Assembly Housing And Community Development Committee

Yeah, sure.

Are they ready for us here?

All right.

Yes.

Thank you, Chairman. Good afternoon. This is a great topic. It's certainly about outcomes. I would say more than outcomes. It's really about transformational reform in the housing finance system for the state of California. My name is Gustavo Velasquez I the director of the Department of Housing and Community Development or HCD Today I want to share with you an update on AB 519 implementation including our working group and the AB 519 report released last month. Assembly Bill 519 required HCD, College FA, the Housing Finance Agency, the Executive Director, Tony Sertich, is here with us, TCAC and SIDLAC, the California Tax Credit Allocation Committee and the California Debt Limit Allocation Committee. We have Marina Wyen, Executive Director of both groups here to jointly convene an affordable housing finance workgroup to develop recommendations and an implementation timeline to streamline access to state financial resources by reducing duplication, improving administrative efficiency, and aligning timelines across reviewing entities. These are the agencies, we are the agencies that administer the state resources that housing developers rely on to build and rehabilitate affordable multifamily housing for lower income households including grants, soft loans, low income housing tax credits, tax except private activity bonds, and other housing finance subsidies. The bill, thank you, Assemblymember Chiavo, required the workgroup to also include nonprofit and for-profit developers, local governments, and tribal governments, very importantly. AB 519 aimed to find ways to improve the complexities within the process to apply for affordable state housing funds. Often, developers request funding from all of our funding agencies. This requires completing multiple applications with largely duplicative information and adds to project delays and expenses, considerable expenses. The goal was clear. The goal is clear. A unified application and coordinated review process that reduces the cost of affordable housing expedites the application and funding process, resulting in more units built faster. To streamline the state affordable housing finance system, the bill tasked the work group with developing recommendations for implementing a single consolidated application and a coordinated review process for multi-family affordable rental housing financing programs administered by the state. The report's recommendations reflects and this is probably the most important part of my remarks, reflects the extensive deliberation and substantial engagement of workgroup members who were a broad coalition of more than 50 active members, including, as I said, affordable housing developers, local governments, tribal governments, lenders, and industry partners who met many times over the course of six months. The resulting recommendations provide a commitment and a timeline for a unified application and coordinated review among HCD, College of Faith, SIDLAC, and TCAC, and the newly launched Housing Development and Finance Committee. We have here the inaugural director of that committee. The report recommendations are a comprehensive framework for an application through a work process covering the majority of the agency's state funding sources. The report includes an implementation plan to align program requirements and scoring criteria to simplify state multifamily affordable housing funding requirements This is accomplished through agency collaboration initiated by this bill Of course, collaboration amongst our agencies have been going on for a long time. Plus, we like each other. Most days. The agencies are now actively engaged in accomplishing the report's recommendations. That includes aligning application and award cycles, funding sources, and ensuring our resources are used efficiently. By making our decisions together, we have the ability to stretch resources across more projects and ensure those housing developments commence construction sooner. I am excited and honored to have been a part of this work. I would like to take all the credit. However, honestly, Marina and Tony have done most of the work. They were very, very involved in this. But through the new housing agency, and thank you for that reform as well, very important creation of the new Housing and Homelessness Agency and the Housing Finance and Development Committee, through all of that, we will see our work, the work of this bill, AB 519, realized and implemented. I now turn it over to my colleague, Director Sergis, who will provide additional detail on our work.

