Senate Standing Committee on Housing

The Senate committee on housing will begin in sixty seconds. Good afternoon. I'd like to call to order this meeting of the Senate standing committee on housing for Wednesday, 04/15/2026. We do not yet have a quorum, so we will operate as a subcommittee. A few announcements as we begin today's hearing.

First, the consent calendar, which consists of items five, SB 1322 by Richardson, and five, six, SB 1122 by myself, Araghim. I ask that all members please come to Capitol Room 112 so we can establish a quorum and conduct business. Also like to summarize our public comment procedure for today's bill hearing.

First, we'll take two principal witnesses in support that were designated by the bill author and two witnesses in opposition, and the opposition witnesses should have filed a letter of opposition in the official portal with the committee prior to today's hearing. After which time, we'll invite any members of the public to express their support or opposition to the bill by stating your name, organization, or where you're from, and your position on the bill.

Your testimony is limited just to state your name, organization, and position on the bill. So with that, we will begin to the first, bill, which is in file order, file it in one SB 866 by Senator Blakespear, who is present. Good afternoon. I think you have a special guest as well. Yeah.

He's not testifying on any of these bills in housing.

But you're in support. Right? Exactly. Okay. And if you have any principal witnesses, if you can please join us. Thank you.

Alright. Well, thank you, chair. Thank you, colleagues. I'm excited to present SB 866. I accept the committee's amendments.

Thank you for your work on this bill. SB866 require requires all jurisdictions that do not receive HAPP grants, which is homeless housing assistance and prevention grants to include a comprehensive homelessness data strategies and regional coordination efforts in their housing elements. Without consistent planning requirements, many jurisdictions lack clear, data driven strategies to address homelessness. This results in incomplete or inconsistent data on homelessness trends, service utilization, and outcomes, making it difficult to measure progress or to ensure accountability.

Additionally, coordination among cities, counties, and regional partners is often fragmented, leading to gaps in service delivery.

Today, only 14 cities in California receive direct HAPP funding, and that there those are the cities that are required to engage in homelessness planning in order to get that HAPP funding, while the vast majority of cities are not held to the same standard. As a result, most communities are operating without clear comprehensive strategies to addressing homelessness.

SB866 closes this gap, ensuring that all jurisdictions take clear actionable steps to plan for and address homelessness, including identifying available funding sources and resources for homelessness programs, taking inventory of housing, shelter, and behavioral health capacity, and detailing strategies for regional coordination and homelessness reduction. Homelessness does not stop at city or county boundaries, and it's also not the responsibility of only the big cities in the state to actually do the planning. It requires strong regional coordination, and this bill helps to provide that.

With me to testify in support, I have Lewis Brown, Corporation for Supportive Housing.

Thank you, Senator.

You have two minutes to address the committee on the bill.

Thank you, Senator. Good afternoon, Chair Arreguin and Members of the Committee. As the Senators, Senator said, my name is Lewis Brown, and I'm with the Corporation for Supportive Housing. We're a national nonprofit organization and community development financial institution, that has worked for decades to solve homelessness across the country, including in California. Through technical assistance and lending, we have contributed to the development of nearly half a million supportive housing units nationwide.

We are proud to support AB sorry, SB866. Successful efforts to solve homelessness require comprehensive data driven planning. SB866 would require jurisdictions non HAPP jurisdictions to collect and report in their housing element key data, that can help to inform more effective strategic homelessness, interventions.

For example, jurisdictions will be required to report various data on unhoused on their unhoused neighbors living in their communities, as well as data on state, local, and federal resources that can be used to serve, those individuals. The bill also requires jurisdictions to outline their plans to reduce homelessness, improve regional coordination, and implement prevention strategies, to, stave off homelessness for vulnerable populations, including people who are exiting institutions, and folks who have, special housing needs.

Together, these requirements will will promote, both transparency and accountability as well as strategies that are grounded, in data, and are that are coordinated. For those reasons, we respectfully, request your aye vote.

Thank you so much.

Do you have another principal witness in support? Okay. We'll now take any members of the public wishing to express support for SB866. If you can please approach the microphone, state your name, organization, and position on the bill. The microphone's on that side.

Sorry.

Adrian Covert with the Bay Area Council in support.

Thank you. Anyone else wishing to express support for SB866?

Elizabeth Funk with Dignity Moves in support.

Thank you very much. Unless there's anyone else coming forward to express support, we'll now move to opposition witnesses. We'll take up to two principal opposition witnesses. If you can please join us here. Thank you.

You have two minutes as well to address the committee.

Okay. Good afternoon, Chair and Committee Members. I'm Caroline Grinder. I'm here on behalf of the League of California Cities, which has an opposing unless amended position on SB866. We share the goal of improving coordination with smaller cities to address homelessness, but unfortunately, SB866, 866 places a significant burden on the cities with the fewest resources.

It imposes extensive new homelessness reporting requirements in the housing element for all but 14 cities, specifically targeting jurisdictions that do not receive state homelessness funding. These are the same cities that are already struggling to continue to provide and sustain homelessness services and programs in their communities and that have been advocating for increased access to programs such as HAPP. One of Cal City's main concerns with SB866 is the bill requires cities to collect data that is outside of their control.

For example, cities would be required to report on data such as how many people become unhoused after leaving jails, prisons, and hospitals, systems that are operated by counties, the state, and private entities, not by cities. Despite the city's best intentions, they might be unable to collect this data.

And under SB866, that could leave them with a noncompliant housing element as a result. Additionally, some of the data included in SB866 is already, collected by existing systems. Continuums of care receive federal funding to conduct annual point in time counts to gather key data, including the number of individuals who are unhoused in the community and if they've been unhoused long enough to be considered chronically homeless.

SB866 shifts out responsibility for collecting and reporting that data onto cities without providing any additional resources to do so. We see we failed to see by duplicating these efforts and requiring cities to report on data that's already being collected and publicly shared by Continuums of Care helps further address homelessness in our communities.

Equally concerning, we're not sure how this bill will help improve coordination. This bill requires over 400 cities to collect and report data independently through their housing elements, while counties and larger cities do so through regional plans. Without alignment, I think we risk creating siloed data that's difficult, if not impossible, to synthesize into actual policy at the statewide level. That's why Cal Cities is requesting amendments that would instead align this proposal with the state's existing regional planning framework.

This approach would achieve the same transparency goals outlined in the bill, but would do so through the same process that's already in place for California's largest cities and counties, giving small cities a seat at the table in the regional planning process.

For these reasons, Cal Cities has an opposed unless amended position and respectfully urges continued changes to SB866.

Thank you.

Thank you very much.

Is there another principal opposition witness? Okay. We'll now take any members of public wishing express opposition to SB866. Please name organization position on the bill.

Good afternoon. Sharon Gonzalves on behalf of the City of Thousand Oaks with an opposed unless amended position. Thank you.

Good afternoon. Spencer Street on behalf of the cities of Kingsburg, Oceanside, Placentia, Tulare, Upland, Whittier, and Walnut Creek. Opposed unless amended. Thank you.

Good afternoon, Chair and members. Cassandra Marr on behalf of the town of Apple Valley in in a respectful opposed unless amended position. Thank you.

Good afternoon, Chair and Members. Kirk Blackburn here on behalf of the City of Inglewood. Respectfully opposed unless amended. Thank you. Very much.

Unless there's anyone else wishing to express opposition to the bill, I'll bring it back to the committee for discussion. Are there any members wishing to ask any questions or comments? Senator Caballero.

Thank you, Mister Chair. Could you address the issue that was raised by Cal Cities in regards to the requirement that it puts a burden on cities and is duplicative of other other reporting that's happening? I'm I'm I'm concerned with that aspect of it.

Yes. Thank you. I'm also concerned with that aspect, but I also recognize that what we have right now is an incomplete patchwork. So when you only have 14 cities that are providing the biggest cities in the state who are providing data about homelessness, homeless people in their jurisdictions, then you are just by nature lacking, you know, 400 other cities that are not providing this data.

So I I wanna work with the opposition and want to recognize that there's absolutely no intent to to have duplicative work or to to create systems that are inefficient, that are not serving any purpose.

But to me, this is similar to the way I come from local government, and I am very familiar with the idea that cities don't want any involvement in statewide problems. Like, they don't cities were really opposed to the RHNA process at all. The idea that there's a deficit of market rate housing and subsidized housing, and we need every city to do its part to provide for that.

And I think this is a similar a similar perspective around homelessness, which is that this is a matter of statewide concern. Our home homelessness crosses boundaries when we only have the biggest cities in the state that are actually doing, standardized reporting and planning for their homeless residents with and as you've seen from the governor's, response to the large cities, in in some ways, those plans then have led the governor's office to say, this is inadequate.

You need to be more ambitious. You need to try to be reducing homelessness. So the the standardized planning and standardized data and having it be comprehensive across the whole state would allow us to have a statewide response. Now now, figuring out the specifics of how and making sure that it works as as well as possible for the cities, but but also with the premise that it actually is their obligation. There are many, many cities that do not see themselves as needing to be involved with homelessness.

They think of it as a county and a big city problem. And even though there are homeless residents living on their streets, they are not wanting to get engaged in this because they don't see it as something that it creates a political win or whatever the the reasons are. There's all sorts of nimbyism and other reasons that peep that cities don't wanna get involved in homelessness planning.

But at base, the premise that they should all be doing the same standardized planning as the big city so that we can have complete data and we can actually have a statewide response so that we can move toward functional zero on street homelessness and homelessness in general. That that to me is a premise that we should be working toward, and this bill is aimed at that.

It's saying everybody does have a role here, every city, not just the big ones.

I appreciate that. Could you respond to what was just said in regards to that? And let me just say that all I have is is small cities, with the exception of the city of Fresno, which is now the only time I've ever represented a big city. And my experience is entirely different that they are actively involved in homelessness. But, your response in regards to that?

Yeah. We we understand the goal of creating more transparency into the efforts of small cities. Our amendments are actually requiring cities to be part of the same regional planning process that's required for the big cities and counties. That's what we're asking for is to be having a seat at the table, increasing access to this data collection just through that other pathway. We think that creates alignment with what everybody else is already doing, and so that's why we're taking that approach.

We're not saying we don't want any transparency. We just think that maybe there's other ways to achieve that goal, that doesn't have to go through the housing element process and doesn't necessarily include some of these metrics, that we think would be really challenging to collect.

And then, what is your opinion of the, COCs and the city's ability to impact what COCs do?

Yeah. Cities do not receive funding to do point in time counts. The Federal Government gives COCs money to do those counts, and they're really responsible for collecting that data. And so that's a huge concern with us in this bill is that, there's real delineation of responsibility when it comes to point in time counts, and we don't want to create any confusion there between the role of the COC in conducting those and the role of the city in collecting some of this data.

Thank you. Yeah. Thank you.

Senator Paul, and and Senator Ochoa Bogh, we're on filing one SB866.

Thank you, mister chair. And I I I wanted to pick up on on Senator Cavallero's question. So because although she said she's never represented a big city, you know, several cities in my district, think of of Encinitas and Berkeley and West Sacramento is like these gigantic metropolises. So Eilton is my favorite example with population just under 800. The last two pointing time counts, no unsheltered homelessness whatsoever.

And so I I'm I'm it makes me wonder whether it's a it's a good use of ielten's almost bankrupt budget to be doing this work given where where they're at, Yountville kind of they're they're not they're also in fiscal distress. Basically, they're bigger, but they're not 50,000 people. Same same issue.

So I think part of the question for you was, you know, is there you know, if if if your pit count is, you know, 25 or under, what are do you really need to go through all of this? Because because it's part of the housing element and therefore the general plan, you're gonna your city attorney is gonna tell you, you know, you would like to get this right, it's gonna get litigated, HCD is gonna look at it, somebody's gonna sue you, probably somebody in this room.

