50735. The following definitions shall apply to all activities
conducted pursuant to this chapter. Except as otherwise provided in
this article or unless the context otherwise requires, the
definitions contained in Chapter 2 (commencing with Section 50050) of
Part 1 of this division shall also apply to this chapter.
(a) "Assisted unit" means a unit which is affordable to an
eligible household as a result of a payment made by the department
pursuant to Article 2 (commencing with Section 50745), 3 (commencing
with Section 50755), 4 (commencing with Section 50765) or 6
(commencing with Section 50771.1), or as a result of establishment
of, or assistance from, an annuity trust fund or both. The department
shall adopt regulations which establish a method for computing rents
for eligible households.
(b) "Below-market interest financing" means any of the following:
(1) A long-term loan made by the agency with below-market
interest, as defined by Section 50056.
(2) A long-term loan made by a local finance entity at a
below-market interest rate no higher than that established from time
to time by the department, provided such rate shall not exceed by
more than 1 1/2 percent the interest rate on long-term loans, if any,
made by the agency for rental housing development proposals being
submitted or processed for department assistance under this chapter
at the same time.
(3) The use of subsidies, assistance, or financing, other than as
provided in paragraphs (1) and (2), which reduce rent levels by an
amount equivalent to that enabled by long-term loans at the interest
rate established for purposes of paragraph (2).
(4) Subsidies, assistance, or financing provided to the sponsor by
or through the agency or local finance entity and which is a loan
made at below-market interest by an agency of the federal government.
(c) "Development costs" means the aggregate of all costs incurred
in connection with construction of a rental housing development
pursuant to this chapter, including (1) the cost of land acquisition,
whether by purchase or lease, (2) the cost of construction, (3) the
cost of overhead including architectural, legal, and accounting fees
incurred in connection with the construction of the rental housing
development, (4) the cost of related offsite improvements, such as
sewers, utilities, and streets, and (5) the cost of necessary and
related onsite improvements. The department shall adopt regulations
consistent with this section specifying the expenses qualifying as
development costs for which a payment may be made pursuant to Section
50745.
(d) "Eligible households" means lower income households, as
defined by Section 50079.5, including very low income households, as
defined by Section 50105.
(e) "Local finance entity" means a redevelopment agency, housing
authority, duly constituted governing body of an Indian rancheria,
city, county, or city and county, or any combination thereof, which,
in connection with the program established pursuant to this chapter,
provides or utilizes financing, at below-market interest or the
equivalent under subdivision (b) of Section 50745, for development of
rental housing developments eligible for assistance under this
chapter.
(f) "Rental housing development" means a development of five or
more rental or cooperative units, on one or more sites and includes a
mobilehome park with five or more mobilehome spaces.
(g) "Sponsor" means any individual, joint venture, partnership,
limited partnership, trust, corporation, cooperative, local public
entity, duly constituted governing body of an Indian rancheria, or
other legal entity, or any combination thereof, certified by the
department and the agency or the department and a local finance
entity as the case may be, to own and manage or construct a rental
housing development assisted pursuant to this chapter. A sponsor may
be organized for profit or limited profit or be nonprofit.
50736. (a) Not less than 30 percent of the units in each rental
housing development consisting of 10 or more units which receives any
funds pursuant to this chapter shall be available on a priority
basis to or occupied by eligible households pursuant to the agreement
required by Section 50739, and not less than 20 percent of all the
units in each rental housing development shall be available on a
priority basis to, or occupied by, very low income households.
(b) Every sponsor shall, with respect to assisted units, conduct
an affirmative marketing program, on a continuous basis, which
program has been approved by the department or by the agency in cases
where the agency provides financing. For the purposes of this
subdivision, "affirmative marketing program" means any program
approved by the department that is designed to achieve greater access
to housing opportunities created by this chapter for eligible
households. Such program shall include educational, promotional, and
other appropriate activity designed to secure greater housing
opportunities for those households. Where a significant number of
persons in a community have limited fluency in the English language,
publications implementing an affirmative marketing program in that
community shall be provided in the native language of those persons.
(c) Of all assisted units, under this chapter, not less than
two-thirds shall be allocated to very low income households and the
balance for lower income households.
(d) Elderly or handicapped households shall be allocated not less
than 20 percent, nor more than 30 percent, of the assisted units
provided pursuant to this chapter. Other handicapped households shall
be eligible for assisted units pursuant to this subdivision or
subdivision (a), (b), (c), or (e) if they otherwise meet the
requirements imposed by those provisions.
(e) Not less than 20 percent of the funds loaned pursuant to this
chapter after November 1988 shall be allocated to rural areas.
For the purposes of this section "rural area" shall have the same
meaning as defined in Section 50199.21.
50737. The department shall adopt rules and regulations, in
accordance with the provisions of Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, for the administration of this chapter. The rules and
regulations shall give priority in the allocation of funds available
for the purposes of this chapter to the following:
(a) Rental housing developments which are of the lowest possible
cost, given local market conditions.
(b) Rental housing developments which incorporate innovative or
energy-efficient design and construction techniques and higher
densities that will result in lower costs while retaining quality.
(c) Rental housing developments which complement the
implementation of a local housing program of increased housing supply
for persons and families of low or moderate income.
(d) Rental housing developments for which the housing sponsor,
whether public or private, has contributed or received funds,
services, or land or for which Community Development Block Grant
Funds have been allocated under Title I of Federal Public Law 93-383
for eligible expenditures, including, but not limited to, rent
subsidies, site acquisition, development costs, or construction
costs.
