AB 939 (Schultz)
HOME sponsor: Habitat for Humanity CA (Cosponsored with CBIA)
The Problem
Currently, developers who build income-restricted for- sale units under Density Bonus Law (DBL) must first spend 180 days marketing those units to individual income-qualified buyers, before they can consider transferring the initial ownership to a qualified nonprofit housing corporation to purchase and resell to eligible low- or moderate-income families.
Market-rate builders are unable to partner with a nonprofit housing organization, like Habitat for Humanity, during the entitlement phase of a project, which can provide certainty that these units will be compliant with DBL prior to the certificate of occupancy being issued.
Units often sit vacant for months, generating unnecessary carrying and marketing costs.
Market-rate builders are not equipped to locate qualified lower-income buyers.
The Solution
AB 939 provides a targeted, no-cost fix to streamline affordable homeownership by creating an exception to the 180-day resale restriction in state law, if the developer is under contract with a nonprofit affordable housing organization, that receives an IRS welfare exemption for properties to be sold to low income families who participate in a below-market rate interest loan program, directly.
Under this bill, income- restricted ownership units could be sold immediately to qualified nonprofit affordable housing organizations rather than sitting vacant, after construction for 180 days. This allows developers to reduce holding and marketing costs while ensuring that homes reach income-qualified families more efficiently.
Already passed through the Assembly, still needs to go through the Senate
Contact for questions: Debbie Arakel, debbie@habitatca.org