Bill Text

Bill Information


PDF |Add To My Favorites |Track Bill | print page

SB-9 Surplus property: sale procedures.(2019-2020)

SHARE THIS:share this bill in Facebookshare this bill in Twitter
Date Published: 08/26/2020 09:00 PM
SB9:v94#DOCUMENT

Amended  IN  Assembly  August 26, 2020
Amended  IN  Assembly  August 25, 2020
Amended  IN  Assembly  August 03, 2020
Amended  IN  Assembly  July 27, 2020
Amended  IN  Senate  April 03, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 9


Introduced by Senator Durazo
(Principal coauthor: Assembly Member Carrillo)

December 03, 2018


An act to amend Sections 54221, 54234, and 54237 of, and to add Sections 54237.9, 54237.10, and 54239 to, the Government Code, relating to surplus property.


LEGISLATIVE COUNSEL'S DIGEST


SB 9, as amended, Durazo. Surplus property: sale procedures.
(1) Existing law prescribes requirements for the disposal of surplus land by a local agency, as defined, and exempts from these requirements exempt surplus land. Existing law defines “exempt surplus land” for these purposes to include, among other things, surplus land that is put out to open, competitive bid by a local agency if specified entities are invited to participate in that competitive bid process. Existing law also requires that exempt surplus land put to an open, competitive bid process under these provisions be used for either (A) a housing development that complies with specified affordability requirements or (B) a mixed-use development that is more than one acre in area and includes not less than 300 housing units that comply with specified affordability requirements.
This bill would expand the definition of “exempt surplus land” to include, thereby exempting from the above-described surplus land disposal procedures, surplus land for which the local agency has entered into an exclusive negotiation agreement before September 1, 2020, for a housing development that complies with specified affordability requirements that are similar to those described above.
Existing law provides that certain dispositions of real property by local agencies are subject to these above-described surplus land disposal procedures as they existed on December 31, 2019, without regard to specified amendments that took effect on January 1, 2020, if those dispositions comply with specified requirements. Under existing law, these provisions apply to dispositions by a local agency that, as of September 30, 2019, has entered into an exclusive negotiating agreement or legally binding agreement to dispose of property, provided that the disposition is completed not later than December 31, 2022.
This bill, except in the case of specified property, would additionally provide that the surplus land disposal procedures as they existed on December 31, 2019, apply if a local agency, as of September 30, 2019, has issued a competitive request for proposals process seeking development proposals for the property that include a residential component of at least 100 residential units and 25% of the total units developed comply with specified affordability criteria, provided that a disposition and development agreement, as defined, is entered into not later than December 31, 2022. If the property is not disposed of pursuant to a qualifying disposition and development agreement before March 31, 2024, or if no disposition and development agreement is entered into before December 31, 2022, the bill would require that future negotiations for and disposition of the property comply with the surplus land disposal procedures then in effect. The bill would extend these dates in the event of a judicial challenge to 6 months following the final conclusion of litigation.
(2) Existing law establishes priorities and procedures that any state agency disposing of surplus residential property is required to follow. Under existing law, specified single-family residences must first be offered to their former owners or present occupants, as specified. Existing law then requires the property to be offered to housing-related entities, as provided, prior to placing the property up for sale, subject to specified priorities. Existing law requires, if a property that is not a historic home is sold to a private housing-related entity or a housing-related public entity, that the entity develop the property as limited equity cooperative housing with first right of occupancy to present occupants, or use the property for low- and moderate-income rental or owner-occupied housing where the development of cooperative or cooperatives is not feasible. Existing law requires, if a property is a historic home, as defined, that the property be offered first to a housing-related entity, subject to the above-described requirements, or a nonprofit private entity dedicated to rehabilitating and maintaining the historic home for public and community access and use, as provided.
This bill would, instead, require that surplus residential property not sold to a former owner or present occupant, as described above, be offered at fair market value to purchasers who are present tenants who have occupied the property for 5 years or more and who are in good standing with all rent obligations current and paid in full, with first right of occupancy to the present occupants. The bill would then require that surplus residential property that is a historic home be offered to the city in which the property is located or a nonprofit private entity dedicated to rehabilitating and maintaining the historic home for public and community access and use, subject to specified terms and conditions. Finally, the bill would require that surplus residential property be offered to a housing-related entity, subject to specified terms and conditions. The bill would require a housing-related entity to cause the property to be used for low- and moderate-income rental housing for a term of at least 55 years, subject to a recorded affordability covenant, as provided, and to provide a first right of occupancy to the present occupants. The bill would authorize the Department of Transportation to designate in regulations, or delegate by agreement to, a public agency to monitor a property’s compliance with the bill’s terms, conditions, and restrictions, in the case of a historic home, or the recorded covenant, in the case of surplus residential properties sold to a housing-related entity, and authorize the monitoring entity to charge the property owner a fee to cover the cost of monitoring.
This bill would prohibit surplus residential property from being sold at less than the price paid by the Department of Transportation for original acquisition of the property. The bill would prohibit the adjustment of this original acquisition price for inflation. The bill would require the Department of Transportation to offer to sell specified unimproved properties at the original acquisition price paid by the department to a housing-related entity for affordable housing purposes, as provided.
The bill would provide that these provisions do not apply to any sales of surplus residential property that are in escrow as of December 31, 2020.
Existing law, known as the Administrative Procedure Act, governs the procedures for the adoption, amendment, or repeal of regulations by state agencies and for the review of those regulatory actions by the Office of Administrative Law. Existing law establishes procedures for the adoption of emergency regulations, including requiring that the state agency make a finding that the adoption of a regulation or order of repeal is necessary to address an emergency, as defined. Under existing law, a regulation, amendment, or repeal adopted as an emergency regulatory action may only remain in effect for up to 180 days, unless the adopting agency complies with specified requirements relating to notice of regulatory action and public comment.
This bill would require the Department of Transportation to adopt emergency regulations by June 1, 2021, to implement the above-described requirements relating to the disposal of surplus property. The bill would include findings that an emergency exists for purposes of specified provisions of the Administrative Procedure Act. The bill, notwithstanding the 180-day limit for emergency regulations, would provide that emergency regulations adopted under its provisions would remain in effect for 2 years after adoption, or until the adoption of permanent regulations, whichever occurs sooner.
This bill would make related findings and declarations.
(3) This bill would incorporate additional changes to Section 54221 of the Government Code proposed by SB 1030 to be operative only if this bill and SB 1030 are enacted and this bill is enacted last.

