A bill has been introduced to implement the new state student housing program. The bill will either be AB 169 or SB 169 (both contain the same proposal). The Legislature is expected to act on this bill on Friday, September 10, which is the final deadline to pass bills in 2021.
AB/SB 169 appropriates $500 million in FY 21-22, and states intent to provide $750 million in FY 22-23 and FY 23-24, for the Higher Education Student Housing Grant Program. The program will provide one-time grants for the construction of student housing, or for the acquisition and renovation of commercial properties into student housing, for the purpose of providing affordable, low-cost housing options for public postsecondary students in California. Facilities may also include: dining, academic and student support service spaces, basic needs centers, student healthcare services, and other necessary facilities and equipment.
For FY 21-22, the proposal focuses on funding projects that could begin construction quickly (see “shovel-ready projects” below), and there is an option to access funds for the purpose of feasibility studies and other planning.
Key Elements of the Proposal Include
Program purpose: The program’s intent is to provide grants to increase the current stock of affordable student housing to support low-income students and facilitate their access to higher education.
Fund distribution: 50% of the available funds each year go to California community colleges; California State University shall receive 30% and University of California shall receive 20% of available funds.
Affordability: Rent provided in the applicable units of the development for low-income students shall be calculated at 30% of 50% of the area median income for a single-room occupancy unit type. The percentage of area median income may be adjusted by the Director of Finance, with approval by the Joint Legislative Budget Committee. “Low income” means students eligible to receive Pell Grant or Cal Grant financial aid, an exemption from paying nonresident tuition provided the student meets income criteria of the California Dream Act, or a fee waiver from a California community college. These units shall be subject to a recorded affordability calculation for the life of the facility. The applicant shall provide a commitment to first offer the housing to low-income students.
Unit requirements: The applicant shall provide a commitment to require any students renting housing in the facilities to take a minimum average of 12 degree-applicable units per semester term, or the quarterly equivalent, to facilitate timely degree completion. A student may receive a temporary exemption to this requirement if they can demonstrate exceptional circumstances, such as illness or injury.
Proposal process: Proposals shall include project goals, costs, number of students to be housed, timeline for the project, financial feasibility of the project, anticipated impact on the campus’ ability to accommodate California resident enrollment growth, a commitment to construct the project within the resource needs identified in the proposal, and any other information deemed necessary for evaluation. Initial proposals shall be submitted to the Department of Finance by October 31, 2021. Department of Finance shall provide a list of projects proposed for inclusion in the Budget Act or other legislation by March 1, 2022.
Project selection criteria may include:
Priority for greater unmet demand for student housing for a campus or service area.
Priority for projects that can begin construction the earliest.
Projects may be fairly representative of various geographical regions of the state.
Projects in the state interest in intersegmental housing arrangements, particularly those that support transfer pathways between community colleges and four-year public postsecondary institutions.
Shovel-ready projects: For the first round of funding, proposals shall demonstrate that construction could begin by December 31, 2022, or by the earliest possible date thereafter.
Public-Private Partnerships: Community colleges may use public-private partnerships for the construction, operation, and maintenance of these facilities. UC and CSU are prohibited from using P3s.
Conditions of grant: Grant recipients must provide oversight of the project, and must submit annual reports to the Department of Finance and Legislature on the status of the project during construction, and annually for five years after completion on the public benefit of the project.
Feasibility studies and planning: California community colleges may submit requests for planning grants for campuses that are exploring or determining if it is feasible to offer affordable student rental housing. It is the Legislature’s intent to use up to $25 million over the three years to support planning grants. Planning grant dollars can be used for: feasibility studies, engineering studies, financing studies, environmental impact studies, architectural plans, application fees, legal services, permitting costs, bonding, and site preparation.
Applicability of existing laws: It is the Legislature’s intent that all laws applicable to the construction of a capital outlay project apply to any student housing project receiving funding. This includes CEQA, Public Contract Code, Education Code, and applicable workforce and labor requirements.
AB/SB 169 will be heard today in each house’s budget committee. We anticipate the Legislature to act on this bill on Friday, September 10. CCFC engaged actively in the conversations pertaining to the development of this program, and we are particularly encouraged that the bill includes flexibility to deliver a project using the method that works best for a particular campus and community, as well as the inclusion of grant funds for planning and feasibility studies.
While this bill includes significant new detail on the program, there are still a number of questions regarding how it will operate. For example, the statute does not identify a state/local share, which is important to know for planning and application purposes. There is no administering agency identified, other than the Department of Finance for application review.
We look forward to continuing to work with the Legislature and Administration on successful implementation of this important program.
CCFC Legislative Advocate