The United Voice for Affordable Housing 

IN CASE YOU MISSED IT

• CHC’s Policy Forum and Housing Hall of Fame in Anaheim last month was a huge success! Thank you to all who attended and congratulations to the recipients of this year’s California Housing Hall of Fame Awards: Rob Wiener, Executive Director of the California Coalition for Rural Housing; Lisa Gutierrez, Senior Vice President and Director of Business Development for Affordable Housing at U.S. Bank; and Jacky Morales Ferrand, former Director of Housing at the City of San José.

• The Legislature quietly approved a wave of affordable housing legislation this year—including several bills sponsored by CHC—that could represent a “sea change” in California’s response to the housing crisis, according to a story in CalMatters. “With the end of the legislative session last week, California is now on the verge of laying down a welcome mat for most major affordable housing projects across the state.” The source of this optimism isn’t just one piece of legislation or policy change—but the combined effect of a half-dozen bills. More details in the legislative roundup below.

• The Los Angeles Times published a story on a CHC-supported bill that advanced last week, ACA 1 (Aguiar-Curry), which would let voters decide in the November 2024 election whether to lower vote thresholds for local housing bond measures. “Our state and local governments are under enormous pressure to address an ongoing crisis with housing and homelessness,” says the bill’s author, Asm. Cecilia Aguiar-Curry (D-Winters). “You cannot have housing without roads and sewers and public safety facilities. And approving ACA 1 will provide the most accountable transparent method in our state for doing so.”

• The UC Berkeley Terner Center for Housing Innovation is holding a webinar on the California Legislative Session Recap on Tuesday, October 10 from 1-2pm. The webinar will feature a discussion with an expert panel of housing advocates including our VP of Government Affairs, Marina Wiant. To register for this event, click here.

• Governor Newsom and State Insurance Commissioner Ricardo Lara took action last week to address the state’s increasingly precarious insurance market—a positive sign after a legislative deal on the issue collapsed before the end of session. Newsom issued an executive order on Thursday urging Lara to take “prompt regulatory action” to stabilize a market that has seen some insurers stop issuing policies in California. Lara followed up late Thursday with an announcement that the state had reached an agreement with wildfire insurance companies—and was developing regulations for new rate-setting models that would be put in place by December 2024. Read Lara’s full release here. 

LEGISLATIVE ROUNDUP

The Legislature has adjourned for interim recess and many CHC sponsored and supported bills have gone to the Governor's desk. The Governor has until the the 15th of this month to sign or veto legislation.

Streamlining approvals: In one of the biggest wins of the year for affordable housing, SB 423 (Wiener) was approved by the Assembly and Senate. The bill will extend SB 35 for another ten years, while improving the law’s labor standards and allowing streamlining for projects in the Coastal Zone.

Ending frivolous lawsuits: Lawmakers also overwhelmingly approved SB 439 (Skinner), a CHC-sponsored bill providing courts with a new special motion to dismiss frivolous lawsuits seeking to halt 100% affordable housing developments—including but not limited to suits brought under state environmental laws. When lawsuits are deemed meritless and dismissed, the bill also allows affordable housing developers to recover costs and attorney’s fees.

CEQA: Two CHC-sponsored CEQA bills are also on their way to the Governor, including AB 1307 (Wicks) which reverses a recent state court decision by clarifying that the sound of residents’ voices cannot be considered an environmental impact under CEQA, and AB 1449 (Alvarez), which extends new CEQA exemptions to a range of 100% affordable housing project approvals. 

Regional financing: Another CHC-sponsored bill, SB 440 (Skinner), did not advance this year but will be taken up by the Legislature again in 2024. The bill seeks to empower more local governments to join forces to create regional housing finance agencies to address their communities’ unique affordable housing needs.

Affordable housing legislation supported by CHC:

Governor’s mental health bond: The Legislature sent both bills in this year’s mental health services package to the Governor. SB 326 (Eggman) aims to modernize the state’s Mental Health Services Act (MHSA) by setting aside 30% of program funds for housing interventions for people suffering from mental illness and substance use disorders. Companion legislation, AB 531 (Irwin), would authorize a $6.4 billion bond to provide additional financial support for the program. Both bills will need to go before voters on the March 2024 ballot.

State housing bond: Negotiations continue in the Legislature about additional bonds that may go before voters on the November 2024 ballot, including AB 1657 (Wicks), a $10 billion housing bond that would support a range of critical housing programs. The Legislature will take up these proposals again when they return in January.

