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. (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.