Legislative Update – May 2018

Legislative Update on Habitat for Humanity California Sponsored Bill AB 2922, Assemblymember Gipson:

On May 9th, Assembly Bill 2922 by Assemblymember Gipson passed through its second of two policy committees with bipartisan support.  AB 2922 sailed through both the Assembly Housing and Community Development and Assembly Revenue and Taxation Committees with unanimous support. This Habitat for Humanity California sponsored bill has been lauded as a creative and innovative solution to California’s housing crisis. AB 2922 is modeled after a successful tax credit program in Florida. This bill, if signed into law, would provide a credit equal to 50 percent of funds contributed to qualified developer projects up to $250,000. This type of tax credit creates an incentive for corporations and individuals alike as it provides them with an opportunity to donate to qualified developers, such as Habitat for Humanity, and in doing so directly reduces the amount of taxes owed, giving them a dollar-for-dollar reduction of tax liability.

As we all know, California is in the midst of a housing crisis. Many households are burdened by the high cost of housing, with many spending well over 30 percent of their income on housing. The Department of Housing and Community Development has identified supply shortage as a major contributing factor. California is building 80,000 units annually when over 200,000 are needed to meet the demands of our growing economy. Assembly Bill 2922 provides a viable alternative to many of the controversial housing bills moving through the legislative process. It incentivizes investment in projects that directly benefit those low-income households hit hardest by this crisis and creates sustainable partnerships between qualified developers, such as Habitat and interested investors in the community.

Thanks to the advocacy campaign started at our Sacramento Advocacy Day in 2017 and the efforts made by all those who attended, we have overwhelming bi-partisan support throughout the state. We are eager to continue moving this piece of legislation forward with unanimous support and look forward to sending it to the Governor in the fall.

Governor’s May Revised Budget:

Governor Brown released his May revised budget today. I wanted to be sure that you had all the necessary and relevant information as it pertains to housing in California. I will note that a majority of funding related to housing is specifically targeted to homelessness and mental health as the budget summary makes a point to note that permits for increased housing development is expected to rise to 170,000 annually up from the 80,000 we are currently seeing.  Please see below for information from the budget release.

SACRAMENTO – Governor Edmund G. Brown Jr. today released a revised state budget proposal that boosts education funding to an all-time high, fills the Rainy Day Fund to the brim and directs billions of dollars in one-time surplus funding to combat homelessness, improve mental health services and rebuild crumbling infrastructure.

“We’re nearing the longest economic recovery in modern history, and as Isaac Newton observed: What goes up must come down,” said Governor Brown. “This is a time to save for our future, not to make pricey promises we can’t keep. I said it before and I’ll say it again: Let’s not blow it now.”

As California’s economy has recovered from the Great Recession, the state has continued to invest in its core priorities, including: increasing K-12 education funding to record levels; raising the minimum wage; expanding health care coverage to millions more Californians; improving transportation and water systems; and paying down debts.

Significant details of the revised budget include:

Combating Homelessness and Investing in Infrastructure
California anticipates $8 billion in higher revenues through 2018-19 compared to the January budget projection. As a result, the state will keep its existing commitments to increase funding for Medi-Cal, Cal Grants, child care, In-Home Supportive Services and foster care reform, among other programs, while focusing the majority of the remaining funding on one-time expenditures in three areas:

  • Infrastructure ($2 billion) – The state has huge liabilities from years of deferred maintenance and would use these funds for universities, courts, state facilities and flood control.
  • Homelessness ($359 million) – The state will assist local governments to immediately address homelessness across the state, bridging the gap until new funding flows from new housing measures signed by Governor Brown last year.

Combatting Climate Change
California has acted decisively and aggressively to reduce greenhouse gas emissions and address climate change, with a state goal to reduce emissions 40 percent below 1990 levels by 2030. The state’s most cost-effective approach to meeting that target is the Cap and Trade Program, which allows the private sector to determine the most appropriate path for reducing emissions through the quarterly auction of pollution credits. In addition to the direct emission reductions required under the program, the state has appropriated $6.5 billion in auction proceeds to further reduce emissions by funding transit and high-speed rail, affordable housing near jobs and services, forest and watershed improvements, healthy soils, recycling and home energy upgrades. The state has prioritized the expenditure of these funds in disadvantaged communities.

Additional details about the Governor’s May Revision can be found at:

Department of Finance May Revise Summary
Governor’s Office Press Release