(e) Rental housing developments which utilize available funds in
the most efficient manner to produce the maximum number of housing
units.
(f) To the extent feasible and consistent with the other
priorities contained in this section, rental housing developments
which are located within existing public transit corridors as defined
in Section 50093.5. However, this priority shall not apply to rental
housing developments located in rural areas which are assisted
pursuant to this chapter.
50737.5. Funds available for the purposes of this chapter shall be
allocated by the department throughout the state in accordance with
identified housing needs.
50738. The department may make payments pursuant to Article 2
(commencing with Section 50745), 3 (commencing with Section 50755),
or 4 (commencing with Section 50765) or contract to make annuity fund
payments, or both, only if such payments or trust fund assistance
result in affordable rents in assisted units for eligible households.
The payments may be provided as loans to be repaid and payments of
principal or interest may be deferred or made payable over a period
of time. The payments may also be provided to acquire rights of
occupancy or leaseholds, or to write down the development costs of a
rental housing development. In addition to making payments to provide
assisted units for eligible households, the department may provide
funds if necessary to ensure the economic feasibility of, and to
enable the construction of, rental housing developments assisted
under this chapter, but no more than 10 percent of the moneys
appropriated to the Rental Housing Construction Fund may be used for
this purpose.
50738.5. (a) The department shall establish and administer an
annuity fund and may, notwithstanding any other provision of this
chapter, make commitments to provide annuity payments from the fund
directly to sponsors of rental housing developments which will
receive construction or mortgage financing, or both, from the Farmers
Home Administration to ensure affordable rents to eligible
households.
(b) The department shall require annual reports on the use of
annuity funds and any audits necessary to ensure the proper use of
moneys from the annuity fund. The department shall review all
complaints received concerning those funds and shall have all powers
necessary to assure the lawful application of those funds.
(c) Any rental housing development assisted pursuant to this
section shall be governed by a regulatory agreement between the
sponsor and the department. The regulatory agreement shall meet all
of the requirements imposed by subdivisions (b), (c), (d), and (e) of
Section 50757. The regulatory agreement shall also contain
restrictions on the occupancy of the dwelling units within the rental
housing development necessary to meet the requirements of
subdivisions (a), (b), (c), and (e) of Section 50736 and Section
50739. In addition, elderly or physically handicapped households
shall be allocated not less than 20 percent, or more than 50 percent,
of the assisted units provided pursuant to this section. Other
handicapped households shall be eligible for assisted units pursuant
to this subdivision or subdivision (a), (b), (c), or (e) of Section
50736 if they otherwise meet the requirements imposed by those
provisions.
(d) The department may utilize up to 2 1/2 percent of the moneys
appropriated for purposes of this section for administrative costs
incurred in administering this section.
(e) The department shall make requests for proposals available to
all potential sponsors of rental housing developments to be financed
by the Farmers Home Administration who request them. The department
shall encourage nonprofit sponsors and public agency sponsors to
submit proposals. The request for proposals shall provide information
about the availability of annuity payments to ensure affordable
rents in rental housing developments financed by the Farmers Home
Administration, the department's criteria for making commitments of
its annuity funds, and the appropriate application procedure. The
applicant shall be required by the department to concurrently submit
a preapplication for financing to the Farmers Home Administration.
The department shall submit to the Farmers Home Administration those
applications for which the department has made commitments for
annuity payments under this section. This section does not prohibit a
sponsor of a rental housing development from applying directly to
the Farmers Home Administration for financing and for federal rental
assistance payments.
(f) "Rental housing development," as used in this section,
includes farm labor housing developments financed or insured by the
Farmers Home Administration pursuant to Section 1484, 1485, or 1486
of Title 42 of the United States Code.
50739. At the time the department makes a payment pursuant to
Article 2 (commencing with Section 50745), 3 (commencing with Section
50755), or 4 (commencing with Section 50765) or contracts to make
annuity fund payments in connection with a rental housing
development, or both, a written agreement between the department and
the agency, local finance entity, or local public entity shall be
executed, designating the number of units within the rental housing
development available to, or occupied by, very low income households,
other lower income households, and other households. If the number
of units occupied by very low income households or other lower income
households in any housing development ever falls below the number
agreed to by the department and agency, local finance entity, or
local public entities, then units which become available for
occupancy shall be made available on a priority basis to very low
income households or other lower income households, as required,
until the number of units so occupied equals at least the number
specified in the agreement.
The department and the agency, local finance entity, or local
public entity, may reduce the number of assisted units to less than
30 percent of a rental housing development only if necessary to
maintain the development's fiscal integrity. Any reduction in the
number of assisted units shall be reviewed annually to determine
whether it is necessary to continue that reduction in the number of
assisted units.
50740. (a) The Rental Housing Construction Incentive Fund
established in the State Treasury is hereby renamed the Rental
Housing Construction Fund. Notwithstanding Section 13340 of the
Government Code, all moneys in the fund are hereby continuously
appropriated to the Department of Housing and Community Development,
and, except as provided in subdivisions (b) and (c), shall be
utilized for purposes of this chapter, Section 50775.5, and Chapter
15 (commencing with Section 50880). All interest or other increment
resulting from investment or deposit of moneys in the fund shall be
deposited in the fund, notwithstanding Section 16305.7 of the
Government Code. Except as described in subdivision (d), moneys in
the fund shall not be subject to transfer to any other fund pursuant
to Part 2 (commencing with Section 16300) of Division 4 of Title 2 of
the Government Code, except the Surplus Money Investment Fund.
