Code Section Group

Health and Safety Code - HSC


  ( Heading of Division 24 amended by Stats. 1975, Ch. 1137. )


  ( Part 1 repealed and added by Stats. 1963, Ch. 1812. )

CHAPTER 8. Redevelopment Construction Loans [33750 - 33799]

  ( Chapter 8 added by Stats. 1975, Ch. 48. )

ARTICLE 1. General Provisions and Definitions [33750 - 33753]
  ( Article 1 added by Stats. 1975, Ch. 48. )


The Legislature finds and declares that it is necessary and essential that redevelopment agencies be authorized to make long-term, low-interest loans through qualified mortgage lenders to finance residential construction in order to encourage investment and upgrade redevelopment project areas and increase the supply of housing. Unless redevelopment agencies intervene to generate mortgage funds and to provide some form of assistance to finance residential construction, many redevelopment areas will stagnate and deteriorate because owners and investors are not able to obtain loans from private sources.

The Legislature further finds and declares that financing of rehabilitation, as provided in this chapter, serves an essential public purpose for the economic renewal of our cities.

(Amended by Stats. 1981, Ch. 602.)


The Legislature further finds and determines that a program to provide residential construction financing would accomplish the following:

(a)  Facilitate increasing the supply of urban housing and ease the housing shortage that exists in many parts of the state.

(b)  Encourage Californians of all social and economic positions to reinhabit urban areas, thereby rendering these areas more socially balanced and economically self-sufficient.

(c)  Reduce pressures for suburbanization and thereby mitigate many of the problems caused by urban migration, including inefficient use of scarce energy resources and urban sprawl.

(d)  Stimulate urban building and construction activity and thereby increase urban employment and improve the urban tax base.

(Added by Stats. 1975, Ch. 48.)


The Legislature further finds and declares that the construction and rehabilitation of residences intended for occupancy primarily by persons and families of low or moderate income, as defined in Section 50093, is properly included within redevelopment plans whether or not such construction or rehabilitation is to occur within a redevelopment area, since redevelopment agencies have specific obligations for development of housing whether or not such development is feasible within specific redevelopment project areas.

(Amended by Stats. 1980, Ch. 1330.)


It is the intent of the Legislature, in enacting this chapter, to strengthen the vitality and promote the completion of urban redevelopment for the general public benefit. The construction of federally assisted housing for low- and moderate-income households is not a primary purpose of this chapter. However, nothing in this chapter shall be deemed to prohibit financing of federally assisted housing for low- and moderate-income households when such housing is consistent with the redevelopment plan and the loan is directly or indirectly insured.

(Added by Stats. 1975, Ch. 48.)


The definitions set forth in Article 1 (commencing with Section 33000) of Chapter 1 of this part shall govern the construction of this chapter. Additionally, as used in this chapter:

(a)  “Construction loan” means a loan to finance residential construction under this chapter, whether such loan is insured or uninsured.

(b)  “Financing” means the lending of moneys or any other thing of value for the purpose of facilitating residential construction pursuant to this chapter, including the making of construction loans and mortgage loans to purchasers of newly constructed and newly rehabilitated residences and the making of loans to qualified mortgage lenders, and the making of mortgage loans to purchasers of newly constructed or existing residences located in targeted areas as provided in Section 33760.

(c)  “Local codes” means applicable local, state and federal standards for residential construction or rehabilitation, including any other standards adopted by the agency for a redevelopment project area or as part of its redevelopment program.

(d)  “Mortgage loan” means a long-term loan which is secured by a mortgage and is made for permanent financing of residences, pursuant to this chapter.

(e)  “Participating party” means any person, corporation, partnership, firm, or other entity or group of entities requiring financing for residential construction pursuant to the provisions of this chapter. No elective officer of the state other than officers provided for by Article VI of the California Constitution, and no employee or member of the redevelopment agency, shall be eligible to be a participating party under the provisions of this chapter. If any elected officer of any political subdivision of the state participates in deliberations or votes on a financing plan, redevelopment plan, or bond issue, that person shall not be eligible to be a participating party for bonds issued pursuant to those plans or issues.

(f)  “Qualified mortgage lender” means a mortgage lender authorized by a redevelopment agency to do business with the agency and to aid in financing pursuant to this chapter on behalf of the agency, for which service the qualified mortgage lender will be reasonably compensated. Such a mortgage lender shall be a state or national bank, federal or state-chartered savings and loan association, or trust company or mortgage banker which is capable of providing service or otherwise aiding in the financing of mortgages on residential construction within the jurisdiction of the agency. Nothing in any other provision of state law shall prevent such a lender from serving as a qualified mortgage lender pursuant to this chapter.

(g)  “Redevelopment project area” means a project area, as defined in Section 33320.1, for which a final redevelopment plan has been adopted pursuant to Section 33365.