So let's you know, we we'll have to hire a consultant or we'll add it to our consulting contract on the housing element. So at the you know, if you're Aisles and you spend a $100,000 complying with it, you don't have any homelessness in the city Or in the outfield, if there's one.

I accept your amendment.

Okay. Alright. Thanks.

I mean, not to cut you off, but there would be I mean, I'm you're not supposed to negotiate against yourself in committee, but I will say that I'm open to suggestions like that. If your point in time count is zero or 25 or you have under a thousand people as your population, that there would be some lower threshold where they wouldn't have the obligation. But, I mean, the these details can be worked out in further committees. But but in general, I I hear your point.

Okay. I appreciate that. I think a thousand is probably too low too low of a threshold for the population,

but I very much appreciate that. You know, we're like, it's with our committees, mostly former mayors as you are as well. So get it, and we do for for the purpose of regional planning and what have you, we do need this information. We do wanna focus the cities on this.

So I appreciate where you're going here and your also your your commitment to to try to make this make make sense for because I know I actually don't wanna force them to participate in the regional things either.

You know, Eilton's police chief is also the city clerk, I think, if I remember correctly. So I mean, they just they don't have time to do all that. So even the opposition amendments don't really get at that problem for the for the for the smallest jurisdictions. So thank you. Thank and thanks, mister chair.

Thank you. Are there any other questions or comments on SB866?

I'll just make a

Senator Ochoa Bogh.

I came in late, so I don't, I, I missed the the beginning conversation, but I just I share the same concerns with with Senator Caballero and Cabaldon with regards to small small communities lots of small communities in the Inland Empire within my district. So I'm gonna actually not support the bill today, but look forward to seeing what comes through when it comes back to the Senate. Or are you going to any other committees on or appropriations? Okay.

So I'll just look at it when it comes back to the Senate and reevaluate where you are at at that time.

Thank you. Okay. Thank you.

I wanna thank the author for bringing this bill forward and as one of the former mayors here in the room. I was proud of the mayor of Berkeley for eight years and lead the city's efforts to reduce unsheltered homelessness by 45%. Maybe not as good as West Sac, but not bad.

I have a lot of opinions about how we address homelessness in California, and we need to improve the way that we fund local responses to homelessness, which is why I'll just state for the record now, I support the bill in the assembly to provide dedicated a HAPP funding for smaller jurisdictions.

I question why the money a third of it needs to go to COCs when it's local governments and counties, the ones that are actually doing the work on the ground, but that's a separate policy discussion for a a later day.

But I think this bill is really critical to make sure that we're getting data on what local jurisdictions are are doing or should be doing to address the crisis of homelessness, which is a matter of statewide concern, which impacts cities of all sizes, not just large cities who get of 300,000 or more who get direct allocation from the state, but impacts also.

I hear the concern in the leak of cities that, well, if you're gonna make me do this, then you should provide some funding for implementation as well as funding to implement policies and programs. That is a legitimate issue, and we're working hard to secure additional funding in the state budget to fund the HAPP program to make sure we can continue that commitment.

But I think the more we can provide information and facilitate better coordination between all levels of government, we're gonna have a better, more effective response in the state of California. And so I wanna thank the author.

I know that you're going to be making amendments in the next committee, and already taken an amendment around the the interval in which you would have to produce this information, and, you know, look forward to this bill as it moves forward in the process.

But I think it is addressing an important goal, which is this exercise is important because the reality is not every jurisdiction in California thinks that they have a responsibility to address homelessness, whereas homelessness is an issue that affects every community in the state of California, whether you have an unhoused person or not. And so even if you have zero homeless people, we all have a collective responsibility. I think your point is well taken.

If you have zero homeless people, you probably shouldn't have to go through this exercise, so that's a valid point.

But I wanna see us move to move the direction of one, we provide the funding, and two, we have a collective responsibility of cities of all sizes to address this crisis, which is a matter of state wide concern. So I do have an I IRECO, as amended. And with that, I'll turn over to close.

Okay. Thank you. I appreciate that, that commentary, Chair, because it really gets at what the aim of this is, which is to recognize that we do have a collective responsibility. And I represent a part of San Diego. So in San Diego County, San Diego City is about half of the county, and there are 18 cities in San Diego County.

So 17 cities see the City Of San Diego as being responsible for the homelessness problem. And this is one of the biggest things that comes up from the mayor of San Diego is that other cities are not doing their part. They're wanting to use our their the city's two one one number, even when somebody lives forty minutes away and their the city is, you know, very far from the downtown urban core.

But they you know, cities, of course, are strapped and have a lot of things on their plate, and so they would love it if the biggest city or the county would just handle this problem. But the reality is the problem is not getting handled fast enough, and we need to start having a shared a bigger sense of the shared obligation and then also the appropriate funding to make that happen.

And so, you know, I I'm very sensitive to the idea of adding more burden and duplication and consultants and costs and planning to cities that that is not adding value. And so I use that lens to evaluate all bill ideas.

And and to me, this does seem like something that is it's it's such a clear oversight and whole that there are so many places that actually don't have standardized data and funding and or not funding, but a response to homelessness, that we just need to deal with it. So so with that, I I appreciate, the the, again, the committee's involvement in getting this bill, into the shape it's in, and I respectfully ask for your aye vote.

Thank you very much. I forgot to be out as a coauthor. So at the appropriate time, I'd love to be a coauthor of the bill. We don't have a quorum yet. So when we do a stop sharing, I think we need two more members.

We'll entertain a motion on the bill.

Okay. Thank you so much.

With that, we'll shift gears to the next bill by Senator Blakespear.

Thank you.

Filing to SB 967. If there are any principal witnesses, if they can please come forward. And while they're approaching, I'd like to just make some introductory comments, colleagues, on this bill, Senate bill 967. So Senator, I appreciate you bringing this bill forward and working with my staff early.

And the author of members that were cross reflect our agree our collective agreement on this bill, which is to provide an avenue for jurisdictions to count their production of interim housing units towards their acutely low income obligations on the regional housing needs allocation.

As we discussed, there are provisions of your bill that are currently in print that you have concerns with. Specifically, you would like to address at a future point the issue of double counting of units by requiring agencies to demonstrate that they have already satisfied the unmet shelter capacity identified in the latest housing element. That that provision may be too stringent. We discussed allowing a city to determine whether the interim housing credit can be counted towards the shelter category or the acutely low income category.

They would still have to meet their shelter obligations under housing element law just for the record. That doesn't absolve them of those requirements. So the provisions addressing double counting are very important. It's a very difficult needle to thread, but I wanna make sure that you have a vehicle moving forward that you can accomplish your goals. So just to clarify the members of the committee, there are no amendments before the committee today. The bill in print is what is before us.

But, Senator, you have my commitment as the bill moves forward to continue working with you on that specific provision to address the concerns that you've expressed. So I just wanna state that for the record because if this bill does move out today, that if there are amendments to address that particular provision, that that is not a jailbreak. So I'll turn it over to you to present.

Okay. Thank you. I really appreciate, Chair, those introductory comments and that is, in line with my understanding and I'm grateful for that, thank you. I'm pleased to author SB 967, which will encourage the development of more interim housing to address the immediate needs of the unsheltered homeless population in California.

I want to thank the chair and the committee staff for working with me over the last several weeks, months, and days, and hours. So thank you for the intensive engagement in the last day. I appreciate the chair's commitment to working on the language to address the that issue he referred to as double counting of interim units. We wanna make sure that, cities are not getting credit in both a shelter category and a housing category. So allowing, one possibility is allowing a city or a municipality to choose which category they're using it in.

But this will be dealt with in future committees. More than a 120,000 Californians do not have an indoor place to sleep on any given night. It's really important that we are grounding the reasons for this bill in the data in California. So a 120,000 Californians do not have an indoor place to sleep on any given night. Housing options for people experiencing homelessness are extremely limited.

For every five people who raise their hand and say, "I would like a bed to sleep in tonight", we only have two beds available for them. So three other people are told, "I'm sorry. The inn is closed. We don't have room for you." And this bill is meant to address building and prioritizing the creation of housing that's at that level directly up from Unsheltered Street Homelessness, from living in an encampment.

The lack of shelter or places for people to sleep tonight has high social costs. On average, people who are living outside die 17 years earlier than the general public, 17 years earlier. People camping in canyons or on freeway properties have been found to have started wildfires, and they are involved in deadly accidents on our roadways. Encampments create waste, trash, and disturb urban environments that make it unfriendly to have a thriving business community.

There are significant public health, indecency, and violence associated with unsheltered homelessness, and we can prioritize a solution. Unfortunately we've tolerated unsheltered homelessness for too long, thinking that it's somehow inevitable. And the reality is, it is not inevitable. Interim housing is a housing type that provides a safe, private, supportive environment for people exiting an encampment. It is not a congregate shelter.

Cities like San Jose, San Francisco, and Santa Barbara have been using tiny homes and modular homes to serve as a bridge between living on the street and the next step in someone's housing journey. These interim housing projects have been associated with at least a 10% decrease in unsheltered homelessness in San Jose. Rather than languishing outdoors or choosing to stay in a congregate shelter, interim housing can immediately address housing needs while people are trying to find the next step of where they will be living.

SB 967 will incentivize the development of interim housing by allowing municipalities to get credit in the RHNA process. Because the reality right now is that if a municipality chooses to, invest in an interim housing project, they're not getting any credit under our house under our housing laws, which are driving and incentivizing the types of development that we see in our cities.

I come from a city, the city of Encinitas, that was essentially only doing the things that are required under the housing element, and that's only after multiple lawsuits and threats from the AG. But doing things that are outside of the housing element process was not something that discretionarily the city was going to be willing to take on. Specifically, SB 967 will define interim housing. So it's non congregate, relocatable, and the term of art that's used is low barrier navigation center.

It requires local governments to commit to providing supportive services for their interim housing units. So there will be supportive services on-site, which is a major difference between living in an encampment and living inside. Sometimes I hear this idea that, well, isn't it better off to just be in an encampment?

And when you realize what you're saying, which is that there is no sanitation in an encampment, there's no law enforcement, there's no supportive service that can help people identify their problems and get on to the next step, there's an enormous difference between being in an interim housing unit and being in an encampment. It would also require HCD to include information on counting interim housing in future RHNA guidance.

And then in the last 24 hours, the chair and I have committed to working together after this committee to allow municipalities to choose whether interim units may count toward their emergency shelter obligation or their acutely low income category under RHNA and to not have them double count. So with me, I am pleased to have Elizabeth Funk on behalf of Dignity Moves and John Doherty on behalf of New California Coalition.

Thank you very much. We actually have two minutes to address the committee on the bill.

Greetings, Chair Arreguin and committee members. My name is Elizabeth Funk and I am the founder and CEO of Degootie Moves, a nonprofit dedicated to ending unsheltered homelessness specifically. Among other things, we build interim supportive housing communities, which we found to be a promising new tool in the toolkit for addressing homelessness. SB 967 would encourage cities to build these dignified alternatives to the streets and as alternatives to congregate shelters.

It's important to note that the official definition of housing is separate sleeping quarters that the person considers their usual place of residence. That even includes hotel rooms for instance, and are specifically counted by the census definition that has been adapted by HCD. However, there's an exclusion, which is units that are used for institutional settings. The thing that this bill would be doing would be softening that exclusion, but these are separate sleeping quarters. And I understand why in California, we have chosen not to include shelter, traditional congregate shelter in our housing inventory, but this is not shelter.

This is private sleeping rooms where people stay, in my experience, an average of 8 months. I understand that for those who are unable to pay rent and acutely low income specifically, the alternative is not a permanent home, the alternative is the streets. This new model is promising, it's working, residents are loving it. They're finding that they feel secure, and therefore, they're able to work with the supportive services that are being offered while they find their pathway to a truly permanent home.