(b) An amount not to exceed four million dollars ($4,000,000) of
the moneys from the fund utilized by the agency for development costs
which is repaid to the agency or disencumbered on or after July 1,
1983, shall be deposited in a separate account and utilized and
apportioned in accordance with the following percentages as it
becomes available:
(1) Fifty percent of the moneys shall be transferred by the agency
to the department and deposited in the Housing Rehabilitation Loan
Fund, established pursuant to Section 50661, and utilized for making
deferred payment loans for residential hotels as authorized by
subdivision (b) of Section 50661 and for purposes of subdivision (c)
of that section.
(2) Twenty-five percent of the moneys shall be transferred by the
agency to the department for deposit in the Emergency Housing and
Assistance Fund, established pursuant to Section 50800.5.
(3) Twenty-five percent of the moneys shall be transferred by the
agency to the department for deposit in the annuity fund, established
pursuant to Section 50738.5.
(c) Notwithstanding any other provision of law, effective with the
date of the act adding this subdivision, appropriations authorized
for support of the department from the Family Housing Demonstration
Account shall instead be authorized for expenditure from the Rental
Housing Construction Fund.
(d) Notwithstanding any other law, the Controller may use the
moneys in the Rental Housing Construction Fund for loans to the
General Fund as provided in Sections 16310 and 16381 of the
Government Code. However, interest shall be paid on all moneys loaned
to the General Fund from the Rental Housing Construction Fund.
Interest payable shall be computed at a rate determined by the Pooled
Money Investment Board to be the current earning rate of the fund
from which loaned. This subdivision does not authorize any transfer
that will interfere with the carrying out of the object for which the
Rental Housing Construction Fund was created.
50740.7. If money committed by the department prior to the
effective date of the act which enacted this section cannot be used
by the local finance entity or housing authority to which funds are
committed, the department may allocate these funds to assist any
other housing developments, including those financed by the agency,
eligible under this chapter.
50741. Only rental housing developments on which construction is
commenced on or after six months from the effective date of this
chapter shall be eligible for assistance under this chapter.
50742. For purposes of acting as a local finance entity pursuant to
this chapter, a city, county, or city and county may, pursuant to an
enabling ordinance of its legislative body, issue revenue bonds to
provide below-market interest financing of a rental housing
development. Any city, county, or city and county may act jointly
with one or more other cities, counties, or cities and counties in
the exercise of powers under this section. The proceeds of local
revenue bonds issued pursuant to this section shall be used solely to
finance rental housing developments containing assisted units, for
any and all costs of administering such finance program and for
complying with mandated reserve requirements. Any interest or other
increment received by a local finance entity acting under the
authority of this section from the investment or reinvestment of the
proceeds of such revenue bonds, any payments of principal or interest
on financing provided by the local finance entity or part of such
program, and any other revenues received by the local finance entity
in connection with, or for purposes of, such program shall be held
and applied solely for the purposes of such program.
50744. Where a local finance entity or local public entity is
authorized to receive payments from the annuity fund established
pursuant to Section 50748, under a written agreement with the
department, the local finance entity or local public entity may with
the approval of the department designate in writing either the
project sponsor or the sponsor's approved management agent for the
rental housing development as a substitute payee for these payments.
Upon the approval of the department and the local finance entity or
local public entity, the department shall make the authorized
payments directly to the designated payee until the entity and the
department agree to revoke or rescind the designation.
50744.5. The same notice requirements as specified in Section
65863.10 of the Government Code shall apply to rental housing
developments that receive financial assistance pursuant to this
chapter.
50735. The following definitions shall apply to all activities
conducted pursuant to this chapter. Except as otherwise provided in
this article or unless the context otherwise requires, the
definitions contained in Chapter 2 (commencing with Section 50050) of
Part 1 of this division shall also apply to this chapter.
(a) "Assisted unit" means a unit which is affordable to an
eligible household as a result of a payment made by the department
pursuant to Article 2 (commencing with Section 50745), 3 (commencing
with Section 50755), 4 (commencing with Section 50765) or 6
(commencing with Section 50771.1), or as a result of establishment
of, or assistance from, an annuity trust fund or both. The department
shall adopt regulations which establish a method for computing rents
for eligible households.
(b) "Below-market interest financing" means any of the following:
(1) A long-term loan made by the agency with below-market
interest, as defined by Section 50056.
(2) A long-term loan made by a local finance entity at a
below-market interest rate no higher than that established from time
to time by the department, provided such rate shall not exceed by
more than 1 1/2 percent the interest rate on long-term loans, if any,
made by the agency for rental housing development proposals being
submitted or processed for department assistance under this chapter
at the same time.
(3) The use of subsidies, assistance, or financing, other than as
provided in paragraphs (1) and (2), which reduce rent levels by an
amount equivalent to that enabled by long-term loans at the interest
rate established for purposes of paragraph (2).
(4) Subsidies, assistance, or financing provided to the sponsor by
or through the agency or local finance entity and which is a loan
made at below-market interest by an agency of the federal government.
(c) "Development costs" means the aggregate of all costs incurred
in connection with construction of a rental housing development
pursuant to this chapter, including (1) the cost of land acquisition,
whether by purchase or lease, (2) the cost of construction, (3) the
cost of overhead including architectural, legal, and accounting fees
incurred in connection with the construction of the rental housing
development, (4) the cost of related offsite improvements, such as
sewers, utilities, and streets, and (5) the cost of necessary and
related onsite improvements. The department shall adopt regulations
consistent with this section specifying the expenses qualifying as
development costs for which a payment may be made pursuant to Section
50745.