(3)

(4) This bill would make legislative findings and declarations as to the necessity of a special statute for the sale of surplus residential property located in neighborhoods within the Cities of Pasadena and South Pasadena and in the El Sereno neighborhood of the City of Los Angeles.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 The Legislature finds and declares all of the following:
(a) The sale of property located within the State Route 710 corridor to a housing-related entity will promote the preservation and creation of affordable housing consistent with Section 54235 of the Government Code.
(b) Offering surplus residential properties to a housing-related entity at low cost will advance the public purpose of preserving affordable housing.
(c) It is the intent of the Legislature that the Department of Transportation engage stakeholders on regulations proposed pursuant to Section 54237.10 of the Government Code, as added by this act, before they are submitted to the Office of Administrative Law.

SEC. 2.

 Section 54221 of the Government Code is amended to read:

54221.
 As used in this article, the following definitions shall apply:
(a) (1) “Local agency” means every city, whether organized under general law or by charter, county, city and county, district, including school, sewer, water, utility, and local and regional park districts of any kind or class, joint powers authority, successor agency to a former redevelopment agency, housing authority, or other political subdivision of this state and any instrumentality thereof that is empowered to acquire and hold real property.
(2) The Legislature finds and declares that the term “district” as used in this article includes all districts within the state, including, but not limited to, all special districts, sewer, water, utility, and local and regional park districts, and any other political subdivision of this state that is a district, and therefore the changes in paragraph (1) made by the act adding this paragraph that specify that the provisions of this article apply to all districts, including school, sewer, water, utility, and local and regional park districts of any kind or class, are declaratory of, and not a change in, existing law.
(b) (1) “Surplus land” means land owned in fee simple by any local agency for which the local agency’s governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agency’s use. Land shall be declared either “surplus land” or “exempt surplus land,” as supported by written findings, before a local agency may take any action to dispose of it consistent with an agency’s policies or procedures. A local agency, on an annual basis, may declare multiple parcels as “surplus land” or “exempt surplus land.”
(2) “Surplus land” includes land held in the Community Redevelopment Property Trust Fund pursuant to Section 34191.4 of the Health and Safety Code and land that has been designated in the long-range property management plan approved by the Department of Finance pursuant to Section 34191.5 of the Health and Safety Code, either for sale or for future development, but does not include any specific disposal of land to an identified entity described in the plan.
(3) Nothing in this article prevents a local agency from obtaining fair market value for the disposition of surplus land consistent with Section 54226.
(c) (1) Except as provided in paragraph (2), “agency’s use” shall include, but not be limited to, land that is being used, is planned to be used pursuant to a written plan adopted by the local agency’s governing board for, or is disposed to support pursuant to subparagraph (B) of paragraph (2) agency work or operations, including, but not limited to, utility sites, watershed property, land being used for conservation purposes, land for demonstration, exhibition, or educational purposes related to greenhouse gas emissions, and buffer sites near sensitive governmental uses, including, but not limited to, waste water treatment plants.
(2) (A) “Agency’s use” shall not include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development. Property disposed of for the sole purpose of investment or generation of revenue shall not be considered necessary for the agency’s use.
(B) In the case of a local agency that is a district, excepting those whose primary mission or purpose is to supply the public with a transportation system, “agency’s use” may include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or be for the sole purpose of investment or generation of revenue if the agency’s governing body takes action in a public meeting declaring that the use of the site will do one of the following:
(i) Directly further the express purpose of agency work or operations.
(ii) Be expressly authorized by a statute governing the local agency, provided the district complies with Section 54233.5 where applicable.
(d) “Open-space purposes” means the use of land for public recreation, enjoyment of scenic beauty, or conservation or use of natural resources.
(e) “Persons and families of low or moderate income” has the same meaning as provided in Section 50093 of the Health and Safety Code.
(f) (1) Except as provided in paragraph (2), “exempt surplus land” means any of the following:
(A) Surplus land that is transferred pursuant to Section 25539.4.
