CHC Industry Insight

Industry Insight - February 2020

Note from the Executive Director

“It’s time for California to say yes to housing. We cannot wait,” Governor Newsom said in his State of the State address last week devoted almost exclusively to California’s twin challenges of affordable housing and homelessness. With more than 150,000 people now living on the streets—and millions more unable to afford a place to live—the governor said the time has come to act: “We must replace California’s scattershot approach with a coordinated crisis-level response.” Calling housing the “fundamental building block” of any statewide solution, he said, “we will tackle the underproduction of affordable housing in California.”

We have spent years working in Sacramento to hear a governor say these words. Governor Newsom clearly gets it, and in last week’s address, he noted exactly what it will take to get more affordable housing built : “This means a commitment—right now, this year—to major reform that will eliminate red tape and delays for building critically needed housing, like affordable, multifamily homes—especially near transit and downtowns.”

As affordable housing advocates, we recognize the unique opportunity of this moment. And with the state facing a continuing shortfall of 1.4 million affordable homes, we are eager to work with the Governor and Legislature to take the steps needed to dramatically accelerate affordable housing production.

CHC’s statewide network of housing experts has already helped lay the foundation for this renewed affordable housing push. Just last week, the City of San Mateo became the first community to take advantage of the new density bonuses created by AB 1763 , a CHC-sponsored bill authored last year by Asm. David Chiu. The new law will allow one of our members, MidPen Housing, to expand a 164-unit, 5-story development near CalTrain and transit to include 225 units and seven stories. The project is now moving toward a vote by the City Council, and there are many more high quality affordable developments just like it on the way.

In his State of the State, the governor also focused on some of the other tools we need to do this job—highlighting in particular the importance of “eliminating roadblocks to housing and shelter” to ensure more “units planned” become “units built.”

Once again, CHC is right there with him—promoting legislation this year that will streamline affordable production and expand the number of sites available for housing.

We’re proud to co-sponsor a bill authored by Asm. Miguel Santiago, AB 1907 , that will expand statewide new rules that exempt emergency shelters and supportive housing projects in Los Angeles from environmental review. The governor highlighted this approach last week—and the Los Angeles Times recently called the legislation a “no-brainer.” Another CHC-sponsored bill, AB 2988 (Chu), will modify the provisions of AB 2162 (2018) to ensure more communities can accelerate development of permanent supportive housing.

Last week, Asm. Richard Bloom announced another important CHC-sponsored bill, AB 3107 , which will dramatically increase the number of sites available for affordable development by making affordable housing an allowable use on commercial land.

We have a lot more ideas for addressing California’s housing crisis—from directing more reliable funding to affordable housing to reducing fees and simplifying the state’s funding application system.

We look forward to working with all of you this year to ensure every community can build the affordable housing Californians need.

Sincerely,

Ray Pearl

Executive Director

In Case You Missed It

Last Friday was the deadline to introduce bills for this session. CHC's sponsored bills include:
AB 1907 (Santiago), which would exempt from CEQA certain supportive and affordable housing projects
AB 3107 (Bloom), which would increase the availability of sites for housing developments by allowing them on any site that is zoned commercial, so long as 20% of the units as affordable to lower- income households.
AB 2988 (Chu), which would modify the provisions of AB 2162 (2018) to ensure more communities can accelerate development of permanent supportive housing
AB 1484 (Grayson) and AB 3148 (Chiu), which focus on impact fee reforms and reductions.

Also last week, Governor Newsom delivered his State of the State address, the bulk of which was focused on housing and homelessness. Read more here.

CDLAC voted to allocate bonds per the CDLAC scoring guidelines up to the previously allocated amount of $650 million in the general pool and $173 million in the mixed-income pool at its lengthy meeting on February 12 and 18. Read the letter CHC submitted to Committee members prior to their meeting.

Our Executive Director Ray Pearl recently met with Assemblymember Jesse Gabriel to discuss affordable housing production ideas and the need for more housing solutions to come from the Los Angeles area. We appreciate the Assemblyman’s leadership on the Housing Committee and his commitment to addressing our ongoing crisis.

Federal Update from David Gasson, Boston Capital

Boy are things heating up now.

The administration released their proposed FY 2021 budget and again demonstrated their love for housing. Comptroller of the Currency Otting renews his push for drastic changes to the Community Reinvestment Act. The House Ways and Means committee has a hearing on infrastructure that features affordable housing and community development as a focus of their plan (did you hear that OCC?). And coming off our near miss at victory in December, our Senate champions are preparing to release a standalone 4% fixed LIHTC bill in the Senate.

Oh, and the Democrats are going at each other in the 2020 version of presidential nominee Survivor. Who will win? A billionaire, a millionaire or the mayor from Indiana? Either way I like their housing plans.

So who said nothing happens but primaries and caucuses in an election year? We are busy as ever on a myriad of issues critical to affordable housing and need all hands on deck.