(d) "Eligible households" means lower income households, as
defined by Section 50079.5, including very low income households, as
defined by Section 50105.
(e) "Local finance entity" means a redevelopment agency, housing
authority, duly constituted governing body of an Indian rancheria,
city, county, or city and county, or any combination thereof, which,
in connection with the program established pursuant to this chapter,
provides or utilizes financing, at below-market interest or the
equivalent under subdivision (b) of Section 50745, for development of
rental housing developments eligible for assistance under this
chapter.
(f) "Rental housing development" means a development of five or
more rental or cooperative units, on one or more sites and includes a
mobilehome park with five or more mobilehome spaces.
(g) "Sponsor" means any individual, joint venture, partnership,
limited partnership, trust, corporation, cooperative, local public
entity, duly constituted governing body of an Indian rancheria, or
other legal entity, or any combination thereof, certified by the
department and the agency or the department and a local finance
entity as the case may be, to own and manage or construct a rental
housing development assisted pursuant to this chapter. A sponsor may
be organized for profit or limited profit or be nonprofit.
50736. (a) Not less than 30 percent of the units in each rental
housing development consisting of 10 or more units which receives any
funds pursuant to this chapter shall be available on a priority
basis to or occupied by eligible households pursuant to the agreement
required by Section 50739, and not less than 20 percent of all the
units in each rental housing development shall be available on a
priority basis to, or occupied by, very low income households.
(b) Every sponsor shall, with respect to assisted units, conduct
an affirmative marketing program, on a continuous basis, which
program has been approved by the department or by the agency in cases
where the agency provides financing. For the purposes of this
subdivision, "affirmative marketing program" means any program
approved by the department that is designed to achieve greater access
to housing opportunities created by this chapter for eligible
households. Such program shall include educational, promotional, and
other appropriate activity designed to secure greater housing
opportunities for those households. Where a significant number of
persons in a community have limited fluency in the English language,
publications implementing an affirmative marketing program in that
community shall be provided in the native language of those persons.
(c) Of all assisted units, under this chapter, not less than
two-thirds shall be allocated to very low income households and the
balance for lower income households.
(d) Elderly or handicapped households shall be allocated not less
than 20 percent, nor more than 30 percent, of the assisted units
provided pursuant to this chapter. Other handicapped households shall
be eligible for assisted units pursuant to this subdivision or
subdivision (a), (b), (c), or (e) if they otherwise meet the
requirements imposed by those provisions.
(e) Not less than 20 percent of the funds loaned pursuant to this
chapter after November 1988 shall be allocated to rural areas.
For the purposes of this section "rural area" shall have the same
meaning as defined in Section 50199.21.
50737. The department shall adopt rules and regulations, in
accordance with the provisions of Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, for the administration of this chapter. The rules and
regulations shall give priority in the allocation of funds available
for the purposes of this chapter to the following:
(a) Rental housing developments which are of the lowest possible
cost, given local market conditions.
(b) Rental housing developments which incorporate innovative or
energy-efficient design and construction techniques and higher
densities that will result in lower costs while retaining quality.
(c) Rental housing developments which complement the
implementation of a local housing program of increased housing supply
for persons and families of low or moderate income.
(d) Rental housing developments for which the housing sponsor,
whether public or private, has contributed or received funds,
services, or land or for which Community Development Block Grant
Funds have been allocated under Title I of Federal Public Law 93-383
for eligible expenditures, including, but not limited to, rent
subsidies, site acquisition, development costs, or construction
costs.
(e) Rental housing developments which utilize available funds in
the most efficient manner to produce the maximum number of housing
units.
(f) To the extent feasible and consistent with the other
priorities contained in this section, rental housing developments
which are located within existing public transit corridors as defined
in Section 50093.5. However, this priority shall not apply to rental
housing developments located in rural areas which are assisted
pursuant to this chapter.
50737.5. Funds available for the purposes of this chapter shall be
allocated by the department throughout the state in accordance with
identified housing needs.
50738. The department may make payments pursuant to Article 2
(commencing with Section 50745), 3 (commencing with Section 50755),
or 4 (commencing with Section 50765) or contract to make annuity fund
payments, or both, only if such payments or trust fund assistance
result in affordable rents in assisted units for eligible households.
The payments may be provided as loans to be repaid and payments of
principal or interest may be deferred or made payable over a period
of time. The payments may also be provided to acquire rights of
occupancy or leaseholds, or to write down the development costs of a
rental housing development. In addition to making payments to provide
assisted units for eligible households, the department may provide
funds if necessary to ensure the economic feasibility of, and to
enable the construction of, rental housing developments assisted
under this chapter, but no more than 10 percent of the moneys
appropriated to the Rental Housing Construction Fund may be used for
this purpose.
50738.5. (a) The department shall establish and administer an
annuity fund and may, notwithstanding any other provision of this
chapter, make commitments to provide annuity payments from the fund
directly to sponsors of rental housing developments which will
receive construction or mortgage financing, or both, from the Farmers
Home Administration to ensure affordable rents to eligible
households.
(b) The department shall require annual reports on the use of
annuity funds and any audits necessary to ensure the proper use of
moneys from the annuity fund. The department shall review all
complaints received concerning those funds and shall have all powers
necessary to assure the lawful application of those funds.
