Assembly Standing Committee on Housing and Community Development

Yeah. Sure. Come on up. Are they ready for us here? No.

Alright. Good afternoon, and welcome to today's outcome review hearing focused on AB 519. I wanna thank Assemblymember Schiavo who's going to be joining us, I know, today, because this is a bill that, she was the author of. And, thank her for her leadership and partnership and to acknowledge speaker Rivas' new outcomes review initiative. I saw him on the way in here, and I said, I'm about to go review some outcomes.

And he was very, very excited about that. This is a part of, our effort, and we've had a number of these hearings already, to make sure that, when we move forward a policy that, it doesn't the conversation does not end with a bill signing. That's the beginning, hopefully, of the impact of that policy, especially when it comes to housing affordability, a crisis that is affecting all Californians.

We wanna make sure that we are not just passing laws, but to evaluate whether they are working, whether they're being implemented as intended, and whether they are, delivering real results for Californians. As we know, our housing market is unaffordable to most income levels, but it is particularly acute for lower income, households.

And according to HCD's estimates, we need an additional 1,200,000 housing units for lower income households. The state plays, a critical role in administering the funding needed to bring more deed restricted affordable multi rental housing online, and ensuring that our state funding is delivered in an efficient and cost effective manner is key to addressing our affordable housing challenges.

AB 519 responded to this concern by requiring the state's four housing entities to convene an affordable housing finance work group made up made up of stakeholders, and how to develop a consolidated application coordinated review process for the application concurrent with the AB 519 process. The governor proposed a reorganization, as we know, of the state's housing organizations and financing to streamline the state's affordable housing funding.

Today, we're going to hear from HCD, CalHFA, TCAC, CDLAC, SidLAC, sorry, on the results of the SB I hate acronyms, but I did my best there.

Of the five SB 519 working group. We will hear from the newly appointed executive director of the Housing Development Finance Committee and Deputy Secretary of Housing Finance, and the new housing and homeless agency on the at the new housing and homeless agency on the next steps in bringing the consolidated application and review process to state funding online.

And finally, we will hear from the consumers of our state housing fund, developers who participate in the AB 519 working group, at the appropriate time when Assembly member Schiavo was here. I will also allow her to make opening remarks, but we already have our first panel here. Welcome.

Our first panel of state housing representatives to share insights and outcomes from the 519, AB519 process. And I wanna introduce our panelist, Gustavo Velasquez, director of the Department of Housing and Community Development, Tony Sertich, executive director of the California Housing Financing Agents Agency, and Marina Wiant?

Wiant.

Wiant. Almost. Wiant. Executive director of the Tax Credit Allocation Committee and the California Debt Limit Allocation Committee. That one probably does need a a acronym.

Great. Thank you so much for being here. And we starting with you, Mister Velasquez? Yes. Welcome.

Thank you, chairman. Good afternoon. This is a great topic.

It's certainly about outcomes. I would say more than outcomes. It's really about transformational reform in the housing finance system for the state of California. My name is Gustavo Velasquez. I'm the director of the Department of Housing and Community Development or HCD.

Today, I wanna share with you an update on AB 519 implementation, including our working group in the AB 519 report released last month. Assembly bill 519 required HCD, CalHFA, the housing finance agency. The executive director, Tony Sertich, is here with us. TCAC and CDLAC, the California tax credit allocation committee and the California debt limit Allocation Committee.

We have Marina Wiant, executive director of both groups here, to jointly convene an affordable housing finance work group to develop recommendations and an implementation timeline to streamline access to state financial resources by reducing duplication, improving administrative efficiency, and aligning timelines across reviewing entities.

These are the agencies. We are the agencies that administer the state resources that housing developers rely on to build and rehabilitate affordable multifamily housing for lower income households, including grants, sub loans, low income housing tax credits, tax accept private activity bonds, and other housing finance subsidies. The bill thank you, Assemblymember Schiavo, required the work group to also include nonprofit and for profit developers, local governments, and tribal government, very importantly.

AB 519 aimed to find ways to improve the complexities within the process to apply for affordable state housing funds.

Often, developers request funding from all of our funding agencies. This requires completing multiple applications with largely duplicate deep information and adds to project delays and expenses, considerable expenses. The goal was clear. The goal is clear. A unified application and coordinated review process that reduces the cost of affordable housing, expedites the application and funding process resulting in more units built faster.

To streamline the state affordable housing finance system, the bill passed the work group with developing recommendations for implementing a single consolidated application in a coordinated review process for multifamily affordable rental housing financing programs administered by the state.

The report's recommendations reflects, and this is probably the most important part of my remarks, reflects the extensive deliberation and substantial engagement of work group members who were a broad coalition of more than 50 active members, including, as I said, affordable housing developers, local governments, tribal governments, lenders, and industry partners who met many times over the course of six months.

The resulting recommendations provide a commitment and a timeline for a unified application and coordinated review among HCD, CalHFA, CDLAC, and TCAC, and the newly launched housing development and finance committee. And we have here the inaugural director of that committee. The report recommendations are a comprehensive framework for an application through our process covering the majority of the agency's state funding sources.

The report includes an implementation plan to align program requirements and scoring criteria to simplify state administered multifamily affordable housing funding requirements. This is accomplished through agency collaboration initiated by this bill. Of course, collaboration amongst our agencies have been going on for a long time. Plus, we like each other most days. The agencies are now actively engaged in accomplishing the report's recommendations.

That includes aligning application and award cycles, funding sources, and ensuring our resources are used efficiently. By making our decisions together, we have the ability to stretch resources across more projects and ensure those housing developments commence construction sooner. I am excited and honored to have been a part of this work. I would like to take all the credit. However, honestly, Marina and Tony have done most of the work.

They were very, very involved in this. But through the new housing agency, and thank you for that reform as well, very important creation of the new housing and homelessness agency and the housing finance and development committee through all of that, we will see our work, the work of this bill, AB 519, realized and implemented. I now turn it over to my colleague, director Sertich, who will provide additional detail on our work.

Great. Thank you, director Velasquez. I'm Tony Sertich, the executive director of the California Housing Finance Agency. I've been in this role for about nine months. Prior to that, I did work at HCD as an assistant deputy director and helped work on get the affordable housing finance affordable housing finance work group off the ground at HCD and continued in that role when I moved to CalHFA.

I wanna thank, you know, all of the partners that really made this happen starting with Assemblymember Schiavo who got this bill moving forward. I wanna thank, you know, the all the staff at TCAC, CDLAC, Marina, staff at HCD led by Gina Ferguson and the the team at CalHFA led by multiple people, mainly Steve Gallagher has been involved the most of there. So it was it was a team effort with staff at all levels working on this from the state.

And starting in June 2025, we brought in we we brought in over a 100 organizations, including over 40 federally recognized tribes to be part of the affordable housing finance work group. 35 all member meetings and subgroup meetings have been held were held in late 2025 to make sure that we got feedback on all sorts of questions that were posed in the legislation, as well as in the additive to make sure that we could implement the changes that were recommended.

The work group discussions were supplemented by engagement at statewide conferences and tribal housing partnership meetings. So some of the outcomes that we, the recommendations that were made through the 519 working group as director Velasquez said are being implemented through the housing development finance committee and the new agency changes. I will I think one of the goals here is for us to walk through the recommendations that the working group made.

I'm going to, let director Wiant, kick that off, and I will then follow-up with additional information.

Great. Thank you. Before I dive into the rec the recommendations, I do wanna acknowledge that one of the biggest things that I think came out of this, was and thank you for the bill. When when the bill was first working its way through the legislature, I was a stakeholder, and I've been in this position now for two and a half years.

One of I one of the greatest outcomes is the amount of coordination and regular communication our three agencies or four have that really came out of AB519.

Prior to the affordable housing work group being created, and early when I had first begun at TCAC and CDLAC, we met quarterly, kind of for funsies. And as a result of this work, we started meeting weekly.

And even with this work having completed and there's new work that we'll touch on that came out of it, there's really ongoing communication and thoughtful engagement between all of us and our staff on a very regular basis, which is ultimately, I think, what AB 519 really was seeking is how do all when when we have such a fractured system to begin with, some of that is gonna stay around forever, potentially.

But how do we act how do we work together as a team, when ultimately all of us are all of our missions are aligned to create as much affordable housing for lower income families in the state as we can.

You know, so one of the largest challenges we were trying to solve for during the AB 519 process was how do projects that are seeking funding from the state not have to compete so many times, and and how do they how do we avoid so many different bottlenecks for those projects?

How do we ensure that those projects are actually more ready to go when they come in and apply? Because so often, what we were observing was projects might come into HCD, get an award in 2019. Their entire financing stack is not complete yet, so they're going to locals, they're going to other agencies, they're applying to different programs to try to complete that stack. And it might not even come to TCAC or CDLAC until 2026.

And so part of it is how do we shorten that timeline so projects, when they come in, they are fully thought through, they're ready to go, and they we can get them to construction more quickly.