So before I dive into the recommendations, I do want to acknowledge that one of the biggest things that I think came out of this was, and thank you for the bill, when the bill was first working its way through the legislature, I was a stakeholder, and I've been in this position now for two and a half years. years. One of the greatest outcomes is the amount of coordination and regular communication our three agencies or four have that really came out of AB 519. Prior to the affordable housing work group being created and early when I had first begun at TCAC and SIDLAC, we met quarterly kind of for funsies. And as a result of this work, we started meeting weekly. And even with this work having completed and there's new work that we'll touch on that came out of it, there's really ongoing communication and thoughtful engagement between all of us and our staff on a very regular basis, which is ultimately, I think, what AB 519 really was seeking is how do all, when we have such a fractured system to begin with, some of that is going to stay around forever, potentially, but how do we work together as a team when ultimately all of our missions are aligned to create as much affordable housing for lower-income families in the state as we can? So one of the largest challenges we were trying to solve for during the AB 519 process was how do projects that are seeking funding from the state not have to compete so many times? And how do we avoid so many different bottlenecks for those projects? How do we ensure that those projects are actually more ready to go when they come in and apply? Because so often what we were observing was projects might come into HCD, get an award in 2019. Their entire financing stack is not complete yet. So they're going to locals, they're going to other agencies, they're applying to different programs to try to complete that stack. And it might not even come to TCAC or SIDLAC until 2026. And so part of it is how do we shorten that timeline? So projects, when they come in, they are fully thought through, they're ready to go, and we can get them to construction more quickly. And the third was, again, as I sort of mentioned, many of these projects would still have funding gaps when they got their first award, which again, slows down, ties up resources and slows down this process. So the first recommendation in the report really built on the work of AB 434, which was the bill that attempted to consolidate the review and award of multifamily housing programs into a single multifamily super NOFA. And so that recommendation was the agency should jointly develop and implement these new now with HDFC regulations into a single coordinated consolidated application along with a coordinated review and approval process that brings multiple of these sources together into one system. Tony will get into more of that detail in a moment. But the second piece that we really needed to solve for was really stressed by stakeholders that there is a need to maintain a TCAC-SIDLAC-only path for projects that did not seek state subsidies. And there are many reasons for this. Historically, many of the funding programs at HCD or at CalHFA have one funding round per year. At TCAC and SIDLAC, we run five per year. That helps stagger, not just staggering the awards, but it staggers readiness deadlines. deadlines it staggers closing deadlines which is better for the entire system and makes it easier And the second was that stakeholders were generally familiar with our program We been around for 40 years We recently had some major changes that said lack six years ago when the program became competitive for the first time in 10 years. But other than that, it's a known quantity. Our scoring change doesn't change year to year. And they didn't want us to be disrupting a predictable system that worked well. And so out of that, the second recommendation was that the agencies should preserve a direct TCAC-SIDLAC application pathway for those projects. And so that's why the recommendations really have this sort of two-track system, which is what's being implemented currently in implementation, and we'll talk more about what that timeline looks like. So the projects that are used to TCAC-SIDLAC, they can continue to have a TCAC application. This is a great path for projects that have local funding, right? They may not need additional state funding. They can continue. And we do have a lot of projects that really don't need any state subsidy at all. And then the second path is the one where if you need state subsidies, you can apply to HDFC. And along with that award, you would concurrently get an award of tax credits and bonds for that project to be able to go forward. Tony.

All done?

Okay, great. Well, before we jump in, any questions that folks may have for you, I want to give an opportunity for the author, Assemblymember Shiro, to both provide any remarks about this And also, you can have your first shot at questions if you have any.

Yeah, I think that right now, there's one path for projects that want tax credits plus additional state subsidy. The other path would be for projects that don't need additional state subsidy. So if they already have local subsidy or don't need other subsidies and just tax credits or bonds, they can go down this path. And that has – it's all the same portal, though. Right now, there will be two separate applications for each path, one for each path. But theoretically, one project would be choosing a path, right?

Right.

Yeah. It comes.

So as part of the budget trailer bill on housing, it established a set aside within SIDLAC or bonds will be set aside in a pool for HGFC funded projects. So once an application is submitted to the portal for an HDFC award, and perhaps Jonathan will talk about this more in his next panel, those projects will be reviewed. Assuming once a project is going to be awarded, that application would then be transferred to us to then process the bond award and the tax credit award without a separate application being submitted and all happening kind of concurrently. so the experience of the you know affordable housing developer homeless housing developer whoever it may be will still be through one portable portal one application and a streamlined process and then all of the multi agency things happen behind the scenes and one of the goals on our is to also work on our systems so that we are able to really share information and ultimately create a more streamlined system for all of us to use as well as the external parties.

You want me to?

Okay, wonderful. And can you just talk a little bit about the, I heard you talking about the new regulations, and there's a process, it sounds like, moving forward. for those. Do you feel like everything you need to do to be able to set this up can be done

for holding this hearing and to the speaker for allowing us this extra layer of oversight. We pass these bills and we don't always get to hear about them or check up on them or know how they're going. And so this is a really helpful tool for us to know how our babies are moving forward and growing up. Thank you. Thank you. Well, this one is growing up fast here. There's a lot,

