Senate Bill No. 580

Introduced by Senator Liu

February 26, 2015

An act to amend Section 54237 of the Government Code, relating to surplus residential property.

LEGISLATIVE COUNSEL’S DIGEST

SB 580, as introduced, Liu. Surplus residential property: affordable housing: historic buildings.

Existing law declares the intent of the Legislature to preserve, upgrade, and expand the supply of housing to persons and families of low or moderate income, through the sale of specified surplus residential property owned by public agencies. Existing law establishes priorities and procedures that any state agency disposing of that surplus residential property is required to follow. Under existing law, specified single-family residences must first be offered to their former owners or present occupants, as specified. If the property is not sold to a former owner or present occupant, existing law requires that the property be offered to a housing-related private or public entity at a reasonable price for either limited equity cooperative housing or low and moderate income rental or owner-occupied housing, as specified.

This bill would authorize a local housing authority to purchase, rehabilitate, and resell surplus residential property within its jurisdiction. The local housing authority would be required to dedicate any profits realized from the sale to the construction of affordable housing. The bill would also require that, prior to offering the property to a housing-related private or public entity as specified above, that property that is a historic home, as defined, be first offered to a housing-related public entity or a nonprofit private entity dedicated to rehabilitating and maintaining the historic home for public and community access and use.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 54237 of the Government Code is
amended to read:

54237.  

(a) Notwithstanding Section 11011.1, begin delete any end delete begin insert an end insert agency
of the state disposing of surplus residential property shall do so in
accordance with the following priorities and procedures:

(1) First, all single-family residences presently occupied by
their former owners shall be offered to those former owners at the
appraised fair market value.

(2) Second, all single-family residences shall be offered,
pursuant to this article, to their present occupants who have
occupied the property two years or more and who are persons and
families of low or moderate income.

(3) Third, all single-family residences shall be offered, pursuant
to this article, to their present occupants who have occupied the
property five years or more and whose household income does not
exceed 150 percent of the area median income.

(4) Fourth, a single-family residence shall not be offered,
pursuant to this article, to present occupants who are not the former
owners of the property if the present occupants have had an
ownership interest in real property in the last three years.

(b) Single-family residences offered to their present occupants
pursuant to paragraphs (2) and (3) of subdivision (a) shall be
offered to those present occupants at an affordable begin delete price, which end delete
begin insert price. The end insert price shall not be less than the price paid by the agency
for original acquisition, unless the acquisition price was greater
than the current fair market value, and shall not be greater than
fair market value. When begin insert a end insert single-family begin delete residences are end delete begin insert residence
is end insert offered to present occupants at a price that is less than fair market
value, the selling agency shall impose terms, conditions, and
restrictions to ensure that the housing will remain available to
persons and families of low or moderate income and households
with incomes no greater than the incomes of the present occupants
in proportion to the area median income. The Department of
Housing and Community Development shall provide to the selling
agency recommendations of standards and criteria for these prices,
terms, conditions, and restrictions. The selling agency shall provide
repairs required by lenders and government housing assistance
programs, or, at the option of the agency, provide the present
occupants with a replacement dwelling pursuant to Section
54237.5.

(c) If single-family residences are offered to their present
occupants pursuant to paragraphs (2) and (3) of subdivision (a),
the occupants shall certify their income and assets to the selling
agency. When begin insert a end insert single-family begin delete residences are end delete begin insert residence is end insert offered
to present occupants at a price that is less than fair market value,
the selling agency may verify the certifications, in accordance with
procedures utilized for verification of incomes of purchasers and
occupants of housing financed by the California Housing Finance
Agency and with regulations adopted for the verification of assets
by the United States Department of Housing and Urban
Development. The income and asset limitations and term of
residency requirements of paragraphs (2) and (3) of subdivision
(a) shall not apply to sales that are described as mitigation measures
in an environmental study prepared pursuant to the Public
Resources Code, if the study was initiated before this measure was
enacted.