So by allowing cities to include these interim housing units with appropriate guardrails that include replacement when they get relocated to count them appropriately, I believe the senators have done a great job in crafting a bill that will truly finally motivate cities to get people indoors into dignified units. The last thing I wanna comment quickly is that there's been concern that this would somehow take land that could be used for permanent housing. In my experience, that is not the case.

The land that is appropriate for relocatable cabins tends to be land that would otherwise be sitting vacant and would be a squandered resource. So the water board in Santa Clara County is not gonna build permanent housing units on their water district land, but they sure as have had cabinets set in to get people out of the riverway and therefore are interested in temporary solutions.

So I don't see that this cuts into permanent housing at all. I think it's an alternative to the streets, and I'd like to respectfully request your aye vote.

Thank you very much.

Good afternoon chair and members of the committee. My name is John Doherty. I'm here on behalf of New California Coalition in support of Senate Bill 967. Our organization is dedicated to promoting pragmatic, data driven, and innovative solutions to California's most pressing, challenges, and few are as urgent or as visible as the crisis in our streets. We all know that we're in a crisis impacting, as the Senator said, over a 120,000 individual Californias a night.

I do wanna say that we wanna make it clear that permanent supportive housing is an essential part of this fight and this solution. But relying on projects that take lots of resources and lots of time, you know, sometimes decades, is not enough. We need to meet the urgency of the moment and pair long term solutions with immediate action that produces results. We believe that this bill provides part of that course correction.

By allowing the cities and counties to account qualifying interim housing towards arena objectives and specifically within the acutely low income category, we create a clear structural incentive for faster deployment of housing.

For the first time, local governments will have a meaningful reason to invest in rapid, scalable solutions and incorporate them in their housing element process. Equally, the bill balances flexibility with accountability, we're not giving folks a free pass. It requires accredited interim housing to meet those standards that were discussed above, and that they are truly become pathways towards stability. Finally, we think that by integrating this element into our annual reporting, you can have better transparency and state oversight.

So for those reasons and our supportive practical immediate steps forward, we respectfully urge and aye vote on the matter.

Thank you very much. We invite any members of public wishing to express support for Senate Bill 967 to please come forward, state your name, organization, position on the bill.

Adrian Covert with the Bay Area Council in support. Thank you.

Thank you very much. Is there anyone else wishing to express support? Okay. We'll now move to opposition witnesses. We'll take up to two opposition witnesses on SB 967.

Good afternoon, Chair Arreguin and members of the committee. My name is Tory Lorett. I am a local government and housing law professor at McGeorge School of Law, with a decade of experience representing people living in poverty. I'm here today in strong opposition to SB 967, because it would create a two tier housing system for the lowest income Californians, and disincentivizes local governments from expanding the supply of deeply affordable permanent housing. SB 967 collapses the distinction between temporary emergency shelter and permanent stable housing for the lowest income Californians.

It allows a jurisdiction, provided it has met its housing element shelter threshold, to count interim housing as satisfying up to 50% of its acutely low income RHNA obligations. This redefines what housing means, but again, only for the poorest Californians. When the legislature added the acutely low income category to housing element law in 2021, the goal was not to create a new way for jurisdictions to escape their obligations. The goal was the opposite.

The legislature recognized that housing our housing crisis reaches deeper than we had previously measured, and we need to plan harder, fund smarter, and build more for the people most left behind.

SB 967 threatens this step forward, allowing municipalities to escape their obligations to build permanent housing for those the legislature has already identified as having the most need. California law prohibits local governments from discriminating on the basis of income. Housing element law was built on this principle that every household, regardless of income, is entitled to plan for a real home.

SB 967 writes into law for the first time the explicit proposition that acutely low income households do not deserve access to permanent housing meant for long term human habitation. Interim housing is defined in SB 967 by direct reference to government code 65660, which describes facilities explicitly designed to provide temporary shelter, while case managers work to connect individuals experiencing homelessness to permanent housing.

HUD, likewise, recognizes that transitional housing exists to facilitate movement of unhoused individuals toward permanent housing.

If you can please wrap up your comments.

Of course. The conflation, of the interim and permanent housing also conflates two distinct populations. People experiencing homelessness in acutely low income households more broadly. These groups overlap, but they are not the same. Acutely low income Californians are single parents working low wage jobs, disabled people, and seniors on fixed incomes.

Interim housing residents do not have the same tenant protections as residents of permanent housing do. And while interim housing is a vital and valued part of our response to homelessness, it is a bridge, and SB 967 threatens to make it a bridge to no where.

Thank you for your comments. Yes, sir. And once again, when you're ready, each witness has two minutes. So let people go a little bit over, but, if you can try to stick to the two minutes, it would be greatly appreciated.

Good afternoon. Again, chair Arreguin and members of the committee, Lewis Brown with the Corporation for Supportive Housing. We had arranged for an oppositional witness to appear, but she couldn't regrettably. If with permission, I'd like to read her statement into the record. Okay.

Just a little bit of background. So the the oppositional witness is Cathy Creswell. From 1998 to 2012, she was employed at the California Department of Housing and Community Development, where she served as deputy director and then acting director of the housing policy development division, at HCD. Among other things, she was responsible for the, supervision of housing element law, and, review housing elements for all local governments in the state.

Miss Creswell's statement reads, in recent years, the state has strengthened the effectiveness of housing element law by increasing requirements related to planning for and increasing the actual development of housing, especially affordable housing, and adding real enforcement of the law.

While the state continues to face a shortage of affordable housing and the supply of of housing has not kept up with the need, there is no question that these legislative changes have significantly improved housing conditions in California. That is why SB 967 is so concerning. This legislation would allow local governments to count interim housing, such as shelter beds, as housing units for people with acutely low incomes towards their regional housing needs assessment.

Rather than actually building permanent affordable housing to address the needs of families struggling to make ends meet. This bill would credit temporary shelter spaces towards the requirement for real housing.

While providing shelter spaces is an important part of the continuum of assistance, without permanent affordable housing to transition to, we will not be able to end the cycle and tragedy of homelessness, and conditions will worsen for unhoused people. Furthermore, housing element law recognizes an adequate support of housing overall is fundamental to addressing California's housing needs. That is why the law mandates that local governments plan for and encourage the development of housing at all income levels.

SB 967 undermines that law that go by allowing jurisdictions to count non housing units towards the arena. Ultimately, this will result in less planning for housing at a time when California continues to suffer from a housing shortage.

Additionally, the bill establishes a precedent that people with acutely low incomes are not entitled to the same housing standards as all other people in the state. Rather than ensuring everyone has access to safe permanent home they can afford, the bill would dictate that acutely low income people can be considered adequately housed in temporary spaces often without heat. AB 967 represents a real retreat from the state's recent efforts. For those reasons, we recommend a no vote.

Thank you. Okay. We'll now ask, is there anyone wishing to express opposition for SB 967? Please state your name, organization, and position on the bill.

I'm Jill Aller on behalf of the California Rural Legal Assistance Foundation and the Public Interest Law Project in opposition.

…with Housing California in opposition, also here to represent public advocates, Heaven Helps, Western Regional Advocacy Project, Housing Matters, ACLU California Action, National Alliance End Homelessness, and Corporation for Supportive Housing.

Benjamin Henderson with the Western Center on Law and Poverty in opposition.

Susanna Parsons with All Home in respectful opposition.

Thank you. Is there anyone else wishing to express opposition for SB 967? Okay. Seeing no one else come forward, I'll bring it back to the committee for discussion. Who would like to begin? Senator Cabeallero and then Cabaldon.

Just I appreciate what you're trying to do here. There's no question that our strategy to end homelessness has been a dismal failure. Just no ifs, ands, or buts. I have my own opinion on why that happened but, it's not the subject of today. So let me just say that, I think every community hates the way the RHNA numbers are determined.

Let me start off by saying that. So that it's not a question of do you like those RHNA numbers? It's a question of is there the will in the community to have your leaders build affordable housing? And the most contentious hearings that I ever were involved in were hearings where we were going to be building affordable housing and people did not want it near them. Over there is okay, but here, we don't want it here.

And in some communities, we don't want it anywhere. And so my bias is that the further you go inland, the more you get a commitment to affordable housing. And yet we've put all kinds of obligations. And I know I've mentioned this a bazillion times, but I'm gonna mention it one more time.

The standard for determining well, the calculation that you add a cost to the house in order to make up for the fact that other communities aren't building is the sheesh, I'm drawing a blank on it now. I see Jeffrey back there. He's gonna give me do the sign language.

Is it an inclusionary housing ordinance?

No. Those so, no. Inclusionary housing ordinances, first time home buyer programs, all of these things that really help communities to put together the resources is really important. But the challenge is that our policies don't line up with, I think, a real commitment to building the housing that needs to get built. And so, I agree with with the opposition on this one. To go backwards and to allow temporary housing to be held counted as part of the RHNA number numbers doesn't make any sense to me.

What makes more sense is for us to continue to fund temporary shelters and tiny homes as a solution for the homeless issue, but to do it in a way where it's local government that gets the money rather than the COCs and and with the commitment that you gotta have the land available to get to get these done.

And to put them in places that we wouldn't normally put them, but that we don't want people to live in permanently, but that would get people off the street. Because I agree with you a 100% that we got to get people off the street. And there's some communities.

I have some small cities that are doing really good jobs, and they, in addition to doing this they're building their affordable housing obligations under RHNA. So 50% is way too much, I'd be willing to consider a lower amount. But I really think that every community has to do a better job of building affordable housing. And I know how difficult it is.

It's one of the reasons we started with smaller lot sizes, and smaller units, and more creative kinds of permitting processes so things can happen quickly. But I have a real hard time supporting a bill that allows us to use this as part of the RHNA process. And it may be that what we need and that designation of the acutely low, I had some concerns about how we were gonna be using that category.

And, to me, this is an example of what is the commitment to acutely low? Because the acutely low really means you have no income in necessary to be able to pay for a housing unit. So somebody has to subsidize it pretty significantly. And if we take the cutely low out of the RHNA number and focus on it as a separate category, that might make some sense to me, but to make this part of the RHNA configuration doesn't. So apologize, you do really good bills. I know where you're trying to go, but I I just can't get there. Okay. Appreciate it.

Sure.

Okay. Thank you. I mean so first, you were talking about the obligations, just as this bill is permissive. So there's no obligation to use, interim housing to fulfill this category. But it's important to recognize that acutely low as a category was created in 2024.

It doesn't matter whether it's in a high cost area or a low cost area. It's still nobody can afford to pay for anything.

So just two years ago, and acutely low is between 0-15% of area median income. So that means that somebody in a high cost area is living on between $0 and $20,000. So the,

Right.

And it doesn't make it any easier in a low cost area to build those same units. I mean, that's my point is that it's expensive no matter where you are in the state. And I will say my bias is that in the Salinas Valley, which is 12 miles from the ocean, but a world away from the ocean. We built way more affordable housing units than Carmel, Monterey, Pebble Beach, who they never built affordable housing.

And so the challenge becomes, what's the equity in allowing wealthy communities to get away from their obligation to build affordable housing and to put it on the back of farmworker communities that are working really hard because they understand that there are three or four families living in a one bedroom apartment. And so, you know, one way or another, you have people living in really overcrowded situations or living on the streets. And it's difficult because I just think that they all deserve a shelter over their head. It's a question of can we get it done.

Right. Yeah. So just, like, one of the through line points though is that for this category, for a city to plan for it, it's important to recognize that in order to get an affordable housing complex off the ground, it costs $700,000 a unit and seven years to permit. And so the the idea behind these relocatable, modular, interim, tiny home, they look a lot of different ways. But basically, they can be constructed quickly, and they can help people exit an encampment in the short term.

