Amended in Senate June 9, 2014

Amended in Assembly May 5, 2014

Amended in Assembly April 21, 2014

Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2135

Introduced by Assembly Member Ting

February 20, 2014

An act to amend Sections 54223, 54225, 54226, and 54227 of begin insert , and to add Sections 54222.5 and 54233 to, end insert the Government Code, relating to begin delete surplus property. end delete begin insert local government. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 2135, as amended, Ting. begin delete Local agencies: surplus land: end delete begin insert Surplus land: end insert affordable housing.

(1) Existing law prescribes requirements for the disposal of surplus land by begin insert a end insert local begin delete agencies, which are defined to include districts. end delete begin insert agency, as defined. end insert Existing law requires begin delete an end delete begin insert a local end insert agency disposing of surplus land to negotiate in good faith with begin delete an entity providing notice that it desires end delete begin insert certain entities that provided notice of a desire end insert to purchase or lease the land and, if the price or terms cannot be agreed upon within a period of not less than 60 begin delete days, end delete begin insert days with those entities, end insert the begin insert local end insert agency may dispose of the begin insert surplus end insert land without fulfilling further requirements, as specified. Existing law authorizes a local agency selling surplus begin delete property end delete begin insert land end insert for specified purposes begin insert to specified entities end insert , including begin delete for end delete begin insert , but not limited to, end insert low- and moderate-income housing, to provide begin delete for end delete a payment period of up to 20 years in a sales contract or trust deed. Existing law requires a local agency disposing of surplus land to give first priority in a purchase or lease to an entity agreeing to use the site for housing for persons of low or moderate income, except as specified. Existing law specifies that these and other related provisions are not to be interpreted to empower a local agency to sell or lease surplus land at less than fair market value.

begin delete

The

end delete

begin insert This bill would require an entity proposing to use the surplus land for developing low- and moderate-income housing to agree to make available not less than 25% of the total number of units developed on the parcels at affordable housing cost or affordable rent for a period of at least 55 years to lower-income households, as those terms are defined in existing law. This bill would require a local agency to give first priority in disposing of the surplus land to an entity that agrees to these requirements. This bill would also require these requirements, as specified, to be contained in a covenant or restriction recorded against the surplus land at the time of sale, to run with the land, and be enforceable, against any owner who violates the covenant or restriction and each successor-in-interest who continues the violation, by a residents’ association, as specified, and certain individuals, that include, but are not limited to, a resident of a unit subject to these requirements. This end insert bill would increase the minimum time that an agency disposing of surplus land is required to conduct negotiations begin insert with certain entities desiring to purchase or lease the surplus land end insert from 60 to 90 days. begin delete The bill would require, if the disposed land is to be used for residential development, that the sales contract or lease agreement provide that not less than 25% of the units in the development have rents or sale prices that are affordable for persons and families of low or moderate income. The end delete begin insert This bill would require, if the local agency does not agree to price and terms with those certain entities and the surplus land is used for the development of 10 or more residential units, the entity or a successor-in-interest that received the surplus land to provide not less than 15% of the total number of units developed on the parcels at affordable housing cost or affordable rent, at terms similar to an entity that received first priority for providing not less than 25% of the total number of units at affordable housing cost or affordable rent, as specified. end insert

begin insert This end insert bill would permit the payment period for surplus land sold for low- and moderate-income housing purposes to exceed 20 years, subject to limits related to land use requirements for low- or moderate-income housing. begin delete The bill would revise the priority given to an entity proposing to use the site for low- and moderate-income housing to give priority to the entity agreeing to use the site for housing for which 100% of the units have rents or sales prices that are affordable for low- and moderate-income persons. The end delete

begin insert This end insert bill would delete the statement that these provisions are not to be interpreted to empower a local agency to sell or lease surplus land at less than fair market value. By increasing the duties of local officials in connection with sales and leases of surplus land, this bill would impose a state-mandated local program.

(2) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

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

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 54222.5 is added to the end insert begin insert Government Code end insert begin insert ,
to read: end insert

begin insert

begin insert 54222.5. end insert   

An entity proposing to use the surplus land for
developing low- and moderate-income housing shall agree to make
available not less than 25 percent of the total number of units
developed on the parcels at affordable housing cost, as defined in
Section 50052.5 of the Health and Safety Code, or affordable rent,
as defined in Section 50053 of the Health and Safety Code, to lower
income households, as defined in Section 50079.5 of the Health
and Safety Code. Rental units shall remain affordable to, and
occupied by, lower income households for a period of at least 55
years. The initial occupants of all ownership units shall be lower
income households, and the units shall be subject to an equity
sharing agreement consistent with paragraph (2) of subdivision
(c) of Section 65915. These requirements shall be contained in a
covenant or restriction recorded against the surplus land at the
time of sale, which shall run with the land and shall be enforceable,
against any owner who violates a covenant or restriction and each
successor in interest who continues the violation, by any of the
following:

(a) The local agency that disposed of the property.

(b) A resident of a unit subject to this section.

