BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
                              Senator Jim Beall, Chair
                                2015 - 2016  Regular 

          Bill No:          SB 580            Hearing Date:    4/14/2015
           ----------------------------------------------------------------- 
          |Author:   |Liu                                                   |
          |----------+------------------------------------------------------|
          |Version:  |2/26/2015                                             |
           ----------------------------------------------------------------- 
           ----------------------------------------------------------------- 
          |Urgency:  |No                     |Fiscal:      |Yes             |
           ----------------------------------------------------------------- 
           ----------------------------------------------------------------- 
          |Consultant|Alison Dinmore                                        |
          |:         |                                                      |
           ----------------------------------------------------------------- 
          

          SUBJECT:  Surplus properties in the State Route 710 corridor 

            DIGEST:  This bill makes changes to the Roberti Act governing  
          the sale of surplus properties in the State Route (SR) 710  
          corridor.

          ANALYSIS:
          
          Existing law identifies the California state highway system  
          through a description of segments of the state's regional and  
          interregional roads that the Department of Transportation  
          (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 (CTC).  Proceeds from  
          the sale are returned to the State Highway Account. 
          
          For decades, Caltrans has proposed extending SR 710 to close a  
          roughly 4.5 mile unconstructed gap in the freeway between SR 10  
          in Los Angeles and SR 710 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 currently owns over 460  
          homes within the original surface route corridor, 97 of which  
          are declared to be of federal or state historical significance.   
          More than 400 homes are occupied by tenants for whom Caltrans  
          serves as landlord. 








          SB 580 (Liu)                                        Page 2 of ?
          

          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:

          1.First, at fair-market value (market rate) to all single-family  
            residences presently occupied by the former owners. 

          2.Second, at an affordable price to current low- or  
            moderate-income occupants who meet minimum length-of-occupancy  
            standards.  
          3.Third, to public or private housing-related entities at a  
            price necessary to make the housing affordable to present  
            tenants and households of low or moderate income.  The sale is  
            conditioned upon the entity rehabilitating and developing the  
            property as a limited-equity cooperative housing with first  
            right of occupancy to present tenants.  If cooperative housing  
            is not feasible, the purchasing agency shall use the property  
            for low- and moderate-income rental or owner-occupied housing,  
            with the first right of occupancy to present tenants.
           
          4.Fourth, at market rate to present occupants in good standing,  
            next to former tenants, and lastly to persons who intend to be  
            owner-occupants. 

          In 2013, SB 416, (Liu) Chapter 468, expedited the sale of  
          surplus residential properties in the cities of Los Angeles,  
          South Pasadena, and Pasadena that do not fall within the  
          boundaries of any alternate route being considered in the North  
          Route 710 Project Draft Environmental Impact  
          Report/Environmental Impact Statement.  SB 416 also removed the  
          originally proposed surface route from further consideration and  
          increased opportunities for current and former tenants to  
          purchase surplus properties owned by Caltrans.  Caltrans  
          recently published and is presently receiving public comments on  
          draft regulations that set forth procedures to dispose of  
          surplus residential properties originally acquired for the SR  
          710 extension in accordance with the Roberti Act.

          This bill makes changes to the Roberti Act governing the sale of  
          surplus properties in the State Route (SR) 710 corridor.   
          Specifically, this bill:

          1.Requires all non-historic surplus residential properties that  
            are not purchased by former owners or the present occupants to  








          SB 580 (Liu)                                        Page 3 of ?
          

            be offered to a public or private housing-related entity at a  
            reasonable price to allow the property to be used as  
            affordable housing for low- and moderate-income individuals.   
            If that housing entity is a public entity, the entity may  
            resell the property, and the profits realized from the sale  
            must be used for the construction of affordable housing within  
            its jurisdiction.  If the housing entity is a private entity,  
            the property must be developed as limited-equity cooperative  
            housing, with first right of occupancy to present occupants.   
            If development of a cooperative is not feasible, the  
            purchasing entity shall use the property for low- and  
            moderate-income rental or owner-occupied housing, with first  
            right of occupancy to the present tenants. 

