Assemblymember Gloria Successful in Passing Two Bills to Combat California’s Housing Crisis

Friday, May 26, 2017

Gloria Bills to Promote Middle Class Housing Opportunities & Stabilize Affordable Housing Finances Advance to State Senate

SACRAMENTO, CA – Continuing on his pledge to bring forward solutions to address California’s housing crisis, California State Assemblymember Todd Gloria (D-San Diego) announced today the successful passage of two more of his housing bills – AB 1193 and AB 1637 – by the State Assembly.

When I was elected to the State Legislature, I promised my constituents that we would work on solutions to California’s persistent housing crisis. AB 1193 and 1637 represent two of these solutions,” said Assemblymember Todd Gloria. “There is still much more to do, but the passage of AB 1193 and 1637 demonstrate the Assembly’s commitment to addressing this crisis and I’m grateful to my colleagues for their support of these measures.”

AB 1193, authored by Assemblymember Gloria, ensures that affordable housing properties built using low income housing tax credits have a predictable level of property tax – thereby, giving affordable housing properties a greater ability to plan for future maintenance, capital repairs, and other loan requirements.

Current state and federal law governing the use of property tax exemptions and low income housing credits can generate a conflict in the amount of property tax affordable housing property owners are required to pay annually because property tax exemptions are based upon the income level of the tenant, not the rent restriction of the unit.

Existing state law exempts affordable housing property owners from property tax on units where tenants enter at or below 60 percent area median income (AMI) and continue to earn 80 percent AMI or less. Federal law then requires these units to be treated as low income and rent restricted as long as the tenant earns less than 140 percent AMI. Therefore, affordable housing property owners could lose the State property tax exemption should a tenant earn between 80 percent and 140 percent AMI, yet cannot ask tenants to leave or increase their rent.

AB 1193 would raise the property tax exemption for affordable housing properties to match the federal requirement (140 percent AMI), eliminating this potential hardship.

AB 1193 fixes a problem for current and future affordable housing properties by eliminating a conflict between federal and state law,” said Assemblymember Todd Gloria. “By creating a predictable tax level as prescribed in AB 1193, it may attract more interest in financing and building additional affordable housing projects.”

AB 1193 is co-sponsored by the California Council for Affordable Housing and the Non-Profit Housing Association of Northern California.

With more than 1.5 million California households currently spending more than half of their monthly income on rent, middle class Californians are facing record rates of housing instability, especially as new residential units produced in the state mostly serve either the luxury or subsided markets. This omits the middle class and entry-level housing consumers. 

AB 1637 – also known as “The Missing Middle Housing Act” – promotes the production of affordable housing units for middle income earners in addition to working class families by allowing housing authorities to develop or finance mixed income housing projects. 

Middle class families are struggling to meet the high costs of rent now more than ever,” said Assemblymember Todd Gloria. “That’s why I have authored AB 1637 to promote construction of mixed income communities that will house more Californians.”

Under AB 1637, housing authorities would be able to create mixed income housing projects so long as 40% of the units are limited to low income families – meaning, those households whose income does not exceed 80 percent of AMI. Further, housing authorities could utilize financial assistance from any public or private source to finance the production of middle income housing – meaning, those households whose income does not exceed 150 percent AMI.

In San Diego County, 49 percent of low income families pay over half of their income on rent. The average rent for a two-bedroom apartment is $1,800. AB 1637 is sponsored by the City of San Diego and supported by the California Association of Realtors as well as the League of California Cities.

Following the Assembly’s passage of AB 1193 and AB 1637, both bills will be referred to the State Senate for review and consideration. 

Assemblymember Gloria represents the 78th Assembly District of California, which includes the Cities of Coronado, Del Mar, Imperial Beach, San Diego, and Solana Beach. He also serves as the Assistant Majority Whip. Assemblymember Gloria’s official, high-resolution photo can be downloaded here.

 

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052617 Asm. Todd Gloria Successful in Passing Two Housing Bills to Combat CA Housing Crisis.pdf