(c) Any rental housing development assisted pursuant to this
section shall be governed by a regulatory agreement between the
sponsor and the department. The regulatory agreement shall meet all
of the requirements imposed by subdivisions (b), (c), (d), and (e) of
Section 50757. The regulatory agreement shall also contain
restrictions on the occupancy of the dwelling units within the rental
housing development necessary to meet the requirements of
subdivisions (a), (b), (c), and (e) of Section 50736 and Section
50739. In addition, elderly or physically handicapped households
shall be allocated not less than 20 percent, or more than 50 percent,
of the assisted units provided pursuant to this section. Other
handicapped households shall be eligible for assisted units pursuant
to this subdivision or subdivision (a), (b), (c), or (e) of Section
50736 if they otherwise meet the requirements imposed by those
provisions.
(d) The department may utilize up to 2 1/2 percent of the moneys
appropriated for purposes of this section for administrative costs
incurred in administering this section.
(e) The department shall make requests for proposals available to
all potential sponsors of rental housing developments to be financed
by the Farmers Home Administration who request them. The department
shall encourage nonprofit sponsors and public agency sponsors to
submit proposals. The request for proposals shall provide information
about the availability of annuity payments to ensure affordable
rents in rental housing developments financed by the Farmers Home
Administration, the department's criteria for making commitments of
its annuity funds, and the appropriate application procedure. The
applicant shall be required by the department to concurrently submit
a preapplication for financing to the Farmers Home Administration.
The department shall submit to the Farmers Home Administration those
applications for which the department has made commitments for
annuity payments under this section. This section does not prohibit a
sponsor of a rental housing development from applying directly to
the Farmers Home Administration for financing and for federal rental
assistance payments.
(f) "Rental housing development," as used in this section,
includes farm labor housing developments financed or insured by the
Farmers Home Administration pursuant to Section 1484, 1485, or 1486
of Title 42 of the United States Code.
50739. At the time the department makes a payment pursuant to
Article 2 (commencing with Section 50745), 3 (commencing with Section
50755), or 4 (commencing with Section 50765) or contracts to make
annuity fund payments in connection with a rental housing
development, or both, a written agreement between the department and
the agency, local finance entity, or local public entity shall be
executed, designating the number of units within the rental housing
development available to, or occupied by, very low income households,
other lower income households, and other households. If the number
of units occupied by very low income households or other lower income
households in any housing development ever falls below the number
agreed to by the department and agency, local finance entity, or
local public entities, then units which become available for
occupancy shall be made available on a priority basis to very low
income households or other lower income households, as required,
until the number of units so occupied equals at least the number
specified in the agreement.
The department and the agency, local finance entity, or local
public entity, may reduce the number of assisted units to less than
30 percent of a rental housing development only if necessary to
maintain the development's fiscal integrity. Any reduction in the
number of assisted units shall be reviewed annually to determine
whether it is necessary to continue that reduction in the number of
assisted units.
50740. (a) The Rental Housing Construction Incentive Fund
established in the State Treasury is hereby renamed the Rental
Housing Construction Fund. Notwithstanding Section 13340 of the
Government Code, all moneys in the fund are hereby continuously
appropriated to the Department of Housing and Community Development,
and, except as provided in subdivisions (b) and (c), shall be
utilized for purposes of this chapter, Section 50775.5, and Chapter
15 (commencing with Section 50880). All interest or other increment
resulting from investment or deposit of moneys in the fund shall be
deposited in the fund, notwithstanding Section 16305.7 of the
Government Code. Except as described in subdivision (d), moneys in
the fund shall not be subject to transfer to any other fund pursuant
to Part 2 (commencing with Section 16300) of Division 4 of Title 2 of
the Government Code, except the Surplus Money Investment Fund.
(b) An amount not to exceed four million dollars ($4,000,000) of
the moneys from the fund utilized by the agency for development costs
which is repaid to the agency or disencumbered on or after July 1,
1983, shall be deposited in a separate account and utilized and
apportioned in accordance with the following percentages as it
becomes available:
(1) Fifty percent of the moneys shall be transferred by the agency
to the department and deposited in the Housing Rehabilitation Loan
Fund, established pursuant to Section 50661, and utilized for making
deferred payment loans for residential hotels as authorized by
subdivision (b) of Section 50661 and for purposes of subdivision (c)
of that section.
(2) Twenty-five percent of the moneys shall be transferred by the
agency to the department for deposit in the Emergency Housing and
Assistance Fund, established pursuant to Section 50800.5.
(3) Twenty-five percent of the moneys shall be transferred by the
agency to the department for deposit in the annuity fund, established
pursuant to Section 50738.5.
(c) Notwithstanding any other provision of law, effective with the
date of the act adding this subdivision, appropriations authorized
for support of the department from the Family Housing Demonstration
Account shall instead be authorized for expenditure from the Rental
Housing Construction Fund.
(d) Notwithstanding any other law, the Controller may use the
moneys in the Rental Housing Construction Fund for loans to the
General Fund as provided in Sections 16310 and 16381 of the
Government Code. However, interest shall be paid on all moneys loaned
to the General Fund from the Rental Housing Construction Fund.
Interest payable shall be computed at a rate determined by the Pooled
Money Investment Board to be the current earning rate of the fund
from which loaned. This subdivision does not authorize any transfer
that will interfere with the carrying out of the object for which the
Rental Housing Construction Fund was created.
