BILL ANALYSIS Ó
AB 2135
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2135 (Ting)
As Amended August 4, 2014
Majority vote
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|ASSEMBLY: |53-22|(May 19, 2014) |SENATE: |22-10|(August 13, |
| | | | | |2014) |
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Original Committee Reference: H. & C.D.
SUMMARY : Amends the procedure for the disposal of surplus land
by local agencies and expands the provisions relating to the
prioritization of affordable housing development if the surplus
land will be used for residential development. Specifically,
this bill :
1)Increases the time a local agency has to conduct good faith
negotiations with certain types of entities desiring to
purchase or lease surplus land from 60 days to 90 days.
2)Provides that, in the event that any local agency disposing of
surplus land receives offers for the purchase or lease of that
land from more than one notified entity, the local agency must
give first priority to the entity that agrees to make
available at least 25% of the units in the development at an
affordable housing cost to low-income households, subject to
exceptions relating to land used or designated for park and
recreational use. In addition, the following requirements
must be recorded against the property and are enforceable by
the local agency or eligible residents:
a) Affordable rental units must remain affordable and
occupied by eligible households for 55 years.
b) Affordable ownership units must be subject to an equity
sharing agreement.
1)Provides that, if more than one notified entity agrees to make
available at least 25% of the units in the development at an
affordable housing cost to low-income individuals, then the
local agency must give priority to the entity that proposes to
provide the greatest number of affordable units at the deepest
level of affordability.
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2)Provides that, if the local agency does not agree to price and
terms with a notified entity and the surplus land is developed
with 10 or more residential units, at least 15% of the units
in the development must be at an affordable housing cost to
low-income households. In addition, the following
requirements must be recorded against the property and are
enforceable by the local agency or eligible residents:
a) Affordable rental units must remain affordable and
occupied by eligible households for 55 years.
b) Affordable ownership units must be subject to an equity
sharing agreement.
1)Provides that the payment period for surplus land sold for
housing for person and families of low- and moderate-income
may exceed 20 years, but the payment period shall not exceed
the term that the land is required to be used for low- or
moderate-income housing.
2)Deletes the provision stating that existing law does not
empower a local government to sell or lease surplus land at
less than fair market value and instead adds any sale or lease
at or less than fair market value consistent with this bill
shall not be construed as inconsistent with a local agency's
purpose.
3)Provides that, if the Commission on State Mandates determines
that this bill contains costs mandated by the state,
reimbursement to local agencies and school districts for those
costs shall be made pursuant to Part 7 (commencing with
Section 17500) of Division 4 of Title 2 of the Government
Code.
The Senate amendments :
1)Provide that, in the event that any local agency disposing of
surplus land receives offers for the purchase or lease of that
land from more than one notified entity, the local agency must
give first priority to the entity that agrees to make
available at least 25% of the units in the development at an
affordable housing cost to low-income households, subject to
exceptions relating to land used or designated for park and
recreational use. In addition, the following requirements
AB 2135
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must be recorded against the property and are enforceable by
the local agency or eligible residents:
a) Affordable rental units must remain affordable and
occupied by eligible households for 55 years.
b) Affordable ownership units must be subject to an equity
sharing agreement.
1)Provide that, if more than one notified entity agrees to make
available at least 25% of the units in the development at an
affordable housing cost to low-income individuals, then the
local agency must give priority to the entity that proposes to
provide the greatest number of affordable units at the deepest
level of affordability.
2)Provide that, if the local agency does not agree to price and
terms with a notified entity and the surplus land is developed
with 10 or more residential units, at least 15% of the units
in the development must be at an affordable housing cost to
low-income households. In addition, the following
requirements must be recorded against the property and are
enforceable by the local agency or eligible residents:
a) Affordable rental units must remain affordable and
occupied by eligible households for 55 years.
b) Affordable ownership units must be subject to an equity
sharing agreement.
1)Clarify that any sale or lease at or less than fair market
value consistent with this bill shall not be construed as
inconsistent with a local agency's purpose.
2)Make a declaration that lower income households are more
likely to use transit when living near a major transit station
than higher income households, and the sale or lease of
surplus land at less than fair market value to facilitate the
creation of affordable housing near transit is consistent with
goals and objectives to achieve optimal transportation use.
