SENATE BILL REPORT

SB 5258

BYSenators Lee, McMullen and Smitherman

Providing housing assistance for persons displaced by development.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):February 1, 1989

Senate Staff:David Cheal (786-7576)

AS OF JANUARY 31, 1989

BACKGROUND:

There is evidence that development activities, both public and private, cause the significant loss of low income housing stock, including mobile home park spaces.

Tenants face a considerable disruption and financial impact when this occurs.  In the case of mobile home owners who are confronted with park closure, they face not only the cost of moving their mobile home, but in some cases considerable loss of equity in their mobile home.  This occurs in the case of an older more modest mobile home whose value derives primarily from its location in a mobile home park.  The combination of the difficulty in finding a relocation spot and the cost of moving the mobile home may make it economically, physically, or legally impossible to move the mobile home, reducing its equity to zero.

The housing trust fund was created in 1986 as a means of providing grants and loans on a competitive basis to local government and nonprofit housing assistance groups.  The Housing Trust Fund Act includes a list of allowable activities and criteria for awarding the funds.  It is unclear whether relocation assistance would be a permissible activity.

SUMMARY:

The list of activities which are eligible for assistance from the housing trust fund is augmented to include relocation assistance or replacement housing to renters who are displaced as a result of public or private development.

The list of criteria to be used by the Department of Community Development in evaluating grant applications is enlarged to include projects that provide replacement housing or relocation assistance to people displaced by development.

Appropriation:    none

Revenue:    none

Fiscal Note:      none requested