50740.7. If money committed by the department prior to the
effective date of the act which enacted this section cannot be used
by the local finance entity or housing authority to which funds are
committed, the department may allocate these funds to assist any
other housing developments, including those financed by the agency,
eligible under this chapter.
50741. Only rental housing developments on which construction is
commenced on or after six months from the effective date of this
chapter shall be eligible for assistance under this chapter.
50742. For purposes of acting as a local finance entity pursuant to
this chapter, a city, county, or city and county may, pursuant to an
enabling ordinance of its legislative body, issue revenue bonds to
provide below-market interest financing of a rental housing
development. Any city, county, or city and county may act jointly
with one or more other cities, counties, or cities and counties in
the exercise of powers under this section. The proceeds of local
revenue bonds issued pursuant to this section shall be used solely to
finance rental housing developments containing assisted units, for
any and all costs of administering such finance program and for
complying with mandated reserve requirements. Any interest or other
increment received by a local finance entity acting under the
authority of this section from the investment or reinvestment of the
proceeds of such revenue bonds, any payments of principal or interest
on financing provided by the local finance entity or part of such
program, and any other revenues received by the local finance entity
in connection with, or for purposes of, such program shall be held
and applied solely for the purposes of such program.
50744. Where a local finance entity or local public entity is
authorized to receive payments from the annuity fund established
pursuant to Section 50748, under a written agreement with the
department, the local finance entity or local public entity may with
the approval of the department designate in writing either the
project sponsor or the sponsor's approved management agent for the
rental housing development as a substitute payee for these payments.
Upon the approval of the department and the local finance entity or
local public entity, the department shall make the authorized
payments directly to the designated payee until the entity and the
department agree to revoke or rescind the designation.
50744.5. The same notice requirements as specified in Section
65863.10 of the Government Code shall apply to rental housing
developments that receive financial assistance pursuant to this
chapter.
50735. The following definitions shall apply to all activities
conducted pursuant to this chapter. Except as otherwise provided in
this article or unless the context otherwise requires, the
definitions contained in Chapter 2 (commencing with Section 50050) of
Part 1 of this division shall also apply to this chapter.
(a) "Assisted unit" means a unit which is affordable to an
eligible household as a result of a payment made by the department
pursuant to Article 2 (commencing with Section 50745), 3 (commencing
with Section 50755), 4 (commencing with Section 50765) or 6
(commencing with Section 50771.1), or as a result of establishment
of, or assistance from, an annuity trust fund or both. The department
shall adopt regulations which establish a method for computing rents
for eligible households.
(b) "Below-market interest financing" means any of the following:
(1) A long-term loan made by the agency with below-market
interest, as defined by Section 50056.
(2) A long-term loan made by a local finance entity at a
below-market interest rate no higher than that established from time
to time by the department, provided such rate shall not exceed by
more than 1 1/2 percent the interest rate on long-term loans, if any,
made by the agency for rental housing development proposals being
submitted or processed for department assistance under this chapter
at the same time.
(3) The use of subsidies, assistance, or financing, other than as
provided in paragraphs (1) and (2), which reduce rent levels by an
amount equivalent to that enabled by long-term loans at the interest
rate established for purposes of paragraph (2).
(4) Subsidies, assistance, or financing provided to the sponsor by
or through the agency or local finance entity and which is a loan
made at below-market interest by an agency of the federal government.
(c) "Development costs" means the aggregate of all costs incurred
in connection with construction of a rental housing development
pursuant to this chapter, including (1) the cost of land acquisition,
whether by purchase or lease, (2) the cost of construction, (3) the
cost of overhead including architectural, legal, and accounting fees
incurred in connection with the construction of the rental housing
development, (4) the cost of related offsite improvements, such as
sewers, utilities, and streets, and (5) the cost of necessary and
related onsite improvements. The department shall adopt regulations
consistent with this section specifying the expenses qualifying as
development costs for which a payment may be made pursuant to Section
50745.
(d) "Eligible households" means lower income households, as
defined by Section 50079.5, including very low income households, as
defined by Section 50105.
(e) "Local finance entity" means a redevelopment agency, housing
authority, duly constituted governing body of an Indian rancheria,
city, county, or city and county, or any combination thereof, which,
in connection with the program established pursuant to this chapter,
provides or utilizes financing, at below-market interest or the
equivalent under subdivision (b) of Section 50745, for development of
rental housing developments eligible for assistance under this
chapter.
(f) "Rental housing development" means a development of five or
more rental or cooperative units, on one or more sites and includes a
mobilehome park with five or more mobilehome spaces.
(g) "Sponsor" means any individual, joint venture, partnership,
limited partnership, trust, corporation, cooperative, local public
entity, duly constituted governing body of an Indian rancheria, or
other legal entity, or any combination thereof, certified by the
department and the agency or the department and a local finance
entity as the case may be, to own and manage or construct a rental
housing development assisted pursuant to this chapter. A sponsor may
be organized for profit or limited profit or be nonprofit.
50736. (a) Not less than 30 percent of the units in each rental
housing development consisting of 10 or more units which receives any
funds pursuant to this chapter shall be available on a priority
basis to or occupied by eligible households pursuant to the agreement
required by Section 50739, and not less than 20 percent of all the
units in each rental housing development shall be available on a
priority basis to, or occupied by, very low income households.