First, CRA reform is tops on our agenda and we did get a slight reprieve when the OCC and FDIC announced they were extending the public comment period on the proposed rule changes from March 9th to April 8th. This is welcome news as we work with our colleagues in and outside the industry to submit comments urging the regulators to more vigorously support equity investment in communities as part of the new rules. A number of groups including HAG, AHTCC and ACTION are working on responses and we are encouraging all interested parties to submit letters as well. There are some good suggestions in the proposed rules but the lack of any requirement to invest equity in communities could severely hamper production of all types.

We expect Senators Maria Cantwell (D-WA) and Todd Young (R-IN) to introduce a standalone 4% fixed LIHTC bill in the Senate in March. They are convinced, coming off of the tax bill discussions in December, that they can push through this provision with strong bipartisan support when/if the Senate and House next address tax issues this year. This may be during a lame-duck session in late November or December. We are very supportive of this effort and are working to secure original cosponsors. Senators Cantwell and Young still want to pass the AHCIA and ask the industry to remain focused on the larger bill as we advocate with their colleagues. We will put the word out if this strategy changes.

The House, among other legislative issues, is working on infrastructure and we are very pleased that Ways and Means Chair Neal and Financial Services Chair Waters are set on include affordable housing in the mix. We have had meetings with committee staff as well as the Speaker’s staff on this and are excited about the focus on our agenda. We will keep you apprised as this progresses and let you know when the time comes for a specific push. Until then the focus in the House remains advocating for the AHCIA, which as of this update, has secured more than half of the U.S. House as cosponsors.

Congratulations and keep up the great work.

Affordable Housing in the News

This month in affordable housing news, the 2020 ballot landscape for state and local housing measures began to take shape. The November statewide ballot will once again feature at least two major housing initiatives: An updated version of a failed 2018 renter protection measure modifying the Costa Hawkins Rental Housing Act and a major new “split roll” proposal that would increase the frequency of commercial property tax assessments—raising between $7 billion and $11 billion annually.

At the local level, in the wake of the defeat of SB 50 Los Angeles business groups are considering a measure that would “double the density of residential buildings allowed on commercial streets and in areas zoned for apartments” in exchange for new affordable housing requirements, according to the Los Angeles Times . In San Diego, a $900 million general obligation bond to fund affordable development and supportive services continues to move toward the ballot. In the Bay Area, meanwhile, voters may have to choose between a number of housing initiatives: One proposal in San Francisco seeks to reduce the amount of office space that can be approved each year by a percentage equal to the city’s affordable housing shortfall. Two regional measures are also being considered—and may ultimately merge into a single initiative . They include a mega-transportation measure, “Faster Bay Area,” seeking to raise $100 billion for transportation and housing over 40 years and a $10 billion housing bond measure, “Bay Area Housing for All,” that was the result of last year’s AB 1487 (Chiu). In San Jose, a citywide initiative, Measure E, will be on the March, when voters will be asked to raise $73 million annually for affordable housing and homeless services through a real estate transfer tax on properties worth $2 million or more.

Click here to view our Clips of the Week .

CHC 2020 Board of Directors News

Welcome CHC's New Board Chair, Caleb Roope of The Pacific Companies

Caleb joined the board in 2015 and served as Vice Chair the last two years. He is the founder and CEO of TPC's interrelated companies in the areas of development, finance, architecture, and construction. He has over 20 years of professional real estate experience with a concentration in affordable housing development, and over his career has successfully constructed more than 160 apartment communities for lower and moderate income families and senior citizens.

"I am honored and consider it a privilege to be named the Chair of an organization that leads the promotion of affordable housing production and preservation in our great state of California. Affordable housing advocacy in both California and Washington DC is essential to the betterment of lower income individuals and families who cannot afford a home of their own. CHC is a statewide advocacy leader that plays a critical role in influencing policy decisions that affect millions of citizens and the overall economic health of California. I am confident in our excellent staff and esteemed fellow Board members and look forward to working with the Governor and Legislature to proactively address our state’s unprecedented housing and homelessness crisis.”

Introducing CHC's New Vice Chair, Robin Hughes from Abode Communities

Robin Hughes has been actively involved in affordable housing and community development for over 30 years and in her 20 years as leader of Abode Communities, she has transformed the organization into a top 50 affordable housing developer nationwide and the premier provider of environmentally sustainable affordable housing in California.

"I am honored to serve in this new leadership role as CHC’s Vice Chair. CHC has played a critical role in advocating for public policy and regulatory changes to expedite the production and preservation of affordable housing for low- and moderate-income Californians. We represent the collective industry voice in Sacramento and I'm proud to have this role as we continue to advance the organization’s work over the next year."

Save The Date For

CHC's 2020 Policy Forum &

California Housing Hall of Fame Awards