California lawmakers review 2023 law to make affordable housing easier

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(The Center Square) – A law passed in 2023 that sought to consolidate applications for California’s affordable housing developers received scrutiny from lawmakers on Tuesday, who looked at how effective the law has been in its first two years.

That law, known as Assembly Bill 519 before its passage, was authored by Assemblymember Pilar Schiavo, D-Santa Clarita, It aimed to have the state’s Affordable Housing Finance Work Group create one application for developers building affordable housing to apply for state funds. The application developers would have to use would allow those developers to access state funds that are meant to be used to build multifamily rental units, according to a legislative analysis of the bill.

“The report recommendations are a comprehensive framework for an application for a process covering the majority of the agencies and state funding sources,” Gustavo Velasquez, director of the California Department of Housing & Community Development, testified in the oversight hearing. “The agencies are now actively engaged in accomplishing the report’s recommendations.”

Those recommendations include aligning applications, award cycles and funding sources and efficiently using financial resources meant for affordable housing programs, Velasquez added.

“By making award decisions together, we have the ability to stretch resources across more projects and ensure those housing developments commence construction sooner,” Velasquez said.

Prior to 519’s passage, affordable housing developers had four different entities to apply to in order to access grants to help build housing. The application process was complex and resulted in costs that ultimately were paid by California’s taxpayers, according to the bill analysis.

Schiavo’s bill aimed to make it simple for developers to apply for grants, tax credits, loans and tax-exempt bond money, according to the bill analysis.

The oversight hearing conducted on Tuesday is one of many such hearings to take place in the legislature this year after the Speaker of the Assembly, Robert Rivas, launched an effort to review recent laws to determine their efficacy.

“We’ve had a number of these hearings already to make sure that when we move forward a policy, that the conversation does not end with a bill signing,” Assemblymember Matt Haney, D-San Francisco and chair of the Assembly Housing and Community Development Committee, said on Tuesday. “That’s the beginning, hopefully, of the impact of that policy, especially when it comes to housing affordability. We want to make sure we are not just passing laws, but to evaluate whether they are working and being implemented as intended.”

According to oversight hearing documents, the state spends $100 to $120 million a year on state tax credits for affordable housing projects, and since 2019, has authorized an additional $500 million in state tax credits for affordable housing.

The federal government gives the state $106.7 million in tax credits for affordable housing developments. The deadline to submit a report about how to implement a single, consolidated application for affordable housing developers is Jan. 1, 2027.

“You can’t address homelessness without addressing housing,” Schiavo, who authored the bill, said in the committee hearing. “So very excited to see it coming to fruition. One single application was kind of the final goal.”