The passage of Assembly Bill (“AB 1598”) in 2017 authorized cities to create Affordable Housing Authorities. Funded by tax-increment financing, these Affordable Housing Authorities were given power to provide affordable housing and affordable workforce housing and are distinct from other housing authorities with broader purposes. Recently, the Governor signed into law Assembly Bill (“AB 2035”) which changes the laws governing how Affordable Housing Authorities operate and what services they provide. Among other things, AB 2035 authorizes these Authorities to use tax increment revenues to provide emergency shelters, supportive housing, and transitional housing, but AB 2035 defines “tax increment” to exclude taxable properties within the boundaries of a former redevelopment agency (“RDA”) unless and until the RDA has been fully dissolved.
To address housing needs in California, the Legislature adopted AB 1598 in 2017 to authorize cities to create a special type of housing authority called an Affordable Housing Authority with power limited to providing low and moderate income housing and affordable workforce housing. In October 2018, the Governor signed into law AB 2035 which revises the rules governing the operation of these special authorities. Most significantly, AB 2035 expands the purpose of Affordable Housing Authorities to include the provision of emergency shelters, supportive housing, and transitional housing.1 AB 2035 also changes the membership requirements2 of the governing board of some Affordable Housing Authorities, and requires counties to distribute tax increment funding to these Authorities directly after deducting their administrative costs.3
AB 2035 defines “property tax increment” to exclude taxable properties within the boundaries of a former RDA unless and until all outstanding obligations of the RDA have been paid and the RDA fully dissolved.4 For this reason, tax increment available to Affordable Housing Authorities created under AB 1598 will not include those properties within an RDA until the RDA has been fully dissolved.
AB 2035 only applies to those Housing Authorities created under AB 1598. Housing authorities created under other authority are not impacted by AB 2035.
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1Gov. Code § 62253(d).
2Gov. Code § 62251(c)(1).
3Gov. Code § 62253(e).
4Gov. Code § 62250(f).