(h)  “Rehabilitation” means repairs and improvements to a substandard residence necessary to make it meet local codes; and also means the acquisition of substandard residences for purposes of repairs and improvements where the cost of such repairs and improvements equals or exceeds 25 percent of the cost of the acquisition. As used in this section, “substandard residence” has the same meaning as the term “substandard building,” as defined in Section 17920.3, except that “substandard residence” shall include all property improved with any structure defined in subdivision (j) of this section as a “residence,” with respect to which any of the conditions listed in Section 17920.3 exist.

(i)  “Residential construction” means the construction of new residences or the rehabilitation and improvement of substandard residences to meet requirements of local codes and the redevelopment plan. “Residential construction” also means the improvement of residences as provided in subdivision (h).

(j)  (1)  “Residence” means real property improved with a residential structure and within a redevelopment project area real property improved with a commercial structure (or structures) or a mixed residential and commercial structure, which the redevelopment agency determines to be an integral part of a residential neighborhood. For purposes of determining the integrality of new construction for such purpose, a proposed commercial or mixed residential and commercial structure shall be located within or immediately adjacent to a neighborhood primarily residential in character.

(2)  “Residence” also means residential hotels in which not less than one-half of the occupied dwelling units are occupied on a nontransient basis. A dwelling unit shall be deemed to be used on a nontransient basis if the term of the tenancy is one month or longer or if the tenant has resided in the unit for more than 30 days. In a residential hotel, individual dwelling units shall lack either cooking facilities or individual sanitary facilities, or both. However, for purposes of this paragraph, a residential hotel does not include dormitories, fraternity and sorority houses, hospitals, sanitariums, rest homes, or trailer parks and courts.

New construction of any commercial structure, or of the commercial portion of any mixed residential and commercial structure, financed under this chapter shall not exceed 80,000 square feet of gross building area per development. Any suit challenging such finding shall be filed within 60 days, or the findings of the agency shall be conclusive.

An agency may not provide long-term financing pursuant to this chapter for new construction of a commercial structure or the commercial portion of a mixed residential and commercial structure if conventional financing in an amount sufficient to complete the construction has been obtained for the construction of such structure or portion thereof.

Prior to the financing of any commercial structure within a redevelopment project area, the agency shall adopt a financing plan by resolution, which may include commercial and residential structures. The square footage of the commercial structures shall not exceed 30 percent of the aggregate square footage of all the commercial and residential structures within the project area and financed pursuant to the financing plan. The financing plan for the commercial and residential structures shall include structures that have been, or are being, financed pursuant to this chapter or under federal or state financial assistance programs or local assistance programs of any kind whatsoever. However, such a financing plan shall not be required for an agency that has financed residential structures with the proceeds of bonds issued prior to September 30, 1980, nor shall such amendments affect the validity of the tax-exempt status of bonds issued pursuant to this chapter prior to such date.

Additionally, any financing for a commercial structure or a mixed residential and commercial structure authorized or preliminarily approved by resolution adopted by a redevelopment agency or community development commission established pursuant to Section 33201 either (1) on or before June 3, 1980, in furtherance of which the agency or any person or entity has expended substantial funds or committed to reimburse another person or entity which has expended substantial funds; provided that if the long-term permanent financing is in excess of five million dollars ($5,000,000) on any one project from all financing sources, including conventional and tax-exempt financing, a redevelopment agency or community development commission shall not provide such long-term permanent financing unless such agency or commission adopted a resolution before January 1, 1981, officially approving and authorizing the sale of revenue bonds to provide such long-term permanent financing, and the bonds were sold and delivered before March 1, 1981; or (2) before October 31, 1980, in furtherance of which the agency has expended funds in connection with such financing or plans relating to such financing if the structure to be financed is located within a city designated pursuant to Section 119 of federal Public Law 95-128, as amended, or within a city designated as of September 30, 1980, under Title IX of federal Public Law 89-136, as amended, as a long-term economic deterioration area, or financing for a commercial structure or mixed residential and commercial structure as to which bonds have been delivered on or before July 31, 1980 (without regard to the date the bonds were authorized or received preliminary approval), shall not be subject to new requirements or conditions of this subdivision enacted by Chapter 1331 of the Statutes of 1980.

“Residence” includes condominium and cooperative dwelling units, and includes both real property improved with single-family residential structures and real property improved with multiple-family residential structures.

(k)  “Revenue bonds” means any bonds, notes, interim certificates, debentures, or other obligations issued by an agency pursuant to this chapter and which are payable exclusively from revenues and from any other funds specified in this chapter upon which the revenue bonds may be made a charge and from which they are payable.

( l)  “Revenues” means all amounts received as repayment of principal, interest, and all other charges received for, and all other income and receipts derived by, the redevelopment agency from the financing of residential construction, including moneys deposited in a sinking, redemption, or reserve fund or other fund to secure the revenue bonds or to provide for the payment of the principal of, or interest on, the revenue bonds.

(m)  “Target areas” has the same meaning as in Section 103A of the Federal Internal Revenue Code of 1954, as amended.

(Amended by Stats. 1983, Ch. 478, Sec. 1. Effective July 28, 1983.)

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