(b) Every sponsor shall, with respect to assisted units, conduct
an affirmative marketing program, on a continuous basis, which
program has been approved by the department or by the agency in cases
where the agency provides financing. For the purposes of this
subdivision, "affirmative marketing program" means any program
approved by the department that is designed to achieve greater access
to housing opportunities created by this chapter for eligible
households. Such program shall include educational, promotional, and
other appropriate activity designed to secure greater housing
opportunities for those households. Where a significant number of
persons in a community have limited fluency in the English language,
publications implementing an affirmative marketing program in that
community shall be provided in the native language of those persons.
(c) Of all assisted units, under this chapter, not less than
two-thirds shall be allocated to very low income households and the
balance for lower income households.
(d) Elderly or handicapped households shall be allocated not less
than 20 percent, nor more than 30 percent, of the assisted units
provided pursuant to this chapter. Other handicapped households shall
be eligible for assisted units pursuant to this subdivision or
subdivision (a), (b), (c), or (e) if they otherwise meet the
requirements imposed by those provisions.
(e) Not less than 20 percent of the funds loaned pursuant to this
chapter after November 1988 shall be allocated to rural areas.
For the purposes of this section "rural area" shall have the same
meaning as defined in Section 50199.21.
50737. The department shall adopt rules and regulations, in
accordance with the provisions of Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, for the administration of this chapter. The rules and
regulations shall give priority in the allocation of funds available
for the purposes of this chapter to the following:
(a) Rental housing developments which are of the lowest possible
cost, given local market conditions.
(b) Rental housing developments which incorporate innovative or
energy-efficient design and construction techniques and higher
densities that will result in lower costs while retaining quality.
(c) Rental housing developments which complement the
implementation of a local housing program of increased housing supply
for persons and families of low or moderate income.
(d) Rental housing developments for which the housing sponsor,
whether public or private, has contributed or received funds,
services, or land or for which Community Development Block Grant
Funds have been allocated under Title I of Federal Public Law 93-383
for eligible expenditures, including, but not limited to, rent
subsidies, site acquisition, development costs, or construction
costs.
(e) Rental housing developments which utilize available funds in
the most efficient manner to produce the maximum number of housing
units.
(f) To the extent feasible and consistent with the other
priorities contained in this section, rental housing developments
which are located within existing public transit corridors as defined
in Section 50093.5. However, this priority shall not apply to rental
housing developments located in rural areas which are assisted
pursuant to this chapter.
50737.5. Funds available for the purposes of this chapter shall be
allocated by the department throughout the state in accordance with
identified housing needs.
50738. The department may make payments pursuant to Article 2
(commencing with Section 50745), 3 (commencing with Section 50755),
or 4 (commencing with Section 50765) or contract to make annuity fund
payments, or both, only if such payments or trust fund assistance
result in affordable rents in assisted units for eligible households.
The payments may be provided as loans to be repaid and payments of
principal or interest may be deferred or made payable over a period
of time. The payments may also be provided to acquire rights of
occupancy or leaseholds, or to write down the development costs of a
rental housing development. In addition to making payments to provide
assisted units for eligible households, the department may provide
funds if necessary to ensure the economic feasibility of, and to
enable the construction of, rental housing developments assisted
under this chapter, but no more than 10 percent of the moneys
appropriated to the Rental Housing Construction Fund may be used for
this purpose.
50738.5. (a) The department shall establish and administer an
annuity fund and may, notwithstanding any other provision of this
chapter, make commitments to provide annuity payments from the fund
directly to sponsors of rental housing developments which will
receive construction or mortgage financing, or both, from the Farmers
Home Administration to ensure affordable rents to eligible
households.
(b) The department shall require annual reports on the use of
annuity funds and any audits necessary to ensure the proper use of
moneys from the annuity fund. The department shall review all
complaints received concerning those funds and shall have all powers
necessary to assure the lawful application of those funds.
(c) Any rental housing development assisted pursuant to this
section shall be governed by a regulatory agreement between the
sponsor and the department. The regulatory agreement shall meet all
of the requirements imposed by subdivisions (b), (c), (d), and (e) of
Section 50757. The regulatory agreement shall also contain
restrictions on the occupancy of the dwelling units within the rental
housing development necessary to meet the requirements of
subdivisions (a), (b), (c), and (e) of Section 50736 and Section
50739. In addition, elderly or physically handicapped households
shall be allocated not less than 20 percent, or more than 50 percent,
of the assisted units provided pursuant to this section. Other
handicapped households shall be eligible for assisted units pursuant
to this subdivision or subdivision (a), (b), (c), or (e) of Section
50736 if they otherwise meet the requirements imposed by those
provisions.
(d) The department may utilize up to 2 1/2 percent of the moneys
appropriated for purposes of this section for administrative costs
incurred in administering this section.
(e) The department shall make requests for proposals available to
all potential sponsors of rental housing developments to be financed
by the Farmers Home Administration who request them. The department
shall encourage nonprofit sponsors and public agency sponsors to
submit proposals. The request for proposals shall provide information
about the availability of annuity payments to ensure affordable
rents in rental housing developments financed by the Farmers Home
Administration, the department's criteria for making commitments of
its annuity funds, and the appropriate application procedure. The
applicant shall be required by the department to concurrently submit
a preapplication for financing to the Farmers Home Administration.
The department shall submit to the Farmers Home Administration those
applications for which the department has made commitments for
annuity payments under this section. This section does not prohibit a
sponsor of a rental housing development from applying directly to
the Farmers Home Administration for financing and for federal rental
assistance payments.
