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AB-2056 Mobilehomes.(2017-2018)

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Date Published: 03/20/2018 04:00 AM
AB2056:v98#DOCUMENT

Amended  IN  Assembly  March 19, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 2056


Introduced by Assembly Member Eduardo Garcia

February 06, 2018


An act to amend Section 50781 Sections 50784.5 and 50784.7 of the Health and Safety Code, relating to mobilehome parks. parks, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


AB 2056, as amended, Eduardo Garcia. Mobilehomes.
Existing law authorizes the Department of Housing and Community Development to make loans from the Mobilehome Park Rehabilitation and Purchase Fund, a continuously appropriated fund, to qualified mobilehome park residents, resident organizations, and nonprofit housing sponsors or local public entities to finance conversion of the parks to resident ownership to make monthly housing costs more affordable acquire a mobilehome park where no less than 30% of residents at the time of acquisition are low income or to make loans to a resident organization or nonprofit housing sponsor to assist park residents with needed repairs or accessibility upgrades to the mobilehomes if specified criteria are met. Existing law provides definitions for the purposes of this loan program.
This bill would authorize the department to make loans from the fund to a qualified nonprofit housing sponsor or a local public entity to acquire or rehabilitate a mobilehome park where no less than 30% of residents at the time that the loan application is filed are low income. The bill would also authorize the department to make grants from the fund to a resident organization or nonprofit housing sponsor to assist park residents with needed repairs or accessibility upgrades. The bill would also require, for those loans issued on or after January 1, 2019, loan payments to be deferred for the full term of the loans, except as specified. The bill would authorize the department to charge a certain transaction fee related to the loan. By expanding the purposes of, and increasing amounts deposited into, a continuously appropriated fund, this bill would make an appropriation.

This bill would make nonsubstantive changes to those definitions.

Vote: MAJORITY2/3   Appropriation: NOYES   Fiscal Committee: NOYES   Local Program: NO  

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


SECTION 1.

 Section 50784.5 of the Health and Safety Code is amended to read:

50784.5.
 (a) The department may make loans from the Mobilehome Park Rehabilitation and Purchase Fund to a qualified nonprofit housing sponsor or a local public entity to acquire or rehabilitate a mobilehome park, provided that no less than 30 percent of residents at the time of acquisition that the loan application is filed are low income.
(b) Loans may be provided pursuant to this section where either of the following applies:
(1) The park to be acquired has significant outstanding violations of the Mobilehome Parks Act (Part 2.1 (commencing with Section 18200)) that threaten the long-term viability of the park and that will be remedied by the purchaser.
(2) The department determines that the acquisition or rehabilitation of the park will have a substantial benefit to low- and moderate-income homeowners and that the purchaser will nonprofit housing sponsor or local public entity agrees to maintain rents at levels affordable to lower income households.
(c) (1) Any mobilehome park purchased by a local public entity with a loan pursuant to this section shall be transferred to a qualified nonprofit housing sponsor or to a resident organization that plans to convert the park to resident ownership no later than three years from the date of loan closing, with all obligations under the loan assumed by the nonprofit organization or resident organization.
(2) If a local public entity has made a good faith effort, but has not been able, to transfer the park by the end of the three-year period, the entity may apply to the department for an additional three-year extension. Upon a determination by the department that the local public entity has made a good faith effort to transfer the park in accordance with paragraph (1), it shall have an additional three years from the expiration date of the first three-year period to consummate the transfer. The three-year extension shall only be granted once by the department for each loan to a local public entity.
(3) If a local public entity fails to make a good faith effort to transfer the park within the first three-year period, as determined by the department, or fails to transfer the park by the expiration date of the extended three-year period, it shall repay the loan in full to the department.
(d) All of the following shall apply to loans provided pursuant to this section:
(1) Loans shall be for a term of no more than 40 years and shall bear interest at a rate of 3 percent per annum unless the department finds that a lower interest rate is necessary and will not jeopardize the financial stability of the fund.
(2) The department may establish flexible repayment terms for loans provided pursuant to this section if the terms do not represent an unacceptable risk to the security of the fund.
(3) Loans shall be for the minimum amount necessary to bring the park into compliance with all applicable health and safety standards and to maintain the monthly housing costs of lower income residents at an affordable level.
(4) The total secured debt in a superior position to the department’s loan plus the department’s loan shall not exceed 115 percent of the value of the collateral securing the loan plus the amount of costs incidentally, but directly, related to the acquisition and rehabilitation of the park.
(5) (A) For loans issued on and after January 1, 2019, notwithstanding paragraphs (1) and (2), loan repayments shall be deferred for the full term of the loan, except for residual receipts payments. These residual receipts payments shall be structured to avoid reducing the amount of payments on local public agency loans resulting solely from changes in the payment terms on the department’s loan, and not resulting from fees or other payments to the borrower, and shall otherwise be consistent with the department’s uniform multifamily regulations (Subchapter 19 (commencing with Section 8300) of Chapter 7 of Division 1 of Title 25 of the California Code of Regulations) or successor regulations. The department may charge a transaction fee to cover its costs for processing these restructuring transactions. The department may waive or defer some or all of this fee if it determines that the residents of the mobilehome park do not have the ability to make these payments.
(B) For loans issued pursuant to subparagraph (A), principal and accumulated interest is due and payable upon completion of the term of the loan. The loan shall bear simple interest at the rate of 3 percent per annum on the unpaid principal balance. The department shall require annual loan payments in the minimum amount necessary to cover the costs of project monitoring. For the first 30 years of the loan term, the amount of the required loan payments shall not exceed forty-two hundredths of 1 percent (.42%) per annum.
(e) In determining the eligibility for and amount of loans pursuant to this section, the department shall take into consideration, among other factors, all of the following:
(1) The current health and safety conditions in the park and the likelihood that conditions would be remedied without the loan.
(2) The degree to which the loan will benefit lower income homeowners.
(3) The age of the park and the age of the infrastructure that will be rehabilitated with the loan proceeds.
(f) Before providing financing pursuant to this section, the department shall require provision of, and approve, at least all of the following:
(1) Verification that either no park residents shall be involuntarily displaced as a result of the purchase or that the impacts of the displacement shall be mitigated as required under state and local law. For purposes of this requirement, compliance with Section 66427.5 of the Government Code shall be conclusively presumed to have mitigated economic displacement.
(2) Projected costs and sources of funds for all purchase and rehabilitation activities.
(3) Projected operating budget for the park after the purchase.
(4) A management plan for the operation of the park.

SEC. 2.

 Section 50784.7 of the Health and Safety Code is amended to read:

50784.7.
 (a) The department may make loans or grants to resident organizations or qualified nonprofit sponsors from the fund for the purpose of assisting lower income homeowners to do any of the following:
(1) Make repairs to their mobilehomes.
(2) Make accessibility-related upgrades to their mobilehomes.
(3) Replace their mobilehomes.
(b) Loans made pursuant to subdivision (a) shall meet both of the following requirements:
(1) The applicant entity has received a loan or loans pursuant to Section 50783, 50784, or 50784.5 for the purpose of assisting homeowners within a park proposed for acquisition or conversion.
(2) The applicant entity demonstrates sufficient organizational stability and capacity to manage a portfolio of individual loans over an extended time period. This capacity may be demonstrated by substantial successful experience performing similar activities or through other means acceptable to the department.
(c) (1) For loans issued pursuant to this section on and after January 1, 2019, loan repayments shall be deferred for the full term of the loan, except for residual receipts payments. These residual receipts payments shall be structured to avoid reducing the amount of payments on local public agency loans resulting solely from changes in the payment terms on the department’s loan, and not resulting from fees or other payments to the borrower, and shall otherwise be consistent with the department’s uniform multifamily regulations (Subchapter 19 (commencing with Section 8300) of Chapter 7 of Division 1 of Title 25 of the California Code of Regulations) or successor regulations. The department may charge a transaction fee to cover its costs for processing these restructuring transactions. The department may waive or defer some or all of this fee if it determines that the residents of the mobilehome park do not have the ability to make these payments.
(2) For loans issued pursuant to paragraph (1), principal and accumulated interest is due and payable upon completion of the term of the loan. The loan shall bear simple interest at the rate of 3 percent per annum on the unpaid principal balance. The department shall require annual loan payments in the minimum amount necessary to cover the costs of project monitoring. For the first 30 years of the loan term, the amount of the required loan payments shall not exceed forty-two hundredths of 1 percent (.42%) per annum.

