here in support of this Bill? Not seeing anyone. Anyone here in opposition of the Bill? No one as well. All right, Committee Members? All right, we have a motion and a second. Don't see any comments.

We have heard this Bill before, and I appreciate you working on some additional amendments. And interestingly, HOAs are getting some bipartisan attention here and certainly support efforts to try to increase the transparency and accountability. They do have a lot of power. They also have an important role.

And folks knowing how decisions are made and being able to access those processes in various ways, I think, is a critical part of ensuring that they are accountable to the people who they serve and who make up the folks who are impacted by their decisions. So, I'll give you the opportunity to close if you would like.

Great. Well, thank you, Mr. Chair and Committee Members. Respectfully ask for your aye vote.

All right, motion is do pass as amended, and we can take a roll.

[Roll Call]

Yes. Thank you for bearing with me, members.

All right, what is it? Eight to zero. All right. All right, so, that was our final Bill. So, we'll go through if there are folks who need to vote. And then, we're asking our absent members to please come to the hearing room because we're now waiting on you for your votes.

Item AB739. [Roll Call]. Nine to zero. Item number two, AB 78. [Roll Call]. That's nine to zero. Item number 3, AB 939. [Roll Call]. Seven to one. Item 4, AB 1070. [Roll Call}. Eight to zero. That is it, sir. Everybody else has voted on item number five, AB 1184, that's present.

All right. So everyone who is present may leave. And we will wait for a couple of the absent Members. They're on the way down. That.

AB 739. Avila Farias. Aye. AB 748. Avila Farias. Aye. AB 939. Avila Farias. Aye. AB 1070. Avila Farias. Aye. And AB 1184. Avila Farias. Aye. Thank you, ma'am.

Are you ready, ma'am?

I'm ready.

All right. Assemblymember Wicks and AB 739. Aye. AB 748. Assemblymember Wicks. Aye. AB 939. Assemblymember Wicks. Aye. AB 1070. Assemblymember Wicks. Aye. And AB 1184. Assemblymember Wicks. Aye. All right.

Crazy traffic situation.

Of course. We're going to start with AB 939. This is to Pass As Amended, to the Assembly Committee and Appropriations. Assemblymember Garcia. Aye. So that would be 10 to one. AB 1070, due pass to the Assembly Committee and appropriations. Assemblymember Garcia. Assemblymember Garcia, aye. It will be 11 to zero. And AB 1184, due pass as amended. Assemblymember Garcia. Assemblymember Garcia, aye. It will be 11 to zero. All right, sir. That is it. You have already voted.

All right, I think that is it. This meeting is adjourned.