Los Angeles Business Council Statement on 2019-2020 State Budget

Mary Leslie
President, Los Angeles Business Council

As California continues to seek solutions to the housing affordability and homelessness crises, the Los Angeles Business Council (LABC) applauds Governor Newsom and the state legislature for passing a package of housing measures in the state budget, which includes a historic $1 billion investment in the fight against homelessness and outlines new accountability measures for cities and counties that are not meeting their housing requirements.

Last month Governor Gavin Newsom signed the $214.8-billion budget, the largest in state history. The subsequent budget trailer bill AB 101 included a handful of measures to provide an additional $2.5-billion in funding, while offering incentives to encourage cities and counties to increase housing production and creating a process for imposing penalties if cities and counties are not fulfilling their housing responsibilities.

The Los Angeles Business Council congratulates state leadership for the important work of exploring smart, effective and vetted policy options to better serve the people of California.

Earlier this month, Governor Newsom announced the names of regional leaders and statewide experts who will advise the Administration on solutions to further address the state’s homelessness epidemic. The Homeless & Supportive Housing Task Force, co-chaired by Sacramento Mayor Darrell Steinberg and Los Angeles County Board of Supervisor Mark Ridley-Thomas, includes seven elected officials including Oakland Mayor Libby Schaaf and six institutional representatives.

Join us on Friday, November 22nd for the 18th Annual Mayoral Housing, Transportation and Jobs Summit for a special discussion with Mayor Steinberg, Mayor Schaaf and Los Angeles Mayor Eric Garcetti.

See the details of AB 101:

Provides $2.5 billion in funding for California’s housing crisis:

  • $250 million for Regional Housing Needs Assessment (RHNA) implementation
  • $500 million for Infill
  • $650 million for Homeless Housing, Assistance and Prevention Program
    • $190 million for continuum of care
    • $275 million for City or County over 300,000 people
    • $175 million for Counties
  • $500 million for Low-Income Housing Tax Credits Program
    • $300 million for new construction projects receiving the federal credit
    • $200 million for CalHFA mixed-income program recipients
  • $500 million for CalHFA Mixed Income Program

New incentives to encourage Cities and Counties to increase housing production:

  • Additional preferences can be awarded for state funding programs (Planning Support Grants Program, Infill Grant Program, Homelessness funding, Affordable Housing Program, CalHome Program) for meeting the Department of Housing and Community Development’s housing element and adopting pro-housing local policies by July 1, 2021. These include:
    • Establishing local housing trust funds
    • Reducing parking requirements
    • Use by right approval
    • Reduce permit processing time
    • Reduce development impact fees
    • Establish Workforce Housing Opportunity Zone
  • Infill Grant requirements for residential or mix-use projects in urban area:
    • 15% affordable units
    • At least as dense as described in AB 2348 (Mullin, 2004)
    • Proximity to transit, parks, and social services
    • Consistent with sustainable community strategies
  • One-time homeless housing grants for counties, cities, or continuum of care to address immediate homelessness challenges, with awards based on proportionate share of total homeless population statewide, and also includes low barrier navigation centers for temporary housing used as by right (meeting requirements)
  • Low-Income Housing Tax Credit Program funding and Mixed Income Program funding
  • Allow CalHome program to include ADUs and JADUs, as well as allow for grants to declared disaster areas.
  • Recommends an improved RHNA process and methodology to Legislature by the end of 2022

Creates a process for determining if city or county complied with Housing Element and imposes penalties if they do not fulfill responsibilities:

  • HCD publishes annual list of cities that failed adoption of HCD housing element. Any identified city has two meetings with HCD and must report written findings to fix this (can also request a review of the determination).
  • If the Attorney General sues the city, then fines are issued from failure to comply (and the State Controller can intercept state and local funds if the fines are not paid)
    • $10,000 – 100,000 per month after 12 months non-compliance from court order
    • $30,000 – 300,000 per month after 15 months
    • $60,000 – 600,000 per month after 18 months, with an appointed agent to help compliance.

To learn more, visit our Housing page.

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