Streamlining inspections of affordable housing in California

affordable housing

The California State Legislature recently passed, and Governor Newsom signed, AB 2006, a bill to eliminate duplication in the inspection of affordable housing projects in the state. The bill was sponsored by Assemblyman Marc Berman (D-Menlo Park) and passed both the State Assembly and State Senate unanimously.

Improving the supply of affordable housing has been a priority for Governor Newsom and his signing of this bill furthers that goal.

Reducing duplication

California has three state agencies which may provide financing to affordable housing developments. They are the Department of Housing and Community Development (HCD), the California Housing and Finance Agency (CalHFA), and the California Tax Credit Allocation Committee (CTCAC). A single project may be financed by more than one of these agencies, resulting in multiple agencies performing largely duplicative inspections and oversight.

The bill requires that the three housing financing agencies meet and develop a memorandum of understanding “to streamline the compliance monitoring of affordable multifamily rental housing developments that are subject to a regulatory agreement with more than one of these entities.” The memorandum must provide that only one of the three agencies perform the physical inspections of the project and that the need for submission of duplicate information be eliminated. The agencies must also align their processes for obtaining approvals required at various stages in the lifecycle of the project.

The memorandum of understanding must be in place by July 1, 2024.

Welcoming the news

The bill was backed by the California Housing Consortium and by the California Housing Partnership.

In response to the bill’s passage, Ray Pearl, Executive Director of the California Housing Consortium said, “This common-sense legislation will make the work of the state and affordable housing providers easier and more efficient, while helping focus resources where they should be: On providing safe, affordable housing for our residents.”

Matt Schwartz, President and CEO of the California Housing Partnership echoed these sentiments saying, “By eliminating duplication in monitoring efforts, AB 2006 saves the state money and reduces the cost of affordable housing. These savings in turn can support additional affordable homes. This common-sense measure is long overdue.”