HomeMy WebLinkAboutRtfy - SB341 - Rdvlpmnt-Housing Functions �� �
CITY OF PALM DESERT
OFFICE OF THE CITY MANAGER
STAFF REPORT
REQUEST: RATIFY THE CITY MANGER'S APPROVAL TO SUBMIT A LETTER OF
OPPOSITION FOR SB 341 (DESAULNIER).
SUBMITTED BY: Stephen Y. Aryan, Risk Manager
DATE: September 12, 2013
CONTENTS: SB 341 (DeSaulnier) Opposition Letter
Recommendation
By Minute Motion, ratify the City Manager's approval to submit a letter of opposition for SB
341 (DeSaulnier).
Committee Recommendation
On August 30, 2013, the Palm Desert Legislative Review Committee recommended that the
City Manager send a letter of opposition for SB 341 (DeSaulnier) given the urgency of this bill
and legislative calendar.
Backctround
The Community Redevelopment Law (CRL) permits local governments to establish a
redevelopment area and capture the increase in property taxes generated within the area (i.e.
"tax increment") over a lengthy period. The law requires redevelopment agencies to deposit
20% of tax increment into a Low and Moderate Income Housing Fund to be used to increase,
improve, and preserve the community's supply of low and moderate income housing
available at an affordable housing cost.
In 2011, the Legislature enacted AB 26X (Blumenfield) eliminating redevelopment agencies
and establishing procedures for winding down these agencies, paying off enforceable
obligations, and disposing of agency assets. AB 26X provided for "housing successors" to
assume the housing rights, powers, duties, obligations, and physical assets of the former
redevelopment agencies. SB 341 retains the housing provisions of the CRL as the basic law
governing housing successors but alters the law for housing successors.
The City of Palm Desert has worked diligently to provide an affordable portfolio that includes
a blend of housing types that are available to a broad range of household incomes. Such
action has been an important aspect of the City's long-range housing strategy to not only
encourage a housing jobs balance, but also to ensure that the portfolio does not segregate or
concentrate any one income category into one location or housing type. To meet the housing
needs of all economic segments of the community, we provide housing units to households
earning up to 120% of the area median income (AMI).
Staff Report: SB 341 (DeSaulnier) Opposition
September 12, 2013
Page 2 of 2
SB 341 seeks to restrict the use of funds to arbitrary percentages of specific income
categories and ages, regardless of the identified local need. While this affects all restricted
income households in the process, it eliminates assistance to moderate income households
and limits assistance to seniors, even though this may be the community group with the
greatest need. Staff is concerned that this calculation may not be representative of the actual
local need and thus harms the exact households that the City seeks to assist with affordable
housing,
The legislation also seeks to limit the use of funds derived from "housing assets", as defined
in Health and Safety Code Section 34176(e), to households earning 80 percent or less of the
AMI. However, it does not clarify how this applies to the preservation of units already
provided above 80%.
According to the 2010 Census approximately 65% of Palm Desert's residents eam less than
120% of AMI and 49% of the residents are over 55. Limiting the use of funds to households
earning below 80% of AMI or to non-senior households would cause a large segment of our
community to be underserved.
Without amendments to the proposed legislation to allow the use of the Low and Moderate
Housing Asset Income Fund based on the local identified need, staff respectfully
recommends that the City oppose this legislation as currently written. Given the urgency of
this bill and impending final consideration by the legislature and Governor, the City Council is
respectfully requested to approve ratification of a letter of opposition for AB 325 (Alejo).
Fiscal Analvsis
No fiscal impact rel ed to the recommended action.
CITY COUNCILACTI4N
Submitted By: APPROVED,...,_.„�,,,..,.,,,,,,.DENtED
RECEIVED 4THER
.�
MF,ETtNG DATE `� '����
AYES: ?J ,'
Stephe Y. A an, Risk anager oEs: A 1r'�n�° - „
AIiSENT: 1�1C�hP .
��
Approval: AI3STAIN: �-
VF,I2[FIED I3Y:
'1 � Original on Fife with City Clerk's Office
�� .
h M. Wohlmuth, City Manager
Senate Bill No. 341
Passed the Senate August 30,2013
Secretary ofthe Senate
Passed the Assembly August 22, 2013
Chief Clerk of the Assembly
This bill was received by the Governor this day
of ,2013,at o'clock M.
