BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 416
Author: Liu (D), et al.
Amended: 9/3/13
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
SENATE FLOOR : 39-0, 5/29/13
AYES: Anderson, Beall, Berryhill, Block, Calderon, Cannella,
Corbett, Correa, De León, DeSaulnier, Emmerson, Evans, Fuller,
Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff,
Jackson, Knight, Lara, Leno, Lieu, Liu, Monning, Nielsen,
Padilla, Pavley, Price, Roth, Steinberg, Torres, Walters,
Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Vacancy
ASSEMBLY FLOOR : Not available
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 the Department of
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Transportation (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.
Assembly Amendments (1) provide that the selling agency may
commence the sales of the properties that former tenants may
possess a right to purchase 30 days if it has provided specified
notices, (2) limit the total funds that can be maintained in the
account to $500,000, (3) specify the funds are to be used to
exclusively fund projects located in specified communities, and
(4) require that the preliminary project alternative referred to
as Alternative F-6 in the December 2012 Alternative Analysis
Report of the Los Angeles County Metropolitan Transportation
Authority (MTA), for purposes of the California Environmental
Quality Act, no longer be deemed a feasible alternative for
consideration in any state environmental review process for the
Interstate 710 North Gap Closure project, State Clearinghouse
number 1982092310.
ANALYSIS : Existing law identifies the California state
highway system through a description of segments of the state's
regional and interregional roads that Caltrans owns and
operates. Under current law, 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 (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
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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:
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 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, with priority given to the most
recent tenants first, before the home can be offered to
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purchasers who intend to be owner-occupants.
4. Specifies that the selling agency may commence the sales of
properties that former tenants may possess a right to
purchase 30 days after the selling agency has done both of
the following:
5. Posted information regarding the sales on the selling
agency's Web site and;
6. Made a good faith effort to provide written notice, by
first-class mail, to the last known address of each former
tenant.
7. With respect to non-residential properties, gives tenants in
good standing priority to purchase the property at fair
market value.
8. Creates the SR 710 Rehabilitation Account and requires
Caltrans to deposit proceeds from sales of SR 710 properties
into the account.
9. 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 to be used for
allocation by the Commission exclusively to fund projects
located in Pasadena, South Pasadena, Alhambra, La Canada
Flintridge, and the 90032 postal ZIP Code.
10.Specifies that projects shall be selected and prioritized by
the affected communities in consultation with the MTA
pursuant to guidelines developed by the Commission.
11.Requires MTA to submit a proposed program of projects and
gives the Commission final authority to approve the projects.
12.Specifies that eligible projects include, but are not
limited to, sound walls; transit; rail capital improvements;
bikeways; pedestrian improvements; signal synchronization;
left turn signals; and major street resurfacing,
rehabilitation, and reconstruction.
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13.Appropriates, continuously, 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.
14.Prohibits funds from the sale of surplus properties in the
SR 10 corridor from being used to advance or construct any
proposed North State Route 710 tunnel.
15.Requires that any funds remaining in the SR 710
Rehabilitation Account after the last property is repaired,
less any reimbursements due to the federal government, be
transferred to the State Highway Account to be used
exclusively for eligible projects in the specified
communities.
16.Requires that the preliminary project alternative referred
to as Alternative F-6 in the December 2012 Alternative
Analysis Report of the MTA, for purposes of the California
Environmental Quality Act, no longer be deemed a feasible
alternative for consideration in any state environmental
review process for the Interstate 710 North Gap Closure
project, State Clearinghouse number 1982092310.
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.
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
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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 9/6/13 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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