COMMITTEE APPROVES ATKINS BILL TO EXPAND FINANCING FOR AFFORDABLE HOUSING

(Sacramento)  A bill to ensure that state tax credits for developers who build low income housing for special needs populations are available where they are most needed was advanced today on a unanimous vote by the Assembly Housing and Community Development Committee.  AB 952, authored by Assembly Majority Leader Toni Atkins, lifts current restrictions on where these tax credits can be used so that the state’s most expensive areas, as well as those with the highest poverty rates, are eligible.   At least half of the planned housing will be required to serve special needs populations such as the homeless, pregnant and parenting teens, and the disabled.

“This bill makes sense from both a business and a humanitarian viewpoint.  AB 952 ensures that no tax credits go unused, while it also benefits Californians with the greatest need for housing,” says Atkins. “Housing developments for special needs populations require substantial subsidies because of the extremely low incomes of residents.  But these subsidies pay off for the state in the long run in terms of quality of life and reduced healthcare and social services costs.”

Funding for affordable housing in California has significantly declined in recent years, due to the loss of tax increment revenues designated for this purpose from now defunct redevelopment areas; a tightening since the recession of what was already difficult to secure bank financing; and the spend-down of housing funds generated by two statewide ballot measures, Props 1C and 63. Currently, areas where affordable housing is most needed -- Difficult to Develop Areas (DDAs,) where housing is most expensive, and Qualified Census Tracts (QCTs,) which have a high level of poor residents -- are ineligible for state low income tax credits because those areas receive similar federal tax credits.  However, due to a lack of demand outside of these two high-need areas, the state Tax Credit Allocation Committee has had as much as $25 million in state credits remaining at the end of the year.  This bill would allow some of those credits to be applied in DDAs and QCTs for special needs housing.

AB 952 will next be heard in the Assembly Revenue and Taxation Committee.