And and I and the third was again, as I sort of mentioned, many of these projects would still have funding gaps when they got their first award, which again slows down ties up resources and slows down those process. So the first recommendation in in the report really built on the work of AB 434, which was a bill that attempted to consolidate the review and award of multifamily housing programs into a single multifamily super NOFA.

And and so that recommendation was the agency should jointly develop and implement these new h now with HDFC regulations into a single coordinated consolidated application along with a coordinated review and approve full process that brings multiple of these sources together into one system. Tony will get into more of that detail in a moment.

But the second piece that we really needed to solve for was really stressed by stakeholders that there is a need to maintain a TCAC, CDLAC only path for projects that did not seek state subsidies.

And there are many reasons for this. Historically, must many of the funding programs at HCD or at CalHFA have one one funding round per year. At TCAC and CDLAC, we run five per year. That helps stagger the not just staggering the awards, but it staggers readiness deadlines, it staggers closing deadlines, which is better for the entire system and makes it easier. And the was that stakeholders were generally familiar with our program.

We've been around for 40 years. We recently had some major changes that said, like, six years ago when the program became competitive for the first time in ten years. But other than that, it's a known quantity. Our our scoring change doesn't change year to year. And they didn't want us to be disrupting a predictable system that worked well.

And so out of that, the second recommendation was that the agencies should preserve a direct TCAC, CDLAC application pathway for those projects. And so that's why the recommendations really have this sort of two track system, which is what's being implemented currently in implementation, and we'll talk more about what that timeline looks like. So the projects that are used to TCAC, CDLAC, they can continue to have a TCAC application. This is a great path for projects that have local funding. Right?

They may not need additional state funding. They can continue. And we do have a lot of projects that really don't need any state subsidy at all. And then the second path is the one where if you need state subsidies, you can apply to HDFC. And along with that award, you would concurrently get an award of tax credits and bonds for that project to be able to go forward.

Tony.

Thanks, Marina. A few of the other specific recommendations that came out of the AB 519 working groups. The first was that which which program should be included in in a consolidated application process. And, after talking through that and working with stakeholders, we determined essentially that, all programs that are developer facing, multifamily affordable housing programs should be run through this to the extent possible. And we'll get into a little more as we talk about the HDFC implementation, how how that's being implemented.

But we're looking at tax exempt bonds. We're looking at federal tax credits, state tax credits, and a number of HCD funding programs starting with multifamily housing program, affordable housing sustainable communities program, infill infrastructure grant program, the Serna the Joe Serna farmworker housing grant program, and along with a few federal programs that are administered at HCD, the HOME program and the Community Development Block Grant Disaster Recovery program.

So there's a wide range of sources that we think we can put together to really streamline the the the application process and the awarding process. But in order to make that happen as director Ryan said earlier, we need to make sure that our our regulations are aligned and our statutes are aligned. A lot of that was done in the the bills that established HDFC to make sure that we're all working together.

But the regulations are currently being developed by HDFC staff, and we actually have a meeting tomorrow for of the housing development finance committee to go over the status of the regulations and get a more clear timeline of when that will get out. But we expect it to be pretty shortly when the first round of regulations will get out for public comment prior to review and finalizing that.

But, there is a lot of work, in combining farmworker programs with general multifamily programs, with homelessness programs, with some of the climate programs that are all touched the housing and make sure that we're taking into account all of the incentives that we're trying to provide without creating too many burdens on on the affordable housing that goes along with it. So it's a very thoughtful process, but there's a lot of progress being made in that.

The timeline for implementation of these recommendations sped up a little bit by the governor's reorganization plan and the development of the housing development finance committee.

The goal is to have the first release of funding through the housing development finance committee early next year in 2027. So that's why we're pushing to get the regulations done as soon as possible. And, the recommendations were to, you know, especially with the two track approach that we're taking to get this moving as quickly as possible. There have been several projects that have been stalled for various reasons that have received partial funding.

Wanna make sure that projects have full funding and are able to move forward, and we have a pathway for them to do that as soon as possible.

The other piece that we are focused on significantly is continuing to incorporate stakeholder feedback. We know whenever we create a new system, a new program, or or make significant changes, we probably aren't gonna get it perfect the first time we roll this out. So we, you know, with the housing development finance committee, we have a public board that will be able to take input from the public and on potential changes and how we can continue to improve the system and make it work better.

This is not something that is ever stagnant given the the amount of federal resources that come through for affordable housing. We're always going to have to be, you know, adjusting to to that world as well as the needs of the state.

The hope is that we're able to really accelerate some affordable housing development and maybe that changed some of the focus of of how we want to move move future money forward. So it's something that we wanna make sure we get right, as right as we can, but also be flexible enough to build off of that moving forward.

All done? Yep. Okay. Great. Well, before we jump in any questions that folks may have for you, I wanna give an opportunity for the author, Assemblymember Schiavo, to to both provide me any remarks about this, and also you can have your first shot at questions if you have.

Thank you. Thank you so much. This is incredibly informative, and I'm so happy. It's they always say don't fall in love with any of your bills, but I tend to fall in love with all of them. And this was one of my first babies.

So so it's a it's a really important one. And as someone who came out of working in homelessness in my own community and started a nonprofit to both fight for permanent supportive housing and also address homelessness in our community. This is close to my heart. It's something that we in our office have talked about working on consistently consistently since the start, working on the three h's, housing, homelessness, and health care, another some another issue close to my heart.

And you can't have you can't address homelessness without addressing housing.

And and this was one of the things that I heard in my community, talking to affordable housing developers and homeless housing developers was, you know, you apply for one pot of money, and then, you know you have to wait for another one. And then if you miss a deadline you have to wait another year and you're paying for the property and taxes. And and it was just so hard to make it all line up in a way that you could move as quickly as possible.

And so this was a district bill. It came out of conversations, especially with LA Family Housing, which is one of our largest homelessness organizations in LA.

And so very excited to see it coming to fruition. Sorry we had to do oversight hearing to hear about all of this. It took a little while to hear back. And so we're like, is something happening? And a lot has been happening.

And so it's, it's really wonderful to hear about that. And, you know, as you discussed, you know, knowing that so many, who are coming and applying for state funding are are applying to multiple, multiple agencies that those, you know, 2% costs can really add up to a lot of money that can be a barrier to those projects going forward in the end if you have too many administrative costs through the process.

So, you know, I feel like one single application was kind of the the final goal. And, and I'm really heartened to hear about how many people you brought to the table in that. I'm also part of the Native American caucus.

And in a lot of our conversations in the Native American community, they've talked about how it feels like grant processes are not set up for how tribes work, and not as accessible as they need to be. And so I'm happy to hear that so many tribes were involved in the process as well to make sure that you're able to hear their feedback and make adjustments accordingly.

I would let so I just wanted to get a little bit of clarification because I know you were talking about the two paths or the two tracks. And so just so I am crystal clear on this, does this mean there's one application, one portal that everybody goes through? And then with there's still five opportunities throughout the year with TCAC or is there and are there more opportunities throughout the year with the other programs now then?

Or there's still once a year or how do, like, the deadlines lining up work or not accessibility?

Yeah. I think that right now, the the paths there's one path for projects that want tax credits plus additional state subsidy. The other path would be for projects that only that don't need additional state subsidy. So if they already have local subsidy or don't need other subsidies

And just the tax.

And just tax credits or bonds, they can go down this path. So

And that has it's all the same portable.

That that right now, there will be two separate applications for each path. One for each path.

But, theoretically, one project would be choosing a path. Right? If you if you're a project that needs state subsidy, you need state subsidy.

Right. And you can also get the tax credits.

Yeah.

It comes so path. Right. So as part of the budget trailer bill and housing, it established a a set aside within CDLAC Or bond bonds will be set aside in a pool for HDFC funded projects. So once an application is submitted to the portal for an HGFC award, and perhaps Jonathan will talk about this more in his next panel, that those projects will be reviewed.

Assuming once a project is gonna be awarded, that application would then be transferred to us to then process the bond award and the tax credit award without a separate application being submitted and all happening kind of concurrently.

So the experience of the, you know, affordable housing developer, homeless housing developer, whoever it may be, will still be through one portable portal one application and a streamlined process, and then all of the multi agency things happen behind the scenes then.

And and one of the one of the goals on our side is to is to also work on our systems so that we are able to really share information and and ultimately create a more streamlined system for all of us to use as well as the external parties.

Okay. Wonderful.

And, you know seeing some of the feedback from timelines I remember that a big question was around aligning all of these. And so the second round of potential there's a first round of proposed and a set and a potential second round in July. Is that contingent on how the process goes for round one or other factors that might be involved?

You want me to? Okay. This probably Jonathan can answer this too. But I think the vision for HDFC is sort of 2027 is the initial launch year. And so we will be at SidLAC implementing that pool for HDFC funded projects.

