Effective Implementation of Affordable Housing Programs

The division of housing (division) within the department of local affairs must submit an annual public report on the funding of affordable housing preservation and production (public report). The act requires that the division include in the report specific information on uses of existing state and federal funds to provide best use of subsidies to maximize unit production and confirmation of rules and practices to ensure developments are not disqualified for funding support from the division if the development has previously received money from funds established by proposition 123. The act further requires the division to add to the public report information on applications for affordable housing programs that the division administers, including the number of applications approved, denied, and pending, the amount of money awarded from approved applications, and the amount of money applied for but not awarded from denied applications. The act also requires the division to add to the public report information regarding money in the housing development grant fund, including amounts in the fund and the use of the money in the preceding year, and information about the timing for drafting, delivering, and executing contracts that are required in connection with receiving money from the fund.

The act also establishes procedures and timelines for the division to follow for affordable housing programs administered by the division. The act requires that the division accept applications once a quarter, with the cycle beginning at the start of a state fiscal year, and requires that the division review applications and issue any requests for additional information, forms, or questions to applicants within 10 calendar days of an application period closing. The division is required to publish the application schedule by May 1 for the upcoming cycle and update the schedule 60 days before the start of the next quarter; except that the division must publish the application schedule for the second half of the 2024-25 state fiscal year by November 1, 2024. If the division will not be accepting applications for any affordable housing program for an upcoming quarter, the division must publish notice of this with an explanation as to why applications won't be accepted for the program. The division must either issue final decisions on applications or submit applications to the board of housing for final decision within 45 days following the submission of completed applications. If applications are submitted to the state housing board, the state housing board must make a final decision on an application at its next regularly scheduled meeting.

After a final decision approving an application, the division shall issue an award letter that includes information on the timeline for issuing money to the applicant, any terms for a loan or grant period, and any conditions that must be met before a contract in connection with the approval is executed. The division shall also provide a draft contract to the approved applicant within 30 days of the application being approved. Within 90 days of the division receiving a substantially complete post-award due diligence package from an approved applicant, the division shall execute any required contracts for the affordable housing program and send it to the approved applicant within 10 days of execution; except that the 90 day period pauses for the period from when an approved applicant receives a preliminary draft contract from the division until the division receives the executed contract from the approved applicant.

The act also amends existing grant, loan, and other affordable housing programs administered by the division to require the application process to be followed for any applications submitted under these programs and requires any programs that have adopted policies, procedures, or guidelines for the application process to be amended if they are inconsistent with the application process established by the act.

The act also modifies the "City Housing Law". The act expands the term "housing project" to include the provision of dwelling accommodations to persons without regard to income as long as the housing project substantially benefits persons of low income. The act clarifies that, in addition to the authority to construct a housing project, a city is authorized to acquire, own, or lease a housing project and that a city can manage, operate, and maintain, or contract for the management, operation, and maintenance of any housing project owned or leased by the city. The act adds an alternative option to the requirement that the city deliver possession of a housing project to a housing authority within the city's boundaries to instead allow the city to contract with a nonprofit or private entity to manage, maintain, and operate the housing project.

The act also allows a community land trust or nonprofit affordable housing homeownership developer or its authorized agent that is applying for a property tax exemption with the division of property taxation to submit only one application and one annual report if the property that is the subject of the exemption application and report has been subdivided. However, the application and the report must be accompanied by payment not to exceed the aggregate amount of payments that would be required if individual applications or reports were filed for each parcel and once a subdivided parcel has been split into a separate taxable parcel from the improvements and is leased to the owner of the improvements, the developer or their designee must file an individual annual report for the subdivided parcel.

APPROVED by Governor May 31, 2024

EFFECTIVE August 7, 2024
(Note: This summary applies to this bill as enacted.)