Private Secretary of the Governor
SB 341 —2—
CHAPTER
An act to amend Section 34176 of,and to add Section 34176.1
to,the Health and Safety Code,relating to redevelopment.
LEGISLATIVE COUNSEL'S DIGEST
SB 341, DeSaulnier. Redevelopment.
(1) Existing law dissolved redevelopment agencies and
community development agencies,and provides for the designation
of successor agencies that are required to wind down the affairs
of the dissolved redevelopment agencies and to, among other
things,make payxnents due for enforceable obligations,as defined.
Existing law provides that the city,county,or city and county that
authorized the creation of a redevelopment agency may elect to
retain the housing assets and functions previously performed by
the redevelopment agency. Existing law requires the entity
assuming the housing functions of the former redevelopment
agency to perform various functions.
This bill would change provisions relating to the functions to be
performed by the entity assuming the housing functions of the
former redevelopment agency to instead refer to the housing
successor.
(2) Existing law provides that any funds transferred to the city,
county, or city and counry or the entity assuming the housing
functions of the former redevelopment agency, together with any
funds generated from housing assets, shall be maintained in a
separate Low and Moderate Income Housing Asset Fund which
shall be used in accordance with applicable housing-related
provisions of the Community Redevelopment Law,as specified.
This bill would provide that funds in the Low and Moderate
Income Housing Asset Fund shall be used in accordance with
applicable housing-related provisions of the Community
Redevelopment Law, except as specified. The bill would require
the housing successor to expend funds in the Low and Moderate
Income Housing Asset Fund, other than those expended to meet
enforceable obligations, for the purpose of monitoring and
preserving the long-term affordability of units subject to
affordability restrictions or covenants entered into by the
96
—3— SB 341 •
redevelopment agency or the housing successor, for homeless
prevention and rapid rehousing services to individuals and families
who are homeless or would be homeless but for this assistance,
and for the development of affordable housing,as specified.
(3) Existing law requires that moneys in the Low and Moderate
Income Housing Fund be used to assist housing for persons of low
income and housing for persons of very low income in at least the
same proportion as the total number of housing units needed for
each of those income groups bears to the total number of units
needed for persons of moderate, low,and very low income within
the community, as specified.
This bill would provide that these provisions shall not apply,
and would instead require that if the aggregate number of units of
deed-restricted rental housing restricted to seniors and assisted by
the housing successor, its former redevelopment agency, and its
host jurisdiction within the previous 10 years exceeds 50%of the
aggregate number of units of deed-restricted rental housing assisted
by the housing successor, its former redevelopment agency, and
its host jurisdiction within the same time period,then the housing
successor shall not expend these funds to assist additional senior
housing units until the housing successor or its host jurisdiction
assists,and construction has started on,a number of units available
to all persons regardless of age that is equal to 50%of the aggregate
number of units of deed-restricted rental housing units assisted by
the housing successor, its former redevelopment agency, and its
host jurisdiction within the same time period.
(4) Existing law requires that a specified percentage of all taxes
that are allocated to a former redevelopment agency be used outside
a specified project area upon a resolution of the agency and the
legislative body that the use will be of benefit to the project.
This bill would provide that program income a housing successor
receives shall not be associated with a project area and may be
expended anywhere within the jurisdiction of the housing successor
or transferred for the purpose of developing transit priority projects,
permanent supportive housing,housing for agricultural employees,
or special needs housing,without a finding of benefit to a project
area,as specified.The bill would also authorize 2 ar more housing
successors, as specified, to agree to transfer funds among their
respective Low and Moderate Income Housing Asset Funds, as
specified.
96
SB 341 —4—
(5) Existing law provides that if excess surplus accumulates in
the Low and Moderate Income Housing Fund, the former
redevelopment agency may adopt a plan for expenditure of the
moneys.Existing law also requires that upon failure of the former
redevelopment agency to expend or encumber excess surplus in
the Low and Moderate Income Housing Fund,it shall be required
to disburse,expend,or encumber its excess surplus, as specified.
This bill would provide that these provisions shall not apply,
and would instead provide that if a housing successor has an excess
surplus, the housing successor shall encumber the excess surplus
for specified purposes or transfer the funds within 3 fiscal years.
The bill would provide that if the housing successor fails to comply
with this subdivision,the housing successor,within 90 days of the
end of the 3rd fiscal year, shall transfer any excess surplus to the
Department of Housing and Community Development for
expenditure pursuant to the Multifamily Housing Program or the
Joe Serna, Jr. Farmworker Housing Grant Program.
