BILL ANALYSIS Ó
SB 416
Page 1
Date of Hearing: August 12, 2013
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SB 416 (Liu) - As Amended: August 7, 2013
SENATE VOTE : 39-0
SUBJECT : Surplus residential property
SUMMARY : Makes a number of changes to provisions 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 certain buyers to reflect
the "as-is" condition of the property, taking into account any
repairs required to make the property safe and habitable.
2)With respect to market-rate residential sales:
a) Gives first priority only to tenants in good standing
with all rent current and paid in full (rather than any
tenant);
b) Gives second priority to former occupants who were in
good standing at the time they left the home, with priority
given to the most recent tenants first; and,
c) Finally, gives third priority to purchasers who intend
to be owner-occupants.
A sale to someone other than those given priority to purchase
under these provisions may be made only after the selling
agency has posted relevant information on its website and
after the selling agency has made a good faith effort to
provide written notice to former tenants.
3)With respect to non-residential properties, gives tenants in
good standing priority to purchase the property at fair market
value.
4)Allows Caltrans, at the request of an income-qualified person,
to offer a residence or property for sale in an "as-is"
condition.
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5)Creates the SR 710 Rehabilitation Account and requires
Caltrans to deposit proceeds from sales of SR 710 properties
into the account.
6)Continuously appropriates funds in the SR 710 Rehabilitation
Account for the purpose of making required repairs to homes
being purchased by income-qualified residents.
7)Limits the total funds that can be maintained in the account
to $500,000, and specifies that funds exceeding that amount
(less any reimbursements due to the federal government) shall
be transferred to the State Highway Account (SHA) to be used
for allocation by the California Transportation Commission
(CTC), in consultation with the Los Angeles County
Metropolitan Transportation Authority (METRO), exclusively to
fund eligible projects located in Pasadena, South Pasadena,
Alhambra, La Canada Flintridge, and the 90032 zip code area.
8)Defines projects that are eligible for funding to include:
sound walls; transit; rail capital improvements; bikeways;
pedestrian improvements; streetscapes; signal synchronization;
left-turn signals; and major street resurfacing,
rehabilitation, and reconstruction.
9)Prohibits funds from the sale of surplus properties in the SR
10 corridor from being used to advance or construct the
proposed State Route 710 tunnel.
10) Requires that any funds remaining in the SR 710
Rehabilitation Account after the last property is repaired be
transferred to the State Highway Account for use only on
eligible projects, as specified.
EXISTING LAW:
1)Allows the California Department of Transportation (Caltrans)
to acquire any real property that it considers necessary for
state highway purposes.
2)Allows Caltrans, whenever it determines that any real property
acquired by the state for highway purposes is no longer
necessary for those purposes, to sell or exchange it in the
manner and upon terms, standards, and conditions established
by the CTC.
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3)Requires Caltrans, to the greatest extent possible, to offer
to sell or exchange excess real property within one year from
the date that it determines the property is excess.
4)Generally requires state and local agencies, prior to
disposing of excess lands, first to offer property for sale or
lease to local public agencies, housing authorities, or
redevelopment agencies within whose jurisdiction the property
is located. Requires Caltrans to give priority first to
entities agreeing to use the land for low- or moderate-income
housing then to entities for open-space purposes, school
facilities construction, enterprise zone purposes, and infill
opportunities, in that order.
