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SB-305 Housing: code compliance: low-interest loans.(2017-2018)

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Date Published: 04/27/2017 09:00 PM

Amended  IN  Senate  April 27, 2017
Amended  IN  Senate  March 29, 2017


Senate Bill
No. 305

Introduced by Senator Skinner

February 13, 2017

An act to add Division 33 (commencing with Section 55500) to the Health and Safety Code, relating to housing. housing, and making an appropriation therefor.


SB 305, as amended, Skinner. Housing: code compliance: low-interest loans.
Existing law authorizes local agencies, upon making specified findings, to provide low-interest loans to owners of buildings within their jurisdiction for the purpose of making seismic safety upgrades to eligible buildings, as defined, in order to meet current earthquake safety codes. Existing law authorizes these local entities to issue bonds in order to finance these loans which are secured by a lien on the subject property.
This bill would establish the Safe and Livable Housing Revolving Loan Fund, in the State Treasury, as specified. Moneys in the fund would be available, upon appropriation by the Legislature, to the California Housing Financial Agency to distribute appropriate the sum of $20,000,000 from the General Fund to the Department of Housing and Community Development to provide financing to local agencies for the purpose of funding low-interest loans made by those agencies to building owners, who meet specified eligibility requirements, in order to rehabilitate eligible buildings, as defined, and bring them up to current building standards for occupancy. The bill would provide that financing under this program, along with other liens on the subject property, could not exceed 80% of the appraised value of the property. The bill would make findings and declarations in support of these provisions.
Vote: MAJORITY2/3   Appropriation: NOYES   Fiscal Committee: YES   Local Program: NO  

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


 Division 33 (commencing with Section 55500) is added to the Health and Safety Code, to read:

DIVISION 33. Safe and Livable Housing Revolving Loan Fund

 (a) The Legislature finds and declares that there exist throughout the state many buildings that are structurally inadequate to safely house individuals due to lack of compliance with state and local building codes. This problem is particularly acute with respect to housing originally built for another purpose and reappropriated for residential housing or live-work housing.
The Legislature further finds and declares that rehabilitation of these buildings to meet current standards of health and safety codes is in the public interest, but that private enterprise will be unable in many cases to meet the high cost of making the necessary modifications without the availability of long-term, low-interest loans for the purpose.
(b) It is, therefore, the intent of the Legislature in enacting this division to authorize establishment of a state low- or no-interest loan program to serve this need at the lowest possible cost and upon favorable terms so that owners of eligible buildings will be encouraged to make modifications required to assure health and safety integrity to help provide housing.

 As used in this division the following terms have the following meanings:
(a) “Eligible building” means a multifamily residential or live-work building existing on the effective date of this section that is identified as a hazard to the safety of its residents due to noncompliance with state and local building code, including, but not limited to:
(1) Buildings that fail to meet seismic code.
(2) Buildings that fail to meet fire code.
(b) “Eligible costs” means all costs, including costs of design, preparation, and inspection incurred in making structural or other modifications to an eligible building, which are required in order to meet reconstruction standards established by state or local building code, and including costs necessary to provide for the reasonable safety of the exterior and interior of the eligible building and of interior fixtures and appurtenances.

 (a) There is established in the State Treasury the Safe and Livable Housing Revolving Loan Fund. Moneys may be deposited in the fund in the annual Budget Act and shall, upon appropriation by the Legislature, be made available to the California Housing Financial Agency The sum of twenty million dollars ($20,000,000) is hereby appropriated from the General Fund to the Department of Housing and Community Development to provide financing to local agencies to make low-interest loans to owners of eligible buildings to pay for eligible costs if the legislative body of the local agency makes one of the following findings:
(1) The owner to whom financing would be made available pursuant to this division is unable to qualify for or could not afford financing for eligible costs from private lending institutions.
(2) Absent the availability of financing pursuant to this division, the eligible building would pose a health and safety risk to its occupants.
(3) Absent the availability of financing pursuant to the division, the costs of modifying the eligible building to meet reconstruction standards, pursuant to Sections 19162, 19163, and 19163.5, as defined by subdivision (a) of Section 8875 of the Government Code, would cause severe economic hardship to the businesses in the building.
(b) Financing provided by a local agency pursuant to this division shall not, when combined with existing liens on the property, exceed 80 percent of the current appraised value of the property, as determined by an independent, certified appraiser, unless existing lienholders consent in writing to a higher loan-to-value ratio. Notice of the intention to provide financing to the owner of the property shall be given to existing lienholders of record not less than 30 days prior to any vote of the local agency authorizing the provision of financing to the owner of the property.