BILL NUMBER: SB 416 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Liu
FEBRUARY 20, 2013
An act to amend Sections 54236, 54237, and 54237.5 of the
Government Code, relating to local government.
LEGISLATIVE COUNSEL'S DIGEST
SB 416, as introduced, Liu. Local government: surplus residential
property.
Existing law declares the intent of the Legislature to preserve,
upgrade, and expand the supply of housing to persons and families of
low or moderate income, through the sale of surplus residential
property owned by public agencies. Existing law establishes
priorities and procedures that any local public agency disposing of
surplus residential property is required to follow, and defines
relevant terms for these purposes, including "fair market value."
This bill would revise the definition of "fair market value" for
purposes of the sale of surplus residential property, to reflect the
existing "as is" condition of the property, taking into account any
needed repairs.
Existing law requires single-family residences to be first offered
to their present occupants, at an affordable price, as defined.
Under existing law, the selling agency has the option of making
repairs to the property required by lenders or government assistance
programs, or providing the occupants with a replacement dwelling,
pursuant to a specified provision of law.
This bill instead would give the selling agency general authority
to offer a replacement dwelling, and would delete the option of
making repairs to the premises.
This bill would revise the procedures applicable to the sale of
surplus residential properties not otherwise sold pursuant to
existing procedures, to be offered to current and former tenants in
good standing, respectively, and to purchasers who will be owner
occupants. The bill additionally would require the selling agency to
offer tenants in good standing of nonresidential properties to be
offered the right of first refusal to purchase the property they
occupy.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 54236 of the Government Code is amended to
read:
54236. (a) As used in this article, the term "offer" means to
solicit proposals prior to sale in a manner calculated to achieve a
sale under the conditions specified, and to hold the offer open for a
reasonable period of time, which shall be no more than one year,
unless the time is extended by the selling agency at its discretion,
for a period to be specified by the selling agency.
(b) As used in this article, the term "affordable price" means, in
the case of a purchaser, other than a lower income household, the
price for residential property for which the purchaser's monthly
payments will not exceed that portion of the purchasing household's
adjusted income as determined in accordance with the regulations of
the United States Department of Housing and Urban Development, issued
pursuant to Section 235 of the National Housing Act; and, in the
case of a purchaser that is a lower income household, the price for
residential property for which the purchaser's monthly payments will
not exceed that portion of the purchasing household's adjusted income
as determined in accordance with the regulations of the United
States Department of Housing and Urban Development issued pursuant to
Section 8 of the United States Housing Act of 1937.
(c) As used in this article, the term "single-family residence"
means a real property improvement used, or intended to be used, as a
dwelling unit for one family.
(d) As used in this article, the term "surplus residential
property" means land and structures owned by any agency of the state
that is determined to be no longer necessary for the agency's use,
and that is developed as single-family or multifamily housing, except
property being held by the agency for the purpose of exchange.
Surplus residential properties shall only include land and
structures that, at the time of purchase by the state, the state had
intended to remove the residences thereon and to use the land for
state purposes.
(e) As used in this article, the term "displacement" includes, but
is not limited to, persons who will have to move from surplus
residential property that they occupy when it is sold by a state
agency because they are unable to afford to pay the price that the
state agency is asking for the residential property.
(f) As used in this article, the term "fair market value" shall
mean fair market value as of the date the offer of sale is made by
the selling agency pursuant to the provisions of this article ,
and shall reflect the existing "as is" condition of the
property, taking into account any repairs required to make the
property safe and habitable . This definition shall not apply
to terms of sale that are described as mitigation measures in an
environmental study prepared pursuant to the Public Resources Code if
the study was initiated before this measure was enacted.
(g) As used in this article, the term "affordable rent" means, in
the case of an occupant person or family, other than a person or
family of low or moderate income, rent for residential property that
is not more than 25 percent of the occupant household's gross monthly
income, and in the case of an occupant person or family of low or
moderate income, rent for residential property that is not more than
the percentage of the adjusted income of the occupant person or
family as permitted under regulations of the United States Department
of Housing and Urban Development issued pursuant to Section 8 of the
United States Housing Act of 1937, but not in excess of the market
rental value for comparable property.
(h) As used in this article, the term "area median income" means
median household income, adjusted for family size as determined in
accordance with the regulations of the United States Department of
Housing and Urban Development issued pursuant to Section 235 of the
National Housing Act, as amended (P.L. 90-448), for the Standard
Metropolitan Statistical Area (S.M.S.A.), in which surplus
residential property to be disposed of pursuant to this article is
located, or the county in which the property is located, if it is
outside an S.M.S.A.
(i) As used in this article, the term "persons and families of low
or moderate income" means persons and families who meet both of the
following conditions:
(1) Meet the definition of persons and families of low or
moderate income set forth in Section 50093 of the Health and Safety
Code.
(2) Have not had an ownership interest in real property in the
last three years.
(j) As used in this article, the term "lower income households"
means lower income households as defined in Section 50079.5 of the
Health and Safety Code.
SEC. 2. Section 54237 of the Government Code is amended to read:
54237. (a) Notwithstanding Section 11011.1, any agency of the
state disposing of surplus residential property shall do so in
accordance with the following priorities and procedures:
(1) First, all single family residences presently occupied by
their former owners shall be offered to those former owners at the
appraised fair market value.
