UPDATE:

July 19, 2011

On Monday, July 18th, the California Redevelopment Association (CRA) and the League of California Cities filed a "petition for writ of mandate" and an "application for temporary stay" with the California Supreme Court challenging the budget trailer bills AB1x 26 and 27 that Governor Brown signed into law on June 28th. The cities of San Jose and Union City have also joined as petitioners as has CRA Executive Director, John F. Shirey, as a taxpayer with standing. The lawsuit is a "facial challenge" that claims that the laws are unconstitutional under Proposition 22, which was approved by 61% of voters in 2010. Lead attorney, Steven L. Mayer, said the petition requests that the Supreme Court suspend the two redevelopment laws with a stay by August 15th and rule on the merits of the case by December 20th. The laws require redevelopment agencies to be dissolved by October 1st unless they opt in and agree to pay to schools and other local districts half of the funds due by January 15th. A second payment for the balance would be due by May 15th. On August 1st, the Department of Finance is to confirm what the "proportionate share" of $1.7 billion will be for each of the 398 sponsoring communities/agencies. The text of the petition for writ of mandate can be found here.

At a special redevelopment workshop convened in Sacramento on Monday, July 18th by the California Housing Consortium and CAL-ALHFA, Steve Shea, budget advisor to Senate Pro Tem Darrell Steinberg and Mark Stivers, Consultant to the Senate Transportation & Housing Committee, confirmed that concepts for clean up legislation are currently being vetted but that no language has yet been made available or printed. The clean up bills are to correct "drafting errors" and inconsistencies in the legislation and will focus on the following critical affordable housing issues:

1.Destination of housing fund balances of agencies that will dissolve;

2.Terms under which FY 2011-2012 housing tax increment may be taken to make remittances;

3.Potential payment flexibility for sponsoring communities/agencies that cannot make the required remittances; and

4.Further definition of qualifying projects that meet "statewide goals" and "fiscal incentives" for such projects as alluded to in AB1x 27.

CRA is advising its members that housing fund balances accrued from previous fiscal years are not to be used to make the voluntary opt-in payments: "The Continuation Bill does not authorize use of housing fund money, other than the 2011-12 set-aside, to reimburse the legislative body for the Continuation Payment. Thus, the fund balance in the low and moderate income housing fund on June 30, 2011, must continue to be used to increase, improve and preserve the supply of affordable housing in the community." CRA has included this item in its FAQs document here.

Mark Stivers noted that SB 450 (Lowenthal), the low/mod housing set-aside reform bill, continues to make its way through the legislative process with bipartisan support. Full text with amendments, analyses, and vote information on SB 450 may be found here.

The NPH policy team will continue to work with our members, friends and allies on these important issues. Please feel free to contact us at any time:
Dianne J. Spaulding, Executive Director, dianne@nonprofithousing.org
Michael Lane, Policy Director, michael@nonprofithousing.org
Gabriella Chiarenza, Policy Associate, gabriella@nonprofithousing.org