Well good afternoon to all of our housing friends out there and out there Pleasure to be here I think maybe my last official housing forum But, you know, on the positive side, I've been here since 2012, so I've been really part of seeing all of this, not only born, if we're using the metaphor of a baby or a child, but, you know, come to fruition. And there's, I would say, with all due respect, some good, excellent, some good, bad, and ugly. And what I mean by that is, yes, there's things to celebrate, and we certainly have made progress. Some of the steps have been legislatively driven by much of our body, including both sides of the aisles, wanting more and more transparency and accountability. And that becomes a fine line of what becomes so much then that you're actually slowing down what we're trying to do, which is get out these dollars to the community so that they can, in fact, build these units. So we've seen some of that. And I, in fact, think that we've probably tipped over the line on wanting more data and more data. And I do think, in fact, that has slowed things down. I was here in 2020 when Assemblymember Daley actually brought forward one of the streamlining. So you had your first, but even before you were. And so this whole streamlining, I think, is a key word in this, which is we're trying to do everything we can so that we're not asking, whether it's builders or cities or developers, to keep having to juggle these balls. And with that being said, I would say that's one of the things in 2020, we're now in 2026 going into 2027. These things have taken quite a bit of time. I know that you have seen me in front of our budget committee discussing everything from the housing reorg. Some things, you know, we're happy to see. But I think one of the elephants in the room is as we look at 2027, we're also looking at a new administration and a new governor. And so hopefully there will be a very warm handoff to whoever that is and whatever so that we're not backtracking. I guess that's my key message is new legislators come in, new administration comes in. I've now served under two governors and four speakers. I think I'm probably one of the very few people left on this floor that have had that opportunity. And what we see, but one of my questions in this kind of narrative is, and I don't have the data in front of me, but I've heard different numbers over the last few years, is how many units are in the process to be built but are yet still lacking kind of that gap funding? I've heard something like 44,000. I don't know if that's way off, but that is a number that has been, I think, thrown out a few times, kind of in the pipeline. And with the tax credits now with the 9 with the 4 is with those units that are sitting there ready to be moved what can we expect in the next year on those units because I will say without speaking out of turn well I not even going to say it because I don want to say something that you know but I think there will be a priority in the future to get those units built and get them built fast but when we say fast I mean I know right now I don't know if you remember it was in our budget committee you probably I don't follow every single thing. I think right here in Sacramento, there were about 80 tiny homes that were supposed to be built. And I think it's taken six, seven years, and I don't even think they're still built because you're talking about utilities, all of these things. So I guess my big question is we're doing a lot. We've done a lot. What can we look forward in 2027 to try to move these units that are ready to be built but just need that, get them over the edge?

And if I may, one thing to add to that, I think to your point, in the past, there was a large logjam of projects that had HCD awards that weren't able to get bonds or tax credits because of the competition at Director Wyant's. area, but one thing that significantly helped over the last year or so is the federal changes that have essentially doubled the amount of bonds that we have to, or 4% tax credits that we have available. So with that, we have been able to push through a number of those stalled projects and got them bonds and tax credits. And just yesterday, today, HCD announced awards for 20 more projects that will help that will get them fully funded and allow them to get through the SIDLAC and TCAC process. So, and to your additional question, and Director Wyant mentioned this earlier, over the next year, the focus of the Housing Development Finance Committee is to really clear that pipeline first, before we then move on to awarding new projects, because those ones in the pipeline, if they're ready to go and they're ready to build, let's get them moving, and then we can start working on new ones as well.

And I think the number that he presented also includes ones that are already under construction, so some of those probably don't need additional gap funding, but that is inclusive.

I wish I could.

It was an E-Bal-C project.

This is one of, I think, two or three phases. That's the other thing that we are.

We're going to these projects that have like multiple phases. So they completed financing during their construction for one phase, but they're in the process of applying for additional units in future phases. And this reform is what is going to make those phases, you know, be online much faster.

All right. Well, I'm just going to ask one question because I think we have two more panels, so a lot left to cover. The question that I had was actually there was a bill, AB 1053 from Assemblymember Gabriel, which requires HCD to offer construction financing by July 1st, 2027. Do you know what the status of that is? does HDFC have the statutory authority to move forward with that requirement? Or are there any barriers to offer construction loans for these programs?

Great. Thank you for that. Happy to hear that. All right. Well, we'll let you all go. Thank you so much. There should be nothing left to cover now because you've covered it all, but we still have two esteemed panels to bring up and I'm sure lots more to talk about. I want to invite our second panel, which will talk about the newly created HDFC, recent efforts to streamline state funding in the budget trailer bill, And the next steps for AB 519, and we have our panelists, Jonathan Klein, Executive Director of the Housing Development Finance Committee, and Christina Munn, the Deputy Secretary of Housing Finance for the California Housing and Homeless Agency. We like long titles here as long as... We do. We can't help ourselves. So many things. Welcome.

