On October 13, 2017, Governor Brown signed Assembly Bill (“AB”) 1598 into law. Legislators have said that the bill, which became effective on January 1, 2018, creates a new financing tool for affordable housing. But what is this new tool exactly?
In some ways, the tool isn’t really new at all, but rather the expansion of an old tool. Building upon AB 2 from 2015, which allowed cities and counties to create Community Revitalization and Investment Authorities (“CRIAs”), AB 1598 allows cities and counties to create “affordable housing authorities.” Affordable housing authorities are authorized to use property tax increment and sales tax revenue contributed by consenting taxing entities to finance low- and moderate-income housing and affordable workforce housing. Authorities may issue bonds payable from the pledged revenues. Schools and successor agencies, however, are not permitted to contribute from their share of tax revenue.
Affordable housing authorities must adopt and then implement a detailed affordable housing program. Unlike former redevelopment agencies, the authorities are not required to spend proceeds only in “blighted” areas. However, housing funds expended must be spent in proportion to the city/county’s Regional Housing Need Allocation (RHNA) requirements. A board made up of elected officials and local residents or employees is required to oversee each affordable housing authority.
If you are interested in learning more about whether your community could benefit from forming an affordable housing authority, please contact us at RSG today. We’re happy to help.
Written by Dominique Clark, an Associate at RSG