Amended in Assembly September 4, 2015

Amended in Assembly September 1, 2015

Senate Bill No. 580

Introduced by Senator Liu

(Coauthor: Assembly Member Holden)

February 26, 2015

An act to amend Sections 54237 and 54237.7 of the Government Code, relating to surplus residential begin delete property, and making an appropriation therefor. end delete begin insert property. end insert

LEGISLATIVE COUNSEL’S DIGEST

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

(1) 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 and rehabilitate surplus residential property within Pasadena, South Pasadena, Alhambra, La Cañada Flintridge, and the 90032 postal ZIP code. The local housing authority would be required to dedicate any profits realized from a subsequent 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.

(2) Existing law requires the Department of Transportation to deposit proceeds from sales of surplus residential property into the SR-710 Rehabilitation Account, a continuously appropriated fund, to be distributed, as specified, exclusively to fund projects located in Pasadena, South Pasadena, Alhambra, La Cañada Flintridge, and the 90032 postal ZIP code.

This bill would specifically require the department to deposit proceeds from the sale of surplus residential property from the department to a new owner in the SR-710 Rehabilitation Account. This bill would establish the Affordable Housing Trust Account within the Housing Finance Fund and require the net proceeds from a subsequent market sale of surplus residential property sold pursuant to these provisions at an affordable or reasonable price, as specified, be deposited in this account. The bill begin delete would continuously appropriate end delete begin insert would, upon appropriation by the Legislature, make end insert funds in this account begin insert available end insert to the California Housing Finance Agency to carry out specified activities for the benefit persons residing exclusively within Pasadena, South Pasadena, Alhambra, La Cañada Flintridge, and the 90032 postal ZIP code.

(3) This bill would make legislative findings and declarations as to the necessity of a special statute for Pasadena, South Pasadena, Alhambra, La Cañada Flintridge, and the 90032 postal ZIP code.

Vote: majority. Appropriation:  begin delete yes end delete begin insert no end insert . 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, an 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 price. The 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 a single-family residence is 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 a single-family residence is 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 as follows:

(1) Except as required by paragraph (2), the property shall be
offered to a housing-related private or public entity 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 used as follows:

(A) If the housing-related entity is a public entity, the entity
shall dedicate profits realized from a subsequent sale, as specified
in subdivision (b) of Section 54237.7, to the construction of
affordable housing within Pasadena, South Pasadena, Alhambra,
La Cañada Flintridge, and the 90032 postal ZIP code.

(B) If the entity is a private housing-related entity or a
housing-related public entity, the entity shall cause the property
to be developed 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 entity 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 entity 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.

(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) or (B) of paragraph (1) or to a nonprofit private
entity dedicated to rehabilitating and maintaining the historic home
for public and community access and use subject to subparagraph
(B) of paragraph (1).

(B) For the purposes of this subdivision, “historic home” means
single-family 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:

(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.

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

(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.).

(e) A surplus residential property 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 sale of property 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 sale 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.

SEC. 2.  

Section 54237.7 of the Government Code is amended
to read:

54237.7.  

(a) Notwithstanding Section 183.1 of the Streets and
Highways Code, the Department of Transportation shall deposit
proceeds from the sale of surplus residential property from the
department to a new owner pursuant to this article into the SR-710
Rehabilitation Account, which is hereby created. Notwithstanding
Section 13340, funds in the account are hereby continuously
appropriated to the department without regard to fiscal years for
the purpose of providing repairs required pursuant to subdivision
(b) of Section 54237. The total funds maintained in the account
shall not exceed five hundred thousand dollars ($500,000). Funds
exceeding that amount, less any reimbursements due to the federal
government, shall be transferred to the State Highway Account in
the State Transportation Fund to be used for allocation by the
California Transportation Commission (commission) exclusively
to fund projects located in Pasadena, South Pasadena, Alhambra,
La Cañada Flintridge, and the 90032 postal ZIP Code. Projects
shall be selected and prioritized by the affected communities in
consultation with the Los Angeles County Metropolitan
Transportation Authority, pursuant to guidelines developed by the
commission. The Los Angeles Metropolitan Transportation
Authority shall submit a proposed program of projects and the
commission shall have final authority to approve the projects.
Eligible projects may include, but are not limited to: sound walls;
transit and rail capital improvements; bikeways; pedestrian
improvements; signal synchronization; left turn signals; and major
street resurfacing, rehabilitation, and reconstruction. The funds
shall not be used to advance or construct any proposed North State
Route 710 tunnel. Any funds remaining in the SR-710
Rehabilitation Account on the date that final payment due for the
last of the properties repaired has been made, less any
reimbursements due to the federal government, shall be transferred
to the State Highway Account in the State Transportation Fund,
to be used exclusively for the purposes described in this section.

(b) Notwithstanding any other law, the net proceeds from a
subsequent market sale of surplus residential property sold pursuant
to this article at an affordable or reasonable price, as specified in
regulations adopted by the department, shall be deposited into the
Affordable Housing Trust Account, which is hereby created within
the Housing Finance begin delete Fund and, notwithstanding Section 13340,
continuously appropriated end delete begin insert Fund. The moneys in this account shall,
upon appropriation by the Legislature, be made available end insert to the
California Housing Finance Agency to carry out any activity
authorized by Part 3 (commencing with Section 50900) of Division
31 of the Health and Safety Code for the benefit of persons and
families of low and moderate income residing exclusively in
Pasadena, South Pasadena, Alhambra, La Cañada Flintridge, and
the 90032 postal ZIP code. The priority for the distribution of
proceeds from subsequent sales shall be established pursuant to
regulations adopted by the department.

SEC. 3.  

The Legislature finds and declares that a special law
is necessary and that a general law cannot be made applicable
within the meaning of Section 16 of Article IV of the California
Constitution because of the unique circumstances relating to
affordable housing and surplus properties in the State Route 710
corridor.