(6) Existing law requires a former redevelopment agency, for
each interest in real property acquired using moneys from the Low
and Moderate Income Housing Fund,to,within 5 years from the
date it first acquires the property interest for the development of
housing affordable to persons and families of low and moderate
income, initiate activities consistent with the development of the
property for that purpose. Existing law provides that in the event
that physical development of the property for this purpose has not
begun by the end of a specified time period, or if the former
redevelopment agency does not comply with this requirement,the
property shall be sold and the moneys from the sale, less
reimbursement to the agency for the cost of the sale, shall be
deposited in the Low and Moderate Income Housing Fund.
This bill would provide that these provisions shall not apply to
interests in real property acquired on or after February 1, 2012,
and that with respect to interests in real property acquired by the
fortner redevelopment agency prior to February l, 2012, the
specified time periods shall be deemed to have commenced on the
date that the Department of Finance approved the property as a
housing asset.
(7) Existing law requires every former redevelopment agency
to submit the final report of any audit undertaken and an annual
report to its legislative body,as specified.Existing law also requires
96
-5— SB 341
the Controller to compile and publish annually reports of the
financial transactions of each former community redevelopment
agency,to make the data a�ailable to the Legislature and its agents
upon request,and to publish this information for each project area
of each redevelopment agency.
This bill would provide that these provisions shall not apply and,
instead, would require the housing successor to conduct and
provide to its governing body an independent financial audit of
the Low and Moderate Income Housing Asset Fund.It would also
require the housing successor to post specified information on its
Internet Web site.
The people of the State of California do enact as follows:
SECTION 1. Section 34176 of the Health and Safety Code is
amended to read:
34176. (a) (1) The city, county, or city and county that
authorized the creation of a redevelopment agency may elect to
retain the housing assets and functions previously performed by
the redevelopment agency. If a city, county, or city and county
elects to retain the authority to perform housing functions
previously performed by a redevelopment agency, all rights,
powers, duties, obligations, and housing assets, as defined in
subdivision(e),excluding any amounts on deposit in the Low and
Moderate Income Housing Fund and enforceable obligations
retained by the successor agency, shall be transferred to the city,
county,or city and county.
(2) The housing successar shall submit to the Department of
Finance byAugust 1,2012,a list of all housing assets that contains
an explanation of how the assets meet the criteria specified in
subdivision (e). The Department of Finance shall prescribe the
format for the submission of the list. The list shall include assets
transferred between February 1, 2012, and the date upon which
the list is created. The department shall have up to 30 days from
the date of receipt of the list to object to any of the assets or
transfers of assets identified on the list. If the Department of
Finance objects to assets on the list, the housing successor may
request a meet and confer process within five business days of
receiving the department objection. If the transferred asset is
deemed not to be a housing asset as defined in subdivision(e), it
96
SB 341 —6—
shall be returned to the successor agency and the provision of
Section 34178.8 may apply.If a housing asset has been previously
pledged to pay for bonded indebtedness,the successor agency shall
maintain control of the asset in order to pay for the bond debt.
(3) For purposes of this section and Section 34176.1,"housing
successor" means the entity assuming the housing function of a
former redevelopment agency pursuant to this section.
(b) If a city, county, or city and county does not elect to retain
the responsibility for performing housing functions previously
performed by a redevelopment agency, all rights,powers, assets,
duties, and obligations associated with the housing activities of
the agency, excluding enforceable obligations retained by the
successor agency and any amounts in the Low and Moderate
Income Housing Fund, shall be transferred as follows:
(1) If there is no local housing authority in the territorial
jurisdiction of the former redevelopment agency,to the Department
of Housing and Community Development.
(2) If there is one local housing authority in the territorial
jurisdiction of the former redevelopment agency, to that local
housing authority.
(3) If there is more than one local housing authority in the
territorial jurisdiction of the former redevelopment agency,to the
local housing authority selected by the city, county, or city and
county that authorized the creation of the redevelopment agency.
(c) Commencing on the operative date of this part,the housing
successor may enforce affordability covenants and perform related
activities pursuant to applicable provisions of the Community
Redevelopment Law(Part 1 (commencing with Section 33000)),
including,but not limited to, Section 33418.