(B) Surplus land that is (i) less than 5,000 square feet in area, (ii) less than the minimum legal residential building lot size for the jurisdiction in which the parcel is located, or 5,000 square feet in area, whichever is less, or (iii) has no record access and is less than 10,000 square feet in area; and is not contiguous to land owned by a state or local agency that is used for open-space or low- and moderate-income housing purposes. If the surplus land is not sold to an owner of contiguous land, it is not considered exempt surplus land and is subject to this article.
(C) Surplus land that a local agency is exchanging for another property necessary for the agency’s use.
(D) Surplus land that a local agency is transferring to another local, state, or federal agency for the agency’s use.
(E) Surplus land that is a former street, right of way, or easement, and is conveyed to an owner of an adjacent property.
(F) Surplus land that is put out to open, competitive bid by a local agency, provided all entities identified in subdivision (a) of Section 54222 will be invited to participate in the competitive bid process, for either of the following purposes:
(i) A housing development, which may have ancillary commercial ground floor uses, that restricts 100 percent of the residential units to persons and families of low or moderate income, with at least 75 percent of the residential units restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 or 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing and 45 years for ownership housing, and in no event shall the maximum affordable sales price or rent level be higher than 20 percent below the median market rents or sales prices for the neighborhood in which the site is located.
(ii) A mixed-use development that is more than one acre in area, that includes not less than 300 housing units, and that restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing and 45 years for ownership housing.
(G) Surplus land for which a local agency has entered into an exclusive negotiation agreement before September 1, 2020, for a housing development, which may have ancillary commercial ground floor uses, that restricts 100 percent of the residential units to persons and families of low or moderate income, with at least 75 percent of the residential units restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Section 50052.5 or 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing and 45 years for ownership housing, and in no event shall the maximum affordable sales price or rent level be higher than 20 percent below the median market rents or sales prices for the neighborhood in which the site is located.
(H) Surplus land that is subject to valid legal restrictions that are not imposed by the local agency and that would make housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site. An existing nonresidential land use designation on the surplus land is not a legal restriction that would make housing prohibited for purposes of this subparagraph. Nothing in this article limits a local jurisdiction’s authority or discretion to approve land use, zoning, or entitlement decisions in connection with the surplus land.
(I) Surplus land that was granted by the state in trust to a local agency or that was acquired by the local agency for trust purposes by purchase or exchange, and for which disposal of the land is authorized or required subject to conditions established by statute.
(J) Land that is subject to Sections 17388, 17515, 17536, 81192, 81397, 81399, 81420, and 81422 of the Education Code and Part 14 (commencing with Section 53570) of Division 31 of the Health and Safety Code, unless compliance with this article is expressly required.
(K) Real property that is used by a district for agency’s use expressly authorized in subdivision (c).
(L) Land that has been transferred before June 30, 2019, by the state to a local agency pursuant to Section 32667 of the Streets and Highways Code and has a minimum planned residential density of at least one hundred dwelling units per acre, and includes 100 or more residential units that are restricted to persons and families of low or moderate income, as defined in Section 50093 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing and 45 years for ownership housing. For purposes of this paragraph, not more than 20 percent of the affordable units may be restricted to persons and families of moderate income and at least 80 percent of the affordable units must be restricted to persons and families of lower income as defined in Section 50079.5 of the Health and Safety Code.
(2) Notwithstanding paragraph (1), a written notice of the availability of surplus land for open-space purposes shall be sent to the entities described in subdivision (b) of Section 54222 prior to disposing of the surplus land, provided the land does not meet the criteria in subparagraph (H) of paragraph (1), if the land is any of the following:
(A) Within a coastal zone.
(B) Adjacent to a historical unit of the State Parks System.
(C) Listed on, or determined by the State Office of Historic Preservation to be eligible for, the National Register of Historic Places.
(D) Within the Lake Tahoe region as defined in Section 66905.5.