(d) All other surplus residential properties and all properties
described in paragraphs (1), (2), and (3) of subdivision (a) that are
not purchased by the former owners or the present occupants shall
be then offered begin delete to end delete begin insert as follows: end insert

begin insert (1) end insert begin insert   end insert begin insert Except as required by paragraph (2), end insert begin insert the property shall be
offered to a end insert housing-related private begin delete and end delete begin insert or end insert public begin delete entities end delete begin insert entity end insert at
a reasonable price, which is best suited to economically feasible
use of the property as decent, safe, and sanitary housing at
affordable rents and affordable prices for persons and families of
low or moderate income, on the condition that the purchasing entity
shall cause the property to be rehabilitated and begin delete developed end delete begin insert used as
follows: end insert

begin insert (A) end insert begin insert   end insert begin insert If the housing-related entity is a public entity, the entity may
resell the property. The entity shall dedicate profits realized from
a sale pursuant to this subparagraph to the construction of
affordable housing within its jurisdiction. end insert

begin insert (B) end insert begin insert   end insert begin insert If the entity is a private housing-related entity or a
housing-related public entity that does not use the property as
described in subparagraph (A), the entity shall cause the property
to be end insert begin insert developed end insert as limited equity cooperative housing with first
right of occupancy to present occupants, except that where the
development of cooperative or cooperatives is not feasible, the
purchasing begin delete agency end delete begin insert entity end insert shall cause the property to be used for
low and moderate income rental or owner-occupied housing, with
first right of occupancy to the present tenants. The price of the
property in no case shall be less than the price paid by the begin delete agency end delete
begin insert entity end insert for original acquisition unless the acquisition price was
greater than current fair market value and shall not be greater than
fair market value. Subject to the foregoing, it shall be set at the
level necessary to provide housing at affordable rents and
affordable prices for present tenants and persons and families of
low or moderate income. When residential property is offered at
a price that is less than fair market value, the selling agency shall
impose terms, conditions, and restrictions as will ensure that the
housing will remain available to persons and families of low or
moderate income. The Department of Housing and Community
Development shall provide to the selling agency recommendations
of standards and criteria for prices, terms, conditions, and
restrictions.

begin insert

(2) (A) If the property is a historic home, the property shall be
offered first to a housing-related public entity subject to
subparagraph (A) of paragraph (1) or to a nonprofit private entity
dedicated to rehabilitating and maintaining the historic home for
public and community access and use.

end insert begin insert

(B) For the purposes of this paragraph, “historic home” means
surplus residential property that is listed on, or for which an
application has been filed for listing on, at least one of the
following by January 1, 2015:

end insert begin insert

(i) The California Register of Historical Resources, as
established pursuant to Article 2 (commencing with Section 5020)
of Chapter 1 of Division 5 of the Public Resources Code.

end insert begin insert

(ii) The National Register of Historic Places, as established
pursuant to Chapter 3021 of Title 54 of the United States Code.

end insert begin insert

(iii) The National Register of Historic Places, as previously
established pursuant to the National Historic Preservation Act
(16 U.S.C. Sec. 470 et seq.).

end insert

(e)  begin delete Any end delete begin insert A end insert surplus residential begin delete properties end delete begin insert property end insert not sold
pursuant to subdivisions (a) to (d), inclusive, shall then be sold at
fair market value, with priority given first to purchasers who are
present tenants in good standing with all rent obligations current
and paid in full, second to former tenants who were in good
standing at the time they vacated the premises, with priority given
to the most recent tenants first, and then to purchasers who will
be owner occupants. The selling agency may commence the begin delete sales end delete
begin insert sale end insert of begin delete properties end delete begin insert property end insert that former tenants may possess a right
to purchase as provided by this subdivision 30 days after the selling
agency has done both of the following:

(1) Posted information regarding the begin delete sales end delete begin insert sale end insert under this
subdivision on the selling agency’s Internet Web site.

(2) Made a good faith effort to provide written notice, by
first-class mail, to the last known address of each former tenant.

(f) Tenants in good standing of nonresidential properties shall
be given priority to purchase, at fair market value, the property
they rent, lease, or otherwise legally occupy.