AB 2329: Surplus residential property: condition-adjusted price of the fair market value: Cities of Pasadena and South Pasadena.

(1)Existing law establishes priorities and procedures that any state agency disposing of surplus property is required to follow. Existing law requires the Department of Transportation to deposit proceeds from the sale of a surplus residential property from the department to a new owner into the SR-710 Rehabilitation Account. Existing law continuously appropriates the funds in the account to the department for the purpose of providing required repairs to certain surplus residential properties that are offered for sale, as provided. Existing law requires that the total funds maintained in the account not exceed a specified amount and that funds exceeding that amount, less any reimbursements due to the federal government, be transferred to the State Highway Account in the State Transportation Fund, to be used for allocation by the California Transportation Commission exclusively to fund projects located in specified cities and in the 90032 postal ZIP Code. Existing law also establishes the Affordable Housing Trust Account within the Housing Finance Fund, a continuously appropriated fund, and requires certain funds to be deposited in the account in accordance with specified provisions for the benefit of income restricted persons and families residing exclusively in the Cities of Pasadena, South Pasadena, Alhambra, La Canada Flintridge, and the 90032 postal ZIP Code. Existing

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 price of the fair market value and would define condition-adjusted price of the 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 determined by an independent appraiser and adjusted, as provided. The bill would revise the above-specified parameters for calculating an affordable price so that the price would be based on the fair market value or the condition-adjusted fair market value of the property, whichever is less. price. 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. The bill would also, for surplus residential property sold at a condition-adjusted fair market value, exempt the selling agency from providing repairs to the property, as specified.

(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 the department Department of Transportation, upon request, 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 price of the fair market value price pursuant to the bill to be assessed at its condition-adjusted price of the fair market value price for property tax purposes. purposes, as prescribed.

(3)Existing law contains provisions that are specific to the sale of surplus residential property located in the City of 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 price of the fair market value. The bill would, for residential property sold at a condition-adjusted fair market value, exempt the City of Pasadena from providing repairs to the property, as specified. 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 make other related changes. value, as defined.

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. specified, and would make other related changes to these provisions.

(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 price of the fair market value. The bill would, for residential property sold at a condition-adjusted fair market value, exempt the City of South Pasadena providing repairs to the property, as specified. 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 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. specified, and would make other related changes to these provisions.

(5)This bill would make legislative findings and declarations as to the necessity of a special statute for the Cities of South Pasadena and Pasadena.

(6)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.