SEC. 2.5.

 Section 54221 of the Government Code is amended to read:

54221.
 As used in this article, the following definitions shall apply:
(a) (1) “Local agency” means every city, whether organized under general law or by charter, county, city and county, district, including school, sewer, water, utility, and local and regional park districts of any kind or class, joint powers authority, successor agency to a former redevelopment agency, housing authority, or other political subdivision of this state and any instrumentality thereof that is empowered to acquire and hold real property.
(2) The Legislature finds and declares that the term “district” as used in this article includes all districts within the state, including, but not limited to, all special districts, sewer, water, utility, and local and regional park districts, and any other political subdivision of this state that is a district, and therefore the changes in paragraph (1) made by the act adding this paragraph that specify that the provisions of this article apply to all districts, including school, sewer, water, utility, and local and regional park districts of any kind or class, are declaratory of, and not a change in, existing law.
(b) (1) “Surplus land” means land owned in fee simple by any local agency for which the local agency’s governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agency’s use. Land shall be declared either “surplus land” or “exempt surplus land,” as supported by written findings, before a local agency may take any action to dispose of it consistent with an agency’s policies or procedures. A local agency, on an annual basis, may declare multiple parcels as “surplus land” or “exempt surplus land.”
(2) “Surplus land” includes land held in the Community Redevelopment Property Trust Fund pursuant to Section 34191.4 of the Health and Safety Code and land that has been designated in the long-range property management plan approved by the Department of Finance pursuant to Section 34191.5 of the Health and Safety Code, either for sale or for future development, but does not include any specific disposal of land to an identified entity described in the plan.
(3) Nothing in this article prevents a local agency from obtaining fair market value for the disposition of surplus land consistent with Section 54226.
(c) (1) Except as provided in paragraph (2), “agency’s use” shall include, but not be limited to, land that is being used, is planned to be used pursuant to a written plan adopted by the local agency’s governing board for, or is disposed to support pursuant to subparagraph (B) of paragraph (2) agency work or operations, including, but not limited to, utility sites, watershed property, land being used for conservation purposes, land for demonstration, exhibition, or educational purposes related to greenhouse gas emissions, and buffer sites near sensitive governmental uses, including, but not limited to, waste water treatment plants.
(2) (A) “Agency’s use” shall not include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development. Property disposed of for the sole purpose of investment or generation of revenue shall not be considered necessary for the agency’s use.
(B) In the case of a local agency that is a district, excepting those whose primary mission or purpose is to supply the public with a transportation system, “agency’s use” may include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or be for the sole purpose of investment or generation of revenue if the agency’s governing body takes action in a public meeting declaring that the use of the site will do one of the following:
(i) Directly further the express purpose of agency work or operations.
(ii) Be expressly authorized by a statute governing the local agency, provided the district complies with Section 54233.5 where applicable.
(d) “Open-space purposes” means the use of land for public recreation, enjoyment of scenic beauty, or conservation or use of natural resources.
(e) “Persons and families of low or moderate income” has the same meaning as provided in Section 50093 of the Health and Safety Code.
(f) (1) Except as provided in paragraph (2), “exempt surplus land” means any of the following:
(A) Surplus land that is transferred pursuant to Section 25539.4. 25539.4 or 37364.
(B) Surplus land that is (i) less than 5,000 square feet in area, (ii) less than the minimum legal residential building lot size for the jurisdiction in which the parcel is located, or 5,000 square feet in area, whichever is less, or (iii) has no record access and is less than 10,000 square feet in area; and is not contiguous to land owned by a state or local agency that is used for open-space or low- and moderate-income housing purposes. If the surplus land is not sold to an owner of contiguous land, it is not considered exempt surplus land and is subject to this article.
(C) Surplus land that a local agency is exchanging for another property necessary for the agency’s use.
(D) Surplus land that a local agency is transferring to another local, state, or federal agency for the agency’s use.
(E) Surplus land that is a former street, right of way, or easement, and is conveyed to an owner of an adjacent property.
(F) Surplus land that is put out to open, competitive bid by a local agency, provided all entities identified in subdivision (a) of Section 54222 will be invited to participate in the competitive bid process, for either of the following purposes:
(i) A housing development, which may have ancillary commercial ground floor uses, that restricts 100 percent of the residential units to persons and families of low or moderate income, with at least 75 percent of the residential units restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 or 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing and 45 years for ownership housing, and in no event shall the maximum affordable sales price or rent level be higher than 20 percent below the median market rents or sales prices for the neighborhood in which the site is located.
(ii) A mixed-use development that is more than one acre in area, that includes not less than 300 housing units, and that restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing and 45 years for ownership housing.
(G) Surplus land for which a local agency has entered into an exclusive negotiation agreement before September 1, 2020, for a housing development, which may have ancillary commercial ground floor uses, that restricts 100 percent of the residential units to persons and families of low or moderate income, with at least 75 percent of the residential units restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Section 50052.5 or 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing and 45 years for ownership housing, and in no event shall the maximum affordable sales price or rent level be higher than 20 percent below the median market rents or sales prices for the neighborhood in which the site is located.