(d) Except as specifically provided in Section 34191.4, any
funds transferred to the housing successor,together with any funds
generated from housing assets,as defined in subdivision(e),shall
be maintained in a separate Low and Moderate Income Housing
Asset Fund which is hereby created in the accounts of the housing
successor.
(e) For purposes of this part,"housing asset"includes all of the
following:
(1) Any real property, interest in, or restriction on the use of
real property,whether improved or not,and any personal property
provided in residences, including furniture and appliances, all
96
—7— SB 341
housing-related files and loan documents,office supplies,software
licenses, and mapping programs,that were acquired for low-and
moderate-income housing purposes,either by purchase or through
a loan,in whole or in part,with any source of funds.
(2) Any funds that are encumbered by an enforceable obligation
to build or acquire low-and moderate-income housing,as defined
by the Community Redevelopment Law(Part 1 (commencing with
Section 33000))unless required in the bond covenants to be used
for repayment purposes of the bond.
(3) Any loan or grant receivable, funded from the Low and
Moderate Income Housing Fund,from homebuyers,homeowners,
nonprofit or for-profit developers, and other parties that require
occupancy by persons of low or moderate income as defined by
the Community Redevelopment Law (Part 1 (commencing with
Section 33000)).
(4) Any funds derived from rents or operation of properties
acquired for low-and moderate-income housing purposes by other
parties that were financed with any source of funds, including
residual receipt payments from developers, conditional grant
repayments, cost savings and proceeds from refinancing, and
principal and interest payments from homebuyers subject to
enforceable income limits.
(5) A stream of rents or other payments from housing tenants
or operators of low-and moderate-income housing financed with
any source of funds that are used to maintain,operate,and enforce
the affordability of housing or for enforceable obligations
associated with low-and moderate-income housing.
(6) (A) Repayments of loans or deferrals owed to the Low and
Moderate Income Housing Fund pursuant to subparagraph(G)of
paragraph(1)of subdivision(d)of Section 34171,which shall be
used consistent with the af�ordable housing requirements in the
Community Redevelopment Law (Part 1 (commencing with
Section 33000)).
(B) Loan or deferral repayments shall not be made prior to the
2013-14 fiscal year. Beginning in the 2013-14 fiscal year, the
maximum repayment amount authorized each fiscal year for
repayments made pursuant to this paragraph and subdivision (b)
of Section 34191.4 combined shall be equal to one-half of the
increase between the amount distributed to t�ing entities pursuant
to paragraph(4) of subdivision(a) of Section 34183 in that fiscal
96
SB 341 —8—
year and the amount distributed to taxing entities pursuant to that
paragraph in the 2012-13 base year. Loan or deferral repayments
made pursuant to this paragraph shall take priority over amounts
to be repaid pursuant to subdivision(b)of Section 34191.4.
(fl If a development includes both low- and moderate-income
housing that meets the definition of a housing asset under
subdivision(e)and other types of property use,including,but not
limited to, commercial use, governmental use, open space, and
parks, the oversight board shall consider the overall value to the
community as well as the benefit to taxing entities of keeping the
entire development intact or dividing the title and control over the
property between the housing successor and the successor agency
or other public or private agencies.The disposition of those assets
may be accomplished by a revenue-sharing arrangement as
approved by the oversight board on behalf of the affected taxing
entities.
(g) (1) (A) The housing successor may designate the use of
and commit indebtedness obligation proceeds that remain after the
satisfaction of enforceable obligations that have been approved in
a Recognized Obligation Payment Schedule and that are consistent
with the indebtedness obligation covenants.The proceeds shall be
derived from indebtedness obligations that were issued for the
purposes of affordable housing prior to January l,2011,and were
backed by the Low and Moderate Income Housing Fund.
Enforceable obligations may be satisfied by the creation of reserves
for the projects that are the subject of the enforceable obligation
that are consistent with the contractual obligations for those
projects,or by expending funds to complete the projects.
(B) The housing successor shall provide notice to the successor
agency of any designations of use or commitrnents of funds
specified in subparagraph (A) that it wishes to make at least 20
days before the deadline for submission of the Recognized
Obligation Payrnent Schedule to the oversight board.Commitments
and designations shall not be valid and binding on any pariy until
they are included in an approved and valid Recognized Obligation
Payment Schedule. The review of these designations and
commitments by the successor agency, oversight board, and
Department of Finance shall be limited to a determination that the
designations and commitments are consistent with bond covenants
and that there are sufficient funds a�ailable.
