AB 430: Community land trusts: welfare exemption: assessment: foreclosure sales: financial assistance.

(1)Existing property tax law, pursuant to constitutional authorization, provides for a welfare exemption for property used exclusively for religious, hospital, scientific, or charitable purposes and that is owned or operated by certain types of nonprofit entities, if certain qualifying criteria are met. For the 202223 fiscal year through the 202728 fiscal year, in the case of an owner of property that is a community land trust, as defined, existing property tax law requires that a unit continue to be treated as occupied by a lower income household for these purposes if the occupants were lower income households on the lien date in the fiscal year in which their occupancy of the unit commenced and the unit continues to be rent restricted, notwithstanding an increase in the income of the occupants of the unit to 140% of area median income, adjusted for family size. Existing law requires that a lease between a community land trust and a lower income household satisfy specified requirements in order for these provisions to apply, including being a renewable 99-year ground lease and a public agency or official must make a finding that the contract serves the public interest of creating or preserving affordable housing, as provided.

This bill would eliminate specified requirements of a lease agreement between a lower income household and a community land trust in order for the unit to continue to be treated as occupied by a lower income household, as described above.

(2)Existing property tax law requires the assessor to consider in the assessment of land the effect of any enforceable restrictions to which the use of the land may be subjected, including, among others, a renewable 99-year ground lease between a community land trust and the qualified owner, as defined, of an owner-occupied single-family dwelling or an owner-occupied unit in a multifamily dwelling that meets certain other conditions. Existing property tax law defines the term community land trust for these and other purposes to mean a nonprofit corporation that satisfies specified requirements, including a requirement that all dwellings and units located on property owned by the nonprofit are either sold to a qualified owner, as defined, or leased to low- or moderate-income persons or families, and the land owned by the nonprofit corporation, on which a dwelling or unit sold to a qualified owner is situated, is leased by the nonprofit corporation to the qualified owner for the convenient occupation and use of that dwelling or unit for a renewable term of 99 years.

This bill would amend the definition of community land trust to extend these requirements to a wholly owned subsidiary of the trust. trust that is solely directed and managed by the trust.

(3)Existing law prescribes various requirements to be satisfied before the exercise of a power of sale under a mortgage or deed of trust and prescribes a procedure for the exercise of that power. Existing law prescribes certain requirements that apply in the case of sales of real property containing one to 4 residential units, inclusive, that is acquired through foreclosure under a mortgage or deed of trust by an institution or that is acquired at a foreclosure sale by an institution, as defined, including requiring that the institution only accept offers from eligible bidders during the first 30 days after the property is listed for sale. Existing law defines eligible bidder for the purposes to include, among others, a community land trust, defined by reference to the above-described provisions relating to the assessment of real property for taxation.

Existing law creates the Foreclosure Intervention Housing Preservation Program, administered by the Department of Housing and Community Development, for the purpose of preserving affordable housing and promoting resident ownership or nonprofit organization ownership of residential real property. Upon appropriation, existing law requires the department to provide loans and grants to eligible borrowers to support the acquisition of one to 25 unit properties meeting specified criteria. Existing law requires that an eligible borrower be one of 3 specified types of entities, including a limited liability company in which a community land trust, defined by reference to the above-described provisions relating to the assessment of real property for taxation, either holds a controlling interest or is the managing member.

This bill would revise the definition of the term community land trust for purposes of the above-described provisions relating to sales of real property acquired through foreclosure, and for purposes of the Foreclosure Intervention Housing Preservation Program, to incorporate the above-described changes to the definition of that term made by the bill for purposes of the assessment of real property for taxation.

(4)Existing law, the Los Angeles County Regional Housing Finance Act, establishes the Los Angeles County Affordable Housing Solutions Agency for the purpose of increasing the supply of affordable housing in the County of Los Angeles by providing for significantly enhanced funding and technical assistance at a regional level for renter protections, affordable housing preservation, and new affordable housing production, as specified. Existing law requires the agency to distribute regional housing revenue in the form of a grant, loan, or other financing tool, as provided, and specifies that grants, loans, or other financing provided to community land trusts and other similarly structured nonprofit entities to acquire, rehabilitate, and preserve existing housing is an eligible use of that funding.

Existing law establishes the CalHome Program, administered by the Department of Housing and Community Development, to enable low- and very low income households to become or remain homeowners. Existing law requires the department, under the program, to use appropriated funds to provide grant or loan funds to local public agencies or nonprofit corporations for specified purposes relating to the promotion of home ownership. Existing law provides that mutual housing, community land trusts, and limited equity cooperative housing are deemed to be forms of home ownership eligible to receive assistance under the program.

This bill would define the term community land trust for purposes of the Los Angeles County Regional Housing Finance Act and the CalHome Program by reference to the above-described provisions relating to the assessment of real property for taxation, as amended by the bill.

(5)By expanding the duties of local tax officials, this bill would establish a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.