And so, to my witness's point of it being a Water District property that wants to move people out of a riverbed and is willing to put up their parking lot to have one of these, interim facilities there, you know, that's not the kind of thing that would happen if a city is not going to get credit for that.

Because the city, if this is just something they are doing discretionarily and they're taking the wrath of the community that says, we don't want any homeless serving housing of any type, if They get credit for it under RHNA. It incentivizes them to do these projects.

And so it's just really important to think about the fact that in the real world, we're not going to be, if you're not building interim, it's not like you're going to be building all of these affordable housing units quickly. So the idea is to say if we're serious about wanting to more quickly solve our street homelessness problem, we have to build that layer of housing that's immediately up from encampment.

We have to incentivize it. We have to fund it. We have to make sure that our processes are designed to have locals decide to build it. And we're not currently doing that. So what that means is that in an eight year planning cycle, that these projects might be on the housing element update, but they're not actually gonna get built.

They're too expensive, and they're hard to finance. And and so people are languishing in an encampment. And I think that is what the core of it is, is how can we provide more quickly that type of indoor dignified, not congregate shelter with a bathroom and a pillow under your head and service workers, social workers to help you get back on your feet. And so this, you know, it can be up to 50% of the ALI category. That's and it's permissive.

I understand. Yeah. It's not a question of do I understand and it's just I disagree. So there we are.

Thank you. Senator Cabaldon?

Thank you. Thank you, mister chair. You know, The Kathy Cresswell's reported testimony, it was a bit instructive about part of the challenge that we always face on these issues. And if I'm quoting this properly, she indicated that doing the bill would undermine our goal with respect to acutely, unaffordable and also that I think the direct was ultimately will result in less planning.

And I think this gets to exactly the issue that the bill is trying to grapple with because if you've ever been to a city council meeting, you would not possibly believe that anyone in the world is gonna be saying, hey, we were about to build this affordable housing project that we had funding for, but the state just opened up this option.

We could actually instead build shelters. Like, it's the exact opposite. The politics are exactly the opposite on the ground in communities. Even in the this city is legendary here. Nobody will let a shelter be built in their city council district while there are dozens of affordable housing projects under construction.

And so I think this notion that the bill opens the door to some, you know, rampant abuse by cities that are saying, "hey, we're no longer gonna build this range of housing that we can't afford to build because of the subsidy levels are so high and instead do shelters." I just think that that worry is not real and it's being compared against ultimately less planning and undermining the goal.

And this is hard because I think in this building in law school, and elsewhere, you know, we're comparing the goals of the statute, what the legislation was written to accomplish, or what it says it's for against what we see with our own eyes and feel with our own hearts in the actual world with people on the streets.

And so the fact that it would undermine the goal from two years ago or, yeah, two years ago with this, you know, with this area that we are not meeting. We're not anywhere close to meeting and we're not really that much closer to meeting than we were two years ago that we're undermining that goal but we're not, it's not affecting the product, actual production of housing to serve the most poorest residents of our state.

So it feels like a false choice to me and then but a challenging one because it is then that false choice can sometimes paralyze us so we just don't do the next best thing. We just don't do anything at all and say we need to have deeper more robust planning and thinking about this into the future. So I mean, I appreciate the at least where the author is trying to go.

This is a very hard set of issues to deal with and the author has been I don't know of anyone more courageous in this legislature in sort of saying, hey, I don’t have all the answers. I have a few.

Some of half of which might be wrong, but we do know one thing, which is the suite of policies that we have today are should not be fetishized to the point where we don't question them and say, could we do better in the actual, world of delivering these projects? So I am, supportive of this. I mean, I think as some of the testimony noted, like, a real home, and two tier housing.

We have that either the street or single room occupancy hotels as was noted. I guess in my city, a lot of hourly motels that are also no one expects, we certainly don’t, in state policy anticipate that people will live there forever, but they're living there tonight, and that's better than them being on the street tonight.

So I don't worry so much about all of the things that could go wrong here. The chair has done a great job in collaboration with the author of, you know, getting this right size, not doing double counting, you know, there it has to make sense, but it also it's not going to run like reckless under this kind of an approach. So there's a lot of details I'm sure to continue to work out and appreciate the author's work here and the chair's work.

It is important that we it only count once, but I honestly don't see a significant threat of jurisdiction saying we will do something that we really never even when the legislature passed that designation, no one had a theory for how it's gonna get paid for. We still don't.

There's zero money in this year's budget from the governor for affordable housing at all. So any projects that are in queue, right now, hopefully, we will do our job here in the legislature to put that money in, but it's that sort of thing sends a signal more than this bill does to local communities.

Well, we're I mean, yes, we would love to build, like, acutely low income housing, but you state, despite the fact that you passed the law, you are not providing a penny in order to support what you know from your own financial analysis here requires a substantial public subsidy that is out of the range of what Emeryville or Solana Beach or Napa can do on their own. And so this is an important, you know, it's an important effort. Appreciate the author's work and leadership in this space, and I'll be supporting the bill today.

So

I actually appreciate this bill. And I appreciate this bill because I'll share with you, I have a city I don't know if I should be calling out cities or not in my district. It's

It's okay.

So I have one city in my district that actually the previous council had actually done these little tiny homes for people, getting the people off the streets into temporary more subsensitive subs Subsidized? Not subsidized, but more I'm sorry? Subsidized? Yes. I can't pronounce that like it won't roll off my tongue.

So but that, yes. Housing, and they literally allocated a cul-de-sac city that was right adjacent to the freeway, in which they allocated a portion of that cul-de-sac. Nobody, there was nothing else in that cul-de-sac, just an empty city next to the freeway. And they placed all of these tiny homes with an office with wrap around services that could help them with their license, their social security, whatever it was that was needed, it was there.

And they had showers, and they had bathrooms out there that they could all have independently, because they had a huge number of folks living out there.

I visited two of their sites, because the first one actually got burned down. And so they built the second one on independently, on in a different street. So mind, I kept thinking about, as I speak to my communities is how do we incentivize cities to actually want to do that? Because they had to fight. Right?

In that component, they had community members that had elected council members that actually saw the value in providing this type of shelter for folks. And then as a new council came in, they actually did not care for that type of housing in there. And my thought, my statements, to the council members, the new council members, they're not gonna go anywhere. So where would you like them to be?

They're not gonna disappear. And so the mindset was, if you build it, they'll continue to be dropped off here. Because their concern was that surrounding communities were dropping off their unhoused into that community, which goes on to talk about what is every city, and holding every city accountable, and town accountable to building their own housing for the unhoused. Right? So I get both bills very, very, very much so.

But I think, if you were to give credit, RHNA credit to these cities, it would compel them to actually want to accommodate, because we still have folks that don't want, you know, "not in my backyard", whatever that may look like. Whether it's small town homes, whether it's affordable housing, whether it's housing for acutely low income housing no one wants, because the images that people have. So we have to find, and like and I love how you framed it.

You have to incentivize the council members that are going to take the brunt of their local communities with something to give back and to say, hey, this is going to actually help us count, you know, count this towards some form of housing temporary for the community members, because they're having a really hard time be able to build this. The wrath on local electives is huge.

So you have to give them something to give the public to say, hey, we're allowing you to do this. You know, we're gonna be able to build this. We're not gonna see them in the community. We're gonna give them these resources. And but I think, also importantly, moving forward, when we talk about wrap around services, and I say these because I've had conversations with my own family members, they hear a lot about what wrap around services mean when it comes to the this type of housing.

We have to be clear in community what that actually means. Because everybody says wraparound services, but what is that? We just kinda throw that, but what does that look like? And that's why I thought I mentioned, you know, my city and my community when they had an office with one person that the city was paying through county funds. And they decided not to apply for those grants, by the way.

But they had one person that was actually getting paid there to work with these individuals to get them the wraparound services, which meant, you know, their ID, social security number, access to food. What did they call us? What's that? Food stamps.

Yeah. Yeah. SNAP. So all of that is part of those. So when, you know, when people, when we talk about that, it would be helpful to say, this is what it means.

So it gets them to the next level of of housing. But I think any sort of housing should be considered when counting within RNHA, because I don't think everything is being accounted for, and there's no incentive to do it. So to me, your bill is incentivizing cities to actually build or act or provide. And I like the way that you mentioned also that it's the fastest, most inexpensive way to put up housing. It is so incredibly true at a fraction of a cost.

So I'm in full support of the bill. Thank you for bringing it forward, and I will be happy to move the bill when the time is appropriate.

And that time is now. We do have a quorum. So if the committee assistant can please call the roll.

Senators, Arreguin?

Arreguin present. Seyarto, Cabaldon?

Present.

Here.

Caballero here. Cortese?

Here.

Here.

Caballero?

Cortese here. Durazo, Gonzales, Grayson?

Here.

Grayson here. Ochoa Bogh?

Here.

Ochoa Bogh here. Padilla.

Okay. Thank you. And I'll recognize you if you would like to make a motion.

Could I close?

No. We're not there yet. Oh, okay. I wanna make sure that other members have an opportunity to comment before we go to your foreclosing. So motion recognized.

We are on colleagues SB 967. Does anyone else have any comments on that bill or questions? Just in closing before I go to you, really wanna thank you for the work and thought partnership on this bill, and to the opposition witnesses and all the organizations that were here today to speak in opposition to the bill. I really appreciate your comments and your commitment to the goal of permanent housing.

I think those of you know I've been a strong advocate for permanent housing and will continue to be a strong advocate, which is why we need to get the $10,000,000,000 housing bond, which we'll talk about next week in this committee on the ballot.

But the biggest barrier we have to creating permanent housing in California is really the the subsidy that's needed to finance those critical projects, which is why we need to do everything we can to provide more state resources, to build permanent supportive housing. Zoning has obviously been a challenge, the cost of construction is also a big challenge. It should not take, years and costs, you know, 800 to 1,000,000 a door to build a permanent supportive housing unit.

We need to do better collectively to bring them that cop that cost to have more rapidly scalable housing that's built with good union labor. But that's the biggest challenge that we face. Meanwhile, we have people, thousands and thousands of people in California who are dying on our streets. So what do we do? And there's no question that a interim housing unit is a much more dignified, safe, and humane place for someone to live than living in a tent or a makeshift shelter under the elements.

And this model has been a very effective strategy in communities throughout California to get people off the streets and to help provide wraparound services and housing support so we can get them into that permanent housing that we needed so desperately create in the state.

I think we've done a good job of and I just wanna say also I really appreciate the thoughtful discussion and the range of opinions of my colleagues on this committee. I I respect everyone's perspective on this. But I think we've done the best we can to be very thoughtful about how we craft this bill to provide this option, but to only allow 50% of the acutely low income, which is a subset of the very low income category.

So, it's a very small percentage of that VLI category. So keep in mind, there will be a lot of VLI housing that will have to be planned for and created and reported to the state under their local jurisdictions obligations under state housing element law.

We're talking about a very, very small subset of that, and 50% of that could be counted if it's interim housing as an incentive for those jurisdictions to create that interim housing. And we also need to also provide the funding through HAPP and, I think, it came in resolution funding to help also support, the construction and support of services as well. So in addition, we have safeguards. We're ensuring that no double counting.

Requiring that local governments report when interim housing is moved out of the jurisdiction and removes those units from the number of units that may be counted towards arena.

So even if it's temporary and you're moving it, if it's off the market, it doesn't count towards RNHA. As we are continuing to hearing, if we can please have some quiet in the chamber. So if people have conversations, they can please step outside. So and then moreover, the bill also requires HCD to provide guidance to local governments regarding how to report interim housing or APRs. So really, I recognize that we don't want all of the ALI to count.

So if only 50% of that would count, there still is a lot of other housing that would have to be built and be reported as part of a local jurisdictions housing element progress. And so I think we're trying to be mindful of not allowing all of the very low income or acute low income to be counted as interim housing to ensure that there's still some requirement that there has to be housing built.