� 96
-9— SB 341
(2) Funds shall be used and committed in a manner consistent
with the purposes of the Low and Moderate Income Housing Asset
Fund. Notwithstanding any other law,the successor agency shall
retain and expend the excess housing obligation proceeds at the
discretion of the housing successor, provided that the successor
agency ensures that the proceeds are expended in a manner
consistent with the indebtedness obligation covenants and with
any requirements relating to the ta�c status of those obligations.
The amount expended shall not exceed the amount of indebtedness
obligation proceeds available and such expenditure sha11 constitute
the creation of excess housing proceeds expenditures to be paid
from the excess proceeds. Excess housing proceeds expenditures
shall be listed separately on the Recognized Obligation Payment
Schedule submitted by the successor agency.
(h) This section shall not be construed to provide any stream of
tax increment financing.
SEG 2. Section 34176.1 is added to the Health and Safety
Code,to read:
34176.1. Funds in the Low and Moderate Income Housing
Asset Fund described in subdivision(d)of Section 34176 shall be
subject to the provisions of the Community Redevelopment Law
(Part 1 (commencing with Section 33000))relating to the Low and
Moderate Income Housing Fund, except as follows:
(a) Subdivision (d) of Section 33334.3 and subdivision (a) of
Section 33334.4 shall not apply. Instead, funds received from the
successor agency for items listed on the Recognized Obligation
Payment Schedule shall be expended to meet the enforceable
obligations,and the housing successor shall expend all other funds
in the Low and Moderate Income Housing Asset Fund as follows:
(1) For the purpose of monitoring and preserving the long-term
affordability of units subject to affordability restrictions or
covenants entered into by the redevelopment agency or the housing
successor and for the purpose of administering the activities
described in paragraphs (2) and (3), a housing successor may
expend per fiscal year up to an amount equal to 2 percent of the
statutory value of real property owned by the housing successor
and of loans and grants receivable, including real property and
loans and grants transferred to the housing successor pursuant to
Section 34176 and real property purchased and loans and grants
made by the housing successor. If this amount is less than two
46
SB 341 —10—
hundred thousand dollars($200,000)for any given fiscal year,the
housing successor may expend up to two hundred thousand dollars
($200,000)in that fiscal year for these purposes.The Department
of Housing and Community Development shall annually publish
on its Internet Web site an adjustment to this amount to reflect any
change in the Consumer Price Index for All Urban Consumers
published by the federal Department of Labor for the preceding
calendar year. For purposes of this paragraph, "statutory value of
real property"means the value of properties formerly held by the
former redevelopment agency as listed on the housing asset transfer
form approved by the Deparnnent of Finance pursuant to paragraph
(2)of subdivision(a)of Section 34176,the value of the properties
transferred to the housing successor pursuant to subdivision(fl of
Section 34181,and the purchase price of properties purchased by
the housing successor.
(2) Notwithstanding Section 33334.2, if the housing successor
has fulfilled all obligations pursuant to Sections 33413 and 33418,
the housing successor may expend up to two hundred fifty thousand
dollars ($250,000) per fiscal year for homeless prevention and
rapid rehousing services for individuals and families who are
homeless or would be homeless but for this assistance, including
the provision of short-term or medium-term rental assistance,
housing relocation and stabilization services including housing
search, mediation, or outreach to property owners, credit repair,
security or utility deposits,utility payments, rental assistance for
a final month at a location, moving cost assistance, and case
management, or other appropriate activities for homelessness
prevention and rapid rehousing of persons who have become
homeless.
(3) (A) The housing successor shall expend all funds remaining
in the Low and Moderate Income Housing Asset Fund after the
expenditures allowed pursuant to paragraphs (1) and (2) for the
development of housing affordable to and occupied by households
earning 80 percent or less of the area median income,with at least
30 percent of these remaining funds expended for the development
of rental housing a$�ordable to and occupied by households earning
30 percent or less of the area median income and no more than 20
percent of these remaining funds expended for the development
of housing affordable to and occupied by households earning
between 60 percent and 80 percent of fhe area median income.A
96
-11— SB341
housing successor shall demonstrate in the annual report described
in subdivision (fl, for 2019, and every five years thereafter, that
the housing successor's expenditures from January 1,2014,through
the end of the latest fiscal year covered in the report comply with
the requirements of this subparagraph.
