AB 2329: Surplus residential property: condition-adjusted fair market value: Cities of Pasadena and South Pasadena.
- Session Year: 2025-2026
- House: Assembly
- Latest Version Date: 2026-06-18
Current Status:
In Progress
(2026-06-18: From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on TRANS.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
(1)Existing law establishes priorities and procedures that any state agency disposing of surplus property is required to follow. Existing law sets forth an order of priority for the disposal of specified surplus residential property, including that a state agency disposing of single-family surplus residential property first offer the property at the appraised fair market value to former owners and present occupants, and then offer the property at an affordable price to other present occupants who have occupied the property for a specified number of years and who meet certain income levels. Existing law sets certain parameters for the calculation of an affordable price for purposes of these provisions based on, among other things, the fair market value of the property.
This bill would, instead, require the first tier priority offer to be based on the appraised condition-adjusted fair market value and would define condition-adjusted fair market value to mean the fair market value of the property as of October 13, 2019, and as adjusted as to reflect the existing as is condition of the property and the amount needed to make certain repairs and capital improvements, as provided. The bill would revise the above-specified parameters for calculating an affordable price to instead be based on the condition-adjusted fair market value. The bill would establish requirements relating to the performance and cost of the inspection of the property, and define various terms for purposes of these provisions, including, among others, guidelines.
Existing law prohibits the Department of Transportation from selling a nonresidential property to a tenant that is either a city or a nonprofit organization, as specified, at a value below a specified minimum sales price. Existing law also provides an exception to the prohibition on using inflation to adjust the original acquisition price of property acquired by the Department of Transportation in determining the minimum allowable price for the subsequent sale of that property.
This bill would delete those provisions. The bill would, instead, define value in use for a nonresidential property to mean the propertys current specific use, including certain specified public uses, regardless of whether that use is the propertys highest and best use as of the appraisal date.
(2)If the surplus residential property is not sold pursuant to the priorities described above, or pursuant to other specified priorities, existing law requires the property to then be sold at fair market value, with priority given first to purchasers who are present tenants in good standing, as provided, and then to former tenants who were in good standing at the time they vacated the premises, as provided.
This bill would, instead, require the property to be sold to those present or former tenants at condition-adjusted fair market value.
This bill would require any dispute between the Department of Transportation and a purchaser regarding the final sales price of surplus residential property offered at the condition-adjusted fair market value sales price to be submitted to the Office of Administrative Law, as provided. The bill would require the department to provide certain documents related to the surplus residential property to all persons or entities offered or purchasing surplus residential property. The bill would require any surplus residential property purchased at the condition-adjusted fair market value price pursuant to the bill to be assessed at its condition-adjusted fair market value price for property tax purposes.
(3)Existing law contains provisions that are specific to the sale of surplus residential property located in the City Pasadena. Those provisions, among other things, contain a priority requiring surplus residential property located in the city to be offered at fair market value to specified present tenants who are in good standing, as provided.
This bill would, instead, require the property to be offered to those present tenants at condition-adjusted fair market value. The bill would authorize the City of Pasadena, in a transaction between the city and the Department of Transportation, and without taking ownership of surplus residential property, to offer the residence to the present tenants, regardless of whether the tenant is in good standing, as specified, at the condition-adjusted fair market value price. The bill, among other things, would require the proceeds realized by the city from this type of sale to be placed into an affordable housing trust fund, as provided. The bill would require the City of Pasadena to retain 15% of the proceeds from the sale of surplus residential property for certain specified costs. The bill would make other related changes.
Existing law also requires the City of Pasadena to commence the construction, or complete acquisition, of affordable units in an amount at least equal to 3 times the number of unoccupied homes acquired by the city by December 31, 2026.
This bill would change the timing for this requirement to within 2 years from the date on which the proceeds from the subsequent sale of the unoccupied homes are received, as specified.
(4)Existing law contains provisions that are specific to the sale of surplus residential property located in the City of South Pasadena. Those provisions, among other things, contain a priority requiring surplus residential property located in the city to be offered at fair market value to specified present tenants who are in good standing, as provided.
This bill would, instead, require the property to be offered to those present tenants at condition-adjusted fair market value. The bill would authorize the City of South Pasadena, in a transaction between the city and the Department of Transportation, and without taking ownership of surplus residential property, to offer the residence to the present tenants, regardless of whether the tenant is in good standing, as specified, at the condition-adjusted fair market value price. The bill would require the proceeds realized by the city from this type of sale to be placed into an affordable housing trust fund, as provided. The bill would require the City of South Pasadena to retain 15% of the proceeds from the sale of surplus residential property for certain specified costs. The bill would make other related changes.
Existing law also requires the City of South Pasadena to commence the construction, or complete acquisition, of affordable units in an amount at least equal to three times the number of unoccupied homes acquired by the city by July 1, 2028.
This bill would, for unoccupied homes acquired by the City of South Pasadena after July 1, 2026, change the timing for this requirement to within 2 years from the date on which the proceeds from the subsequent sale of the unoccupied homes are received, as specified.
(5) This bill would make legislative findings and declarations relating to the scarcity of certain types of land within the Cities of Pasadena and South Pasadena and the anticipated disposition of surplus nonresidential property by the Department of Transportation to the Cities of Pasadena and South Pasadena.
(6)This bill would make legislative findings and declarations as to the necessity of a special statute for the City of South Pasadena. Cities of South Pasadena and Pasadena.
(7)By imposing new requirements on the Cities of South Pasadena and Pasadena, this bill would impose 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.