But we're we're still, as a state, clearing out projects that previously awarded were awarded, you know, the affordable housing and sustainable communities program had an awards had an application cycle this year prior to the trailer bill. So those projects would be awarded at the end of this year that then would be coming in for bonds and credits or be to be taking allocation from the set aside next year.

So we're sort of in this, like, both and right now as we clear out the projects that ex have existing awards. And then round one, which would be sort of in the first half of the year, would be for 2027 allocation. But I think the the real big launch of this true single portal will happen at the end of next year

Okay.

That would be for 2028 bonds. Okay. So that so that's sort of why 2027 is a little bit of this transition year that's a little bit of projects that are old money, a little bit of projects that are new money, a little bit of projects that are both.

And and the only thing I would add to that is yeah. I mean, there are things that we need to learn as we're working through this. Like I said, the initial launch, we're trying to get things as as good as you know, trying to get them perfect, but there's probably gonna be things that we'll need to change.

I don't think the timing on it necessarily relies on those lessons learned, but it does give us some time to sort of work through things and make sure we get it right.

Okay. Wonderful. And and can you just talk a little bit about the I heard you talking about the new regulations, and there's a process, it sounds like, moving forward. For those, is there do you feel like everything you need to do to be able to set this up can be done administratively or is there any additional legislative needs?

At this point, all of the statutory changes that we need to move this forward, we think we we have already received through over the last couple years of governor's reorganization plan and and such. Obviously, if there's more that we need, we would come back. But at this point, we think we're pretty set on on the statutory changes.

Thank you. And I wanna say a special thank you also to the Chair for holding this hearing and to the speaker for allowing us this extra layer of oversight. We pass these bills, and we don't always get to hear about them or check up on them or know how they're going. And so this is a a really helpful tool for us to know how our babies are moving forward and growing up. Thank you.

Thank you. Well, this one is is is is growing up fast here. There's a lot actually, a whole lot of work that's been done here. So thank you for for your leadership. Miss Quirk Silva.

Well, good afternoon to all of our housing friends out there and out there. Pleasure to be here. I think maybe my last official housing I'm not sure about that. Forum.

But, you know, on the positive side, I've been here since 2012. So I've been really part of seeing all of this. Not only born if we're using the metaphor of a a baby or a child, but, you know, come to a fruition. And there's, I would say, with all due respect, some good, excellent, some good, bad, and ugly. And what I mean by that is, yes, there's things to celebrate, and we certainly have made progress.

Some of the steps have been legislatively driven by much of our body, including both sides of the aisles, wanting more and more transparency and accountability. And that becomes a fine line of what becomes so much then that you're actually slowing down what we're trying to do, which is get out, these dollars to the community so that they can, in fact, build these units.

So we've seen some of that, and Aye, in fact, think that we've probably tipped over the line on wanting more data and more data. And and I do think, in fact, that has slowed things down. I was here in 2020 when Assemblymember, Dahle actually brought forward one of the streamlining.

So you had your first, but even before you were and so this whole streamlining, I think, is a key word in this, which is we're trying to do everything we can so that we're not asking whether it's builders or cities or developers to keep having to, you know, juggle these balls. And with that being said, I would say that's one of the things in 2020. We're now in 2026 going into 2027. These things have taken quite a bit of time.

I know that you have seen me in front of our budget committee discussing everything from the housing reorg.

Some things, you know, we're happy to see. But I think one of the elephants in the room is as we look at 2027, we're also looking at a new administration and a new governor. And so, hopefully, there will be a a very warm hand off to whoever that is and whatever so that we're not backtracking. I guess that's my key message is new legislators come in, new administration comes in. I've now served under two governors and four speakers.

I think I'm probably one of the very few people left on this floor that have had that opportunity. And what we see but one of my questions in this kind of narrative is, and I don't have the data in front of me, but I've heard different numbers over the last hand few of years is how many units are in the process to be built but are yet still lacking kind of that gap funding. I've heard something like 44,000.

I don't know if that's way off, but that is a number that has been, I think, thrown out a few times kind of in the pipeline and with the tax credits now with the 9%, but the 4% with is with those units that are sitting there ready to be moved, what can we expect in the next year on those units? Because I will say without speaking out of turn well, I wanna I'm gonna say it because

I don't wanna say something that, you know but I think there will be a priority in the future to get those units built and get them built fast. But when we say fast I mean, I know right now I don't know if you remember. It was in our budget committee. You probably don't follow every single thing. I think right here in Sacramento, there were about 80 tiny homes that were supposed to be built.

And I think it's taken six, seven years, and I don't even think they're still built because you're talking about utilities, all of these things. So I guess my big question is we're doing a lot. We've done a lot. What can we look forward in 2027 to try to move these units that are ready to be built but just need that, get them over the edge?

Thank you. Assemblymember Ward, there there are many data points that that we track. Specifically to your question, like, I keep a tab, for example, on the precisely the units that are sort of in process, have not been completed. Residents still aren't living there, but the HCD has assisted, financed. That number ranges between, you know, at the moment, between fifty and sixty thousand.

We can get you the exact number. But the number that now

Look. But That's a lot.

But the number that that now we've been keeping much closer track of is the number I think matter most to all of us, which is what is the number of homes that actually been built that are completed? That number since 2018 is more than 600,000. Homes built across the income spectrum. This is not just homes for very low income people, homes for people persons experiencing homelessness or market rates. It's just across the income spectrum.

You mentioned streamlining, which has been a big focus in this administration and this legislature. That also we are keeping very close track of because it's just as important that we work on not only bringing to scale the level of housing that we need, but also accelerating it. In that regard, also since that same period of time, approximately 2018, the reduction in time for entitlements, permitting, and construction is half.

So average across the state of California right now, it takes exactly by 50% less time to entitle, permit, and construct a residence. And and and the level of construction is increasing since 2018, 2018, 2019 at approximately 59, 60% more residential construction.

So the the pipeline is robust. And I think with these efforts that we're making, thanks to AB 519, we are ensuring that the process from, you know, proposing these projects to actually getting the financing stack that needs to be completed to go into construction, that that that time and the cost of it is even shortened even more. So we have, I think, a very promising outlook, and this financing reform is going to enhance even more the outlook in terms of time and scale.

And if if I may, one one thing to add to that, I think, to your point, in the past, there was a large logjam of projects that had HED awards that weren't able to get bonds or tax credits because of the competition at director Wyant's area. But one thing that significantly helped over the last year or so is the the federal changes that have essentially doubled the amount of bonds that we have to or 4% tax credits that we have available.

So with that, we have been able to push through a number of those stalled projects and and get got them bonds and tax credits. And just yesterday today, HCD announced awards for 20 more projects that will help that will get them fully funded and allow them to get through the the the CDLAC and TCAC process. So and to your your additional question, and director Wyant mentioned this earlier.

Over the next year, the focus of the Housing Development Finance Committee is to really clear that pipeline first first before we then move on to awarding new projects because those ones in the pipeline, if they're ready to go and they're ready to build, let's get them moving, and then we can start working on new ones as well.

I like that. And I hear that. So you're saying between fifty and sixty thousand units are in the pipeline, and you're going to do everything you can to make sure that that gap funding is filled so those can get built.

And and that that I think the number that he presented also includes ones that are already under construction. So some of those probably don't need additional gap funding, but but that in it is inclusive of all.

And I'd be remiss if I didn't compliment all of you as I was able to go to Oakland during the summer break to see one of these, I believe, senior project. I can't remember how many units. Can you remind us of that project?

I wish I could. I

The way you were there. I don't know.

I was there.

I I know. I just can't remember the name of it. Yes.

Yeah. The one with the governor.

The one the trailer bill. He signed the trailer bill?

Yeah. No. Yes.

It was a But we

were at construction project.

Yeah. It evolves the I can't remember the name, but it was I think it was 61 senior units. Yes. Don't call me

And then with some future plan for a courtyard and and so so

It is one of, I think, two or three phases. That's that's the other thing that we are And

you weren't there, Mister Haney. We're

we're going to this we're going to this projects that have, like, multiple phases. So it's it's we we've they completed financing during their construction for one phase, but they're in the process of applying for additional units in in future phases. And this reform is what is what is going to make those phases, you know, be online much faster.

Thank you. Appreciate it.

Alright. Well, I'm just gonna ask one question because I I think we have, we have two more panels. So a lot lot to left to cover. The question that I had was actually there was A Bill, AB 1053 from, Assemblymember Gabriel, which requires ACD to offer construction financing by 07/01/2027. Do you know what the status of that is?

Does does HDFC have the statutory authority to move forward with that requirement? Or are there any barriers to offer construction loans for these programs? HDFC administered programs?

I I I'll say this because this was one of the bills that I was working on when I was at HCD, working, to try to move it forward. Initially, there was no appropriations for that to move that forward. And so I think there was movement on that with HDFC. HDFC is focused on getting that money out earlier.

One of the things the reason director Velasquez pointed this to me is because California Housing Finance Agency has some tools that other state departments don't in terms of being able to disperse funds more efficiently and quickly.