          2.  Requires all historic surplus residential properties that  
            are not purchased by former owners or the present occupants to  
            be offered first to a housing-related public entity or a  
            nonprofit private entity dedicated to rehabilitating and  
            maintaining the home for public and community access and use.
          COMMENTS:

          1.  Purpose of the bill.  According to the author, the purpose  
            of the Roberti Act was to preserve thousands of mostly low- to  
            moderate-income homes.  Caltrans published regulations in  
            April 2014 to implement the amended Roberti Act (pursuant to  
            SB 416, Chapter 468, Statutes of 2013) and expedite the sale  
            of homes in the SR 710 corridor.  After substantial input from  
            current tenants, the impacted cities, stakeholders, and  
            elected officials, earlier this year Caltrans issued revised  
            regulations.  The revised regulations address major concerns  
            with the originally proposed regulations.  One issue remains,  
            however, that requires legislative action to resolve:   
            disposition and preservation of designated historical homes.   
            Many of these historical homes remained vacant and boarded up  
            for decades and require substantial restoration.  Even then,  
            they may be too large and costly for conversion into  
            affordable housing or for an affordable housing owner to  
            maintain.  Amending the bill to allow cities to buy and sell  
            homes, both historical and otherwise, will provide a financial  
            incentive to generate more affordable housing and preserve  
            neighborhoods and community historical assets. 

          2.  Priority of sale for non-historic homes.  The Roberti Act  
            establishes a priority of sales for the disposal of surplus  
            rental property within the SR 710 corridor.  The Act states  








          SB 580 (Liu)                                        Page 4 of ?
          

            that after a non-historic surplus property has been offered to  
            former owners and present occupants, it shall then be offered  
            to a public or private housing-related entity at a reasonable  
            price to establish affordable housing for low- and  
            moderate-income people.  This bill also allows a public  
            housing-related entity to resell the property and requires  
            profits realized from that sale to fund the construction of  
            affordable housing within its jurisdiction.   If the housing  
            entity is a private entity, the bill states that the property  
            shall be developed as a cooperative with first right of  
            occupancy to the present tenants.  If the development of a  
            cooperative is not feasible, the private entity shall use the  
            property for low- and moderate-income rental or owner-occupied  
            housing with first right of occupancy to the present tenants.   


            The bill seeks to realize the original intent of the Roberti  
            Act by preserving and creating affordable housing for low- and  
            moderate-income individuals. The changes to the Act will allow  
            a public housing entity to purchase, rehabilitate, and resell  
            a home and requires the profits from that sale to be used for  
            building affordable housing in the same area.  

          3.  Historic home sales.  This bill establishes a priority of  
            sale of surplus historic homes in the SR 710 corridor.  After  
            historic surplus property has been offered to former owners  
            and present occupants, that property shall be offered first to  
            a public housing-related public entity or other public entity  
            at a reasonable price for purposes of rehabilitating and  
            reselling the home at fair market value.  The bill requires  
            profits from that sale to be dedicated to the construction of  
            affordable housing in that area.  Next, the home will be  
            offered to a non-profit dedicated to rehabilitating and  
            maintaining the home for public and community access.

            As noted above, this bill seeks to realize the original intent  
            of the Roberti Act.  Many of these historic homes are in such  
            a state of disrepair that rehabilitation of the existing  
            structure may not be economically feasible.  Where possible,  
            the bill gives priority to public entities to rehabilitate the  
            home for resale and use the profits to construct affordable  
            housing in the entities' jurisdiction.  Alternatively, the  
            bill will allow non-profit entities to purchase and convert an  
            otherwise dilapidated home into a community park or other  
            neighborhood use.  








          SB 580 (Liu)                                        Page 5 of ?
          


          4.  Caltrans regulations.  Caltrans issued revised draft  
            regulations earlier this year to accommodate public input and  
            is presently receiving feedback from the public on those  
            regulations.  This bill is a work in progress; once the public  
            comment period has ended, the author is committed to working  
            with Caltrans to make any necessary changes to the bill to  
            address outstanding issues raised from the public feedback.  

          Related Legislation:
          
          SB 416 (Liu, Chapter 468, Statutes of 2013) - Expedited the sale  
          of surplus residential  properties in the cities of Los Angeles,  
          South Pasadena, and Pasadena that do not fall within the  
          boundaries of any alternate route being considered in the North  
          State Route 710 Project Draft Environmental Impact  
          Report/Environmental Impact Statement.

          SB 204 (Liu, 2012) - Would have required the sale of  
          Caltrans-owned surplus properties in the North Route 710  
          Project.  This bill was vetoed by the Governor.

          AB 1617 (Liu, 2006) - Would have given cities priority over  
          affordable housing entities to purchase, rehabilitate, and  
          resell Caltrans-owned surplus residential properties in the  
          North State Route 710.  This bill failed passage in the Senate  
          Transportation and Housing Committee. 

          FISCAL EFFECT:  Appropriation:  No    Fiscal Com.:  Yes     
          Local:  No


           

          POSITIONS:  (Communicated to the committee before noon on  
          Wednesday,
                          April 8, 2015.)
          
           SUPPORT:  

          None received. 

          OPPOSITION:

          None received. 








          SB 580 (Liu)                                        Page 6 of ?
          


          
          

                                      -- END --