(c) A residents association with members who reside in units
subject to this section.

(d) A former resident of a unit subject to this section who last
resided in that unit.

(e) An applicant seeking to enforce the covenants or restrictions
for a particular unit that is subject to this section, if the applicant
conforms to all of the following:

(1) Is of low or moderate income, as defined in Section 50093
of the Health and Safety Code.

(2) Is able and willing to occupy that particular unit.

(3) Was denied occupancy of that particular unit due to an
alleged breach of a covenant or restriction implementing this
section.

(f) A person on an affordable housing waiting list who is of low
or moderate income, as defined in Section 50093 of the Health
and Safety Code, and who is able and willing to occupy a unit
subject to this section.

end insert

begin delete SECTION 1. end delete
begin insert SEC. 2. end insert   

Section 54223 of the Government Code is amended
to read:

54223.  

After the disposing agency has received notice from
the entity desiring to purchase or lease the land, the disposing
agency and the entity shall enter into good faith negotiations to
determine a mutually satisfactory sales price or lease terms. If the
price or terms cannot be agreed upon after a good faith negotiation
period of not less than 90 days, the land may be disposed of without
further regard to this begin delete article. If the disposed land is to be used for
residential development, including residential development with
rents or sale prices that are affordable for persons or families of
low or moderate income, the sales contract or lease agreement
shall provide that not less than 25 percent of the total number of
units in the development have rents or sale prices that are affordable
for persons and families of low or moderate income. end delete begin insert article, except
that Section 54233 shall apply. end insert

begin delete SEC. 2. end delete
begin insert SEC. 3. end insert   

Section 54225 of the Government Code is amended
to read:

54225.  

Any public agency selling surplus land to an entity
described in Section 54222 for park or recreation purposes, for
open-space purposes, for school purposes, or for low- and
moderate- income housing purposes may provide for a payment
period of up to 20 years in any contract of sale or sale by trust deed
for the land. The payment period for surplus land sold for housing
for persons and families of low and moderate income may exceed
20 years, but the payment period shall not exceed the term that the
land is required to be used for low- or moderate-income housing.

begin delete SEC. 3. end delete
begin insert SEC. 4. end insert   

Section 54226 of the Government Code is amended
to read:

54226.  

begin delete Nothing in this end delete begin insert This end insert article shall begin insert not end insert be interpreted to
limit the power of any local agency to sell or lease surplus land at
fair market value or at less than fair market value. No provision
of this article shall be applied when it conflicts with any other
provision of statutory law.

begin delete SEC. 4. end delete
begin insert SEC. 5. end insert   

Section 54227 of the Government Code is amended
to read:

54227.  

begin insert (a) end insert begin insert   end insert In the event that any local agency disposing of
surplus land receives offers for the purchase or lease of that land
from more than one of the entities to which notice and an
opportunity to purchase or lease shall be given pursuant to this
article, the local agency shall give first priority to the entity that
agrees to use the site for housing begin delete for which 100 percent of the units
are to have rents or sale prices that are affordable for persons and
families of low or moderate income, except that first end delete begin insert that meets
the requirements of Section 54222.5. If the local agency receives
offers from more than one entity that agrees to meet the
requirements of Section 54222.5, then the local agency shall give
priority to the entity that proposes to provide the greatest number
of units that meet the requirements of Section 54222.5 at the
deepest level of affordability. end insert

begin insert (b) end insert begin insert   end insert begin insert Notwithstanding subdivision (a), first end insert priority shall be given
to an entity that agrees to use the site for park or recreational
purposes if the land being offered is already being used and will
continue to be used for park or recreational purposes, or if the land
is designated for park and recreational use in the local general plan
and will be developed for that purpose.

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 54233 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

begin insert

begin insert 54233. end insert   

If the local agency does not agree to price and terms
with an entity to which notice and an opportunity to purchase or
lease are given pursuant to this article and disposes of the surplus
land to an entity that uses the property for the development of 10
or more residential units, the entity or a successor-in-interest shall
provide not less than 15 percent of the total number of units
developed on the parcels at affordable housing cost, as defined in
Section 50052.5 of the Health and Safety Code, or affordable rent,
as defined in Section 50053 of the Health and Safety Code, to lower
income households, as defined in Section 50079.5 of the Health
and Safety Code. Rental units shall remain affordable to, and
occupied by, lower income households for a period of at least 55
years. The initial occupants of all ownership units shall be lower
income households, and the units shall be subject to an equity
sharing agreement consistent with the provisions of paragraph
(2) of subdivision (c) of Section 65915. These requirements shall
be contained in a covenant or restriction recorded against the
surplus land prior to land use entitlement of the project, and the
covenant or restriction shall run with the land and shall be
enforceable, against any owner who violates a covenant or
restriction and each successor in interest who continues the
violation, by any of the entities described in subdivisions (a) to (f),
inclusive, of Section 54222.5.

end insert

begin delete SEC. 5. end delete
begin insert SEC. 7. end insert   

If the Commission on State Mandates determines that
this act contains costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.