I'm Christina Moon, Deputy Secretary of Housing Finance with the new Housing and Homelessness Agency. We really want to start by appreciating your vision in creating AB519. As you've heard, it's really enabled us to work together very closely, very deeply, not just within our own agency departments, but across the table with our partners at SIDLAC and TCAC. and all of the many sessions that we've heard and engaged with developers, lenders, investors, service providers, it's been really informative to all of the work and thinking that you've heard through the recommendations in the last panel and what's underway under HDFC. And it really built, you know, we really built upon AB 519's thinking when we put together the reorganization plan under the governor. We wanted to create the organizational structure that we needed to have that vehicle to deliver not just the consolidated program administration that's envisioned and laid out, but also that transparency that's touched upon. We created the executive committee under HDFC to have that public facing body and platform for folks to comment directly engage with come forward hear how decisions are made in an open forum So that has been stood up It met twice We have our third meeting tomorrow, and we have an expanded membership through the budget proposal that really gives the expert guidance across our state to inform these decisions. And with that organizational vehicle in place, the AB 519 recommendations really informed the budget proposal, which we touched upon at the past panel. But, you know, it really brought together all of the resources to truly create the one-stop shop. So not just the subsidy that was initially identified for HDFC, but also the bonds and 4% tax credits, as well as the ASIC housing component, such that everything can be considered together and not have these multiple stops along the way. And the end goal, of course, is to be more streamlined, to have it be a one-stop, and to provide full funding. So there isn't any question that a project can move forward. So with this structure and momentum in place, the HDFC team has been working very furiously on developing the underlying regulations that will really govern and stand up the one-stop shop in 2027. So I'm going to pass it to our new HDFC director, Jonathan Klein, to share more about his approach to this work and what's to come.

Implementing the recommendations of AB 519 are at the heart of the work plan. And so from an oversight standpoint, I want you to know that AB 519 is alive and well, living in many places, but certainly in the work plan that we will use to implement our work at HDFC. Let me briefly explain how the AB 519 recommendations drive the work forward. So the plan has four goals. Coordinate multifamily affordable housing finance. Accelerate the process from application to loan conversion Measure our progress Enhance trust and transparency I think of those four goals as an acronym C coordinate accelerate measure enhance The plan also articulates objectives to achieve each goal. The 519 recommendations are explicitly cited in the objectives to achieve the goals. I'll give you a couple of examples. The plan says that one of the objectives to achieve that first goal of coordinating housing finance is, quote, the creation of a draft unified application workbook consistent with GRP 2025 and AB 519. We expect to have a skeleton of that workbook done this month and we'll revise it in December to reflect the final regs. And I will talk more about the regs in a minute. Another objective to achieve the coordination goal is to, quote, identify a team to develop the process to review applications consistent with GRP 2025 and AB 519. We anticipate identifying those team members in the weeks ahead and launching training in December in anticipation of issuing a NOFA in the first quarter of 27 so that those review teams are in place and trained. The implementation of the 519 recommendations lives primarily in the objectives to achieve the coordination goal, but I'm happy to discuss how we will achieve the other three goals as well. I'd also like to discuss a key focus of our work since HDFC's July 1 launch. As Christina mentioned, drafting the regulations has rightly demanded much of our time and attention in these initial weeks. I'd like to discuss both the substance of drafting those regs and the process we intend to pursue to reach final adoption. We are deep into the work of issuing the first draft of the HDFC regulations. One of the early tasks of the team was to identify the statutory requirements of each of the programs that will be migrating to HDFC. We are hard at work identifying those unique statutory requirements that must be preserved, while also identifying universal elements that can be consolidated, and also identifying elements of the uniform multifamily regulations, the UMRs, that might be streamlined rather than simply lifted and transferred over to HDFC. And I just want to stress those are three very distinct tasks. We need to follow, obviously, regulatory requirements for these programs that are moving over, one set of work. We then need to say, okay, amongst those programs, where is there overlap, duplication, inefficiency? How can we consolidate that? And then the third piece is when we look at the governing regs, the UMRs that have governed or first issued about 10 years ago, where are there places that are just inefficiencies that aren't required that can just go away? So, again, a lot of deep, intricate work. We see the regs as an essential tool for meeting our obligations under the mission statement to make the system simpler and faster. In addition to that substantive work, we're also launching a process which will advance the transparency component of HDFC's mission. The regs will go through two rounds of public comment and a public hearing with the aim of delivering the final version to the executive committee for approval at their regularly scheduled public meeting in December So we are moving quickly to get to final regs by the end of the year issue a NOFA in the first quarter of next year and my hope and expectation very strong expectation, is that if you invite us back a year from now, or sooner, but certainly a year from now, we'll be doing awards. So, REGS, NOFA, awards. Finally, two other notes on advancing the mission of transparency. I'm scheduled to appear on panels at all of the big affordable housing conferences throughout the fall. I'm also traveling and speaking with tribal organizations, rural developers, and others. We aim to have, we are also aiming to have an informal sounding board and information sharing session with attorneys who represent developers to get their perspective on how we might alleviate some of the pain points that arise from time to time in closing loans with the state. And I wanted to get the input from the lawyers because candidly on the loan closings, they're the ones really in the trenches. And so pulling together a group of folks to get their input on how we might think about alleviating some of those pain points seemed like it would be time well spent. Through the continued robust stakeholder feedback built upon the stakeholder engagement and work groups for maybe 519, I'm confident we will build upon our existing system, creating a housing finance process that builds more collaboratively, faster, and with greater efficiencies. And with that, I would be happy to take your questions. Thank you so much.

