BILL ANALYSIS Ó
AB 2697
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Date of Hearing: May 11, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2697 (Bonilla) - As Amended April 14, 2016
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|Policy |Housing and Community |Vote:|6 - 1 |
|Committee: |Development | | |
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| |Local Government | |6 - 3 |
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Urgency: No State Mandated Local Program: YesReimbursable:
Yes
SUMMARY: This bill requires successor agencies to create a
first right of refusal process for the disposal of land for the
purpose of developing low- and moderate- income housing.
Specifically, this bill:
1)Requires the successor agency to a former redevelopment agency
to send to any "local public entity," within whose
jurisdictions the land is located, a written offer to sell
land belonging to the former redevelopment agency for the
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purpose of developing the land into low- and moderate-income
housing.
2)Requires the successor agency to send "housing sponsors," upon
written request, a written offer to sell land for the purpose
of developing low- and moderate-income housing.
3)Requires priority to be given to offers to purchase the land
by entities that agree to development affordable housing for
lower-income households.
4)Requires preference to be given to an entity that proposes to
make at least 25% of the units affordable, by sale or rent, to
lower-income households and that agrees to record an
affordability covenant restricting the property for a period
of at least 55 years.
5)Provides that if the successor agency receives more than one
offer for the land that priority be given to the entity that
proposes the greatest number of units at the highest level of
affordability.
6)Provides that if land is not sold to an entity that agrees to
include affordable housing on site but is sold for a
residential use that includes at least 10 units, then at least
15% of the units must be provided at an affordable housing
cost to low-income households. Rental units must remain
affordable and occupied by eligible households for 55 years.
Ownership units must be subject to an equity sharing
agreement. These requirements must be recorded against the
property and are enforceable by the local government or
eligible residents.
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FISCAL EFFECT:
1)Significant cost pressure to increase funding for Successor
Agencies for increased workload associated with sending the
written offers to sell and evaluating offers pertaining to
affordability requirements. Successor Agency budgets are
capped at $250,000 annually and are paid for by other taxing
entities, including schools.
2)Unknown, but potentially reimbursable local mandate costs to
the extent cities and counties would need to rezone land or
perform other duties regarding the deviations from approved
Property Management Plans this bill may cause.
3)Unknown forgone property tax revenue as a result of rezoning
land approved for commercial use in an agency's Property
Management Plan to residential land for affordable housing.
The State General Fund would cover the school share.
COMMENTS:
1)Purpose. Affordable housing developers are at a special
disadvantage because they cannot compete with market
developers when it comes to buying land. Land is one of the
most costly parts of a project, especially in California. This
bill will allow affordable housing developers to have first
right of refusal to purchase any properties currently in
possession of redevelopment successor agencies. This small
step will give these developers a leg up in the process to
locate and acquire properties on which to build affordable
housing."
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This would require successor agencies to adhere to some
provisions of the State Surplus Land Act, including offering
affordable housing developers the right of first refusal and
if the land is purchased for market rate residential
development, require 15% of the units to be low income.
2)Background. Local agencies are required to inventory the land
they own every year. If land is no longer needed, a local
agency must follow certain procedures prior to disposal of
this "surplus" land. The intent behind the disposal
procedures is to promote the use of surplus land towards
affordable housing, parks and recreation purposes, open-space
purposes, and transit-oriented development. The disposal
procedures provide a Right of First Refusal to entities
agreeing to use the land for, amongst other things, affordable
housing.
As part of the dissolution of redevelopment, successor
agencies were created to dispose of the redevelopment agencies
assets and wind down their affairs. The activities of
successor agencies are overseen by oversight boards made up of
representatives of the local taxing entities and others. Part
of the function of the successor agencies is to transfer the
housing assets of a former redevelopment agency to the housing
successor which was either the local housing authority or the
city or county in which the redevelopment agency was located.
Housing assets transferred to the housing successor entity
were to be used for affordable housing activities, while
disallowed assets would go to the successor agency for
disposal or retention pursuant to an approved property
management plan.
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3)Interaction with Property Management Plans. This bill would
require a successor agency to notify a local agency, including
a housing authority, and housing developers that they are
selling property previously owned by the redevelopment agency.
The sale of the properties would be subject to the same
process as state surplus property. This bill requires
successor agencies to offer all available parcels to
affordable housing interests. It is unclear what would be
required of local agencies if this is in conflict with the
approved use under an approved Property Management Plan.
4)Arguments in Support. Supporters argue that this bill will
allow successor agencies to utilize their remaining property
as was intended and help to develop a significant amount of
affordable homes.
5)Arguments in Opposition. Opponents argue that "imposing new
procedural and substantive requirements for the disposition of
former RDA properties at this time would no doubt complicate
and delay the wind down process. Additionally, it would work
to the disadvantage of the local taxing entities which have an
interest in obtaining maximum value for the properties to be
sold and or get the benefit of increased valuations from the
properties that are to be used for economic development."
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081
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