So I really wanna thank the author for the work on this bill, and give you the opportunity to work on this as the bill moves to the process if it gets out today. So with that, I'll turn it over to you to close.

Okay. Thank you. Well, I really appreciate those remarks, chair, and the thought partnership, as you said, around this. Your experience as the mayor of Berkeley has made a big, really influenced, your perspective on homelessness and street homelessness, and I appreciate so much working with you on it. I also just wanna say that the committee, all of the different commentary today has been really excellent, and I'm happy to have that deep engagement.

Senator Ochoa Boghs, you've restated exactly the point of the bill, which is to incentivize, and to allow for this to be built so that more people, more quickly, can move out of an encampment, which I think we should all collectively agree is a situation that we should not have, and we should be working with urgency to get to functional zero on street homelessness, which means finding ways for people to move out of encampments as quickly as possible.

So, you know, I just wanna end by saying that I think, and this goes to the opposition witnesses, that we have, which I think of as a fiction. The idea that everybody can have their forever home, and they will stay in it forever, and we should be working to create that for them.

And in reality, in an apartment, which is a market rate apartment where someone lives in in California or throughout the rest of the country, people are staying on average three years in a rental unit that's considered to be permanent. But yet if somebody is staying for a year in an interim housing unit, we're considering that to be somehow not acceptable housing.

And in reality, when someone and you talk to the people who live in these interim units, and they tell you how grateful they are to have that safe place, that they can close the door, that there's someone to help them. They like the congregate eating and using a restroom facility, ways that they're still involved with other people that is actually more similar to the encampment they came from, but it's in the urban spaces right around where they were living. So if it was if it was the riverbed, it's nearby. If it was the downtown streets, it's nearby. This allows for that rung of the ladder to be built.

And I go back to that stat, five people who raised their hand saying, I want a bed tonight. Only two actually have a bed tonight. And so if we continue to double down on the idea that we can only build people's forever homes, Meanwhile, they're languishing on the streets and encampments. You know, I just find that to be an unacceptable situation. So trying to figure out how to bridge those two realities, is where this bill came from.

And I do continue to feel like it really is the future of trying to do planning in California for housing is that we need to be dealing with from the very, very low income, no money at all, zero living in an encampment, all the way up to the billionaire. And we can't be just focusing on just essentially those who the forever homes.

We we need to be focusing on the reality of people coming out of encampments or institutional settings, and it's people who are both go coming up the ladder and also falling down the ladder. So what are we doing about people to help stabilize them as they're losing their housing? So with all that said, I hope that this bill can make it out of committee and we can continue working on the details. It is limited to 50% only as the chair said, and I respectfully request your aye vote.

We have a motion by Senator Chua Bau. The motion is do passed to the committee on appropriations.

Aye.

Aye.

Senators Arreguin

Aye.

Arreguin, aye. Seyarto, Cabaldon?

Caballero. Cortesi Cortesi, aye. Durazo, Gonzalez, Grayson?

Grayson, aye. Ochoa Bogh?

Ochoa Bogue, aye. Padilla.

Aye.

We'll keep that bill on call for absent members. Thank you very much. We have one more. I see Senator Wahab in the audience. Thank you for waiting patiently. We have a reso that Senator Blakesford is gonna present and then we'll go to you, thereafter.

This is this SCR.

Okay. We're now on file item three, SCR 131 by Senator Blakespear. This is a, a resolution, and so, I'll turn over to the Senator to present.

It's all homelessness all the time in my world. So, this is, like, you know, an hour and I appreciate an hour plus on homelessness in the housing committee. So, this SCR 131 is a resolution that rallies our state, which has tremendous influence on funding and programming, to make an urgent coordinated effort to end unsheltered homelessness in California.

On any given night, as we've talked about, more than a 120,000 Californians live unsheltered on our sidewalks, in parks, under freeway overpasses, and along riverbeds, without access to privacy, safety, or sanitation. The longer that someone remains unsheltered, the greater their risk of preventable illness, trauma, and death.

In fact, the life expectancy for people experiencing homelessness is seventeen years shorter than the general public. Over fifty thousand people nationwide have died while living unsheltered in the past decade. This is a moral failure. It's a crisis that we should not normalize or accept. Unsheltered homelessness is not only a humanitarian crisis, but a systemic failure that undermines public health, community safety, and trust in government.

The Interagency Council on Homelessness has set a clear, measurable target. By 2027, increase exits from unsheltered homelessness into shelter or housing from 42% to 72%. So, the goal from the Interagency Council on Homelessness is that 70% have to exit homelessness. The ultimate objective is straightforward and doable: ensure people experiencing unsheltered homelessness can access shelter or housing with a clear pathway to permanent stability.

But in order to address unsheltered homelessness, we need to do more as a legislature, as does the administration. We often marvel in California and in this nation at what we can achieve when we work together toward a shared common goal, such as sending people to the moon or to the backside of the moon. This but this is no moonshot. It's far easier, frankly, but it does require our focus and determination. The problem is we have an old, outdated, and ineffective mindset.

Because, as I mentioned in the previous hearing, we've we have sought to build people their forever homes when what they need first and foremost is housing tonight, and then they can transition to other, more permanent housing. Interim housing is a small modular tiny home which can be constructed for as little as $50,000 a unit, compared to an average cost of between $600,000 and $1,000,000 for a permanent housing unit.

Yet, much of the state priorities focus on permanent housing only, and we continue to fall farther and farther behind. San Jose and other cities throughout the US have shown that we can get people off the streets and significantly reduce unsheltered homelessness by focusing our efforts on building interim housing.

Using this approach, San Jose has been able to create 1,400 beds within roughly eighteen months. So, it really can be done. We must significantly scale up flexible state investments, such as HHAP, Homelessness Housing Assistance and Prevention. This can be leveraged alongside federal, state, and local funding to more effectively serve those who are experiencing unsheltered homelessness. State, regional, and local governments must better align and coordinate limited resources to invest in both interim and long-term housing solutions.

We can do this and we should do this. Our constituents demand it and we can do better by the folks we walk by every single day who continue to go without housing tonight. With me to testify in support of SCR 131, I have Adrian Covert from the Bay Area Council.

Thank you, Senator. Thank you, chair, and thank you members of the committee. California today provides just four shelter beds for every 10 homeless residents. That's the second lowest ratio in the United States and far below the national average of about seven and a half beds for every 10. Our lack of interim options for homeless individuals has produced the largest unsheltered population in the United States.

And California's tolerance for widespread unsheltered homelessness has been catastrophic for the health and safety of unsheltered homeless individuals who suffer staggeringly elevated levels of chronic disease, infectious disease, criminal violence, and accidental deaths.

Deaths like Rebecca Roden, a 40 year old mother of five who was killed not far from here, when a tree fell on her tent during a winter storm in 2023, or Lisa McCool, a 61 year old woman who was murdered in July 2024 outside of her tent along the Santa Rosa Creek Trail, right along the path where I ride my kindergarten son to school every day.

Had shelter been available, these two women and many of the 5,000, roughly 5,000 or so, homeless Californians who die on our streets each year might still be alive. The solution to homelessness is housing, but warehousing Californians alongside our roads and beneath our, beneath our overpasses, underneath our trees, and along our creek trails. For decades, waiting for a Federal Government and reinvestment in housing that may not come is cruel, especially when California today has the means to bring everyone indoors with rapid, high quality, non-congregate interim housing.

SCR 131 makes clear the legislature's priority is for the state agencies and the governor, and for state programs to prioritize the interagency on council—Interagency Council on Homelessness—goal of ending and drastically reducing unsheltered homelessness in the near term.

And for these reasons, the Bay Area Council is proud to support SCR 131 and respectfully request your aye vote. Thank you.

Thank you very much. Now we're gonna continue with any witnesses in support support of SCR 131. If you can come to the microphone, state your name, your organization, and your support on the bill.

Elizabeth Bunk with Dignity Moves, here in support.

Harrison Linder with Leading Age California in support.

...support.

Thank you very much. Seeing no other witnesses in support, we're gonna continue with any witnesses in lead opposition. Seeing none. Do we have any other witnesses in opposition here? Seeing none. We're gonna bring it back to the dais.

Do we have any comments or questions by our members? Okay. We have a motion by Senator Cabaldon. Senator—oh, I'm sorry. I did not see you. I apologize.

I just wanna say I appreciate you bringing forward the resolution. Proud to be a coauthor of the resolution and it, it may seem new and cutting edge, but I know you've been working on it a long time, and then I could tell you that, and I think others here can, and local government people have been pushing, trying to push on this issue for a long time. So, hopefully this helps us get to a breakthrough. Thank you.

Thank you. Senator Ochoa Bogh?

I think I'm gonna—I probably should explain my abstention for the, the resolution today. I don't like to just abstain and not know why I hear what it's done to me. So, I think out of courtesy, I'm not—just explaining.

So, one of the things that I had concerns with is the language on in the in the resolution, which says, "As well as funding all interventions that prioritize housing unsheltered Californians now, it could be interpreted as endorsing significantly increased funding for homeless programs that have not demonstrated significant effectiveness despite prior funding." So, the notion that having an obligation to uplift individuals may risk a transforming a targeted public policy issue into a broad moral mandate without clear boundaries, metrics, and accountability mechanisms.

That is the concern that I have because, as we know, we have invested approximately about $28,000,000,000 in trying to address homelessness, yet we haven't had metrics or evaluations of programs that deem effective. So, when we have a generality where we says we're gonna do all of this and fund all of these programs without having some sort of language saying after or, or standard, or evidence based, or successful evaluated programs, that's the concern that I have with the, with the language in, in, in the, in this resolution.

So, with that, I'm gonna abstain, but I do support wholeheartedly the efforts that the, the state should be providing safety nets for, for those that are in shelter, and providing pathways in which we can empower people with the tools and skills, in order for them to be able to basically escape the unhoused situation in which they live in.

Comments? I'll just say on that note, the author did accept amendments to amend the language to focus on a broad suite of interventions that is not just around interim housing, but also permanent supportive housing. Homelessness prevention is more cost effective to invest in programs to prevent homelessness than to address street homelessness. And so, that was the intent. It's just recognizing that interim housing is extremely important, but there are a whole host of strategies that are also equally important in the state's response to homelessness.

And, moreover, I agree with you, Senator Ochoa Bogh. We need clear metrics. There's a state homelessness plan, but the legislature's never adopted any particular target or set of quantifiable goals towards how we're trying to align funding to achieve a quantifiable reduction in homelessness. And I hope in, whether it's other bills that come before us or maybe even an informational hearing, we'll have an opportunity to dive deeply into that, and how we're spending our money, and how we can be more effective in in reducing unsheltered homelessness.

I think that's a very legitimate point and I thank you for that comment.

I'll turn it back with the author to close.

Okay. Thank you. Yeah. I appreciate that. I mean, this—a lot of resolutions don't come to a policy committee, but because of the nature of the conversation around homelessness and housing in the State of California, it can become very contentious.

And so, this was an effort last year that didn't make it. And so, now, it's in a committee to be worked out and then it'll come to the floor. I'm very open to changing phraseology to try to address your concern because I think this is a very broad call to action that's basically shining a light on unsheltered homelessness. And it's an area that a lot of times has not been called out.

We, we—there's an effort to just consider homelessness part of housing or homelessness in all these different categories, but I'm focused on people living in places that are not living environments.

Unsheltered homelessness as an acute crisis. And so, this resolution is recognizing that there's a whole suite of interventions and housing options that that need to be available for people, but we need to rally around saying the encampments that we are normalizing in California, that's a situation that we should not—we should not be doing that. We need to change—basically change the narrative here. So, that's the point of this.

And as you can see, there are a lot of co authors who, in general, feel like we should do more on unsheltered homelessness.