So bear in mind that our goal is to get the first draft of the regs out at the end of this month in August. So that formal feedback process has not yet started.

And it's why I referred to the mission statement as my North Star in terms of the work that HDFC is going to do. we need to achieve, I don't need to tell this panel, we're in the middle of a housing crisis. We need to achieve simpler, faster, more transparent. And so that's the work that we're going to be all about at HDFC. So that's a broad answer to your question, but it may be the next panel could could speak more specifically to what they're looking for. We don't expect to get the first draft of regs right, which is why, again, we've got the two rounds and the hearing. I have worked in this field for a long time. I've been in affordable housing finance in California for 30 years. It's a lot of incredibly smart, gifted, committed, talented folks. And the more of that input we can get in to inform our work, the better the product's going to be.

So, again, I think the regs, as adopted, I hope and expect, by the Executive Committee in December, sort of is our starting gun a little bit. And that, again, will have been informed by this robust public comment process we've been discussing. And we will then go through the NOFA and the awards. And then I think we probably want to tap on the brakes a bit, assess how do we correct. HDFC is a startup. I mean, I think it's obvious, but bears repeating. It didn't exist before July 1, and obviously we're in August. So inevitably, and I've worked on other startups in other ways and other places in my career, you learn a lot right out of the box. Nobody gets it right. You know, so I'm always very humble about my learning, and I'm sure there's a lot of stuff that we're going to learn so that when we go back out, we will actually have an even better, more improved process and product. But I think it all needs to be done in a spirit of being very receptive to that feedback and very receptive to that learning and that input and I was joking with somebody the other day if there two Hausers in a booth at a Denny I going to go and talk to them I mean it part of the reason why I am so determined to do this very robust public engagement process because I think we have the affordable housing community, again, is so extraordinarily talented. We have so much to learn from them about how we can do this work better. And the work group is going to continue

Yes, and I haven't yet drafted the strategic plan for 2027, but I fully anticipate doing, again, we're doing the stakeholder engagement really through the regs, through the balance of the year. But in the new year, I would expect, I would hope to have sort of some quarterly feedback on an ongoing basis, having exactly figured out the channel for that, to get more live feedback on how we're doing and how we can be doing it better on an ongoing basis.

Ms. Wixell.

Amen. You're always welcome to make comments. You always keep it real. I think Ms. Quirksova raises a point, which maybe it might be worth to address a bit, as to whether there's anything with the possibility of the bond coming forward and a lot of new resources. I know it hasn't passed and there's nothing for certain, but are there things that you all are doing perhaps to think about that or prepare for that or how it affects your work in any way? Are there new you know we put a lot of different priorities in there Are there certain new things that you preparing for in some way that there may be resources for which there aren currently Just if I might I mentioned I been doing affordable housing finance in California for 30 years. There have been lean years and fat years. And the way I think about HDFC is kind of an all-weather vehicle. I think the bond may pass, the bond may not pass. I have no prognostication on that. I think we need to really be thinking about a system that works in good times and bad times. All of the things I was saying earlier, simpler, faster, more transparent, that's going to help us get more housing built in the years when we got a lot of resources and in the years when we don't have a lot of resources. So more globally than that, other than building a system that works in good times and bad, I haven't thought a lot about it. I will just say from the perspective of HDFC, if the bond does pass, I'm sure there will be a robust conversation and I would hope a real public plan about what happens with those resources. But, Christine, I don't know if you have a different perspective.

