BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 416|
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THIRD READING
Bill No: SB 416
Author: Liu (D), et al.
Amended: 5/28/13
Vote: 27
SENATE TRANSPORTATION & HOUSING COMMITTEE : 11-0, 4/23/13
AYES: DeSaulnier, Gaines, Beall, Cannella, Galgiani, Hueso,
Lara, Liu, Pavley, Roth, Wyland
SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/23/13
AYES: De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg
SUBJECT : Surplus residential property
SOURCE : Author
DIGEST : This bill makes a number of changes to the Roberti
Act, which governs the sale of surplus property in the SR 710
corridor, including authorization for Caltrans to sell
properties in an as-is condition to specified income-qualified
persons. The bill also requires the proceeds from the sale of
those properties to be deposited into a newly created
continuously appropriated fund, rather than the State Highway
Account, for purposes of providing repairs to remaining
properties until the last property is sold.
ANALYSIS : Existing law identifies the California state
highway system through a description of segments of the state's
regional and interregional roads that the Department of
Transportation (Caltrans) owns and operates. Under current law,
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whenever Caltrans determines that any real property acquired for
highway purposes is no longer necessary, it may sell or exchange
the property upon terms, standards, and conditions established
by the California Transportation Commission. Proceeds from the
sale are returned to the State Highway Account.
For decades, Caltrans has proposed the SR 710 extension project
to close a roughly 4.5-mile unconstructed gap in the freeway
from just north of SR 10 in Los Angeles to SR 210 in Pasadena.
This gap affects the cities of Alhambra, Pasadena, South
Pasadena, and a portion of Los Angeles. The project has been in
the planning stage since 1953 for a variety of reasons related
to the federal environmental review process. Caltrans is
currently considering several options for moving forward,
including building a tunnel instead of a freeway or not building
anything at all. By 2014, Caltrans plans to identify how it
intends to proceed. Caltrans currently owns 460 properties with
the originally proposed right-of-way, which include 330
single-family homes and 103 multifamily housing units.
Existing law, known as the Roberti Act, establishes priorities
and procedures for the disposition of surplus residential
properties in the SR 710 corridor. Under the act, Caltrans must
offer surplus property in the following priority order:
First, at market rate to a former owner who currently occupies
the property.
Second, at an affordable price to a current low- or
moderate-income occupant who meets minimum length of occupancy
thresholds. For these income-qualified buyers, Caltrans must
provide repairs required by lenders and government housing
assistance programs or provide the occupants with a
replacement dwelling.
Third, to entities that provide affordable housing at a price
necessary to make the housing affordable to present tenants
and households of low or moderate income.
Fourth, at market rate to occupants and then to persons who
intend to be owner-occupants.
This bill makes a number of changes to the Roberti Act governing
the sale of surplus properties in the SR 710 corridor.
Specifically, the bill:
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1.Requires the fair market value price that Caltrans offers to
non-income-qualified buyers to reflect the "as-is" condition
of the property, taking into account any repairs required to
make the property safe and habitable.
2.Allows Caltrans, at the request of an income-qualified person,
to offer the residence in an "as-is" condition.
3.Alters the fourth priority relating to market-rate sales to
give priority only to tenants in good standing with the rent,
rather than any tenant, and then to former occupants who were
in good standing at the time they left the home, before the
home is offered to persons who intend to be owner-occupants.
4.With respect to non-residential properties, gives tenants in
good standing a right of first refusal to purchase the
property at fair market value.
5.Requires Caltrans to deposit proceeds from sales of SR 710
properties into a newly-created SR 710 Rehabilitation Account,
which the bill continuously appropriates for the purpose of
making repairs required by the Roberti Act to homes being
purchased by income-qualified residents. Requires any funds
exceeding the cost of repairs, and any remaining funds after
the last repair is made, be transferred to the State Highway
Account.
6.Prohibits any of the proceeds from the sales of SR 710
properties be used to advance or construct the proposed North
State Route 710 tunnel.
Comments
According to the author, the Bureau of State Audits has cited
Caltrans a number of times over the years for poor performance
as a real estate manager and landlord. The author believes this
is a role outside of the Caltrans' primary mission and one that
Caltrans is not anxious to continue. Given that a surface route
is no longer under consideration, the most expeditious means of
taking Caltrans out of the real estate management business is to
sell the properties. This will restore community integrity and
have the added advantage of returning the properties to private
ownership and to the local tax rolls.
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FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Diversion of over $200 million in SR 710 home sales proceeds
from the State Highway Account to the SR 710 Rehabilitation
Account, likely beginning in 2014-15 and ending when all
surplus residential properties in the corridor are sold. The
total magnitude of the diversion depends upon how much is
needed annually for home repairs. Senate Appropriations
Committee staff assumes that approximately $500,000 annually
could be dedicated for repairs, and the remainder would be
used to fund unspecified "eligible projects" in cities of the
SR 710 corridor. Absent the bill, all proceeds from the sale
of surplus properties are deposited in the State Highway
Account for use on other state highway system projects.
Indeterminable fiscal impact related to the authorization to
sell properties to income-qualified persons in an "as-is"
condition. Caltrans indicates that each home sold "as-is"
would result in up-front cost avoidance of approximately
$68,000 related to avoided repairs, but also result in a lower
property value and sale price. Since the number of homes that
will be sold in an "as-is" condition and the resulting
decrease in property value at the time of sale is unknown, the
overall fiscal impact is indeterminable.
JA:nl 5/28/13 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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