(f) "Rental housing development," as used in this section,
includes farm labor housing developments financed or insured by the
Farmers Home Administration pursuant to Section 1484, 1485, or 1486
of Title 42 of the United States Code.
50739. At the time the department makes a payment pursuant to
Article 2 (commencing with Section 50745), 3 (commencing with Section
50755), or 4 (commencing with Section 50765) or contracts to make
annuity fund payments in connection with a rental housing
development, or both, a written agreement between the department and
the agency, local finance entity, or local public entity shall be
executed, designating the number of units within the rental housing
development available to, or occupied by, very low income households,
other lower income households, and other households. If the number
of units occupied by very low income households or other lower income
households in any housing development ever falls below the number
agreed to by the department and agency, local finance entity, or
local public entities, then units which become available for
occupancy shall be made available on a priority basis to very low
income households or other lower income households, as required,
until the number of units so occupied equals at least the number
specified in the agreement.
The department and the agency, local finance entity, or local
public entity, may reduce the number of assisted units to less than
30 percent of a rental housing development only if necessary to
maintain the development's fiscal integrity. Any reduction in the
number of assisted units shall be reviewed annually to determine
whether it is necessary to continue that reduction in the number of
assisted units.
50740. (a) The Rental Housing Construction Incentive Fund
established in the State Treasury is hereby renamed the Rental
Housing Construction Fund. Notwithstanding Section 13340 of the
Government Code, all moneys in the fund are hereby continuously
appropriated to the Department of Housing and Community Development,
and, except as provided in subdivisions (b) and (c), shall be
utilized for purposes of this chapter, Section 50775.5, and Chapter
15 (commencing with Section 50880). All interest or other increment
resulting from investment or deposit of moneys in the fund shall be
deposited in the fund, notwithstanding Section 16305.7 of the
Government Code. Except as described in subdivision (d), moneys in
the fund shall not be subject to transfer to any other fund pursuant
to Part 2 (commencing with Section 16300) of Division 4 of Title 2 of
the Government Code, except the Surplus Money Investment Fund.
(b) An amount not to exceed four million dollars ($4,000,000) of
the moneys from the fund utilized by the agency for development costs
which is repaid to the agency or disencumbered on or after July 1,
1983, shall be deposited in a separate account and utilized and
apportioned in accordance with the following percentages as it
becomes available:
(1) Fifty percent of the moneys shall be transferred by the agency
to the department and deposited in the Housing Rehabilitation Loan
Fund, established pursuant to Section 50661, and utilized for making
deferred payment loans for residential hotels as authorized by
subdivision (b) of Section 50661 and for purposes of subdivision (c)
of that section.
(2) Twenty-five percent of the moneys shall be transferred by the
agency to the department for deposit in the Emergency Housing and
Assistance Fund, established pursuant to Section 50800.5.
(3) Twenty-five percent of the moneys shall be transferred by the
agency to the department for deposit in the annuity fund, established
pursuant to Section 50738.5.
(c) Notwithstanding any other provision of law, effective with the
date of the act adding this subdivision, appropriations authorized
for support of the department from the Family Housing Demonstration
Account shall instead be authorized for expenditure from the Rental
Housing Construction Fund.
(d) Notwithstanding any other law, the Controller may use the
moneys in the Rental Housing Construction Fund for loans to the
General Fund as provided in Sections 16310 and 16381 of the
Government Code. However, interest shall be paid on all moneys loaned
to the General Fund from the Rental Housing Construction Fund.
Interest payable shall be computed at a rate determined by the Pooled
Money Investment Board to be the current earning rate of the fund
from which loaned. This subdivision does not authorize any transfer
that will interfere with the carrying out of the object for which the
Rental Housing Construction Fund was created.
50740.7. If money committed by the department prior to the
effective date of the act which enacted this section cannot be used
by the local finance entity or housing authority to which funds are
committed, the department may allocate these funds to assist any
other housing developments, including those financed by the agency,
eligible under this chapter.
50741. Only rental housing developments on which construction is
commenced on or after six months from the effective date of this
chapter shall be eligible for assistance under this chapter.
50742. For purposes of acting as a local finance entity pursuant to
this chapter, a city, county, or city and county may, pursuant to an
enabling ordinance of its legislative body, issue revenue bonds to
provide below-market interest financing of a rental housing
development. Any city, county, or city and county may act jointly
with one or more other cities, counties, or cities and counties in
the exercise of powers under this section. The proceeds of local
revenue bonds issued pursuant to this section shall be used solely to
finance rental housing developments containing assisted units, for
any and all costs of administering such finance program and for
complying with mandated reserve requirements. Any interest or other
increment received by a local finance entity acting under the
authority of this section from the investment or reinvestment of the
proceeds of such revenue bonds, any payments of principal or interest
on financing provided by the local finance entity or part of such
program, and any other revenues received by the local finance entity
in connection with, or for purposes of, such program shall be held
and applied solely for the purposes of such program.
50744. Where a local finance entity or local public entity is
authorized to receive payments from the annuity fund established
pursuant to Section 50748, under a written agreement with the
department, the local finance entity or local public entity may with
the approval of the department designate in writing either the
project sponsor or the sponsor's approved management agent for the
rental housing development as a substitute payee for these payments.
Upon the approval of the department and the local finance entity or
local public entity, the department shall make the authorized
payments directly to the designated payee until the entity and the
department agree to revoke or rescind the designation.
50744.5. The same notice requirements as specified in Section
65863.10 of the Government Code shall apply to rental housing
developments that receive financial assistance pursuant to this
chapter.