(G)

(H) Surplus land that is subject to valid legal restrictions that are not imposed by the local agency and that would make housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site. An existing nonresidential land use designation on the surplus land is not a legal restriction that would make housing prohibited for purposes of this subparagraph. Nothing in this article limits a local jurisdiction’s authority or discretion to approve land use, zoning, or entitlement decisions in connection with the surplus land.

(H)

(I) Surplus land that was granted by the state in trust to a local agency or that was acquired by the local agency for trust purposes by purchase or exchange, and for which disposal of the land is authorized or required subject to conditions established by statute.

(I)

(J) Land that is subject to Sections 17388, 17515, 17536, 81192, 81397, 81399, 81420, and 81422 of the Education Code and Part 14 (commencing with Section 53570) of Division 31 of the Health and Safety Code, unless compliance with this article is expressly required.

(J)

(K) Real property that is used by a district for agency’s use expressly authorized in subdivision (c).

(K)

(L) Land that has been transferred before June 30, 2019, by the state to a local agency pursuant to Section 32667 of the Streets and Highways Code and has a minimum planned residential density of at least one hundred dwelling units per acre, and includes 100 or more residential units that are restricted to persons and families of low or moderate income, as defined in Section 50093 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing and 45 years for ownership housing. For purposes of this paragraph, not more than 20 percent of the affordable units may be restricted to persons and families of moderate income and at least 80 percent of the affordable units must be restricted to persons and families of lower income as defined in Section 50079.5 of the Health and Safety Code.
(2) Notwithstanding paragraph (1), a written notice of the availability of surplus land for open-space purposes shall be sent to the entities described in subdivision (b) of Section 54222 prior to disposing of the surplus land, provided the land does not meet the criteria in subparagraph (H) of paragraph (1), if the land is any of the following:
(A) Within a coastal zone.
(B) Adjacent to a historical unit of the State Parks System.
(C) Listed on, or determined by the State Office of Historic Preservation to be eligible for, the National Register of Historic Places.
(D) Within the Lake Tahoe region as defined in Section 66905.5.

SEC. 3.