(2) Second, all single-family residences shall be offered,
pursuant to this article, to their present occupants who have
occupied the property two years or more and who are persons and
families of low or moderate income.
(3) Third, all single-family residences shall be offered, pursuant
to this article, to their present occupants who have occupied the
property five years or more and whose household income does not
exceed 150 percent of the area median income.
(4) Fourth, a single-family residence shall not be offered,
pursuant to this article, to present occupants who are not the former
owners of the property if the present occupants have had an
ownership interest in real property in the last three years.
(b) Single-family residences offered to their present occupants
pursuant to paragraphs (2) and (3) of subdivision (a) shall be
offered to those present occupants at an affordable price, which
price shall not be less than the price paid by the agency for
original acquisition, unless the acquisition price was greater than
the current fair market value, and shall not be greater than fair
market value. When single-family residences are offered to present
occupants at a price that is less than fair market value, the selling
agency shall impose terms, conditions, and restrictions to assure
that the housing will remain available to persons and families of low
or moderate income and households with incomes no greater than the
incomes of the present occupants in proportion to the area median
income. The Department of Housing and Community Development shall
provide to the selling agency recommendations of standards and
criteria for these prices, terms, conditions and restrictions.
The selling agency shall provide repairs required by lenders
and government housing assistance programs, or, at the option of the
agency, provide the present occupants with a replacement dwelling
pursuant to Section 54237.5.
(c) If single-family residences are offered to their present
occupants pursuant to paragraphs (2) and (3) of subdivision (a), the
occupants shall certify their income and assets to the selling
agency. When single-family residences are offered to present
occupants at a price that is less than fair market value, the selling
agency may verify the certifications, in accordance with procedures
utilized for verification of incomes of purchasers and occupants of
housing financed by the California Housing Finance Agency and with
regulations adopted for the verification of assets by the United
States Department of Housing and Urban Development. The income and
asset limitations and term of residency requirements of paragraphs
(2) and (3) of subdivision (a) shall not apply to sales that are
described as mitigation measures in an environmental study prepared
pursuant to the Public Resources Code, if the study was initiated
before this measure was enacted.
(d) All other surplus residential properties and all properties
described in paragraphs (1), (2), and (3) of subdivision (a) that are
not purchased by the former owners or the present occupants shall be
then offered to housing-related private and public entities at a
reasonable price, which is best suited to economically feasible use
of the property as decent, safe, and sanitary housing at affordable
rents and affordable prices for persons and families of low or
moderate income, on the condition that the purchasing entity shall
cause the property to be rehabilitated and developed as limited
equity cooperative housing with first right of occupancy to present
occupants, except that where the development of cooperative or
cooperatives is not feasible, the purchasing agency shall cause the
property to be used for low and moderate income rental or
owner-occupied housing, with first right of occupancy to the present
tenants. The price of the property in no case shall be less than the
price paid by the agency for original acquisition unless the
acquisition price was greater than current fair market value and
shall not be greater than fair market value. Subject to the
foregoing, it shall be set at the level necessary to provide housing
at affordable rents and affordable prices for present tenants and
persons and families of low or moderate income. When residential
property is offered at a price that is less than fair market value,
the selling agency shall impose terms, conditions, and restrictions
as will assure that the housing will remain available to persons and
families of low or moderate income. The Department of Housing and
Community Development shall provide to the selling agency
recommendations of standards and criteria for prices, terms,
conditions, and restrictions.
(e) Any surplus residential properties not sold pursuant to
subdivisions (a) to (d), inclusive, shall then be sold at fair market
value, with priority given first to purchasers who are present
occupants tenants in good standing with all
rent obligations current and paid in full, second to form
er tenants who were in good standing at the time they vacated the
premises, and then to purchasers who will be owner occupants.
(f) Tenants in good standing of nonresidential properties shall be
offered a right of first refusal to purchase, at fair market value,
the property they rent, lease, or otherwise legally occupy.
SEC. 3. Section 54237.5 of the Government Code is amended to read:
54237.5. Notwithstanding the requirement to provide
repairs in subdivision (b) of Section 54237, the selling agency may,
at its option, provide The selling agency may, at its
option, offer the present occupants with a
replacement dwelling if all both of the
following conditions exist:
(a) Providing a replacement dwelling is less expensive than
providing the repairs required by subdivision (b) of Section 54237.
(b)
(a) The replacement dwelling is determined to have all
of the following characteristics:
(1) Is decent, safe, and sanitary.
(2) Is suitable to the occupancy needs of the household as
provided under regulations of the United States Department of Housing
and Urban Development issued pursuant to Section 8 of the United
States Housing Act of 1937.
(3) Is open to all persons regardless of race, color, religion,
sex, or national origin and consistent with requirements of Title 8
of the Civil Rights Act of 1978.
(4) Is in an area not generally less desirable than the dwelling
to be acquired in regard to public utilities and public and
commercial facilities.
(5) Is reasonably accessible to the displaced person's place of
employment.
(6) Is in an equal or better neighborhood.
(7) Is affordable, as defined in subdivision (a) of Section 54236,
to the displaced person.
(c)
(b) The offer is made at an affordable price that is
not less than the price paid by the agency for original acquisition
of the unit now occupied by the displaced person or the replacement
unit, whichever is less, and is not more than market value.
(d)
(c) The replacement dwelling is a newly constructed or
a vacant residential unit. No resident shall be displaced pursuant to
Section 7260 for the purpose of creating a replacement unit.