(B) If the housing successor fails to comply with the extremely
low income requirement in any five-year report,then the housing
successor shall ensure that at least 50 percent of these remaining
funds expended in each fiscal year following the latest fiscal year
following the report are expended for the development of renial
housing affordable to, and occupied by, households earning 30
percent or less of the area median income until the housing
successor demonstrates compliance with the extremely low income
requirement in an annual report described in subdivision(�.
(C) If the housing successor exceeds the expenditure limit for
households earning between 60 percent and 80 percent of the area
median income in any five-year report,the housing successor shall
not expend any of the remaining funds for households earning
between 60 percent and 80 percent of the area median income unril
the housing successor demonstrates compliance with this limit in
an annual report described in subdivision(fl.
(D) For purposes of this subdivision,"development"means new
construction, acquisition and rehabilitation, substantial
rehabilitation as defined in Section 33413, the acquisition of
long-term affordability covenants on multifamily units as described
in Section 33413, or the preservation of an assisted housing
development that is eligible for prepayment or termination or for
which within the expiration of rental restrictions is scheduled to
occur within five years as those terms are defined in Section
65863.10 of the Government Code. Units described in this
subparagraph may be counted towards any outstanding obligations
pursuant to Section 33413, provided that the units meet the
requirements of that section and are counted as provided in that
section.
(b) Subdivision(b)of Section 33334.4 shall not apply.Instead,
if the aggregate number of units of deed-restricted rental housing
restricted to seniors and assisted individually or jointly by the
housing successor, its former redevelopment agency, and its host
jurisdiction within the previous 10 years exceeds 50 percent of the
aggregate number ofunits of deed-restricted rental housing assisted
96
SB 341 —12—
individuaily or jointly by the housing successor, its former
redevelopment agency, and its host jurisdiction within the same
time period, then the housing successor shall not expend these
funds to assist additional senior housing units until the housing
successor or its host jurisdiction assists, and construction has
commenced,a number of units available to all persons,regardless
of age,that is equal to 50 percent of the aggregate number of units
of deed-restricted rental housing units assisted individually or
jointly by the housing successor,its former redevelopment agency,
and its host jurisdiction within the time period described above.
(c) (1) Program income a housing successor receives shall not
be associated with a project area and,notwithstanding subdivision
(g) of Section 33334.2, may be expended anywhere within the
jurisdiction of the housing successor or transferred pursuant to
paragraph (2) without a finding of benefit to a project area. For
purposes of this paragraph,"program income"means the sources
described in paragraphs (3), (4), and (5) of subdivision (e) of
Section 34176 and interest earned on deposits in the account.
(2) Two or more housing successors within a county, within a
single metropolitan statistical area,within 15 miles of each other,
or that are in contiguous jurisdictions may enter into an agreement
to transfer funds among their respective Low and Moderate Income '
Housing Asset Funds for the sole purpose of developing transit
priority projects as defined in subdivisions (a) and(b)of Section
21155 of the Public Resources Code,permanent supportive housing
as defined in paragraph(2)of subdivision(b)of Section 50675.14,
housing for agricultural employees as defined in subdivision (g)
of Section 50517.5,ar special needs housing as defined in federal
or state law or regulation if all of the following conditions are met:
(A) Each participating housing successor has made a finding
based on substantial evidence, after a public hearing, that the
agreement to transfer funds will not cause or exacerbate racial,
ethnic, or economic segregation.
(B) The development to be funded shall not be located in a
census tract where more than 50 percent of its population is very
low income,unless the development is within one-half mile of a
major transit stop or high-quality transit corridor as defined in
paragraph (3) of subdivision (b) of Section 21155 of the Public
Resources Code.
96
-13— SB 341
(C) The completed development shall not result in a reduction
in the number of housing units or a reduction in the affordability
of housing units on the site where the development is to be built.
(D) A transferring housing successor shall not have any
outstanding obligations pursuant to Section 33413.
(E) No housing successor may transfer more than one million
dollars($1,000,000)per fiscal year.
(F) The jurisdictions of the transferring and receiving housing
successors each have an adopted housing element that the
Deparhnent of Housing and Community Development has found
pursuant to Section 65585 of the Government Code to be in
substantial compliance with the requirements of Article 10.6
(commencing with Section 65580) of Chapter 3 of Division 1 of
Title 7 of the Government Code and have submitted to the
Department of Housing and Community Development the annual
progress report required by Section 65400 of the Government Code
within the preceding 12 months.