 Section 54234 of the Government Code is amended to read:

54234.
 (a) (1) If a local agency, as of September 30, 2019, has entered into an exclusive negotiating agreement or legally binding agreement to dispose of property, the provisions of this article as it existed on December 31, 2019, shall apply, without regard to the changes made to this article by Chapter 664 of the Statutes of 2019, to the disposition of the property to the party that had entered into such agreement or its successors or assigns, provided the disposition is completed not later than December 31, 2022.
(2) If a local agency, as of September 30, 2019, has issued a competitive request for proposals for the development of property that include a residential component of at least 100 residential units and at least 25 percent of the total residential units developed are restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing and 45 years for ownership housing, the provisions of this article as it existed on December 31, 2019, shall apply, without regard to the changes made to this article by Chapter 664 of the Statutes of 2019, to the disposition of the property to the party that had participated in the competitive proposal process, or their successors or assigns, provided a disposition and development agreement for the property is entered into not later than December 31, 2022. A joint development involving multiple parcels may meet the requirements of this paragraph so long as there was a single competitive proposal process. A “disposition and development agreement” shall mean an agreement that binds the developer to construct a specific development and the local agency to dispose of the property in the event permits and other entitlements for the project are obtained. This paragraph shall not apply to land held in the Community Redevelopment Property Trust Fund pursuant to Section 34191.4 of the Health and Safety Code, or that has been designated in a long-range property management plan pursuant to Section 34191.5 of the Health and Safety Code. If the property is not disposed of pursuant to a qualifying disposition and development agreement before March 31, 2024, or if no disposition and development agreement is entered into before December 31, 2022, then future negotiations for and disposition of the property shall be subject to the provisions of this article.
(3) The dates specified in paragraphs (1) and (2) by which the disposition of property must be completed shall be extended if the disposition of property, the local agency’s right or ability to dispose of the property, or a development project for which the property is proposed to be transferred, is the subject of judicial challenge, by petition for writ of mandate, complaint for declaratory relief or otherwise, to the date that is six months following the final conclusion of that litigation.
(b) (1) With respect to land held in the Community Redevelopment Property Trust Fund pursuant to Section 34191.4 of the Health and Safety Code, or that has been designated in a long-range property management plan pursuant to Section 34191.5 of the Health and Safety Code, either for sale or retained for future development, this article as it existed on December 31, 2019, without regard to the changes made to this article by Chapter 664 of the Statutes of 2019 which take effect on January 1, 2020, shall apply to the disposition of that property if both of the following apply:
(A) An exclusive negotiating agreement or legally binding agreement for disposition is entered into not later than December 31, 2020.
(B) The disposition is completed not later than December 31, 2022.
(2) If land described in paragraph (1) is the subject of litigation, including, but not limited to, litigation challenging the disposition of such property, the right or ability to dispose of the property, or a development project for which such property is proposed to be transferred, the dates specified in paragraph (1) shall be extended to the date that is six months following the final conclusion of such litigation.
(c) Nothing in this section shall authorize or excuse any violation of the provisions of this article as it existed on December 31, 2019, in the disposition of any property to which such provisions apply pursuant to subdivision (a) or (b).

SEC. 4.

 Section 54237 of the Government Code is amended to read:

54237.
 (a) Notwithstanding Section 11011.1, an agency of the state disposing of surplus residential property shall do so in accordance with the following priorities and procedures:
(1) First, all single-family residences presently occupied by their former owners shall be offered to those former owners at the appraised fair market value.
(2) Second, all single-family residences shall be offered, pursuant to this article, to their present occupants who have occupied the property for two years or more and who are persons and families of low or moderate income.
(3) Third, all single-family residences shall be offered, pursuant to this article, to their present occupants who have occupied the property for five years or more and whose household income does not exceed 150 percent of the area median income.
(4) Fourth, a single-family residence shall not be offered, pursuant to this article, to present occupants who are not the former owners of the property if the present occupants have had an ownership interest in real property in the last three years.
(b) Single-family residences offered to their present occupants pursuant to paragraphs (2) and (3) of subdivision (a) shall be offered to those present occupants at an affordable price. The price shall not be less than the price paid by the agency for original acquisition, unless the acquisition price was greater than the current fair market value, and shall not be greater than fair market value. When a single-family residence is offered to present occupants at a price that is less than fair market value, the selling agency shall impose terms, conditions, and restrictions to ensure that the housing will remain available to persons and families of low or moderate income and households with incomes no greater than the incomes of the present occupants in proportion to the area median income. The Department of Housing and Community Development shall provide to the selling agency recommendations of standards and criteria for these prices, terms, conditions, and restrictions. The selling agency shall provide repairs required by lenders and government housing assistance programs, or, at the option of the agency, provide the present occupants with a replacement dwelling pursuant to Section 54237.5.
(c) If single-family residences are offered to their present occupants pursuant to paragraphs (2) and (3) of subdivision (a), the occupants shall certify their income and assets to the selling agency. When a single-family residence is offered to present occupants at a price that is less than fair market value, the selling agency may verify the certifications, in accordance with procedures used for verification of incomes of purchasers and occupants of housing financed by the California Housing Finance Agency and with regulations adopted for the verification of assets by the United States Department of Housing and Urban Development. The income and asset limitations and term of residency requirements of paragraphs (2) and (3) of subdivision (a) shall not apply to sales that are described as mitigation measures in an environmental study prepared pursuant to the Public Resources Code, if the study was initiated before this measure was enacted.
(d) After surplus residential properties are offered for sale pursuant to subdivisions (a) to (c), inclusive, these properties shall then be offered at fair market value to purchasers who are present tenants who have occupied the property for five years or more and who are in good standing with all rent obligations current and paid in full, with first right of occupancy to the present occupants.
(e) (1) After a surplus residential property is offered for sale pursuant to subdivisions (a) to (d), inclusive, and if the property is a historic home, the property shall be offered to the city in which the property is located or a nonprofit private entity dedicated to rehabilitating and maintaining the historic home for public and community access and use subject to the following:
(A) The property shall be offered at a reasonable price, which is best suited to economically feasible use of the property as a historic home for public and community access and use.
(B) The sales price in no case shall be less than the price paid by the Department of Transportation unless the acquisition price was greater than current fair market value and shall not be greater than fair market value. Subject to the foregoing, the price shall be set at the level necessary to rehabilitate and maintain the historic home for public and community access and use.
(C) Property sold pursuant to this subdivision shall be sold in the existing “as is” condition.
(D) The selling agency shall impose terms, conditions, and restrictions as will ensure that the historic home will remain available for public and community access and use. The purchaser shall comply with monitoring requirements, as determined by the Department of Transportation.
(E) The Department of Transportation may designate in regulations, or delegate by agreement to, a public agency to monitor the property’s compliance with the terms, conditions, and restrictions required by this subdivision. The monitoring entity may charge the property owner a fee to recover the cost of this monitoring.
(2) For purposes of this subdivision, “historic home” means single-family surplus residential 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:
(A) The California Register of Historical Resources, as established pursuant to Article 2 (commencing with Section 5020) of Chapter 1 of Division 5 of the Public Resources Code.
(B) The National Register of Historic Places, as established pursuant to Chapter 3021 of Title 54 of the United States Code.
(C) The National Register of Historic Places, as previously established pursuant to the federal National Historic Preservation Act (54 U.S.C. Sec. 300101 et seq.).
(f) After surplus residential properties are offered for sale pursuant to subdivisions (a) to (e), inclusive, these properties shall be offered to a housing-related entity as follows:
(1) The sales price shall be the price paid by the Department of Transportation for original acquisition. The original acquisition price shall not be adjusted for inflation.
(2) Property sold pursuant to this subdivision shall be sold in the existing “as is” condition.
(3) For each property purchased under this subdivision, the housing-related entity shall do all of the following:
(A) (i) Cause the property to be used for low- and moderate-income rental housing for a term of at least 55 years. The purchase and operation of the property shall be subject to a covenant recorded against the property that requires the property to remain available and affordable for rental by lower income and moderate-income households, as defined by Sections 50079.5 and 50052.5 of the Health and Safety Code, respectively, for a term no shorter than 55 years.
(ii) In the event that the property is sold prior to the expiration of the covenant, the covenant shall remain in effect until the time at which it expires. In the event the housing-related entity is no longer able to provide the housing on the property, the housing-related entity shall transfer the title to the city in which the property is located, which shall transfer the title and operations to a successor housing-related entity that will maintain the property and the operations in compliance with the covenant. Any housing-related entity purchaser shall comply with monitoring requirements, as determined by the Department of Transportation.
(B) Provide first right of occupancy to the present occupants. The rental amount shall be in accordance with income certification if the current occupants qualify as low or moderate income. If the current tenant’s income exceeds the limits for that level, the rent for those occupants shall be no less than their current rent, or adjusted no higher than current market rates for the area.
(C) Cause any additional new units added to the property to be used only for low- or moderate-income rental housing.
(D) Provide relocation assistance as required under subdivision (b) of Section 54238.3.
(4) The Department of Transportation may designate in regulations, or delegate by agreement to, a public agency to monitor the property’s compliance with the covenant required by this subdivision. The monitoring entity may charge the property owner a fee to recover the cost of this monitoring.
(g) A surplus residential property not sold pursuant to subdivisions (a) to (f), inclusive, shall then be sold at fair market value, with priority given first to purchasers who are present tenants in good standing with all rent obligations current and paid in full, second to former tenants who were in good standing at the time they vacated the premises, with priority given to the most recent tenants first, and then to purchasers who will be owner occupants. The selling agency may commence the sale of property that former tenants may possess a right to purchase as provided by this subdivision 30 days after the selling agency has done both of the following:
(1) Posted information regarding the sale under this subdivision on the selling agency’s internet website.
(2) Made a good faith effort to provide written notice, by first-class mail, to the last known address of each former tenant.
(h) (1) Tenants in good standing of nonresidential properties shall be given priority to purchase, at fair market value, the property they rent, lease, or otherwise legally occupy.
(2) (A) A tenant in good standing of a nonresidential property shall be given priority to purchase, at the lesser of fair market value or value in use, if the tenant is a city or a nonprofit organization qualified as exempt under Section 501(c)(3) of the Internal Revenue Code.
(B) The Department of Transportation shall not sell a nonresidential property to a tenant described in subparagraph (A) at a value below the minimum sales price, as defined by Section 1476 of Title 21 of the California Code of Regulations as that regulation read on July 1, 2019.
(C) If a nonresidential property is offered at a price that is less than fair market value, the selling agency shall impose appropriate terms, conditions, and restrictions.
(D) As used in this paragraph, “value in use” means the value of a nonresidential property assuming a specific use, that may or may not be the property’s highest and best use on the effective date of the property’s appraisal.