(c)

(d) The department may adopt guidelines to implement this section.

SECTION 1.Section 50781 of the Health and Safety Code is amended to read:
50781.

Unless the context otherwise requires, the following definitions given in this section shall control construction of this chapter:

(a)“Affordable” means that, where feasible, low-income residents should not pay more than 30 percent of their monthly income for housing costs.

(b)“Conversion costs” includes the cost of acquiring the mobilehome park, the costs of planning and processing the conversion, the costs of any needed repairs or rehabilitation, and any expenditures required by a governmental agency or lender for the project.

(c)“Department” means the Department of Housing and Community Development.

(d)“Fund” means the Mobilehome Park Rehabilitation and Purchase Fund created pursuant to Section 50782.

(e)“Housing costs” means the total cost of owning, occupying, and maintaining a mobilehome and a lot or space in a mobilehome park. The regulations of the department shall specify the factors included in these costs and may, for the purposes of calculating affordability, establish reasonable allowances.

(f)“Individual interest in a mobilehome park” means any interest that is fee ownership or a lesser interest that entitles the holder to occupy a lot or space in a mobilehome park for a period of not less than either 15 years or the life of the holder. Individual interests in a mobilehome park include, but are not limited to, the following:

(1)Ownership of a lot or space in a mobilehome park or subdivision.

(2)A membership or shares in a stock cooperative, as defined in Section 11003.2 of the Business and Professions Code, or a limited equity housing cooperative, as defined in Section 817 of the Civil Code.

(3)Membership in a nonprofit mutual benefit corporation that owns, operates, or owns and operates the mobilehome park.

(g)“Low-income resident” means an individual or household that is a lower income household, as defined in Section 50079.5. However, personal assets shall not be considered in the calculation of income, except to the extent that they actually generate income.

(h)“Low-income spaces” means those spaces in a mobilehome park operated by a resident organization, a qualified nonprofit housing sponsor, or a local public entity that are occupied by low-income residents.

(i)“Mobilehome park” means a mobilehome park, as defined in Section 18214, or a manufactured home subdivision created by the conversion of a mobilehome park, as defined in Section 18214, including a senior park, to resident ownership or ownership by a qualified nonprofit housing sponsor or local public entity.

(j)“Program” means the Mobilehome Park Rehabilitation and Resident Ownership Program.

(k)“Qualified nonprofit housing sponsor” means a nonprofit public benefit corporation, as defined in Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code, that (1) has received its tax-exempt status under Section 501(c)(3) of the Internal Revenue Code, (2) is not affiliated with or controlled by a for-profit organization or individual, (3) has extensive experience with the development and operation of publicly subsidized affordable housing, (4) the department determines is qualified by experience and capability to own and operate a mobilehome park that provides housing affordable to low-income households, and (5) has formal arrangements for ensuring resident participation or input in the management of the park that may include, but not be limited to, membership on the board of directors. “Qualified nonprofit housing sponsor” also means a limited partnership where all of the general partners are nonprofit mutual or public benefit corporations that meet the requirements of paragraphs (1) to (5), inclusive.

(l)“Resident organization” means a group of mobilehome park residents who have formed a nonprofit corporation, cooperative corporation, or other entity or organization for the purpose of acquiring the mobilehome park in which they reside and converting the mobilehome park to resident ownership. The membership of a resident organization shall include at least two-thirds of the households residing in the mobilehome park, or in each park of a combination of parks where the residents of two or more parks combine to form a single resident organization. The two-thirds of households in the resident organization at the time of funding the park need not be the same households that were residing in the park when the application for assistance was submitted to the department. A household’s membership in the resident organization when the application was submitted to the department shall not be a requirement for that household to receive a loan or assistance under this chapter.

(m)“Resident ownership” means, depending on the context, either the ownership by a resident organization of an interest in a mobilehome park that entitles the resident organization to control the operations of the mobilehome park for a term of no less than 15 years, or the ownership of individual interests in a mobilehome park, or both.