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LEGISLATION COMMITTEE

Meeting Date:	04/08/2019
Subject: AB 723 (Wicks and Bonta): Low-Income Housing Incentives: Leased Rental Housing
Submitted For:	LEGISLATION COMMITTEE
Department:	County Administrator
Referral No.:	2019-01
Referral Name:	AB 723 Low-Income Housing Incentives: Leased Rental Housing
Presenter:	L. DeLaney & B. Palmer	Contact:	L. DeLaney, 925-335-1097

Information

Referral History:

This bill was referred to the Legislation Committee by the County Administrator.

Referral Update:

AB 723 (Wicks and Bonta): Low-Income Housing Incentives: Leased Rental Housing

According to its author, "this bill is an effort to avoid tenant displacement and accelerate the creation of affordable housing. AB 723 would provide property owners an opportunity to convert existing buildings to affordable housing and charge sufficiently low rents in return for a lower overall property tax liability." The Fact Sheet from its author is attached.

Legislative Counsel's Digest:

Existing property tax law, in accordance with authorization provided by the California Constitution, provides a welfare exemption for property used exclusively for religious, hospital, scientific, or charitable purposes and that is owned or operated by certain types of nonprofit entities, if certain qualifying criteria are met. Existing property tax law additionally exempts from taxation on the possessory and fee interest property that is leased for 35 years or more, if the lessor is not otherwise qualified for the welfare exemption and the property is used exclusively and solely for rental housing and related facilities for low?income tenants, as provided, and leased and operated by specified entities.

This bill would instead authorize the Counties of Alameda and Contra Costa to provide the lessor of an eligible property located within its territorial boundaries with a low?income rental housing incentive. The bill, among other requirements similar to those for the leased property exemption for rental housing described above, would require that an eligible property be used exclusively for rental housing that is rented for no more than 30 percent of the income level of persons of low income to tenants occupying the property at the commencement of the lease and that the lease commence on or after January 1, 2020, and before January 1, 2025. The bill would require that the amount of incentive payment be based on the amount of property taxes apportioned to the county and the city in which the eligible property is located. The bill would require a city to reimburse a county for a certain amount of the low?income rental housing incentive, thereby imposing a state?mandated local program.

This bill would make legislative findings and declarations as to the necessity of a special statute for the Counties of Alameda and Contra Costa.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

The text of the bill is available at: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB723

Introduced:	02/19/2019
Last Amend:	03/25/2019
Disposition:	Pending
Committee:	Assembly Revenue and Taxation Committee
Hearing:	04/08/2019 2:30 pm, State Capitol, Room 126

Recommendation(s)/Next Step(s):

CONSIDER recommending to the Board of Supervisors an advocacy position on AB 723 (Wicks and Bonta): Low-Income Housing Incentives: Leased Rental Housing.

Fiscal Impact (if any):

The fiscal impact to the County is unknown; potential loss of property tax revenue.

Attachments
AB 723 Fact Sheet