(G) Transferred funds shall only assist rental units affordable
to, and occupied by,households earning 60 percent or less of the
area median income.
(H) Transferred funds not encumbered within two years shall
be transferred to the Department of Housing and Community
Development for expenditure pursuant to the Multifamily Housing
Program or the Joe Serna,Jr.Farmworker Housing Grant Program.
(d) Sections 33334.10 and 33334.12 shall not apply. Instead,if
a housing successor has an excess surplus,the housing successor
shall encumber the excess surplus for the purposes described in
paragraph(3) of subdivision(a) or transfer the funds pursuant to
paragraph (2) of subdivision (c) within three fiscal years. If the
housing successor fails to comply with this subdivision,the housing
successor,within 90 days of the end of the third fiscal year, shall
transfer any excess surplus to the Department of Housing and
Community Development for expenditure pursuant to the
Multifamily Housing Program or the Joe Serna, Jr. Farmworker
Housing Grant Program.For purposes of this subdivision,"excess
surplus"shall mean an unencumbered amount in the account that
exceeds the greater of one million dollars ($1,000,000) or the
aggregate amount deposited into the account during the housing
successor's preceding four fiscal years,whichever is greater.
96
SB 341 —14—
(e) Section 33334.16 shall not apply to interests in real property
acquired on or after February l,2012.With respect to interests in
real property acquired by the former redevelopment agency prior
to February 1,2012,the time periods described in Section 33334.16
shall be deemed to have commenced on the date that the
Department of Finance approved the property as a housing asset.
(� Section 33080.1 of this code and Section 12463.3 of the
Government Code shall not apply. Instead,the housing successor
shall conduct, and shall provide to its governing body, an
independent financial audit of the Low and Moderate Income
Housing Asset Fund within six months after the end of each fiscal
year,which may be included in the independent financial audit of
the host jurisdiction. If the housing successor is a city or county,
it shall also include in its report pursuant to Section 65400 of the
Government Code and post on its Internet Web site all of the
following information for the previous fiscal year. If the housing
successor is not a city or county, it shall also provide to its
governing body and post on its Internet Web site all of the
following information for the previous fiscal year:
(1) The amount deposited to the Low and Moderate Income
Housing Asset Fund, distinguishing any amounts deposited for
items listed on the Recognized Obligation Payment Schedule from
other amounts deposited.
(2) A statement of the balance in the fund as of the close of the
fiscal year,distinguishing any amounts held for items listed on the
Recognized Obligation Payment Schedule from other amounts.
(3) A description of expenditures from the fund by category,
including,but not limited to,expenditures(A)for monitoring and
preserving the long-term affordability of units subject to
affordability restrictions or covenants entered into by the
redevelopment agency or the housing successor and administering
the activities described in paragraphs (2) and (3) of subdivision
(a), (B) for homeless prevention and rapid rehousing services for
the development of housing described in paragraph (2) of
subdivision(a), and(C) for the development of housing pursuant
to paragraph(3)of subdivision(a).
(4) As described in paragraph(1)of subdivision(a),the statutory
value of real property owned by the housing successor, the value
of loans and grants receivable,and the sum of these two amounts.
96
-15— SB 341
(5) A description of any transfers made pursuant to paragraph
(2) of subdivision (c) in the previous fiscal year and, if still
unencumbered,in earlier fiscal years and a description of and status
update on any project for which transferred funds have been or
will be expended if that project has not yet been placed in service.
(6) A description of any project for which the housing successor
receives or holds property tax revenue pursuant to the Recognized
Obligation Payment Schedule and the status of that project.
(7) For interests in real property acquired by the former
redevelopment agency prior to February 1, 2012, a status update
on compliance with Section 33334.16.For interests in real property
acquired on or after February 1, 2012, a status update on the
project.
(8) A description of any outstanding obligations pursuant to
Section 33413 that remained to transfer to the housing successor
on February l,2012,of the housing successor's progress in meeting
those obligations, and of the housing successor's plans to meet
unmet obligations.In addition,the housing successor shall include
in the report posted on its Internet Web site the unplementation
plans of the former redevelopment agency.
(9) The information required by subparagraph(B)of paragraph
(3)of subdivision(a).