So we are working on partnering with our state housing partners to to support them and helping them get them funds out more quickly and more efficiently during construction. But I there's no specific plans on that. But when HDFC makes its first awards, we hope to have a full plan laid out for that as well.

Great. Thank you for that. Happy to hear that. Alright. Well, we'll let you all go.

Thank you so much. There should be nothing left to cover now because you've covered it all, but we'll we still have two esteemed panels to bring up, and I'm sure lots more to talk about. I want to invite our second panel, which is which will talk about the newly created HDFC, recent efforts to streamline state funding in the budget trailer bill, and the next steps for AB 519.

And we have our panelist, Jonathan Klein, executive director of the Housing Development Finance Committee, and Christina Munn, the deputy secretary of housing finance for the California Housing and Homeless Agency. We like long titles here as long

as We

do. We can't stop. We can't help ourselves. Yeah.

So many things. Welcome.

Thank you. Well, thank you to the committee for this opportunity to share our work thus far on AB 519 and how it's been informing all of the work happening under the new housing development and finance committee. I'm Christina Moon, deputy secretary of housing finance with the new housing and homelessness agency. We really wanna start by appreciating your vision in creating AB 519.

As you've heard, it's really enabled us to work together very closely, very deeply, not just within our own agency departments, but, you know, across the table with our partners at CDLAC and TCAC.

And all of the many sessions that we've heard and engaged with developers, lenders, investors, service providers, it's been really informative to all of the work and thinking that, you know, you've heard through the recommendations in the last panel and what's underway under HDFC. And it really built you know, we really built upon AB 519's thinking when we put together the reorganization plan under the governor.

You know, we wanted to create the organizational structure that we needed to have that vehicle to deliver not just the consolidated program administration that's envisioned and and laid out, but also, you know, that that transparency that's touched upon. We created the executive committee under HDFC to have that public facing body and platform for folks to comment directly, engage with, come forward, hear how decisions are made, in an open forum. So that has been stood up.

It's been it's met twice. We have our third meeting tomorrow. And we have an expanded membership through the the budget proposal that really gives the expert guidance across our to inform these decisions. And with that organizational vehicle in place, the AB 519 recommendations really inform the budget proposal, which we touched upon at the past panel. But, you know, it really brought together all of the resources, to truly create the one stop shop.

So not just the subsidy that was in initially identified for HDFC, but also the bonds and 4% tax credits, as as well as the ASIC housing component such that everything can be considered together and not have these multiple stops along the way. And the end goal, of course, is to be more streamlined, to have it be a one stop, and to provide full funding. So there isn't any question that a project can move forward.

So with this structure and momentum in place, the HDFC team has been working very furiously on developing the underlying regulations that will really govern and stand up the one stop shop in 2027. So I'm gonna pass it to our new HDFC director, Jonathan Klein, to share more about his approach to this work and what's to come.

Thank you, Christina. And thank you to all of you for the opportunity to explain more about what we're up to at HDFC. I it is a new entity, officially launched July 1. And I know it is still a little bit of a mystery about what we're doing and what we're up to. So I appreciate the opportunity to talk to you all more about that.

At the first meeting of the HDFC executive committee in May, the committee adopted a mission statement which says that the mission of HDFC is to, quote, alleviate California's affordable housing crisis. HDFC creates homes by making California's housing finance system simpler, faster, and more transparent. As the inaugural executive director of HDFC, I take that mission statement very seriously. It is my North Star. Simpler, faster, more transparent.

To implement that mission statement, I developed a work plan presented in draft form to the executive committee on my first day in the role on June 15. That draft outline only covered the first hundred days of HDFC looking out to October. I've since developed a work plan that goes to the end of twenty twenty six, and it will be discussed at the executive committee meeting tomorrow. The work plan will guide our work.

Implementing the recommendations of AB 519 are at the heart of the work plan.

And so from a oversight standpoint, I want you to know that AB 519 is alive and well, living in many places, but certainly in the work plan that we'll we will use to implement our work at HDFC. Let me briefly explain how the AB 519 recommendations drive the work forward. So the plan has four goals, coordinate multifamily affordable housing finance, accelerate the process from application to loan conversion, measure our progress, enhance trust and transparency.

I think of those four goals as an acronym, c a m e, coordinate, accelerate, measure, enhance. The plan also articulates objectives to achieve each goal.

The 519 recommendations are explicitly cited in the objectives to achieve the goals. I'll give you a couple of examples. The plan says that one of the objectives to achieve that first goal of coordinating housing finance is, quote, the creation of a draft unified application workbook consistent with GRP 2025 and AB 519. We expect to have a skeleton of that workbook done this month, and we'll revise it in December to reflect the final regs.

And I will talk more about the regs in a minute.

Another objective to achieve the coordination goal is to, quote, identify a team to develop the process to review applications consistent with GRP 2025 and AB 519. We anticipate identifying those team members in the weeks ahead and launching training in December in anticipation of issuing a NOFA in the first quarter of twenty seven so that those review teams are in place and trained.

The implementation of the five nineteen recommendations lives primarily in the objectives to achieve the coordination goal, but I'm happy to discuss how we will achieve the other three goals as well. I'd also like to discuss a key focus of our work since HDFC's July 1 launch. As Christina mentioned, drafting the regulations has rightly demanded much of our time and attention in these initial weeks.

I'd like to discuss both the substance of drafting those regs and the process we intend to pursue to reach final adoption. We are deep into the work of issuing the first draft of the HDFC regulations. One of the early tasks of the team was to identify the statutory requirements of each of the programs that will be migrating to HDFC.

We are hard at work identifying those unique statutory requirements that must be preserved, while also identifying universal elements that can be consolidated and also identifying elements of the uniform multifamily regulations, the UMRs, that might be streamlined rather than simply lifted and transferred over to HDFC. And I I just wanna stress, those are three very distinct tasks.

We need to follow, obviously, regulatory requirements for these programs that are moving over, one set of work. We then need to say, okay, amongst those programs, where is there overlap, duplication, inefficiency? How can we consolidate that? And then the third piece is when we look at the governing regs, the UMRs that have governed or first issued about ten years ago, where are there places that are just inefficiencies that aren't required that can just go away? So, again, a lot of deep intricate work.

We see the regs as an essential tool for meeting our obligations under the mission statement to make the system simpler and faster. In addition to that substantive work, we're also launching a process which will advance the transparency component of HDFC's mission. The regs will go through two rounds of public comment and a public hearing with the aim of delivering the final version of to the executive committee for approval at their regularly scheduled public meeting in December.

So we are moving quickly to get to final regs by the end of the year, issue a NOFA in the first quarter of next year. And my hope and expectation, very strong expectation, is that if you invite us back a year from now or sooner, but certainly a year from now, we'll be doing awards.

So regs, NOFA, awards. Finally, two other notes on advancing the mission of transparency. I'm scheduled to appear on panels at all of the big affordable housing conferences throughout the fall. I'm also traveling and speaking with tribal organizations, rural developers, and others.

We aim to have, we are also aiming to have an informal sounding board, and information sharing session with attorneys who represent developers to get their perspective on how we might alleviate some of the pain points that arise from time to time in closing loans with the state.

And I wanted to get the input from the lawyers because candidly on the loan closings, they're the ones really in the trenches. And so pulling together a group of folks to get their input on how we might think about alleviating some of those pain points seemed like it would be time well spent.

Through the continued robust stakeholder feedback built upon the stakeholder engagement and work groups from AB 519, I'm confident we will build upon our existing system, creating a housing finance process that builds more collaboratively, faster, and with greater efficiencies. And with that, I would be happy to take your questions.

Thank you so much. That is very helpful and really grateful for your focus on moving faster, being accountable and transparent, and making things simpler, which was the goal of the bill too. So we're, we're in line. So you were talking about the two public comment periods and then wrapping up with regs by the end of the year.

Plus a hearing.

Plus a hearing. Okay. I mean, I guess what would be interesting to hear is through all of these conversations, what are kind of the high level common feedback that you all are hearing or feeling like, you know, you really need to be responsive to?

So bear in mind that our our goal is to get the first draft of the regs out at the end of this month In August. So that formal So process has not yet started. Sure.

What I will say, and I know you've got a a panel coming up of of some of the state's leading developers, is that I think the mission statement that the executive committee adopted at its first meeting, simpler, faster, more transparent, really speaks to a lot of those pain points I was referencing earlier. And it's why I referred to the mission statement as my North Star in terms of the work that HDFC is gonna do.

We need to achieve. I don't need to tell this panel, we're in the middle of housing crisis. We need to achieve simpler, faster, more transparent. And so that's the work that we're gonna be all about at HDFC. So that's a a broad answer to your question, but it maybe the next panel could could speak more specifically to what they're looking for.

We don't expect to get the first draft of rigs right, which is why, again, we've got the two rounds in the hearing. I have worked in this field for a long time. I've been in affordable housing finance in California for thirty years. It's a lot of incredibly smart, gifted, committed, talented folks. And the more of that input we can get in to inform our work, the better the product's gonna be.