And you hear this as well from whenever you're talking to groups of legislators about their priorities, so many people put homelessness in the top two. But then you look at the number of bills around homelessness, and the amount we talk about it is really pretty small. So, this is, this is a resolution, but it is aiming to say, let's focus ourselves around unsheltered homelessness.

So, if you can send over, in writing, your concerns to my office, we can see if it's not considered a jailbreak by the chair. We'll work with the chair if there's a change in phraseology to make sure that the resolution still suits everybody.

But I would love to have it be inclusive enough to have you as a co author as well. So with that, I respectfully ask for your aye vote.

Thank you. That is acceptable. Is there a motion? Okay. We'll give that to Senator Cortese.

Thank you. The motion is that the resolution be adopted. If the Committee Assistant can call the roll.

[Roll Call]

Okay. We'll keep that bill on call the resolution on call. Thank you, Senator Blakesburg. Okay. We'll now move to filing four, SB 1238 by Senator Wahab.

And good afternoon, Senator. Whenever you're ready, you may present on the bill.

Timing these technically will be taken in Senate judiciary where this bill goes next. The department of real estate reports that 99% of all new housing construction create an HOA to offset long term infrastructure costs, but this also comes with long term effects as the HOA board and management companies have little to no accountability to the homeowners whose property they are responsible for maintaining.

HOA management companies are only required to obtain a business license if required by local ordinance and may hold a real estate license, which is not subject to discipline or oversight by the Department of Real Estate for practices related to HOA management as prescribed by the Davis Sterling Act. To be clear, under current law, neither an HOA manager nor an HOA management company is subject to the licensing and oversight by any state agency.

Even more concerning, many HOA management contracts contain a hold harmless clause, ensuring that an HOA manager and management company cannot be held responsible for any activity that the HOA management company and its employees do with HOA board and homeowner resources, leaving the HOA board and homeowners responsible for an HOA manager's wrongdoing.

I wanna highlight that this is throughout this nation, we keep hearing stories of, bad management in HOAs that have taken money and done some awful things with. Homeowners are seeking to hold an HOA management company accountable, must file a court action in superior court to enforce the law in Davis Sterling, a very expensive and cumbersome process where homeowners are at a distinct disadvantage.

SB 1238 will protect homeowners who reside in communities with a homeowners association by requiring additional disclosures to the homeowner and ensuring HOA managers and board act in the homeowner's best interest. The bill as proposed to be amended by the committee will ensure property owners can obtain necessary information from the HOA to clarify the financial health of the association. This is particularly critical information homeowners need when selling a condo or home within an HOA.

Specifically, SB 1238 will protect homeowners by ensuring a fiduciary duty is provided by HOA managers to the HOA board and the HOA members.

Similar to other professions that manage millions of dollars of property owner assets, budgets, and reserve accounts, this change will ensure that HOA managers provide a defined standard of care to ensure that the duties and responsibilities of an HOA manager have a mutual benefit to both the HOA board and its members who share a mutual goal of maintaining financial and physical building health of the HOA.

As proposed to be amended, SB 1238 clarifies that HOA reserves are not expended on specific types of litigation that are not already authorized in existing law. This ensures that HOA managers can no longer exploit a loophole in current law that allows HOA managers to use reserve funds that are intended for the maintenance and upkeep of the community for their legal defense. Further, SB 1238 ensures the legal defense line item is in the general fund and not hidden from the homeowner or board.

Lastly, the clarifying amendments outlined in the analysis will ensure that inspection ratings are transparent and understandable for the homeowner, HOA board, and HOA manager, who is responsible for ensuring buildings are, habitable and compliant with the state's current health and safety standards. Deferred maintenance has created massive financial consequences for property owners living in these associations, and the ratings proposed in the analysis are intended to help the HOA's plan for maintenance that is necessary to keep the building safe and in good repair.

With me to testify in support of this measure is Jennifer Speck, vice president of public policy and advocacy for the California Association of Realtors.

Thank you very much. Good afternoon. You have two minutes to address the committee on the bill.

Good afternoon. Thank you, mister chair, committee members. We'd like to to applaud this under for carrying the bill. We'd also like to acknowledge the work of the chair as well as the committee staff in helping us to refine some of the provisions within the bill to make it better as we move forward and we continue these conversations that are very important and vital for the homeowners in California seeking to create wealth, through homeownership.

Specifically, SB 1238 seeks to strengthen protections for millions of Californians who live Californians who live in, common interest developments.

It increases transparency, accountability, and creates more financial clarity within homeowners associations. SB 1238 addresses the gaps that have been, by establishing clear standards of conduct and improving access to information necessary for homeowners to understand the financial health of their communities. By establishing some basic accountability standards and improving transparency within homeowners associations, SB 1238 provides meaningful protections for homeowners who currently have limited recourse when facing significant financial risk when management practice fails.

The goal is really to ensure that we are protecting our our first time, first gen homeownership opportunities and ensuring that they can continue to be used as move up housing, which is extraordinarily vital to ensure that we create the path for homeownership for families, of of all generations throughout the state of California. I'm happy to answer any questions the committee may have and happy to be a resource, but wanna thank you again.

Okay. Is there anyone else wishing to express support for SB 1238? If you can please come forward and state your name, organization, and position on the bill.

Danielle Fontas, Citrus Valley Association, and I'm a California homeowner in an HOA, and I support.

Very much. Is there anyone else wishing to express support? Seeing no one else, we'll now invite up to two principal witnesses in opposition to the bill if they wish to testify.

Good afternoon, mister chair and members. Jennifer Wadda on behalf of the California Association of Community Managers. We are opposed to the bill. I did wanna say upfront, my apologies for our letter not being in the portal. We thought we uploaded it in March, and apparently, we did not do that successfully.

So my apologies to the committee, the chair, and the author. But we have been working with the author and this committee since the bill's introduction, so I think our concerns are on record. I'm here to answer any questions, but I'd like to turn it over to Tom Freeley, the CEO of the California Association of Community Managers.

Thank you. Good afternoon, mister chair and members. My name is Tom Freely. I'm the CEO of the California Association of Community Managers, better known as CACM. Excuse me.

CACM is an association for certified community managers that provide education and training to managers throughout California. We appreciate the work the committee staff and thank the author for accepting the committee amendments. With the caveat that we still need to review the language, the concepts help to address our concerns about requiring managers to make representations regarding critical repairs they are not qualified to make.

Managers are administrative agents that are hired by associations through the board of directors to provide administrative services such as putting together Board Meetings, company materials, overseeing vendor contracts, and sending out notices and collecting of collection of assessments. They are not attorneys.

They are not contractors and are not equipped to make judgments about federal lending rules or critical repairs. I want to emphasize, please, that managers have no independent authority outside of the HOA board of directors. They do not make high stakes decisions for homeowners, nor do they control association funds. It is for this reason that imposing a fiduciary duty on managers to individual homeowners goes against the very structure of an HOA.

There is only privity of contract between the association and the manager with the scope of services being to implement decisions of the Board of Directors to impose a fiduciary duty on individual homeowners, two individual homeowners, I apologize, places managers in the position of having a duty to two interests that often do not align. It will also increase the association's insurance and litigation costs, which all homeowners ultimately pay. We request request that the fiduciary duty to homeowners be removed from the bill. We look forward to working with the author as this bill moves through to the Judiciary Committee. I'm happy to answer any questions. I would like to also state for the record, CACM and all of our members support regulation in this industry as we have discussed over the last few years.

Thank you.

Thank you very much. I will invite anyone else who wishes to express opposition to SB 1238 to please come forward.

Mister chair, members of the committee, Louis Brown here today today on behalf of the Community Association Institute. My apologies. We did not submit a letter. We do have concerns. We did not submit a letter because we're in working with the sponsor and the author on a variety of issues.

My main reason for coming forward today, express our appreciation to the committee staff, for the efforts and time put into this issue, and to you, mister chair, for meeting with us and working through this. Thank you.

Thank you. Anyone else wishing to express opposition to SB 1238? Okay. Seeing no one else, I'll bring it back to the committee. I wanna thank the author and the sponsor for working with us on this, in addressing this very important issue, and I'll invite my colleagues if they have any questions or comments at this time.

Senator Caballero?

Listen to what you had to say to see if you you you're persuasive, but let me just say that I just I have some questions because I'm not really sure what what what the amendments were that were taken. And so is is I'm I'm looking in there in I'm I'm just not the committee may wish to consider amending the bill. And the first one is the reserves issue. So that yes. And then the question that was asked in regards to the fiduciary duty.

That was not part of the set of amendments that we we have agreed upon that will be made in next committee. But I know this is an issue the Judiciary Committee is looking at, and certainly maybe something that they'll be discussing with the author if this bill moves forward.

K. And then the the disclosures in regards to who has the responsibility, the homeowner or the management company? That's the homeowner?

Yes. On page 12 of the analysis, we did come to agree with the author on revising the the mandated disclosures to, I think, really reference, you know, existing disclosures that are required rather than creating a new requirement that was rather onerous.

Okay. Well, those were the three that were were the ones I'm concerned about. I sit in judiciary, so we'll have an opportunity to take a look at that, at the fiduciary, issue. I I agree with the testimony, today. I I think there's some legal issues involved in that, and I also, I mean, a big part of belonging to an HOA is you have to participate.

You have to know what's going on. And if you don't agree with something, then you have to serve on the board, and you have to be much more engaged than if you're if if you have a strong opinions about it. So I'll support the bill today. I just wanted to make sure that I understood what the what the amendments were going to do, and whether you were taking them or not. So appreciate it.

Whether you were taking them or not. So appreciate it.

Senator Baldwin. Just to to to concur with, with my seatmate in every respect, I mean, the two the two areas that are most and I'm not on judiciary, but the two areas I've been the most concerned about, one of one of which is addressed at least partially in the in the committee amendments, and that is the, the the reserves. Because fundamentally, I mean, the issue is, like, we we're not telling anyone any other party to any litigation that they how to fund their case.

And, you know, so if the if the if the if the dispute that's happening is that, you know, Anna Caballero who lives next door to me has a, you know, a a a vat of toxic waste on her deck and I've filed a complaint with HOA and then now it's gone to litigation or whatever and Anna Caballero happens to be independently wealthy, I I I don't want to in not knowing what the cases are or anything else, I'd like, sort of universally saying the HOA cannot use its reserves for that like it would for any other legal purpose.

So I understand here it's for the committee amendments, a respect for property maintenance.

I just wanna be, you know, as once the language is out and all of that as it goes if if it makes it through judiciary and heads on to the rest of the process, that will be important for me that it's that it's a wide enough exception that that that like anyone else, the HOAs have the ability to defend themselves and to initiate and that we're not rigging the game in litigation issues and then the fiduciary issue which is odd because we know that you can't be, you can't effectively be a realtor and represent both the buyer and the seller and have a absolute fiduciary to both.

It's not possible.

Like you have you can only be one or the other and the same thing is true in any association governing board that having a fiduciary obligation to each of the members is hard to imagine even how that would work, but when an HOA association a good chunk of what's happening in HOA's are arguments between members, and they are often financial in some respect and so how that would actually translate, but then you but then that legal entity that the that the association managers is working for is the HOA board and so their obligation should also be to the board.

Even there, I'm not I'm not entirely sure about that because it's a contract between the HOA board and the, and the manager and so having a separate fiduciary responsibility, I I I don't wanna imagine a case in which the board says, our contract says do this manager and the manager says, I know that's the contract says and your the board said to do this, but notwithstanding what the board says, my fiduciary obligation is to somebody else. Like, that doesn't work.

So I'm hoping, you know, the further conversations between the author and the and the opponents and then in the Judiciary Committee resolve those. But to me, those are the I'm I'm prepared to support the bill today because I know a lot of work's been going into this and it is an important issue.