(10) The percentage of units of deed-restricted rental housing •
restricted to seniors and assisted individually or jointly by the
housing successor, its former redevelopment agency, and its host
jurisdiction within the previous 10 years in relation to the aggregate
number of units of deed-restricted rental housing assisted
individually or jointly by the housing successor, its former
redevelopment agency, and its host jurisdiction within the same
time period.
(11) The amount of any excess surplus,the amount of time that
the successor agency has had excess surplus, and the housing
successor's plan for eliminating the excess surplus.
96
Approved , 2013
Governor
CI � Y 0 � P � l �l DESERI �
73 5�o FRFo WnR�Nc Daivr
rALM �ESER9',CAUFORNIA q2260-2578
• TEL:�60 346—ob��
Fnx:760 390 a574
infoC palm-deserc.org
OI I H 1 �tl'llli� �fl'S M4N��(.1 N .. . . . .
August 3Q, 2013
The Honorable Mark DeSaulnier
Califomia State Senate
State Capitol, Room 5035
Sacramento, Califomia 95814
Dear Senator DeSaulnier:
SUBJECT: SB 341 (DESAULNIER) OPPOSE
The City of Palm Desert respectFully regrets that we must oppose 5B 341 (DeSaulnier).
As an active supporter of affordabte housing in aur community, Palm Desert has worked
diligently to provide an affordable portfolio that includes a biend of housing types that
are available to a broad range of household incomes. This has been an important
aspect of our long-range housing strategy to not oniy encourage a housing Jobs
ba{ance, but also to ensure that the portfolio does not segregate or concentrate any one
income category into one location or housing type. To meet the housing needs of ali
economic segments of the community, we provide housing units to households eaming
up to 120%of the area median income(AMI).
SB 341 seeks to restrict the use of funds to arbitrary percentages of spec�c income
categories and ages, regardless of the identi�ed locai need. While this affects all
restricted income households in the process, it eliminates assistance to moderate
income housel�lds and limits assistance to seniors, even though this may be the
community group with the greatest need. We are very concerned that this calculation
may not be representative of the actual local need and thus harm the exact households
that we seek to assist with affordable housing.
The legislation also seeks to limit the use of funds derived from "housing assets", as
defined in Health and Safety Code Section 34178(e), to households earning 80% or
less of the AMI. However, it daes not clarify how this applies to the preservation of units
already provided above 80%. For example: Is a household required to move from their
rentai unit if their income exceeds 80% after they move in? If a househoid eaming over
80% currently owns a home that has deed restrictions and decides to sell their home,
can the money derived from the seller's assistance (program income) be used to re-sell
the home to a qualfied moderate income" household?
�',i!lMDMIBIX�YMIO �
SB 341 Opposition CoRespondence
August 30, 2013
Pag�2 of 2
Accordfng to the 2010 Census approximateiy 65% of Palm Desert's residents eam less
than 120% of AMI and 49% of the nesidents are over 55. Limiting the use of funds to
households eaming below 80% of AMI or to non-senior households would cause a large
segment of our community to be underserved.
Without amendments to the proposed legislation to aliow the use of the Low and
Moderate Housing Asset Income Fund based on the local identified need, we must
OPPOSE this legislation as currently written. If you or your staff have any questions or
require clarification on our position, please contact me or Janet M. Moore� Director of
Housing, at(760) 346-0611. Thank you for your consideration in this matter.
Sincerely,
�L,l�c+^-�---�
OHN M. WOHLMUTH
CITY MANAGER
*NOTE: Given �he curnent AM/for Riverside County, utiliry allowances for/arge units
and interest rate fluctuation, a moderate income household a/ready requires more than
40% of the sa/es price in subsidy to qualify for a $200,000 home. Re-selling homes to
preserve affordability to harseholds eaming/ess than 80% of the AM/wou/d require
much/arger subsidies.
JMW:JMM
cc: City Council
The Honorable Jerry Brown, Govemor, State of Califomia
The Honorable Brian Nestande. Califomia State Assembly
Erin Sasse, League of Califomia Cities, esasseCa'2cacities.or�
Anthony Gonsalves, Gonsalves and Sons, c,�onsalves�dl��onsalvi.com
Paul S. Gibson, Director of Finance
Janet M. Moore, Director of Housing
Lauri Aylaian, Dire�tor of Community Development
Stephen Y. Aryan, Risk Manager
CIiY Af P�IM DESfR1
��