I appreciate I mean, you know, I feel like sometimes we've passed bills that are requiring departments to do things, and everybody's, like, grumbling along the way and doing the bare minimum. But it does feel like, you know, you've really taken this on in a bigger way to make sure you're hearing for more voices that you have a lot of people at the table.

And like you said, a lot of caring, committed, hardworking people who are trying to, make a difference in a way we need in our state with more affordable housing and housing more quickly. And so, you know, our goals should be aligned. And I think to the point of assemblywoman and Chair Quirk-Silva, who has done a lot of leadership on this issue, we wanna make sure that we're not getting in the way of ourselves.

You know? And I think one of the the biggest frustrations is when, government is getting in the way of making things happen instead of helping facilitate and helping to bolster those things to happen, like affordable housing and housing that people can afford to to buy or live in or rent.

So, you know, so I'm looking forward to all that comes out of this because it sounds like it's much beyond and can be much beyond, you know, a streamlined application, but is really kind of turned into more.

To the point of the the work and how it's gonna work, you know, what it sounds like you're saying is that you're endeavoring to be nimble in this process and that, you know, knowing that once you put something into place, you're gonna learn along the way and that thing there need to may need to be adjustments and things like that.

How how does that how is that going to work to be able to hear that feedback, to be able to know what's working and what's not, and how you make those adjustments, and what does that actually look like in process?

So again, I think the regs as adopted, I hope and expect, by the executive committee in December, sort of is our starting gun a little bit. And that, again, will have been informed by this robust public comment process we've been discussing. And we will then go through the NOFA and the awards. And then I think we probably want to tap on the brakes a bit, assess how do we correct. HDFC is a startup.

I mean, I I think it it it it's obvious, but bears repeating. It didn't exist before July 1 and obviously were in August. So, inevitably, and I've worked on other startups in other ways and other places in my career, you learn a lot right out of the box. Nobody gets it right, you know.

So I'm always very humble about my learning, and I'm sure there's a lot of stuff that we're gonna learn so that when we go back out, we will actually have a an even better, more improved process and product.

But I think it it all needs to be done in a spirit of being very receptive to that feedback and very receptive to that learning and that input. And I was joking with somebody the other day, if there's two houses in a booth at a Denny's, I'm gonna go and talk to them. I mean, I it's part of the reason why I am so determined To do this very robust public engagement process because I think we have affordable housing community, again, is so extraordinarily talented.

We have so much to learn from them about how we can do this work better.

And the work group is going to continue on and okay. So that'll be that'll be an entry point to be able to hear that feedback and

Yes. And I haven't yet drafted the strategic plan for 2027. But I fully anticipate doing again, we're we're doing the the stakeholder engagement really through the regs through the balance of the year. But in the new year, I would expect, I would hope to have sort of some quarterly feedback on an ongoing basis. Haven't exactly figured out the channel for that, to get more live feedback on how we're doing and how we can be doing it better on an ongoing basis.

Great. Thank you.

Miss Quirk-Silva.

The Chair asked if I had any comments. And I had to say, well, what do you think? I really like the strong vocabulary you're using related to housing development and finance committee, meaning simpler, faster, more transparent. Those are really important goals and I'm really impressed by how you're laying this out. So thank you for that.

I do want to just touch on two things that aren't necessarily related to what you've said and maybe would have been better in the first panel, but I came in a little bit late. And so I'm just gonna throw it out there. As a budget Chair in sub five and being on housing committee, we've seen many bills this last session. We don't know where they're all headed. We don't know if they're all gonna get out, so on and so forth.

But there's I was an elementary classroom teacher for many years, so I like little tricks with words. So here's my little icon here. See, it's a house. And on the foundation is housing, but affordable housing. I know we need market and all that.

That's fine. And we're building that. And then we have homelessness. And my colleague mentioned health, but I would make it broader and put human services. So it's the three h's.

Right? Housing, homelessness, and human services, which includes health. And I think when we think about what we're trying to do in that context, that urgency has to be there. Because the foundation for much of what we're trying to solve in California is to get people in a housing unit, whichever level that is. But secondly, there's two other words that some of our colleagues are just starting to use more and more.

I may not see the life of them as a legislator right now, but we have to start to think about two things. One is preventing the homelessness. We've done a lot since I've been here with shelters and infusing dollars into that system. But really thinking about keeping people in the units they are, which I know it sounds like, some of the social, some people might say communist, which means maybe subsidizing rent for a certain amount of time.

There have been studies that even up to $500 a month, 500 times 12 is, for one year versus having people fall into homelessness and then digging out with eviction, all the things that happened.

So prevention and the other is preservation on the units that we already have. I we've had various bills that have come through, but we haven't really put an emphasis on dollars to keep those units rehab doing the things we need to do so they don't fall into disrepair. So that's kind of my big macro just comments there.

But last, what I would say is depending on the voters in the fall, we could actually have a $10,000,000,000 housing bond, which I know some of us are very supportive of. I'm just gonna go on the record on saying that the UCs and the CSUs, anybody in the housing world that is listening to this, they have to build affordable housing for students.

It can't be just dorm rooms. It cannot just be dorm rooms. So what does this look like? Fullerton, the city I live in, Cal State Fullerton, is super excited to bring, 500 dorm rooms online at, actually, in the next month or so. So that should be a celebration.

But when I asked how much are those dorm rooms when you're calling them affordable? So you see CSUs, listen. $3,000 a month is not affordable for a vulnerable student. Now they're adding a meal plan. I've already talked to the Chair about this, but please, there has to be oversight.

We cannot have a run on development because they go, oh, UC's CSUs. We can build, but we're gonna build maybe 10%, 25% lower than market rate. That's not affordable. So I'm saying it loud and clear. We have to build affordable units, and somebody has to be out there to have some oversight on that.

We cannot just give a free pass of taxpayer dollars because we even have cities who are trying to count those as Reyna units. And unless they're affordable, we should never count them. And I live in Fullerton with Cal State Fullerton. So I'm sorry, Cal State Fullerton. But, no, I'm excited there's more units.

But if they're not affordable, we're just building more dorm room for students whose families can afford it. So that's my big statement. You don't need to really respond, but I wanted to get out there because these are really prickly issues and they're really important. If that bond passes, everybody's gonna be in line, but it has to be for affordable units. Thank you.

Amen. Yes. You're always welcome to make comments. You you always keep keep it real. I, you know, I think miss Quirk Silva raises a a point which maybe it might be worth to to address a bit as to whether there's anything with the possibility of the bond coming forward and a lot of new resources.

I know it hasn't passed and there's nothing for certain. But are there things that, you all are doing perhaps to to think about that or prepare for that or how it affects your your work in in any way? Are there new ask new, you know, we put a lot of different priorities in there. Are there certain new things that you're you're preparing for in in in some way that there may be resources for which there aren't currently?

Just if I might, I mentioned I've been doing affordable housing finance in California for thirty years. There have been lean years and fat years. And the way I think about HDFC is kind of an all weather vehicle. I think the bond may pass, the the bond may not pass. I, you know, have no prognostication on that.

I think we need to really be thinking about a system that works in good times and bad times. All of the things I was saying earlier, simpler, faster, more transparent, that's gonna help us get more housing built in the years when we got a lot of resources and in the years when we don't have a lot of resources. So more globally than that, other than building a system that works in good times and bad, I haven't thought a lot about it.

I will just say, from the perspective of HDFC, if the bond does pass, I'm sure there will be a robust conversation, and I would hope a real public plan about what happens with those resources. But, Christina, I don't know if you have a different perspective.

No. I agree. I think the idea is that universal approach that is set up to deploy those dollars if and when they come. And so that was really the intention is to flex with the the fat and the lean years. The underlying regulations that are being worked on now are inclusive of the relevant programs that would flow through this vehicle.

So, you know, we already have MHP MHP supportive housing, you know, the other sources that would be relevant here. They could be they would already be ready to kinda flow through the system. And so it would really be more about the the forward looking and the planning out of the rounds to not necessarily flood it all at once, but really think about how we do it in a sustainable and intentional way.

Great. Well, thank you both. Thank you for your work and your leadership, and we look forward to continuing to partner, with you as this moves forward. And hopefully, we will have, fat years or I don't know what the right More than that.

Thing was that. Robust. I said lean. I don't know what the Thank you very much. Robust years, ahead, and lots of opportunities to build more housing and to do it faster and, quicker and more transparent.

So thank thank you so much. Or faster what was it? Faster?

Faster, simpler, more

Simpler, more transparent. There we go. Thank you. Appreciate it. Alright.

We will bring up our third panel. These are folks who build affordable housing, and we're grateful for you to able to share your perspective. Ann Silverberg, president and CEO of Related California, welcome. Linda Mandalini, president and CEO of, Eden Housing, and Tom Kalashaw, the president and CEO of Self Help Enterprises. Welcome.

Okay.