But I think for as it goes forward, those two issues about the not rigging the litigation balance and then get dealing with this fiduciary issue as which seems unnecessary given that there's a contract already, it would be important.

Any other questions or comments on this bill? Yes. Senator Chobot.

And speaking of every single bill, but on this bill I am I'm a realtor. And so I'm just Kinda curious, what is the thought process on the fiduciary part? Because I have exactly the same concerns that the opposition expressed as well as my colleagues Caballero and Cabaldon. So from the perspective of the realtors, I wanna know what the thought process was coming in with this idea of of who, you know, the fiduciary duty towards the homeowners rather than the board, as well as the reserve funds.

I just how did you folks come up with that?

Is that a question for the

For the for the realtor?

Yes. The principal witness and support. Yeah.

Thank you, Senator. Thank you, mister chair. Happy to answer the question. We have a robust board. It has 800 members that vote and create policies similar to the way that the legislature does with, a policy process where there's a lot of investigation and discussion.

This particular issue was was, something that was explored by a working group where they had a a variety of conversations as well as presentations within the space. What their concern is in Senator Cabaldon's point, real estate licensees do have a fiduciary duty to their clients. And if they're in a dual agency relationship, they have a fiduciary duty to both. That's what makes that a very complicated space, but it doesn't mean that they don't have a fiduciary duty to both.

There's a standard of care that's contained within the oversight entity of the Department of Real Estate.

And if they don't meet those obligations, then they have a license that is on the hook and that can be taken. The difference between real estate licensees and HOA managers is it's the wild, wild west. HOA managers have no oversight that happens with that except for the board. The challenge that my members are running into is ensuring that, the activities of the manager are actually meeting the obligations that are necessary to maintain the health and safety.

As we all know, there was a catastrophic loss of life in Berkeley, several years ago that necessitated the balcony inspection law.

That is really what has created the genesis of the concerns that our members have, where they have asked for the opportunity for a fiduciary duty because those inspections have not all been completed. Because there is no way to force compliance on the HOA managers to ensure that they're going out and getting the three contracts that are out there. There is also boilerplate language within, CACM's contracts that we have seen that is a hold harmless clause.

That means that the board is holding all responsibility even if there is failures by the HOA management company to use the resources in the reserve accounts appropriately. In the discussions that we have had with CACM, they have said that there is no intent within reserves to use them for litigation defense against an HOA manager who's a bad actor, but that is not what's happening.

Unfortunately, bad actor HOA managers that are neither members of my my association or CACMs are able to access those reserves and use them in their litigation defense for bad actor behaviors. The goal is not to to get involved and cause the HOA not to have the resources to defend in sort of, we'll call it homeowner on homeowner concerns that then bring in the board.

The concern is making sure that the resources are not used inappropriately, because it's very difficult for a homeowner to be able to to defend, or or I should say, be the plaintiff when the management company has been called out for failing to do a fiduciary duty. In Florida, there was a recent news article about someone that was an HOA manager, and they have enforcement and oversight there using all of the resources of a board for, plastic surgery.

That's an inappropriate use of those reserves and making sure that those can't be used.

I think that we're not unaligned, and we can find an opportunity to move forward to be able to resolve the all of the concerns that that Senator Cabaldon and Cabello and you have brought forward. But this was not without, forethought and and goals to ensure that there is transparency and maintenance in these properties. Was that did that answer it or no?

No. I no. It it I said I I wanted to know the thought process, and I think you did a very good job of explaining the thought process as to why this came forward. Because my, I mean, they verbatim said what I was thinking and I had concerns. I'm thinking as a realtor, I know about fiduciary duty, quite well, and I also understand.

So I I guess the next question that I guess will you you folks will see it in the next committee is, with regards to the fiduciary duty as when we have clients, we have dual, but there's full disclosure accepting by both parties that that that fiduciary duty has, you know, is is being exercised for by for both for both clients, so they have to acknowledge that and accept that.

When it comes to the board, I'm kind of curious to see how that's going to logistically look like, as far as there's a difference between having two clients that you have a fiduciary duty to, versus a board that it's a multiple board versus the homeowner. So I'm gonna look I'm gonna I'm gonna support the bill today. You know, you picked one of my favorite, you know, senators out here, but that's not why I'm supporting the bill.

I'm supporting the bill, because I I know that she works hard in, with her bills and with good intent.

And I and as a realtor, I trust that you folks will be doing your homework in ensuring that you're working diligently, with Senator Wahab in in making something that is balanced and appropriate.

So with that, I am going to, make a motion for for the bill at appropriate time, with hopes that you will, but I will retain my my, my right to change my vote once we see the final language to see, make sure that there is a respect and balance and and respect to the board that these managers actually have to answer to.

Thank you. We are on, SB 1238, colleagues. Are there any other questions or comments? If not, in closing, just wanna once again clarify the amendments the authors agreed to to make in the next committee if this bill moves out. The current language of the bill prohibits the use of reserve funds for any type of litigation.

The language that the authors agree to to take would clarify that the bill does not limit HOAs from complying with its legal obligations to maintain property existing law authorized to use reserves for legal expenses related to the general preservation of major components that the HOA is obligated to maintain and hold reserves for. That was a very that was a critical change that I felt needed to be made, and I I think the author and the sponsor for being to take that.

We also made changes to the inspection requirements, as noted on page 11 of the analysis. And lastly, on the solid disclosures, you know, this was an area where we really wanted to kind of streamline and make the implementation of this piece more more, reasonable. And so the amendment that was agreed to be taken is to expand the disclosure requirements, proposed to be added to a list of seller disclosure requirements, specifically to place the disclosure requirements on the seller.

This will ensure the continuity within that section, additionally revised requirements to ensure that expanded disclosure requirements are objective, and that this objectivity will facilitate compliance with the disclosure requirements to reduce the risk of delaying or canceling a sale or transfer or or of the property.

So I I do think this fiduciary piece is another piece that does need some further thought, and I wanna encourage the author and the sponsor to continue the conversations with opposition as this if this bill moves out to judiciary, so we don't create this conflict. But but my recommendation is a two pass recommendation. So with that, I'll turn it back to the author, Khloe.

Thank you. I appreciate the conversation here. I do wanna highlight when people are purchasing a home, especially first time homebuyers, seniors, immigrants, people who are working multiple jobs, and for the most part, starting, to become a homeowner, HOA boards are a quasi judicial type of government over that property. And oftentimes, the average person, one, doesn't know their rights. Two, doesn't necessarily participate based on timing.

Three, not everything is transparent. Four, HOA's don't all operate the same. Five, the people on that board, can be a problem themselves. Six, the the managers may themselves also be a problem. Seven, there's not any actual real training behind this.

I can go on and on about what concerns I have with HOA's. And as a local council member, we often had a lot of residents that would email us and say that they have a problem. I will highlight that there was a young, individual, first time home buyer that would pay all of the fees, bought their first condo, and got hit with an assessment after buying it.

They paid the $5,000, got hit with another assessment of $40,000 that they were required to pay within, you know, a month that they were not able to. That went up into our local DA's case saying that there is a concern here, the way that this property manager and HOA is operating.

They would not be able to handle this situation themselves, especially if they are working full time, let alone if they have two jobs. And I always wanna put that at the forefront because, you know, senators, you guys may have different resources, may have a different educational background, but the majority of average people are not gonna be able to look into every single detail, every assessment, every fee. Last year, this body passed one of the more robust bills my bill. Thank you.

On June regarding h o a's and capping those fines.

The LA Times wrote an article saying that these individuals were getting hit with $500 a day fines from the HOA, right, for something they did inside their home that had nothing to do with the safety or the health or the building in in itself or affecting anybody else. There is report after report after report of how these HOAs are operating, and it's not always in good faith.

We hear so many stories where the property manager is the boyfriend of the chair of the HOA and getting paid out to mow the lawn when there is no lawn, right, for maintenance. So I I do wanna say that this bill is largely about transparency. We have gladly accepted amendments.

We are more than willing to work with opposition on a wide variety of issues, especially in the next house and and the legal obligations there. But I do wanna say why this was important. Right?

When an average person comes in and gets hit with fine after fine after fine, and the money that they are investing in this HOA for maintenance is being utilized to sue them potentially, right, not just necessarily neighborly disputes, You know, we have to at least say, here are the parameters that all HOAs need to operate and respect. And, yes, we can, you know, talk about that.

But I don't think that this you know, as the opposition even stated, there's enough regulation in this space. And if we are building condos and townhomes and things like that, and that is largely what is being built as homeowner properties, people are now subject to HOAs without HOAs being subject to any real governance by the state. So that is one of the biggest concerns I have. And so we have agreed to clarify this. We're going to continue to work with our colleagues here and stakeholders here.

As far as the fiduciary duty, it's our hope that this won't be necessarily an issue, because the financial interests of the HOA board and the HOA members should be pretty much aligned. That's the honest truth. Right? The board is made up of the, property owners.

So we're happy to look into this a little bit further, but I I just wanted to highlight why these things are important to me, because I see it in my district, and it's young people and seniors and immigrants and first time homebuyers that are getting hit with these ridiculous fines and literally no one to turn to and no laws that govern this space.

So it is the wild, wild west, and we're just trying to bring law and order to HOA board. So with that, I respectfully ask for an eye.

Thank you very much. Is there a motion? Moved by Senator Chua Bau. The motion is, do pass to the committee on judiciary.

Senators Arreguin? Aye. Arreguin, aye. Ciarto Cabaldon? Caballero?

Aye. Caballero, aye. Cortesi? Aye. Cortesi, aye.

Durazo, aye. Gonzales. Grayson? Aye. Grayson, aye.

Ochoa Bog? Aye. Ochoobog, aye. Badia.

Keep that bill on call for absent members. Thank you. We have one more bill to present, which is mine. So I'll pass yes. I'll pass the gavel to Senator Chobog.

Would you mind sharing my

absence? Yeah.

We're gonna go ahead and uplift the, or lift the calls for the consent calendar.

[Roll Call]

Thank you. Madam chair and members, my pleasure to present SB 1383, which would clarify that the state density bonus law cannot be applied to waive essential construction labor standards when an applicant is seeking to use their concessions and incentives. As many of my colleagues know, I'm a strong supporter of building more housing and making sure that we have housing for people of all income levels, so we can address our state's affordability and homelessness crises.

The density bonus was intended to increase the supply of most critically needed affordable housing in our state. As part of the law, applicants can be granted concessions and incentives on a scale based on the level of affordable units that are built in a project.

In addition, applicants also are entitled to waivers of lot development standards that physically preclude the construction of the density bonus project. Historically, incentives that concessions have been used to address lot development standards. Things that may preclude the physical construction of a project or may affect the feasibility of a project. However, a unique situation has happened in my district, which is the impetus for this particular bill.

Recently, projects in my district have applicants for those projects have used their waive their incentives and concessions under the state density bonus law to waive labor standards.

For me, it's clear that the intent and legislative history of the density bonus statute was specific to the use of these incentives and waivers for the physical development standards of a project. I believe this has set a bad precedent that has statewide implications for worker safety. And let's be clear, we need to build housing for people at all income levels and all over the state of California, but we can't do it on the backs of our workers. Labor standards are essential.

So so meant for our working families to continue to live in our great state, to have health care, to have to be able to put a roof over their head, allowing labor standards, whether it's construction standards, whether it is prevailing wage requirements, any kind of wage wage or labor standard, threatens worker safety, undermines training pipelines, and creates unfair competition by allowing bad actors to undercut responsible contractors.

This bill is about not just ensuring that we can increase our housing supply, but we can also maintain these essential protections for workers, which are things that local governments have adopted to address wage theft, to address prevailing wage requirements, to make sure that we are treating our workers fairly. With me to testify in support of this bill is Andreas Kluver, the secretary treasurer of the Alameda County Building Construction Trades Council, and David Vincent, the director of a compliance for Sheet Metal Workers Local one zero four.

