BILL ANALYSIS Ó
SB 580
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Date of Hearing: July 1, 2015
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Ed Chau, Chair
SB
580 (Liu) - As Introduced February 26, 2015
SENATE VOTE: 36-0
SUBJECT: Surplus residential property: affordable housing:
historic buildings.
SUMMARY: This bill makes changes to the Roberti Act (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
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,
subject to the following:
a) Provides that 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.
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b) Provides that 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 surplus historic homes that are not purchased by
former owners or the present occupants to be offered first to
a housing-related public entity, for purposes of
rehabilitating and reselling the home at fair market value, or
a nonprofit private entity dedicated to rehabilitating and
maintaining the home for public and community access and use.
3)Defines "historic home" as 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:
a) The California Register of Historical Resources, as
established pursuant to Article 2 of Chapter 1 of
Division 5 of the Public Resources Code;
b) The National Register of Historic Places, as
established pursuant to Chapter 3021 of Title 54 of the
United States Code; or
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c) The National Register of Historic Places, as
previously established pursuant to the National Historic
Preservation Act (16 U.S.C. Sec. 470 et seq.).
EXISTING LAW:
1)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 (Streets and Highways Code
Section 230 et seq.).
2)Provides that, 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 (Streets and Highways Code Sections
118-118.6).
3)Establishes, pursuant to the Act, 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:
a) First, at fair-market value (market rate) to all
single-family residences presently occupied by the former
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owners.
b) Second, at an affordable price to current low- or
moderate-income occupants who meet minimum
length-of-occupancy standards.
c) 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.
d) Fourth, at market rate to present occupants in good
standing, next to former tenants, and lastly to persons
who intend to be owner-occupants.
(Government Code Section 54237)
4)Expedites, pursuant to SB 416 (Liu, Chapter 468, Statutes of
2013), 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. Removes the
originally proposed surface route from further consideration
and increased opportunities for current and former tenants to
purchase surplus properties owned by Caltrans (Government Code
Sections 54236-54237.8).
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FISCAL EFFECT: According to the Senate Appropriations
Committee:
1)Minor one-time costs to Caltrans to update regulations
regarding the sale of surplus property in the SR 710 corridor
(State Highway Account).
2)Unknown secondary fiscal impacts related to the authority for
public housing-related entities to resell properties purchased
at less than fair market value.
COMMENTS:
Background: 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.
Purpose of this bill: The author points out that, according to
Senator Roberti, the Act was intended both to preserve
neighborhoods and provide affordable housing. According to the
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author, "Caltrans revised regulations to implement the Act as
amended by SB 416 (Liu) to a great extent addressed major
concerns with the originally proposed regulations. However, one
issue remains that requires legislative action to resolve:
disposition and preservation of the historical homes. Many of
these homes have remained vacant and boarded up for decades.
They require substantial restoration in accordance with
historical designation protocols. Even if it were economically
feasible to restore and convert a property into affordable
housing, it would likely be too expensive for an affordable
housing owner to maintain. Amending the Act to allow cities to
buy and flip homes, both historical and otherwise, will provide
a financial incentive to 'do it right,' generate more affordable
housing than might otherwise be created, and preserve
neighborhoods and community historical assets."
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 must 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, or to a non-profit dedicated to
rehabilitating and maintaining the home for public and community
access. If the home is sold by a public-housing-related public
entity, profits from that sale must be dedicated to the
construction of affordable housing in that area.
The author notes that many of these historic homes are in such a
state of disrepair that rehabilitation of the existing structure
may not be economically feasible. After the property has been
offered to former owners and present occupants, this 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, this bill will allow
nonprofit entities to purchase and convert an otherwise
dilapidated home into a community park or other neighborhood
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use.
Priority of sale for non-historic homes: The Act establishes a
priority of sales for the disposal of surplus rental property
within the SR 710 corridor. The Act states 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, this
bill requires the property to 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
must use the property for low- and moderate-income rental or
owner-occupied housing with first right of occupancy to the
present tenants.
Caltrans regulations: Caltrans issued revised draft regulations
earlier this year to accommodate public input. The author has
indicated that this bill is a work in progress, and 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.
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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.
REGISTERED SUPPORT / OPPOSITION:
Support
None on file
Opposition
None on file
Analysis Prepared by:Rebecca Rabovsky / H. & C.D. / (916)
SB 580
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319-2085