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Budget Sent to Governor:

What It Means for Affordable-Home/Homeless Program Funding

Midday on Tuesday, August 21, 2007, the legislature resolved the budget concerns of Republican senators, resulting in the passage of California's state budget and related "trailer bills."

Although Governor Schwarzenegger has up to 12 days to sign the budget and trailers, Capitol insiders expect that he will take only one or two days to review it and release the signed version, with up to $700 million eliminated through his "blue pencil" authority.

THE BUDGET BILL
SB 77 appropriates $103 billion of state funds, including a number of housing-related expenditures:

SB 77 does not appropriate any of Prop. 1C's $100 million for "innovative financing" or $200 million for "housing-related parks." As a result, SB 586 (Dutton) and AB 1252 (Caballero) or SB 732 (Steinberg) will remain the vehicles, respectively, for appropriating these funds and designing the programs.

TRAILER BILLS
Legislators also sent Schwarzenegger 15 "trailer bills," which can both amend the budget bill appropriations and enact policy changes necessary to carry out the budget's revenue or spending assumptions. The legislature usually passes the trailer bills at the same as the budget, and the governor generally -- but not always -- signs them.

The housing-related trailer bill is SB 86. Additionally, SB 851 (Steinberg) -- although it’s not officially a trailer bill -- implements the program to serve mentally ill parolees.

SB 86 impacts Prop. 1C's $850 million Regional Planning, Housing, and Infill Incentive Account (see pages 35-40). We're pleased the bill's new infill home program reflects most of the joint HCA-Planning and Conservation League proposal. Our clear "wins" include:

  • The funds will be expended on public infrastructure -- e.g. roads and sidewalks -- that directly support residential development in which at least 15% of the homes are affordable at 60% area median income (AMI) for rentals or 120% AMI for for-sale homes.
  • Developers are allowed to apply directly for funds.
  • Any supported development must be built at the "Mullin densities" or higher, with an adjustment for rural areas.
  • Developments will be ranked based on their density; affordability; and proximity to transit, job centers, and other amenities.
  • There is no "affordability cap," which had appeared in a previous version of the language. The cap would have given the same number of points in the ranking system for a development with 25% affordable units and developments with 26-100% affordable units.

SB 86 appropriates $240 million to the infill program and an additional $60 million to the CALReUSE Program for brownfields clean-up.

The main difference between our proposal and SB 86 is that SB 86 does not allow the funds to be used directly to achieve below-market-rate affordability. Importantly, though, Perata and Núñez both acknowledge that the legislature will need to address dwindling Multifamily Housing Program (MHP) resources next year.

The senate sent SB 86 to the governor on a 27-12 vote.

SB 851 would establish PROMISE (Program for Returning Offenders with Mental Illness Safely and Effectively) using the $4 million in the California Department of Corrections and Rehabilitation budget. PROMISE would provide homes with services (supportive homes) for up to 100 mentally ill parolees in each of three parole regions.

SB 851 will be heard today in the Assembly Appropriations Committee.

WE'LL KEEP YOU POSTED
That's the latest. We will send you an update if the governor blue-pencils any housing-related items!

Contact Julie Snyder, (916) 447-0503 x 102 or or Zack Olmstead, (916) 447-0503 x 108 or .

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