SEC. 5.

 Section 54237.9 is added to the Government Code, to read:

54237.9.
 Notwithstanding any other provision in this article, the price of property sold pursuant to this article shall not be less than the price paid by the Department of Transportation for original acquisition of the property. The original acquisition price shall not be adjusted for inflation.

SEC. 6.

 Section 54237.10 is added to the Government Code, to read:

54237.10.
 (a) The Legislature finds and declares that the state’s homelessness crisis has compounded the need for affordable housing described in Section 54235. To help mitigate the need for affordable housing and to speed up sales pursuant to this article, the Legislature further finds and declares that an emergency exists for purposes of Sections 11342.545, 11346.1, and 11349.6.
(b) The Department of Transportation shall adopt emergency regulations by June 1, 2021, to implement this article.
(c) Notwithstanding Section 11346.1, the emergency regulations adopted pursuant to subdivision (b) shall remain in effect for two years after adoption or until permanent regulations are adopted, whichever is sooner.

SEC. 7.

 Section 54239 is added to the Government Code, to read:

54239.
 Before selling unimproved property within the State Route 710 corridor within the Cities of Pasadena, South Pasadena, or Los Angeles pursuant to Section 118 of the Streets and Highways Code, the Department of Transportation shall offer to sell the property at the price paid by the Department of Transportation for original acquisition to a housing-related entity for affordable housing purposes, pursuant to the terms and conditions provided in subdivision (f) of Section 54237.

SEC. 8.

 Sections 4 to 7, inclusive, of this act shall not apply to any sale of surplus residential property pursuant to Section 54237 of the Government Code that is in escrow as of December 31, 2020. Any surplus residential property that is subject to Section 54237 of the Government Code that is not in escrow as of December 31, 2020, or for which that escrow does not close, shall be offered for sale pursuant to the regulations required by this act and the priorities and procedures provided by this act, regardless of prior offers or prior determinations of eligibility.

SEC. 9.

 Section 2.5 of this bill incorporates amendments to Section 54221 of the Government Code proposed by this bill and Senate Bill 1030. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2021, (2) each bill amends Section 54221 of the Government Code, and (3) this bill is enacted after Senate Bill 1030, in which case Section 54221 of the Government Code, as amended by Senate Bill 1030, shall remain operative only until the operative date of this bill, at which time Section 2.5 of this bill shall become operative, and Section 2 of this bill shall not become operative.

SEC. 9.SEC. 10.

 The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique social, cultural, and economic conditions that necessitate the repair and improvement of neighborhoods within the Cities of Pasadena and South Pasadena and the El Sereno neighborhood of the City of Los Angeles.