Good afternoon, Chair, members, staff of the Assembly Housing and Community Development Committee, esteemed author of AB 519. Thank you. My name is Ann Silverberg, and I am the president and CEO of Related California and Northwest Affordable. Just by way of introduction, related develops affordable housing all throughout the state. And in our twin or excuse me, thirty five year history, we've delivered over 20,000 homes for Californians.

Over the past I was gonna say year, but I was informed earlier it's actually only six months. Over the last six months, I've participated in the affordable housing work group, convened pursuant to AB 519. I'm also A Board member of California Housing Consortium. All three of us are CHC, who, as you know, has been following AB 519, worked very carefully and submitted very specific recommendations on all of the issues covered, under the under the law.

I really appreciate the opportunity to make some comments on the July 2026 report and the process in general.

This issue is of great importance to me. Personally, I have been working with these programs my entire career. I closed my first HCD loan when I was in my early twenties, which was not yesterday. And I'm very excited to see these improvements that we've been talking about put into action to really achieve meaningful change in the state of California. So I will say, in general, I do believe that the July 2026 report is very reflective of the conversations and the concerns raised by the work group.

I will, comment on a few things that I do specifically support that appeared in the report. But I do think that there are a few other things for us to think about as next steps, and you've been hearing a little bit about what's on people's minds, and I'll just add a little bit to that. So let me start by highlighting a few things that I very strongly support.

First, I commend the state and everyone involved in this process for engaging such a robust group of stakeholders and soliciting extensive and meaningful feedback. This has been really quite an amazing process, and I really also strongly support the identified next step in the report to go through a public review process before regulations are adopted.

An open and transparent process is as Jonathan has been talking about with opportunity opportunity for feedback is always important. We haven't always had it, but it's especially critical as we are talking about reforms of this magnitude. So it's very, very important. Second, I strongly support the focus on a consolidated process. It is amazing to me that we haven't had this yet.

We're in California. It's 2026. But we're talking about it now, and I really, really support that. We need a state system that's coordinated in its priorities first and foremost, its thresholds, application materials, award, cycles, and and schedules. So that's where we're going, and this is really, really good.

We all know that multiple funding applications adds time, cost, and certainty to the development process. And I really hope the old system of going to one agency, getting funding for your project, and then sitting stuck in the queue of another agency is a thing of the past. In fact, I would say, and you already heard some of this today, it's been amazing through this process. We're observing that our leaders, many of whom are here today, are already beginning to coordinate, work together.

They're working collaboratively so much more than we've ever seen before, and I'm talking decades, that we've been part of this process.

It's really giving, the stakeholders great confidence and optimism. So it's a really good thing. Third, the report acknowledges and recommends, and I'm gonna quote this, preserving a path for applicants that are not seeking subsidy to continue to apply directly to the state treasurer's office through CDLAC and TCAC. This was talked about earlier by Marina, and I really think this is a very, very important point.

The five nineteen work should create a pathway forward for state funded projects, but we also need a path forward for projects that don't need state funding.

And just to elaborate on what some of these projects are, these are locally funded projects that reflect local priorities. These are lower cost projects that don't need state funding. These are rehab, resendecation projects that we really need to move forward on to preserve California's affordable housing stock. So all of these need a pathway, must go forward. So we really appreciate that in the report.

So, again, I submit there's a lot to support about the 519 process, absolutely, as well as the report. There are a few other things I'd like to highlight as, consideration for next steps, and many of these have been talked about here today, showed up in the report. These are not new. But I would say that consolidated application alone is not enough to fully address the challenges of our system. And, you know, the focus has been on this consolidated application.

It's really, really important. We need to do that, but there are other things we also need to be thinking about. And I think some of these are, as I say, in process. One thing that I just really wanna emphasize is the importance for HDFC now in its new role to fully fund projects ideally with a single loan. This has not been the case to date.

The Super NOFA through AB 434 was a step in the right direction, but it stopped short because it still put multiple programs into one single application. That's progress, but it was still a a variety of programs, and each program needed their own loan process and loan processing team, and it wasn't as streamlined as it could have been. Also, projects were not fully funded, and so they were stalled out and didn't move forward.

So I think it's gonna be really, really important for us to think this through. I think, we haven't heard any resistance to this, but it'd be helpful to understand more clearly exactly how these various programs will work together.

Jonathan started talking about some of this. We know it can be done. We've seen it in other jurisdictions. We've seen it in other states. We just haven't yet heard exactly how that will happen here, and I think it's very important.

Another thing that we would suggest is to modify the MHP program, multi family housing program, which is kind of the primary program that will be funded through HDFC. Modify it to be a more basic housing program, and let it serve as the foundation for all of the other funding programs. Today, the program is highly complex with threshold competition and other programmatic requirements load on loaded on to this basic housing program.

People talk about it as Christmas tree ornaments or bells and whistles, a lot of extra things. And these additional requirements compromise the long term feasibility of projects, makes them harder to finance, and it's something that we should be thinking about if we want simpler is it?

Hold on. No. No. No. More transparent.

Simpler, faster, more transparent. Okay. I got it. We're all gonna be saying that in our sleep.

Yeah. Yeah. SFT.

Yes. At any rate, we we we are suggesting that making MHP a simpler, more basic program will provide a foundation on which to to build with all of the very specific housing programs that have requirements in statute. And then also, I hope is one of the other next steps. Agencies can think through the practical impact of this one stop shop from the applicant's perspective, you know, I would submit to you, and this is an all weather vehicle as Jonathan said.

So in times of plenty and times of less plenty, you know, this needs to to work.

Well, we've had a number of years where oversubscription for funding sources has been profound. So, you know, one funding source over excuse me. Oversubscription is 11 to 1. That means one project moves forward and 10 applications are thrown in the trash. It takes a tremendous amount of energy, time, resources for these applications to be put together, also for them to be reviewed.

So we hope that as part of this process, the agencies can think about maybe a pre application or a multistep application process as we've seen in other states. Let's learn from what works in other places. And then my final point is that reform cannot end at the award stage of the process, please. You know, the report does identify the need to align and modernize post award functions, and that is really, really important.

But we worry that some of that might be lost in the midst of implementing all of the great work that's been discussed so far.

I think that it's really important that the measure of success needs to be not just the one stop shop application, but instead, actually, our ability to quickly and efficiently move projects forward through construction into occupancy. And that might be stated as Jonathan's North Star of simpler, faster, more transparent, or just quick and efficient. Bottom line is this should be part of everybody's, you know, performance reviews. Everyone should have the same North Star.

We need to build more housing, and that is part of what we need to make sure gets implemented.

So, again, very appreciative of the focus and attention on streamlining our process here in California, and happy to answer any questions that you have.

Thanks. Linda Bandolini, the CEO of Eden Housing. I could repeat everything Anne just said, but I'm just gonna say plus one and emphasize a few extra things.

For those of you who don't know Eden, we're one of the oldest nonprofit affordable housing developers in California. We got our start in 1968. We have worked with every acronym HCD has ever had. We have the dubious distinction of having had to reform many of those with the legislature. Prior to all of you, we passed many bills trying to just modernize and update HCD's programs just so that we can make them functional for the long term.

And so we are grateful. I moved to California in 1996 from the Commonwealth of Massachusetts where we had a single application for all 47 of our programs. And so I have been asking for this for decades. So thank you for finally getting us here and to all of our colleagues at the state agencies for working so hard to get us to this place. I think it's super important.

I think the report is really fair, in in its reflection. We had several staff that participated in the work groups, and we feel like it's landed in a very good place, but it's just the beginning. My concern is that we're gonna get this really great start. We're gonna have a really great application process and we're gonna get through the first round and it's gonna be like, okay. What next?

Right? And how do we do this? And so, also, our second concern is with what money will we do this? And so we are very much appreciative of the $11,250,000,000 bond that is on the ballot, and we hope that it passes. But if it does not, we do need money to come through this entity.

So we need general fund allocation like we had this year, but in larger quantity if we don't get the bonds. And we also need the ASIC funds back since those have now are now not coming to housing next year. We think this is really important for the legislature to think about. We're gonna go through all this work to create this streamlined structure. We need to make sure we have money, and I hear everybody on the drought part of this.

We hate the drought years because projects get completely stalled. So, I'm just gonna add this sort of what are the next steps, and I think money is an important next step here. Another important point we'd like to make, and Assembly member Quirk Silva, you were singing my song about preservation. We cannot stop streamlining with just an application to start a new project. These are long term partnerships for all of us together.

So asset management and oversight and streamlining these programs on the back end is really important. We are partners for fifty five years on these projects, and Eden can actually prove that since we've been in this with the state for a very long time. We think that it's super important for the state to recognize the value of long term assets, to invest in those assets. We know the bond has PRP, the, renovation program as part of the bonds, but we really need to invest in those.

We need to think more like partners.

We have a highly punitive system, where if you just you send the wrong email or somebody doesn't save the email, you get negative points in future applications. We need to really think about how we work together as developers and as the state to have a process where we recognize that these assets have to last for a very long time, that the tenants need to be protected in those units and that those units need to stay standing.