Great. Well, thank you both. Thank you for your work and your leadership, and we'll look forward to continuing to partner with you as this moves forward, and hopefully we will have fat years, or I don't know what the right name was. Robust. I said lean. I don't know what that. Thank you very much. Robust years. ahead and lots of opportunities to build more housing and to do it faster and quicker and more transparent. So thank you so much. Or faster, what was it? Faster? Faster, simpler, more transparent. Simpler, more transparent. There we go. Thank you. Appreciate it. All right. We will bring up our third panel. These are folks who build affordable housing, and we're grateful for you to be able to share your perspective. Anne Silverberg, President and CEO of Related California. Welcome. Linda Mandolini, President and CEO of Eden Housing, and Tom Colashaw, the President and CEO of Self-Help Enterprises. Welcome.

We're all going to be saying that in our sleep. Yeah, yeah. SFT. Yes.

Thanks. Linda Mandolini, the CEO of Eden Housing. I could repeat everything Anne just said, but I'm just going to say plus one and emphasize a few extra things. For those of you who don't know, Eden, we're one of the oldest nonprofit affordable housing developers in California. We got our start in 1968. We have worked with every acronym HCD has ever had. We have the dubious distinction of having had to reform many of those with the legislature. Prior to all of you, we passed many bills trying to just modernize and update HCD's programs just so that we can make them functional for the long term. And so we are grateful. I moved to California in 1996 from the Commonwealth of Massachusetts, where we had a single application for all 47 of our programs. And so I have been asking for this for decades. So thank you for finally getting us here and to all of our colleagues at the state agencies for working so hard to get us to this place. I think it's super important. I think the report is really fair in its reflection. We had several staff that participated in the work groups and we feel like it's landed in a very good place, but it's just the beginning. My concern is that we're going to get this really great start. We're going to have a really great application process and we're going to get through the first round and it's going to be like, OK, what next? Right. And how do we do this? And so also our second concern is with what money will we do this? And so we are very much appreciative of the $11.25 billion bond that is on the ballot, and we hope that it passes. But if it does not, we do need money to come through this entity. So we need general fund allocation like we had this year, but in larger quantity if we don't get the bonds. And we also need the ASIC funds back since those are now not coming to housing next year. We think this is really important for the legislature to think about. We're going to go through all this work to create this streamlined structure. we need to make sure we have money. And I hear everybody on the drought part of this We hate the drought years because projects get completely stalled So I just going to add the sort of what are the next steps and I think money is an important next step here Another important point we like to make and Assemblymember Quirk Sylvia you were singing my song about preservation. We cannot stop streamlining with just an application to start a new project. These are long-term partnerships for all of us together. So asset management and oversight and streamlining these programs on the back end is really important. We are partners for 55 years on these projects, and Eden can actually prove that since we've been in this with the state for a very long time. We think that it's super important for the state to recognize the value of long-term assets, to invest in those assets. We know the bond has PRP, the renovation program, as part of the bond, but we really need to invest in those. We need to think more like partners. We have a highly punitive system where if you just you send the wrong email or somebody doesn't save the email, you get negative points in future applications. We need to really think about how we work together as developers and as the state to have a process where we recognize that these assets have to last for a very long time, that the tenants need to be protected in those units and that those units need to stay standing. And in some instances, some of those projects could actually be scaled up to be bigger projects. We have a lot of older projects that could be intensified, but the state has no mechanism to help us think about how do you optimize assets that we already are partners on. So that's one place where I think we need to look. I also think there's agencies outside of the six that are in the room today that also impact our success. So we have the Excess Lands Program through DGS that I think is adjacent to this, but also relies on funding from HCD and TCAC to make parts of those programs move forward. And we think some thinking about how that could be in this fold and expedited or prioritized would be super helpful. We also think that we have other agencies like DTSC and others that can help or hinder our processes with the state. And so if the legislature is thinking about how to help us, thinking about how all the other parts come into these projects and continuing to encourage streamlining and encourage agencies that might hinder us from helping to move to helping us, to put them in the same mindset that these agencies are currently in. And so as I look to the future, thinking about how do you do it faster, it's not just how do we finance it more quickly. And then I just want to make one plug for construction lending. We have two or three projects right now where if HCD were doing the construction lending, we'd be saving three or four million dollars on them. This is real money. So to encourage the continued focus on how do we get the state engaged earlier, I think is going to be super important. So I also want to thank all of my colleagues and congratulate Jonathan for taking this job, because I think this is a really great first step. We really appreciate how much work this is. I think it's going to be a lot of work for us, too. CHC would welcome the opportunity to regularly interface and create a subcommittee to work with the agencies on how to make this better. We have had a constant feedback loop with TCAC and SIDLAC to date, and it's been very effective for us. So I just want to thank the legislature for really holding our collective feet to the fire to move this forward. We're very excited about this process and we see a lot of potential here and we hope that it's super successful because I think we have 3000 units in the pipeline that we could proceed with relatively quickly. If this process had sufficient funds and could move forward and we're just one developer. So I think we have a lot of. lot of opportunity here, and I really appreciate the opportunity to be here.