FISCAL EFFECT : According to the Senate Appropriations
Committee, likely minor, reimbursable mandate costs. Local
agencies would likely incur minor one-time costs to revise
administrative procedures related to the disposal of surplus
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property. These costs could be subject to state-reimbursement
to the extent local agencies file a claim for reimbursement and
the Commission on State Mandates determines specified activities
are subject to reimbursement.
COMMENTS : Background on surplus land: Local agencies are
required to inventory the land they own every year. If land is
no longer needed, a local agency must follow certain procedures
prior to disposal of this "surplus" land. The intent behind the
disposal procedures is to promote the use of surplus land
towards affordable housing, parks and recreation purposes,
open-space purposes, and transit-oriented development. The
disposal procedures provide a Right of First Refusal to entities
agreeing to use the land for, amongst other things, affordable
housing.
Prior to disposing of surplus land, local agencies must make a
written offer to sell or lease surplus land for the purpose of
developing low- or moderate-income housing to "housing sponsors"
upon written request, as well as any local public entity within
the jurisdiction where the surplus land is located. A local
agency wishing to dispose of surplus land must also provide a
written offer to additional entities, depending on the type of
proposed development, for park and recreational purposes, school
facilities construction or use by a school district for open
space purposes, enterprise purposes, and infill opportunity
zones, or transit village plans.
If one of these entities is interested in buying or leasing the
land, it must notify the local agency within 60 days of receipt
of the offer. If a notified entity is interested but cannot
agree with the agency upon the price or terms, the local agency
must enter into good faith negotiations with the entity for at
least 60 days. If 60 days have passed without an agreement,
then the local agency may sell or lease the land without further
regard to the Right of First Refusal requirements under the
disposal procedures.
If the land is going to be used for residential development and
a local agency receives multiple offers from notified entities,
the local agency is required to give first priority to the
entity that agrees to use the site for affordable housing for
low- or moderate-income individuals and families. In the event
that a local agency enters into a contract to sell or lease the
land to a notified entity for park or recreation purposes,
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open-space purposes, school purposes, or for low- and
moderate-income housing purposes, that contract may provide for
a payment period of up to 20 years. While nothing in the
disposal procedure limits the power of a local agency to sell or
lease surplus land at fair market value or at less than fair
market value, it also provides that nothing in the procedure
shall be interpreted to empower any local agency to sell or
lease surplus land at less than fair market value.
Purpose of this bill: According to the author, this bill "would
increase the supply of affordable housing in California by
strengthening provisions of existing law that guarantees
affordable housing projects first priority to obtain surplus
land held by local governments." As the author explains, "this
'Right of First Refusal ' is especially critical in light of
state and local priorities for transit oriented development - as
transportation districts and other local agencies expand public
transit, surplus land acquired in the process will provide
valuable opportunities to create new affordable housing options
within sustainable communities."
This bill expands upon the provisions relating to the
prioritization of affordable housing development, and the Senate
amendments further refine this prioritization. While existing
law already requires local agencies to give first priority to an
affordable housing developer in the case of multiple offers for
residential land, this bill would specify that a notified
developer agreeing to make available at least 25% of the units
in the development at an affordable housing cost to low-income
individuals would have the first priority. If more than one
developer agrees to this limitation, then the local agency must
give priority to the developer that proposes to provide the
greatest number of affordable units at the deepest level of
affordability. This bill clarifies that a local agency may sell
or lease the land at less than fair market value, and doing so
will not be construed as inconsistent with a local agency's
purpose.
This bill extends the period of good faith negotiation between a
local agency and a notified entity from 60 days to 90 days. If
90 days have passed without an agreement, the local agency may
dispose of the land without further regard to the Right of First
Refusal requirements. However, if the surplus land is developed
with 10 or more residential units, at least 15% of the units in
the development must be at an affordable housing cost to
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low-income households. Lastly, this bill extends the payment
period for surplus land sold for housing for person and families
of low- and moderate-income by permitting it to exceed the
previous limit of 20 years, except that the payment period
cannot exceed the term that the land is required to be used for
low- or moderate-income housing.
Analysis Prepared by : Rebecca Rabovsky / H. & C.D. / (916)
319-2085
FN: 0004682