And in some instances, some of those projects could actually be scaled up to be bigger projects. We have a lot of older projects that could be intensified, but the state has no mechanism to help us think about how do you optimize assets that we already are partners on. So that's, one place where I think we need to look.

I also think there's agencies outside of the 446 that are in the room today, that also impact our success. So we have the excess lands program through DGS that I think, is adjacent to this, but also relies on funding from HCD and TCAC to make parts of those programs move forward. And we think some thinking about how that could be in this fold and expedited or prioritized would be super helpful.

We also think that we have other agencies like DTSC and others that can help or hinder our processes with the state. And so if the legislature's thinking about how to help us, thinking about how all the other parts come into these projects and continuing to encourage streamlining and encourage agencies that might hinder us, from helping, to move to helping us, to to put them in the same mindset that these agencies are currently in.

So as I look to the future, thinking about how do you do it faster, it's not just how do we finance it more quickly. And then I just wanna make one plug for a construction lending. We have two or three projects right now where if HCD were doing the construction lending, we'd be saving 3 or $4,000,000 on them. These are this is real money. So to encourage the continued focus on how do we get the state engaged earlier, I think is gonna be super important.

So, I also wanna thank all of my colleagues and congratulate Jonathan for taking this job because I think this is a really great first step. We really appreciate how much work this is. I think it's gonna be a lot of work for us too. CHC, is would welcome the opportunity to regularly interface, and create a subcommittee to work with, the agencies on how to make this better.

We have had a constant feedback loop with TCAC and CDLAC, to date, and it's been very effective for us.

So, I just wanna thank the legislature for really holding our collective feet to the fire to move this forward. We're very excited about this process and we see a lot of potential here. And we hope that it's super successful because I think we have 3,000 units in the pipeline that we could proceed with relatively quickly if this process had sufficient funds and could move forward. And we're just one developer.

So I think we have a lot of opportunity here, and I really appreciate the opportunity to be here.

Great. Thank you, Chairman Haney and members of the, Committee and also Assemblymember Shaibo, for this opportunity to discuss the progress around 05/19. Complex of undertaking. My name is Tom Kalashaw. I am the CEO of Self Help Enterprises.

By way of background, we are the foremost developer of affordable both single family home ownership as well as rental housing projects in the eight counties of the San Joaquin Valley, as well as Foothill and Mountain communities affected by our housing crisis.

Our vantage point, while similar to our peers in focus who focus more on the coastal areas, provides an essential augmentation of the thoughts expressed by my esteemed colleagues, particularly as relates to rural areas of our state, as well as important efforts to serve our farm worker population. We too have been pleased by the seriousness of effort put forth by the various parties to improve the pathways for affordable rental housing projects to move expeditiously towards build out and occupancy.

California is an incredibly diverse state geographically, socioeconomically, and culturally. My comments will both amplify the remarks of my colleagues who have already testified and also point to the particular challenges we have in the San Joaquin Valley, which in many cases echoes the concerns of other exurban and rural developers around the state.

We have appreciated the amount of listening that secretary Moss and a range of staff, state staff have endured during this process. It can't have been easy. At first, we were concerned that an overall emphasis on process may fail to address a central issue related to our delivery system. That is an entrenched culture and attitude at HCD that at times had created an adversarial and mistrustful relationship with developers who are essential to making the system work.

To their credit and led by secretary Moss, the staff was open minded about these issues, acknowledged that any new system would require renewed approach to this relationship, and thus far have embraced this imperative.

The needs of our rural regions continue to be a special case. Even our largest cities like Fresno, Modesto, and Bakersfield lack the resources, both staffing and funding that our coastal communities rely on for affordable housing development. Sadly, we lack the political will to develop significant local solutions such as ample trust funds or voter approved bonds to augment state and federal resources.

Some of this is related to the realities of our dynamics in the inland areas of the state where competition for scarce resources often prioritize backbone infrastructure needs such as roads and water rather than affordable housing. We were pleased by the wisdom of hiring an experienced leader in the complex financing world of rental housing, capital stacks to run the new housing development finance committee, Jonathan Klein.

The expertise and depth that Mister Klein brings to the job is essential to improve our delivery system. The super NOFA approach to our funding priorities have left many rural communities behind due to its one size fits all outcomes. In the last Super NOFA competition, exactly zero MHP, multifamily housing program dollars went to rural communities as compared to the last MHP only NOFA in 2021, where a more appropriate share of 20% went to rural communities.

Some of this was the result of presuming that Joe Serna Farmworker Housing Grant funds satisfy the needs of rural communities, which is not the case. We too have people experiencing homelessness as well as a need to develop workforce serve workforce housing populations that work outside of the agricultural industry.

The Super NOFA process also created a mismatch for our CERN of farmworker households. To be successful in the funding competition, deep income targeting targeting was essential. This created a problem for farmworker set asides where 30% of area median income units are difficult to fill with agricultural households who tend to make between 40 and 60% of the area median income. Serna and other programs serving special needs populations need to get back to a flat maximum subsidy per unit and remove subsidies based on unit size and AMI levels.

This would eliminate the issue with Serna where we need to find a 40% AMI family that fits in a two bedroom unit when all our applicants are at 50% AMI, and they need a three bedroom unit.

A flat subsidy per unit would allow us to float Serna units based on need and would fix similar issues we see in filling No Place Like Home and home Homekey Plus units as well. We should all be able to agree that it is absurd to place projects in service with long waiting lists, but with the matrix that makes it difficult to fill certain units.

We have been involved in numerous discussions at California Coalition for Rural Housing, CHC, and Housing California about ways to improve the fairness of the funding competitions at TCAC, CDLAC, CalHFA, and HDFC. We are particularly supportive of efforts to improve market study requirements and square footage minimums of grocery stores in TCAC regulations, for instance. We are also deeply interested in reforming the coordinated entry system that has created difficult challenges within our rental communities.

We have also experienced continuing challenges with the methodology used for so called high resource areas, which fail to account for the unique nature of large geographic census tracts in rural California. We continue to support the geographic regions of the 9% tax credit program and urge HDFC to take this approach in future funding allocations. The North South regions are too large and leave large segments of the state behind, including the San Joaquin Valley.

Overall, the revised competition set up by CDLAC has resulted in far less 4% tax credits and bonds available to rural projects. And as such, we support a rethinking of how these set asides and allocations are distributed, which will occur during this regulatory process.

We look look forward to this continued work in all of these areas, and thank you for the opportunity to comment today.

Thank you. Appreciate it. Hollies? Alright. What?

Oh, yeah. Alright. Miss Schiavo.

Thank you so much. It is incredibly helpful to hear about, you know, your experience and your with the process and the and the feedback and insights. And and I appreciate the, you know I I feel like the overarching message of your panel is there's more work to be done. This is great, and there's more work to be done.

And, you know, and I I'm hopeful from the previous panels that that it does sound like coordination collaboration is happening beyond because I think, you know, what what you are really speaking to, miss miss Silverberg Yes.

Is is that while there may be a consolidated application, you know, as we talked about last in the in the previous panel, there's a lot of things that will be happening behind that application in multiple agencies. And and that still needs to be streamlined, and that needs to move faster and be more nimble and collaborative.

And so, you know, I'm hopeful that through this process, it's opened up a lot of cross pollination and cross communication amongst these agencies to really be thoughtful about that and the other ways in which things can be, more streamlined and consolidated. And, and, you know, at the end of the day, move move forward housing more quickly for more Californians, which is what we're all trying to do.

And, Mister Kuleshov, I wanna just highlight that, you know, I really appreciate that you're bringing a rural perspective to the challenges that exist because it is unique and different and not highlighted, I think, enough.

I while I represent North LA County, I grew up in Tuolumne County. And so Aye, you know, I know the rural perspective very well and feel like it's always a piece of me. So I think that those are really important perspectives to keep in mind to make sure that we're meeting the needs because while, you know, in Sonora, it doesn't have the same level of homelessness that we're experiencing in Los Angeles.

I while I represent North LA County, I grew up in Tuolumne County. And so Aye, you know, I know the rural perspective very well and feel like it's always a piece of me. So I think that those are really important perspectives to keep in mind to make sure that we're meeting the needs because while, you know, in Sonora, it doesn't have the same level of homelessness that we're experiencing in Los Angeles.

There is homelessness and and a great need for for affordable housing, for folks there too. And so we need to make sure we're meeting the needs of all of our communities throughout the state.

So thank you for bringing that perspective. And I'm sorry I will have to run because it's my kid's first day of school, and I can't do this work if I had an unhappy child. So so very grateful for everyone's feedback and leadership. And and, again, for the Chair and staff for making this happen and speaker's leadership to allow us to have these hearings. It's been incredibly helpful to hear about the progress and am hopeful, cautiously cautiously optimistic, but really hopeful.