5)Provides an exception from these provisions for the disposal
of excess residential properties in the unconstructed portion
of the SR 710 corridor, i.e., the portion of SR 710 addressed
in this bill. According to this exception, provided for in
the Roberti Act, excess residential properties in this
corridor are to be sold as follows:
a) First, homes presently occupied by their former owners
must be offered for sale to the occupant at fair market
value. (Caltrans reports that there are no longer any
properties in the SR 710 corridor occupied by previous
owners);
b) Second, homes are to be offered to present occupants
that have lived in the property for at least two years and
who are persons and families of low or moderate income;
c) Third, homes must be offered for sale to present
occupants that have lived in the home for more than five
years and whose household income does not exceed 150% of
the area median income;
d) Homes offered to income-qualified buyers are to be
offered at an affordable price, but not less than the
acquisition price or more than fair market value. Homes
sold at less than fair market value must have deed
restrictions to assure that the house remains available to
families and households of low or moderate income; also,
prior to selling properties to income-qualified buyers,
Caltrans must provide any repairs required by lenders or
provide replacement dwellings;
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e) Homes not sold under these terms must then be offered to
housing-related private and public entities for a price
which is best suited economically to using the property for
low- or moderate-income housing; and,
f) Any excess homes not sold pursuant to these provisions
are then to be sold at fair market value with first
priority given to purchasers who are present occupants and
then to purchasers who will be owner occupants.
6)Directs the proceeds from the sale of excess property to be
deposited first to the SHA and then transferred to the
Transportation Debt Service Fund.
7)Directs 50% of the revenue collected by Caltrans from rental
of historic property that is located in a freeway right-of-way
corridor to be deposited in the Historic Property Maintenance
Fund to pay for costs associated with maintenance and
operation of the historic properties.
FISCAL EFFECT : Unknown, but, absent this bill, revenues derived
from the sale of surplus properties are directed to the
Transportation Debt Service Fund. This bill will direct at
least some of those proceeds to cover the cost of repairs to
homes being purchased by income-qualified purchasers; the
remainder of the proceeds will be directed to the SHA to fund
eligible projects in the SR 710 corridor, resulting in fewer
dollars being directed to the Transportation Debt Service Fund.
COMMENTS : 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 but has not progressed
past the environmental review stage, due largely to community
opposition. METRO, on behalf of Caltrans, is currently
preparing a draft environment impact report to assess
alternatives for ameliorating traffic congestion in the SR 710
corridor and address community concerns. At this point in the
process, the originally proposed surface route has essentially
been eliminated from further consideration. Alternatives
remaining under consideration include a tunnel, light rail, bus
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rapid transit, and transportation demand and traffic flow
management.
Caltrans currently owns 460 properties within the originally
proposed right-of-way, including 358 single-family homes and 42
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
Caltrans' primary mission and one that Caltrans is not anxious
to continue. Given that a surface route is no longer under
consideration, the author believes that the most expeditious
means of taking Caltrans out of the real estate management
business is to sell the properties and, as a result, restore
community integrity and return the properties to private
ownership and to the local tax rolls. SB 416 is intended to
facilitate the expeditious sale of those properties.
Regarding provisions directing revenue from the sale of surplus
properties to local transportation improvements, SB 416 is not
without precedent. Similar provisions were enacted directing
the proceeds from the sale of excess homes in the SR 84 and the
SR 238 corridors to local alternative transportation improvement
programs. Similar to the freeway gap closure project planned for
the north SR 710, Caltrans began acquiring properties in these
corridors decades ago and, like the SR 710 project, projects in
these corridors faced community opposition and subsequently
stalled for years.
SB 416 does have one notable difference from those earlier
provisions, however. Revenue received from the sale of surplus
properties in the SR 84 and SR 238 corridors was used to fund
local alternative transportation improvement programs in lieu of
the originally planned state highway project. SB 416 differs in
this regard in that not only is there still a state highway
project under consideration in the SR 710 corridor, the bill
would prohibit revenues received from surplus properties from
being used on that project if the preferred alternative
ultimately chosen is a tunnel option.
Double-referral : This bill was also referred to the Assembly
Housing Committee and passed out of that committee on a 7-0
vote.
Previous legislation: SB 791 (Corbett) Chapter 705, Statutes of
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2008), among other provisions,
authorized proceeds from the sale of surplus property to be used
to develop the local alternative transportation improvements in
the SR 84 and SR 238 corridors.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093