our CERNA farmworker households. To be successful in the funding competition, deep income targeting was essential. This created a problem for farmworker set-asides where 30 percent of area median income units are difficult to fill with agricultural households who tend to make between 40 and 60 percent of the area median income. CERNA and other programs serving special needs populations need to get back to a flat maximum subsidy per unit and remove subsidies based on unit size and AMI levels. This would eliminate the issue with CERNA where we need to find a 40% AMI family that fits in a two-bedroom unit when all our applicants are at 50% AMI and they need a three-bedroom unit. A flat subsidy per unit would allow us to float CERNA units based on need and would fix similar issues we see in filling no place like home and home home key plus units as well. We should all be able to agree that it is absurd to place projects in service with long waiting lists, but with the matrix that makes it difficult to fill certain units. We have been involved in numerous discussions at California Coalition for Rural Housing, CHC, and Housing California about ways to improve the fairness of the funding competitions at TCAC, SIDLAC, CalHFA, and HDFC. We are particularly supportive of efforts to improve market study requirements and square footage minimums of grocery stores in TCAC regulations, for instance. We are also deeply interested in reforming the coordinated entry system that has created difficult challenges within our rental communities. We have also experienced continuing challenges with the methodology used for so-called high-resource areas, which fail to account for the unique nature of large geographic census tracts in rural California. We continue to support the geographic regions of the 9% tax credit program and urge HDFC to take this approach in future funding allocations. The north-south regions are too large and leave large segments of the state behind, including the San Joaquin Valley. Overall, the revised competition set up by SIDLAC has resulted and far less 4% tax credits and bonds available to rural projects. And as such, we support a rethinking of how these set-asides and allocations are distributed, which will occur during this regulatory process. We look forward to this continued work in all of these areas, and thank you for the opportunity to comment today.

Thank you so much. It is incredibly helpful to hear about, you know, your experience and your, with the process and the feedback and insights. And I appreciate the, you know, I feel like the overarching message of your panel is there's more work to be done. This is great and there's more work to be done. And you know and I am hopeful from the previous panels that that it does sound like coordination collaboration is happening beyond because I think you know what what you are really speaking to Ms Silverberg yes is that while there may be a consolidated application as we talked about in the previous panel, there's a lot of things that will be happening behind that application in multiple agencies and that still needs to be streamlined and that needs to move faster and be more nimble and collaborative. And so, you know, I'm hopeful that through this process, it's opened up a lot of cross-pollination and cross-communication amongst these agencies to really be thoughtful about that and the other ways in which things can be more streamlined and consolidated and, you know, at the end of the day, move forward housing more quickly for more Californians, which is what we're all trying to do. And, Mr. Kulashai, I want to just highlight that, you know, I really appreciate that you're bringing a rural perspective to the challenges that exist because it is unique and different and not highlighted, I think, enough. While I represent North LA County, I grew up in Tuolumne County. And so I know the rural perspective very well and feel like it's always a piece of me. So I think that those are really important perspectives to keep in mind to make sure that we're meeting the needs because while in Sonora, it doesn't have the same level of homelessness that we're experiencing in Los Angeles, there is homelessness and a great need for affordable housing for folks there too. And so we need to make sure we're meeting the needs of all of our communities throughout the state. So thank you for bringing that perspective. And I'm sorry I will have to run because it's my kid's first day of school and I can't do this work if I had an unhappy child. So very grateful for everyone's feedback and leadership. and again for the chair and staff for making this happen and speakers' leadership to allow us to have these hearings. It's been incredibly helpful to hear about the progress and I'm hopeful, cautiously optimistic, but really hopeful. And I've heard a lot of praises of Jonathan today. So we have high hopes, big expectations, and excited to see your leadership take flight here. So thank you so much.

Well I mean I think we appreciate the hearing process a transparent hearing process and the ability to comment We very much like an ongoing working group I think CHC would be happy to convene a working group that specific to HDFC and the regs and how it working and how it rolling out We don't want to create a lot of extra meetings for a lot of people. And so whatever the most efficient way is to do this, and I think we all feel like we have a pretty good system of communicating now with TCAC and SIDLAC through the California Housing Consortium. So we could offer that as an opportunity to just have a regular interface. And, you know, we all show up in force to anything that's a public hearing to bring our comments there. But we also welcome the informal conversations with the directors of all of the agencies because we think it makes for a better outcome before you get to the public hearing.