Local vote thresholds: In another big win for affordable housing, ACA 1 (Aguiar-Curry), a bill seeking to lower vote thresholds for local housing bonds, also made it out of the Legislature for the first time this year. The bill would allow 55% of voters to approve local housing bonds—instead of the two-thirds required today—mirroring the threshold for school bonds. The legislation will go before voters on the November 2024 ballot.

Additional bills of note on the Governor’s desk:

• AB 84 (Ward): Improves access to the welfare exemption for affordable housing by authorizing 501(c)(3) bonds as an allowable public financing source and allowing non-tax credit developments to continue to receive the welfare property tax exemption when a tenant's income increases, up to 100% of AMI.
• AB 346 (Quirk-Silva): Allows TCAC to reallocate some of the state’s enhanced $500 million in LIHTC from 4% projects to 9% projects.
• AB 1386 (Gabriel): Authorizes organizations referring veterans to deeply affordable housing units funded by the Veterans Housing and Homelessness Prevention Program (VHHP) to refer veterans at higher income levels if units are unable to be filled at a lower income threshold.
• AB 1633 (Ting): Settles state law regarding what happens when a local government requires a CEQA analysis beyond what the courts consider sufficient, establishing that such actions against infill housing projects in particular are in violation of the Housing Accountability Act.
• SB 4 (Wiener): Requires affordable housing projects to be a “use by right” on land owned by an independent institution of higher education or a religious institution.
• SB 469 (Allen): Exempts from Article 34 vote requirements affordable housing projects receiving funding from programs administered by HCD, CalHFA, and the California Business, Consumer Services and Housing Agency, as well as those funded through federal or state tax credits or the state’s Affordable Housing and Sustainable Communities Program.

AFFORDABLE HOUSING NEWS OF THE MONTH

How California lawmakers greenlit ‘any flavor of affordable housing you could possibly want’ (CalMatters)

California voters will decide in 2024 whether to lower bar for new taxes and housing bonds (Los Angeles Times)

California insurance commissioner announces agreement on wildfire coverage (Politico)

The California conundrum: Fewer people, more homes, but an acute housing shortage (Los Angeles Times)

Why churches could become California’s most important affordable housing developers (San Francisco Chronicle)

FEDERAL UPDATE FROM DAVID GASSON

As I write this update, the final days of the 2023 fiscal year are passing and there is no sign of a federal budget on the horizon. As I predicted at the beginning of the year, both before and after the marathon voting for Speaker of the House in January, the disfunction that defines the House Republican Conference is coming to a head with what seems to be an inevitable government shutdown.

The dynamics have been clear for some time. There is a faction, albeit small, of the House that, a. does not like government, b. does not like Speaker McCarthy, and c. does not care if the government shuts down. And to be clear, we are talking about some of the Speaker’s Republican colleagues. They have been steering the appropriations process in the House from the beginning, insisting on cuts to federal spending that do not jibe with the agreement the Speaker made with President Biden to avert a debt default and fund the government (aside from an increase for defense) at FY 2023 levels. They did this knowing the bipartisan Senate and White House would not go along with the cuts they were proposing for FY 2024. 

So the question now is, how long will the shutdown last and what will be the political cost of reopening the government. Assuming, which I know is dangerous, the Speaker finally goes along with a majority of his House conference and Senate Republicans, and brings the Senate passed budget to the floor for a bipartisan vote, it will likely pass and there will be an immediate motion by the House rebels to Vacate the Chair. This means a vote on Kevin McCarthy’s tenure as Speaker. Depending on whether the Speaker cuts a deal with Democrats to keep his speakership, which could be costly in itself, it is hard to see him getting 218 (he only has a four seat majority) of his colleagues to support him. That being the case, the other side of the coin is there does not appear to be another Republican in the House that can get 218 votes. It is possible we could see a total shutdown of the House, as without a Speaker the House cannot conduct its business. 

CHC MEMBER SPOTLIGHT

CHC Member: EAH Housing

Project Name: Greenfield Commons

Location: Greenfield, California

Units: 210 units (for families, farmworkers and veterans)

Opening Date: 2025

State & Federal Financing Sources: 

• Joe Serna Jr. Farmworker Housing Grant
• California HCD Accelerator funds
• HOME Investment Partnership Grant Funds

Greenfield Commons is a two-phase development offering 210 units of permanently affordable rental housing for families tied to the local agriculture sector and veterans referred through the Veterans Administration. This new development will feature garden-style apartments, a community building, a recreation and play area, indoor and outdoor common areas, and a community garden. 

“Many rural farming communities in Central California are impacted by the rising rents and are facing a severe shortage of permanent housing,” said Welton Jordan, vice president of real estate development at EAH Housing. “Agricultural workers in Salinas Valley and Monterey County desperately need quality, affordable housing.”