BILL ANALYSIS �
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: ab 2135
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: ting
VERSION: 6/9/14
Analysis by: Mark Stivers FISCAL: yes
Hearing date: June 17, 2014
SUBJECT:
Local government surplus land and affordable housing
DESCRIPTION:
This bill requires that surplus local government land sold under
preference for affordable housing provide at least 25 percent of
the units at affordable housing cost to low-income households,
and requires that such land sold outside the preference system
for residential use provide at least 15 percent of the units at
affordable housing cost to low-income households.
ANALYSIS:
Current law establishes the parameters under which local
governments dispose of surplus property. The local government
must first send a written offer to sell or lease the property to
specified preferred entities, including school districts, parks
departments, housing authorities, and affordable housing
developers. Any of these preferred entities desiring to
purchase or lease the property must then notify the local
government within 60 days of its intent to purchase or lease the
land. If there are competing offers, the local government must
give first priority to the entity that agrees to use the site
for low- or moderate-income housing, unless the surplus land is
already being used for park or recreational purposes or
designated for park or recreational use in the local general
plan, and the buyer will use the land for park or recreation
purposes.
If the local government receives an offer from one of these
preferred entities, it then enters into good-faith negotiations
with the entity to determine a mutually satisfactory sales price
or lease terms. The statute expressly states that it neither
limits the power of a local government to sell or lease surplus
land at fair market value or at less than fair market value, nor
empowers a local government to sell or lease surplus land at
AB 2135 (TING) Page 2
less than fair market value. The statute does provide, however,
that the local government may allow a preferred entity proposing
to use the property for park or recreation purposes, for
open-space purposes, for school purposes, or for affordable
housing purposes to pay for the property over a term up to 20
years. If the price or terms cannot be agreed upon after 60
days, the disposing agency may dispose of the property on the
open market.
This bill :
Extends from 60 to 90 days the good-faith negotiation period
between the local government and a preferred entity.
Requires an entity seeking to exercise the preference for
affordable housing purposes to agree to make available not
less than 25 percent of the units in the development at an
affordable housing cost to low-income households. Rental
units must remain affordable and occupied by eligible
households for 55 years. Ownership units must be subject to
an equity sharing agreement. These requirements must be
recorded against the property and are enforceable by the local
government or eligible residents.
With respect to properties sold or leased to preferred
entities for affordable housing purposes, allows the payment
period to exceed 20 years, provided that the payment period
does not exceed the term of affordability of the housing
units.
Deletes the provision stating that current law does not
empower a local government to sell or lease surplus land at
less than fair market value.
With respect to the priority among competing offers from
preferred entities, provides that if there are competing
affordable housing offers, priority shall go to the project
that proposes the greatest number of affordable units at the
deepest level of affordability.
Requires properties sold outside the preference system that
are developed with 10 or more residential units to include at
least 15 percent of the units in the development at an
affordable housing cost to low-income households. Rental
units must remain affordable and occupied by eligible
households for 55 years. Ownership units must be subject to
an equity sharing agreement. These requirements must be
recorded against the property and are enforceable by the local
government or eligible residents.
COMMENTS:
AB 2135 (TING) Page 3
1.Purpose of the bill . According to the author, one of the
barriers to increasing affordable housing supply in California
is the lack of available sites. Local agencies, however,
control significant amounts of unused land, much of which is
appropriate for affordable housing. This bill will increase
the supply of affordable housing in California by
strengthening provisions of existing law that give affordable
housing projects first priority to obtain surplus land held by
local governments. Most importantly, the bill defines the
percentage of units and levels of affordability that a project
must provide in order to exercise the preference. The bill
also extends the period of good-faith negotiation between a
local agency and a preferred entity from 60 to 90 days,
clarifies that a local agency may sell or lease the land at
less than fair market value, and allows for longer payment
periods for affordable housing.
2.Non-preference sales . If no preferred entities seek the
property, or if there is no agreement on price and terms for a
preferred sale, current law allows a local government to
dispose of the property on the open market. In addition to
altering rules for preferred sales, this bill creates a new
requirement for open-market sales. If the owner subsequently
develops 10 or more housing units on the property, the bill
requires that 15 percent of these units be affordable to
low-income households. The author and sponsors believe that
the reuse of surplus public land should provide a public
benefit. Naturally, this will likely reduce the price that a
buyer is willing to pay the local government for the surplus
land, which will mean fewer resources for other city
priorities. It is also possible that this requirement could
make some parcels unsellable.
Assembly Votes:
Floor:53-22
Appr: 12-5
LGov: 7-2
H&CD: 5-2
POSITIONS: (Communicated to the committee before noon on
Wednesday, June 11,
2014.)
SUPPORT: Non-Profit Housing Association of Northern
AB 2135 (TING) Page 4
California (sponsor)
California Housing Partnership Corporation
California Rural Legal Assistance Foundation
Century Housing
Charities Housing
Community Housing Opportunities Corporation
Community Housing Works
Domus Development
EAH Housing
Housing California
Housing Leadership Council of San Mateo County
John Stewart Company
MidPen Housing Corporation
Mutual Housing California
Northern California Community Loan Fund
Resources for Community Development
San Luis County Affordable Housing Trust Fund
Satellite Affordable Housing Associates
South County Housing
Urban Habitat
Western Center on Law and Poverty
OPPOSED: None received.