Good afternoon, chair and members of the committee. My name is Andreas Kluver. I'm secretary treasurer with the Alameda County Building Trades Council. I'm also the Northern California vice president for the State Building Construction Trades Council. And we're here we're here in strong support of SB 1383.

For many years in Berkeley, we work collaboratively with policy makers, stakeholders, and even developers to craft what became known as the hard hats ordinance. This policy was developed carefully, deliberately, and with a clear goal to protect construction workers with health care standards and to support the apprenticeship pipeline while ensuring that housing projects still pencil out. We understand the balance that needed to be struck.

We knew housing must get built, but we also knew that men and women building that housing deserve basic protections in the most dangerous profession. But what we are seeing now is deeply troubling.

In Berkeley, we saw a proposed 20 tower store 20 story tower where the developer was successfully able to use the density bonus concessions to waive these core labor protections, including prevailing wages, health care, and apprenticeship standards. On a building of that scale, 20 stories where workers are operating at high at heights and in high risk conditions, those protections are not optional. They are essential. That is not good faith. That is not what the law was meant to do.

Developers are exploiting the density bonus law in ways never intended, using it not just for zoning relief, but as a loophole to strip away worker protections. SB 1383 is about restoring the balance. It clarifies that concessions cannot be used to strip away essential labor standards and ensures that we can continue to build housing without compromising worker safety, training, or fair competition. Let me be clear. We support housing.

We want to build more of it, but we want to build it the right way. SB 13 SB 1383 ensures that we can do both. We respectfully request an aye vote. Thank you.

Chair and members, my name is David Vincent, director of compliance for the Sheet Metal Workers, local union number one zero four. Construction is not easy work. It comes with real risks every day. When something goes wrong, the consequences are serious and sometimes permanent. Last year alone, seventy eight construction workers were killed on the job in California.

Tens of thousands more every year, were seriously injured, which makes construction the deadliest industry within the state. I've worked closely with enforcement agencies in the aftermath of many of these cases. These are not abstract risks, and we know that many of these incidents are preventable when workers are properly trained. Too many contractors in this industry do not provide proper health care coverage. When injuries happen, those costs are shifted onto the public health care system instead of being covered through employer responsibility or workers' compensation plans.

That's a predictable outcome in a system without clear standards, and it ultimately burdens both the workforce and California taxpayers. That is why construction labor standards set a necessary baseline in an industry where, without otherwise clear rules, standards can erode quickly. State approved apprenticeship programs ensure workers are properly trained. Health care protects workers when injuries happen, and prevailing wages make sure that experienced and skilled workers stay on these jobs.

These standards do not just protect workers, they directly impact the quality and durability of the housing being constructed.

There's a gap in California housing law that creates confusion in how these standards apply, particularly under density bonus. And we are beginning to see that used to justify lowering standards. This creates a race to the bottom. That was never the intent of the law. The goal was to build more housing, not to do it in a way that compromises safety or quality.

S B 1383 fixes that. I respectfully ask for your vote of support. Thank you.

Thank you very much. We're on file item number seven, SB 1383. We'll now proceed with any witnesses in support.

Thank you, madam vice chair. Jeremy Smith here on behalf of the State Building and Construction Trades Council, also supporting. Thank you.

Thank you very much. Do you have any other witnesses in support? K. Seeing none, we're gonna continue with any witnesses in opposition lead opposition to SB 1383. No lead opposition.

Okay. Rolled out. Just continue with any, opposition general opposition to the bill.

Madam chair, members of the committee, Jordan Fernando Carvajal on behalf of California DMV. We have no we're not no position on thiS Bill. We just wanna express our concerns with SB 1383. We appreciate the author and his staff as we're working to find a solution in the near future to address our concerns. Thank you so much.

I'm sorry. Could you repeat the group you're with?

California YIMBY. Thank you. YIMBY. YIMBY. Yes.

YIMBY. Yes. In my back. Yes.

In my back. Yeah. Correct.

Acronym's gonna help the public understand.

Thank you, y'all.

Yeah. Thank you.

Okay. Seeing no other witnesses in opposition, we're gonna bring it back to the a dais. Any comments or questions by the members? Senator Cabaldon?

Yeah. Thank

you. I I I shared the YIMBY antenna going up just because the the density bonus law has been through its various iterations and improvements, especially over the last six years has been perhaps the most impactful successful state policy inducing the construction and the production of housing, especially affordable housing, because it's helped to make projects that otherwise wouldn't pencil work, and so it's it's it's something to be to be protected and nurtured and all of that.

That said, this it was never intended to be about labor standards so I'm I'm definitely supporting the bill today. I think I appreciate the author's leadership here both on this and on the hard hats ordinance in the first place because it is the right thing to do. I'm only saying my my initial comments so so we don't end up with 17 other bills that that narrow the density bonus law.

But when it comes to the folks building, this the density bonus law was not supposed to be about that. It shouldn't be about that. And this is a tightly tailored solution to try to assure that the density of motion law will continue to work and deliver the results that it's doing, but not doing on the backs of the folks that are that are that are risking it all in order to produce that housing. So thanks so much, Luke.

Okay. Senator Cortese.

First of all, I just wanna thank the mister Coover and and the support witnesses for being here. It makes a difference. Not that I was wavering on the vote, but I think it makes a difference when the author, you know, has somebody of your stature from the labor movement here, you know, letting us know how important this particular bill is. We have a couple thousand bills we're going through, and we know you don't show up for each and every one of them.

I think, you know, the bottom line is just I'll say it in kind of a anecdotal way is, you know, it used to be an old school thing, you know, to see precious things, loophole or we want to characterize it that way, it should just be off limits.

You don't do that. You don't Local governments shouldn't be in the position to negotiate a way something as precious as labor standards and as precious as the workers that those labor standards are there for. So I'm a strong supporter of the bill, and I'd be happy to be a co author at some point if that becomes available. Thank you.

Do you

have any other comments, questions? We have a motion by Senator Caballero. I do have a couple of questions for you. I'm trying to remember what year. It was either 2223 that we had a bill that was carried.

It was either by Senator Skinner, in conjunction with Senator Weiner, that removed certain requirements in order to ensure that housing was being developed developed in at UC Berkeley. How does this play into that particular bill that was passed in order to incentivize? Because it wasn't getting built or it was too expensive.

Yeah. I think I think there was SB 1212, and that was a, a bill that amended the DNC was to to provide a special bonus for the construction of student housing. And I was very much in supportive of that particular bill. Really, at the end of the day, it's up to the jurisdiction whether they have whether they locally adopt labor standards or not.

This is not a this does not affect state state established labor standards that are part of any state state law, whether it be a AB 2011 or SB 423.

This does not impact those labor standards because those are hardwired in state law. What this bill seeks to address is when a local jurisdiction decides to adopt its own labor standards to address the unique circumstances in that jurisdiction, and believes that a prevailing wage requirement may be necessary or some sort of health care requirement. And so, in that instance, what this bill seeks to do is to say that an applicant cannot use their incentives and concessions to waive the application of those specific labor standards.

The applicant can use their incentives and concessions for other things, like height requirements, FAR requirements, parking requirements, other things, public art requirements even even for that basis, landscaping requirements, other things, but not labor standards. Because as I said in my opening comments, going back and looking at the legislative history of the statute, there's nothing in there that ever said that the intention of this was to allow applicants to waive labor standards.

That's a very separate type of statutory requirement. So that so in the case of Berkeley, for example, if an applicant was building a 20 story high rise, which they did in the South Campus area, and the local jurisdiction had a had a labor standard, this bill would say that they cannot waive that labor standard in that instance.

But it wouldn't affect the other rights that an applicant would have under the density bonus, to seek their their rights and and, the relief that they that they may need to build the project.

Okay. So are we referring to publicly funded projects?

Yeah. This would apply to any any project that seeks an entitlement.

Private projects as well that are not publicly funded. So you're you're with this bill, you would be placing a prevailing wage requirement on private funded

Just to clarify. So this bill does not impose any labor standard, unlike other pieces of legislation that the legislature has considered in recent years. What this bill says is that if a jurisdiction decide if the City Council of that jurisdiction decides that they want to adopt a labor standard, where there's a minimum wage requirements, a prevailing wage requirements, a health care requirement, that if an applicant is seeking a density bonus, they cannot waive those things under the density bonus. That's all it does.

It's not it's not imposing labor standards statewide.

It's not requiring jurisdictions to impose labor standards. It's it's preserving local control, frankly, to ensure that local jurisdictions have the have the ability to impose those specific requirements that they adopted for labor standards and not allow an applicant to waive them. That's that's the effect of the bill.

Not to waive them. Okay. So it doesn't I'm just trying to understand. I just wanna make sure that we're not counteracting it. So with these particular for the waiving on the on on the construction of these projects, does it actually are you placing it Okay.

I'm sorry. I'm trying to think of There was another bill that we saw in housing that had to do with construction, that because it wasn't in being incentivized to to bill, we're trying to incentivize construction. There was a bill, and I believe it was Senator Weiner that passed, that introduced this bill, that would apply any of these standards, labor standards, for buildings that are were above a certain height.

Senate bill four twenty three.

Okay. Look at you. Okay. So does this at all contradict those centers? No.

Not at all.

Once again, this bill does not affect any labor standards that were adopted by the state of California.

Okay.

Part of any housing law. What this bill would do is address locally adopted labor standards that a local city council, local jurisdiction adopted by action of that jurisdiction and say if an applicant is is seeking a density bonus that they cannot use their incentives and concessions to waive those local standards. Doesn't affect the state state standards in any way.

Okay. Alright. So we have a motion by Senator Caballero. With that, would you like to close?

Yes. I just wanna thank the witnesses for being here for the important work they do to help not just build our state, but to help support the workers who build our state. And thank the comments from California YIMBY. We are in conversation with California YIMBY and the Home Builders Alliance. We'll be meeting with them.

My intention is not to allow for jurisdictions like Woodside to pass ridiculous requirements to prevent the construction of of needed homes, but what we wanna do is preserve local control to ensure that those jurisdictions that feel that labor standards are necessary and appropriate to address the needs of workers in their jurisdiction to preserve that local controls that those those laws can be applied, and that builders cannot find loopholes to evade those requirements. I respectfully ask for an aye vote.

Senator Arguin. Madam secretary, please call the roll.

Motion is do passed to local government senators Arguin, Ehrgin Aye, Sciarto, Cabaldin Aye, Caballero, Caballero Aye, Cortesi, Cortesi Aye, Durazo Durazo Aye, Gonzales, Grayson? Aye. Grayson Aye, Ochoa Bogue? No. No.

Badia.

I will keep that bill on call for reps and members. We need to lift calls on bills. Yes. We need a motion on SBE. Okay.

First, as we are transitioning, we we need to record votes on bills. We need a motion on Senate bill eight sixty six by Senator Blake Spear. Moved by Senator Cabaldon. The motion is do passed to appropriations as amended.

Senator Zarragun? Aye. Aragun, aye. Ciarto? Cabaldon?

Aye. Caballero? Caballero? Caballero? Aye.

Cortesi? Aye. Cortesi, aye. Durazo? Dorazo, aye.

Gonzales. Grayson? Aye. Grayson, Aye. Ochoa Bogue?

No. No. Badia. Badia, Aye.

Okay. We'll keep that bill on call for absent members. Let's proceed with the the other bills.

File item two. File item two.

[Roll Call]

We'll keep that on call as well. To my colleagues who recorded your votes, thank you for being here for your service, and we'll recess the committee while we wait for Senator Gonzales. Thank you. The Senate committee on housing iS Back in session. We are going to lift calls on bills, so we can start from the top on the consent calendar, which consists of five item five, SB 1322 Richardson, and five item six, SB 1122 by myself.

[Roll Call]