Great. Thank you so much for your work and for your perspective and for your participation in this process, and I'm sure we'll be hearing from you again very soon, and thank you for your ongoing partnership.

Thank you. Thank you. Thank you. All right. And thank you to all of the folks who joined us today, both on the panel and here in the committee hearing room. If there's anybody who would like to provide public comment, we are going to allow for that now. And please identify yourself and keep your comments to less than two minutes.

Good afternoon, Natalie Spivak with Housing California. I just want to say a huge thank you to you, Assemblymember Haney, and this committee for prioritizing this issue, and really a huge thank you to everyone here in the room. are the minds that helped us get to where we are today. So I think it's really special that we're all here. We support much of what's in the AB 519 report. And as you've heard, there's also a lot of work in front of us. Housing California convened a work group filled with affordable housing developers across the state, many of whom were on the AB 519 working group to help inform the creation of the new agency and HDFC. So I just want to lift up a few of our priorities, many of which you have heard about in the room today. One is making sure that HDFC has a more equitable geographic allocation system for many of the reasons that Tom mentioned. Additionally, it will be really important to reduce the administrative burden of the application process process so we can make sure that affordable housing developers are spending as much of their time as possible on actually building the housing. And third, it'll also be really important to see asset management processes streamlined. Additionally, I have to mention, as everyone else did here today, the success of the system does depend on adequately funding the system. And so, of course, we're completely committed to getting the affordable housing bond over the finish line in November, but we also need general fund allocations annually. And as mentioned, it's absolutely critical that funding for the Affordable Housing and Sustainable Communities Program doesn't get cut. We're looking at projections of cutting of over 80% by DOF, and it's just really important that the bond doesn't substitute the resources that have already been going to housing, but rather complements and builds on our progress going forward. So with that, thank you, and we look forward to continuing this conversation.

you. Good afternoon. Thanks for having me here and getting to know what my government does. I did a tour and I ended up here in the building and in this conference and this committee is very unique. And so I'm a veteran. I joined the Navy when I was 18. You can look my name up online. There's five federal lawsuits. The Army hid my medical records when I attempted to transfer to the Army in 1998. I've done a lot of homelessness. My name's Aaron Hasse, A-A-R-O-N-H-A-S-S-A-Y. I'm a California kid. Thought I would have joined the military to live the American dream. Well, found out there's other things that happened as well. And so housing's been a big issue for me with limited or injuries from military And then also learning the government and how it works when, you know, when you're a kid and you go through that stuff. And then basically you're like, you don't, you're not educated on what I heard today and the VA system, et cetera. So I went to CalVet recently here, California Veterans Day, and they offer a home loan. I do recently have a VA home loan that I don't qualify. Based on my VA income, VA income is limited to that I don't get a home loan enough to purchase a house in California. I don't have a car, so I can't, you know, basically I'm stuck with a home loan that's not enough to buy a house. because my VA income is not much, enough to buy a house because the income from the VA. So I don't know a solution to that. I don't even know if that even is in this committee. That's one issue that I'm learning about. And I'm only learning the VA system in the last few years. CalVet involved That one issue And then the second issue is something to do with like instant veteran housing If I show up in Sacramento I went to you know there is no place for you to say I have an honorable discharge. I need a place to stay. I'm treating, you know, like, situated here in Sacramento. I need a safe place to stay. and I've been to each different VA or I went even to Scott Wiener's, Gavin Newsom's office like a week ago. And I said, hey, you know, where is a – and the guy came down from his office. I think his name is Adrian, who was a former vet who didn't get injured in military. He's a veteran. Long story short is there's no housing building just to put your stuff down and rack if you're a veteran, show up. You have to fill out 50 different applications, wait two months. You know, administratively, it's a whole process to get housing if I show up to get situated in Sacramento. Another issue that may be specific to my, you know, problem, but, you know, when I want to get resituated. I was born in Carmichael, and I moved to San Diego when I was a kid. My mom, you know, so I'm actually a Sacramento resident. at birth in Carmichael, but my mom married a Vietnam combat vet who was injured from Vietnam, didn't get any VA housing or VA programs from the Vietnam Army infantry guys. So I lived it as a kid, and now I'm living it for my own service, like generationally. Yeah, I'm learning the system as I go, but those are two situations. I'm not even sure how I could solve it here. Thank you.