And I've heard a lot of praises of Jonathan today. So we have high hopes, big expectations, and and excited to see your leadership take take flight here. So thank you so much.

Thank you, and thank you for authoring this important bill and for reviewing the outcomes. I'm glad you're you're you're satisfied with some of the progress so far, and and I think there is a lot to to to be hopeful about in terms of what has happened as a result of of this work. One one I just wanna ask one question.

It did sound like there was a lot of, obviously, feeling that there was a lot of input and a and a robust process, that got us to this point in the recommendations that have been put forward and the changes that are associated with them. Do you all have any thoughts on what the most effective way will be for HDFC to engage in stakeholder feedback moving forward?

Obviously, some of what we heard is there are still things that you hope get addressed and and and that need to be heard moving forward. Are there thoughts that you have about how to do that and what's the right, framework for that?

Well, I mean, I think, we we appreciate the hearing process, a transparent hearing process, and the ability to comment. We'd very much like an ongoing working group. I think CHC would be happy to convene a working group that's specific to HDFC and the regs and how it's working and how it's rolling out. We don't wanna create a lot of extra meetings for a lot of people.

And so whatever the the most efficient way is to do this, and I think we all feel like we have a pretty good system of communicating now with TCAC and CDLAC through the California Housing Consortium.

So we could offer that as an opportunity to just have a regular interface. And and, you know, we all show up enforced to anything that's a public hearing to to bring our comments there, but we also welcome the informal conversations with with the directors of all of the agencies because we think it makes for a better outcome before you get to the public hearing. So

I I would agree with that and I I think CHC could expand it a bit too to include some of the other housing advocacy organizations as well just so that they're everybody's seated at the table.

Great. Thank you so much for your work and for your perspective and for your participation in this process, and I'm sure we'll be hearing from you again very soon, and and thank you for your ongoing partnership.

Thank you for having us.

Alright. And thank you to all of the the folks who joined us today, both on the panel and here in the committee hearing room. If there's anybody who would like to provide public comment, we are going to allow for that now. And please identify yourself and keep your comments to no more than to less than two minutes.

Good afternoon, Chair and members. My name is Tyisha Watts with the California Housing Partnership. The California Housing Partnership was created in 1988 by the legislature and governor to increase the supply of sustainable and affordable homes in California. We first wanna thank the time take the time to thank Assemblymember Schiavo for authoring landmark legislation that has laid the foundation to create a one stop shop financing system that addresses the many obstacles that prevent nonprofit developers from being able to build affordable housing.

We also wanna thank HCD, CalHFA, and the CDLAC and TCAT staff working together to bring this goal to fruition. Nonprofit affordable housing developers often see developments stalled because financing requires layering multiple funding sources, each with its own timeline, application cycle, and underwriting requirements, forcing developers to assemble their capital stack sequentially rather than in parallel, all while construction costs continue to rise.

A one stop shop addresses this directly by aligning timelines and consolidating review across agencies to nonprofit developers can move developments from predevelopment to closing faster and with greater certainty. Since the July 1 launch of HDFC, our team has seen leadership and staff move quickly and diligently to begin implementing the recommendations from the five nineteen work group. This isn't just something we've heard about.

It reflects what we've directly observed in our ongoing engagement with HCD staff. The department's published work plan is tangible evidence that commitment, and it gives us confidence that recommendations are being taken seriously and acted with urgency. We're happy to continue to serve as a resource to the committee and to HDD as this work continues. Lastly, thank you Senator Haney for posing the question on AB 1053 implementation.

CHP is a sponsor of this bill and is looking forward to being a resource for CalHFA and HCD to see this important work through successful implementation. Thank you.

Good afternoon. Natalie Spivak with Housing California. I just wanna say a huge thank you to you, Assemblymember Haney, and this committee for prioritizing this issue and really a huge thank you to everyone here in the room. These are the minds that helped us get to where we are today. So I think it's really special that we're all here.

We support much of what's in the AB 519 report. And as you've heard, there's also a lot of work in front of us. Housing California convened a work group filled with affordable housing developers across the state, many of whom were on the AB 519 working group to help inform the creation of the new agency and HDFC. So I just wanna lift up a few of our priorities, which many of which you have heard about in the room today.

One is making sure that HDFC has a more equitable geographic allocation system for many of the reasons that Tom mentioned.

Additionally, it'll be really important to reduce the administrative burden of the application process so that we can make sure that affordable housing developers are spending as much of their time as possible on actually building the housing. And third, it'll also be really important to see asset management processes streamlined. Additionally, I have to mention, as everyone else did here today, the success of the system does depend on adequately funding the system.

And so, of course, we're completely committed to getting the affordable housing bond over the finish line in November, but we also need general fund allocations annually. And as mentioned, it's absolutely critical that funding for the affordable housing and sustainable communities program doesn't get cut.

We're looking at, projections of of cutting of over 80% by DOF, and it's just really important that the bond doesn't substitute the resources that have already been going to housing, but rather complements and build up builds on our process going for on our progress going forward. So with that, thank you, and we look forward to continue continuing this conversation.

Good afternoon. Marina Espinosa with the California Housing Consortium. We appreciate the work that went into developing the recommendations included in the 519 report. The effort to move toward a consolidated application is important and this is a great opportunity for the state to review the requirements attached to affordable housing programs. We appreciate the report's acknowledgement of the need to modernize post award functions, including contracting, loan closings, and long term asset management.

Those items are going to be critical to the success of this effort, as was mentioned by some of the panelists here today. There is still some uncertainty around this effort and the RYOR. And we believe that what happens over the next six to twelve months will be critical. We want this to be successful and look forward to working with the administration on this over the next several months. Thank you.

Good afternoon. Thanks for having me here and just getting to know what my government does. I did a tour, and I ended up here in the building and in this conference and this committee. It's very unique. And so I'm a veteran.

I joined the navy when I was 18. If you look my name up online, there's five federal lawsuits. The army hit my medical records when I attempted to transfer to the army in 1998. Done a lot of homelessness. My name is Aaron Hassay, a a r o n h a s s a y.

I'm a California kid. Thought I would join the military to live the American dream. Well, found out there's other things that happened as well. And so housing has been a big issue for me with limited or injuries from military and then also learning the government and what what how it works when, you know, when you're a kid and you go through that stuff and then basically, you're like, you don't you're not educated on on what I heard today and the VA system, etcetera.

So I went to Cal Vet recently here, California Veterans. They and they offer a home loan. I do get recently have a VA home loan that I don't qualify. Based on my VA income, VA income is limited to that I don't get a home loan enough to purchase a house in California. I don't have a car, so I can't you know, I basically, I'm stuck with a home loan that's not enough to buy a house. Because

my VA income is not much, enough to buy a house, you know, from the VA. So I don't know a solution to that. I don't even know if that even is in this committee. That's one issue that I'm I'm learning about. And I and I'm only learning the VA system in the last few years.

Calvet's involved. That's one issue. And then a second issue is something to do with, like, instant veteran housing if I show up in Sacramento. I went to, you know

and there is no place you just say I who I have an honorable discharge. I need a place to stay. I'm creating, you know, like, situated here in Sacramento. I need a safe place to stay. And I've been to each different VA or I went even to Scott Weiner's or Gavin Newsom's office, like a week ago.

And I said, hey, you know, where is a and the guy came down from his office. I think his name is Adrian. He was a former vet who didn't get injured in military. He's a veteran. Long story short is there's no housing building just to put your stuff down and rack if you're a veteran, show up.

You have to fill out 50 different applications, wait two months, you know. Administratively, it's a whole process to get housing if I show up to get situated in Sacramento. Another issue that might be specific to my, you know, problem, but, you

know, when I wanna get resituated I was born in Carmichael, and I moved to San Diego when I was a kid. My mom, you know so I'm actually a Sacramento resident at birth in Carmichael, but my mom married a Vietnam combat vet who was injured from Vietnam. Didn't get any VA housing or VA programs from the Vietnam army infantry guys. So I I lived it as a kid, and now I'm living it from my own service, like, generationally. Yeah.

I'm learning the system as I go, but those are two situations I'm not even sure Thank you. How I could solve it here. Thank you.

Thank you. Appreciate you being here, Aaron. Thank you all.

Thank you.

Thank you. Appreciate it. Thank you again to all of our witnesses and everyone who participated and joined us. I think as as you heard, from from Aaron there, we have a lot to do to simplify this process, both folks who wanna build affordable housing and people who should be able to access it, including veterans.

And, hopefully, additional dollars come through with the bond and otherwise to be able to fund affordable housing and, affordable housing for veterans that we are also looking at how to simplify this process to get more housing built and simplify it for folks who want to access it as well.

And we appreciate you being here and sharing those comments as well about how challenging it is, especially when we have not enough affordable housing available for people who need it. So thank you all again for being here, and we'll close public comment. And thank you for participating in this last outcome reviews hearing of the year, and appreciate everyone's hard work. And we look forward to following this closely as it moves forward. Thank you.

Meeting's adjourned.