BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 416
                                                                  Page  1

          Date of Hearing:   July 3, 2013

               ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
                                   Ed Chau, Chair
                      SB 416 (Liu) - As Amended:  June 24, 2013

           SENATE VOTE  :   39-0
           
          SUBJECT  :   Surplus residential property.

           SUMMARY  :   Makes a number of changes to the Roberti Act  
          governing the sale of surplus properties in the State Route (SR)  
          710 corridor. Specifically,  this bill  :   

          1)Requires the fair market value price that the Department of  
            Transportation (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 a residence or property for sale in an "as-is"  
            condition.

          3)With respect to market-rate residential sales, gives first  
            priority only to tenants in good standing with all rent  
            current and paid in full, rather than any tenant, and second  
            priority to former occupants who were in good standing at the  
            time they left the home, before the home can be offered to  
            purchasers who intend to be owner-occupants.

          4)With respect to non-residential properties, gives tenants in  
            good standing priority to purchase the property at fair market  
            value.

          5)Creates the SR 710 Rehabilitation Account and requires  
            Caltrans to deposit proceeds from sales of SR 710 properties  
            into the account.

          6)Limits the total funds that can be maintained in the account  
            to $500,000, and specifies that funds exceeding that amount  
            shall be transferred to the State Highway Account to be used  
            exclusively to fund eligible projects located in Pasadena,  
            Alhambra, La Canada Flintridge, and the community of El Sereno  
            in the City of Los Angeles.








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          7)Continuously appropriates funds in the SR 710 Rehabilitation  
            Account for the purpose of making required repairs to homes  
            being purchased by income-qualified residents, and requires  
            any funds exceeding the amount needed for repairs to be  
            transferred to the State Highway Account.

          8)Prohibits funds from the sale of surplus properties in the SR  
            10 corridor from being used to advance or construct the  
            proposed North State Route 710 tunnel.

          9)Requires that any funds remaining in the SR 710 Rehabilitation  
            Account after the last property is repaired be transferred to  
            the State Highway Account.

           EXISTING LAW:  Pursuant to 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:

          1)First, at market rate to a former owner who currently occupies  
            the property.

          2)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.

          3)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.

          4)Fourth, at market rate to occupants and then to persons who  
            intend to be owner-occupants.  

          (Government Code Section 54237)

           FISCAL EFFECT  : Unknown. 

          COMMENTS  :   

          For decades, Caltrans has proposed the SR 710 extension project  








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          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. The Los Angeles  
          County Metropolitan Transportation Authority (LCMTA), on behalf  
          of Caltrans, is currently preparing a Draft Environment Impact  
          Report to assess alternatives for ameliorating traffic  
          congestion in the area between the current terminus of SR 710  
          and SR 210 in Pasadena. At this point in the process, the  
          originally proposed surface route has been eliminated from  
          further consideration. Alternatives remaining under  
          consideration include a tunnel, light rail, bus rapid transit,  
          and transportation demand and traffic flow management. By 2014,  
          Caltrans plans to identify how it intends to proceed.

          Caltrans currently owns 460 properties within the originally  
          proposed right-of-way, including 330 single-family homes and 103  
          multifamily housing units. 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.

          SB 416 makes a number of changes to the Roberti Act governing  
          the sale of surplus properties in the SR 710 corridor aimed at  
          expediting the sale of Caltrans-owned properties in the corridor  
          that are no longer needed to construct the freeway extension.  
          The bill does the following: 

             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.









                                                                  SB 416
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             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.

          SB 416 additionally creates the SR 710 Rehabilitation Account  
          and requires that Caltrans deposit proceeds from the sale of SR  
          710 properties into the account for the purposes of making  
          repairs required by the Roberti Act to homes being purchased by  
          income-qualified residents. The bill limits the account to  
          having a maximum of $500,000 on deposit at any one time. Funds  
          in excess of $500,000 would be deposited into the State Highway  
          Account to be used to fund eligible projects in Pasadena,  
          Alhambra, La Canada Flintridge, and the community of El Sereno  
          in the City of Los Angeles. The bill 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.

           Double-referral  : This bill was also referred to the  
          Transportation Committee, where it will be heard should it pass  
          out of this committee.

           REGISTERED SUPPORT / OPPOSITION  :

           Support / Opposition 
           
          None on file.

           Analysis Prepared by  :    Anya Lawler / H. & C.D. / (916)  
          319-2085