BILL ANALYSIS                                                                                                                                                                                                    Ķ



                                                                     SB 580


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          SENATE THIRD READING


          SB  
          580 (Liu)


          As Amended  September 4, 2015


          Majority vote


          SENATE VOTE:  36-0


           -------------------------------------------------------------------- 
          |Committee       |Votes|Ayes                   |Noes                 |
          |                |     |                       |                     |
          |                |     |                       |                     |
          |                |     |                       |                     |
          |----------------+-----+-----------------------+---------------------|
          |Housing         |7-0  |Chau, Steinorth,       |                     |
          |                |     |Burke, Chiu, Beth      |                     |
          |                |     |Gaines, Lopez, Mullin  |                     |
          |                |     |                       |                     |
          |----------------+-----+-----------------------+---------------------|
          |Appropriations  |14-0 |Gomez, Bigelow, Bloom, |                     |
          |                |     |Bonta, Calderon,       |                     |
          |                |     |Chang, Eggman,         |                     |
          |                |     |Gallagher, Eduardo     |                     |
          |                |     |Garcia, Jones, Quirk,  |                     |
          |                |     |Rendon, Weber, Wood    |                     |
          |                |     |                       |                     |
          |                |     |                       |                     |
           -------------------------------------------------------------------- 


          SUMMARY:  Makes changes to the Roberti Act (Act) governing the  








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          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.  


             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:









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             a)   The California Register of Historical Resources, as  
               established pursuant to Public Resources Code Division 5,  
               Chapter 1, Article 2;


             b)   The National Register of Historic Places, as established  
               pursuant to 54 United States Code (US.C.) Chapter 3021; or


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


          4)Creates the Affordable Housing Trust Account within the  
            Housing Finance Fund.
          5)Provides that net proceeds from a subsequent market sale of  
            surplus residential property sold pursuant to regulations  
            implementing the Roberti Act at an affordable or reasonable  
            price, as specified in regulations adopted by the Department  
            of Transportation (Department), shall be deposited into the  
            Affordable Housing Trust Account within the Housing Finance  
            Fund. The moneys in this account shall, upon appropriation by  
            the Legislature, be made available to the California Housing  
            Finance Agency (CalHFA) to carry out any authorized activities  
            for the benefit of persons and families of low and moderate  
            income residing exclusively in Pasadena, South Pasadena,  
            Alhambra, La Caņada Flintridge, and the 90032 postal ZIP Code.  
            The priority for distribution of proceeds from subsequent  
            sales shall be established pursuant to regulations adopted by  
            the Department.




          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, minor one-time costs to the Department of  
          Transportation (Caltrans) to update regulations regarding the  








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          sale of surplus property in the SR 710 corridor.  (State Highway  
          Account)


          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  
          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."









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          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  
          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  








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          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.  


          Affordable Housing Trust Account: Assembly Floor amendments  
          create the Affordable Housing Trust Account within the Housing  
          Finance Fund.  Net proceeds from a subsequent market sale of  
          surplus residential property sold pursuant to regulations  
          implementing the Roberti Act at an affordable or reasonable  
          price must be deposited into the Affordable Housing Trust  
          Account.  The moneys in this account shall, upon appropriation  
          by the Legislature, be made available to CalHFA to carry out any  
          authorized activities for the benefit of persons and families of  
          low and moderate income residing exclusively in Pasadena, South  
          Pasadena, Alhambra, La Caņada Flintridge, and the 90032 postal  
          ZIP Code. The priority for distribution of proceeds from  
          subsequent sales will be established pursuant to regulations  
          adopted by the Department.


          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  








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          Transportation and Housing Committee. 




          Analysis Prepared by:                                             
                          Rebecca Rabovsky / H. & C.D. / (916) 319-2085     
                                                                  FN:  
          0002141