2005 California Government Code Sections 54235-54238.7 Article 8.5. Surplus Residential Property

54235.  The Legislature reaffirms its finding that the disposition
of surplus property owned by public agencies should be utilized to
further state policies.
   The Legislature reaffirms its finding that there exists within the
urban and rural areas of the state a serious shortage of decent,
safe, and sanitary housing which persons and families of low or
moderate income can afford, and consequently a pressing and urgent
need for the preservation and expansion of the low- and
moderate-income housing supply.  The Legislature further reaffirms
its finding that highway and other state activities have contributed
to the severe shortage of such housing.  The Legislature reaffirms
that the provision of decent housing for all Californians is a state
goal of the highest priority.  The Legislature finds and declares
that actions of state agencies including the sales of surplus
residential properties which result in the loss of decent and
affordable housing for persons and families of low or moderate income
is contrary to state housing, urban development, and environmental
policies and is a significant environmental effect, within the
meaning of Article XIX of the California Constitution, which will be
mitigated by the sale of surplus residential property pursuant to the
provisions of this article.
   The Legislature further finds and declares that the displacement
of large numbers of persons as a result of the sale of surplus
residential property owned by agencies of the state is a significant
environmental effect, within the meaning of Article XIX of the
California Constitution which will be mitigated by sale of such
properties pursuant to the provisions of this article.
   The Legislature further finds and declares that the sale of
surplus residential property pursuant to the provisions of this
article will directly serve an important public purpose.  Wherefore,
the Legislature intends by this article to preserve, upgrade and
expand the supply of housing available to persons and families of low
or moderate income.  The Legislature further intends by this article
to mitigate the environmental effects, within the meaning of Article
XIX, of the California Constitution, caused by highway activities.
54236.  (a) As used in this article, the term "offer" means to
solicit proposals prior to sale in a manner calculated to achieve a
sale under the conditions specified, and to hold such offer open for
a reasonable period of time, which shall be no more than one year,
unless such time is extended by the selling agency at its discretion,
for a period to be specified by the selling agency.
   (b) As used in this article, the term "affordable price" means, in
the case of a purchaser, other than a lower income household, the
price for residential property for which the purchaser's monthly
payments will not exceed that portion of the purchasing household's
adjusted income as determined in accordance with the regulations of
the United States Department of Housing and Urban Development, issued
pursuant to Section 235 of the National Housing  Act; and, in the
case of a purchaser that is a lower income household, the price for
residential property for which the purchaser's monthly payments will
not exceed that portion of the purchasing household's adjusted income
as determined in accordance with the regulations of the United
States Department of Housing and Urban Development issued pursuant to
Section 8 of the United States Housing Act of 1937.
   (c) As used in this article, the term "single-family residence"
means a real property improvement used, or intended to be used, as a
dwelling unit for one family.
   (d) As used in this article, the term "surplus residential
property" means land and structures owned by any agency of the state
that is determined to be no longer necessary for such agency's use,
and which is developed as single-family or multi-family housing,
except property being held by the agency for the purpose of exchange.
   Surplus residential properties shall only include land and
structures which, at the time of purchase by the state, the state had
intended to remove the residences thereon and to use the land for
state purposes.
   (e) As used in this article the term "displacement" includes, but
is not limited to, persons who will have to move from surplus
residential property that they occupy when it is sold by a state
agency because they are unable to afford to pay the price which the
state agency is asking for the residential property.
   (f) As used in this article, the term "fair market value" shall
mean fair market value as of the date the offer of sale is made by
the selling agency pursuant to the provisions of this article.  This
definition shall not apply to terms of sale that are described as
mitigation measures in an environmental study prepared pursuant to
the Public Resources Code if such study was initiated prior to the
enactment of this measure.
   (g) As used in this article, the term "affordable rent" means, in
the case of an occupant person or family, other than a person or
family of low or moderate income, rent for residential property which
is not more than 25 percent of the occupant household's gross
monthly income, and in the case of an occupant person or family of
low or moderate income, rent for residential property which is not
more than the percentage of the adjusted income of the occupant
person or family as permitted under regulations of the United States
Department of Housing and Urban Development issued pursuant to
Section 8 of the United States Housing Act of 1937, but not in excess
of the market rental value for comparable property.
   (h) As used in this article, the term "area median income" means
median household income, adjusted for family size as determined in
accordance with the regulations of the United States Department of
Housing and Urban Development issued pursuant to Section 235 of the
National Housing Act, as amended (P.L.  90-448), for the Standard
Metropolitan Statistical Area (S.M.S.A.), in which surplus
residential property to be disposed of pursuant to this article is
located, or the county in which such property is located, if it is
outside an S.M.S.A.
   (i) As used in this article, the term "persons and families of low
or moderate income" means persons and families of low or moderate
income as defined by Section 50093 of the Health and Safety Code.
   (j) As used in this article, the term "lower income households"
means lower income households as defined in Section 50079.5 of the
Health and Safety Code.
54237.  (a) Notwithstanding Section 11011.1, any agency of the state
disposing of surplus residential property shall do so in accordance
with the following priorities and procedures:
   (1) First, all single family residences presently occupied by
their former owners shall be offered to such former owners at the
appraised fair market value.
   (2) Second, all single-family residences shall be offered,
pursuant to this article, to their present occupants who have
occupied the property two years or more and who are persons and
families of low or moderate income.
   (3) Third, all single-family residences shall be offered, pursuant
to this article, to their present occupants who have occupied the
property five years or more and whose household income does not
exceed 150 percent of the area median income.
   (b) Single-family residences offered to their present occupants
pursuant to paragraphs (2) and (3) of subdivision (a) shall be
offered to such present occupants at an affordable price, which price
shall not be less than the price paid by the agency for original
acquisition, unless the acquisition price was greater than the
current fair market value, and shall not be greater than fair market
value.  When such single-family residences are offered to present
occupants at a price which is less than fair market value, the
selling agency shall impose such terms, conditions and restrictions
to assure that such housing will remain available to persons and
families of low or moderate income and households with incomes no
greater than the incomes of the present occupants in proportion to
the area median income. The Department of Housing and Community
Development shall provide to the selling agency recommendations of
standards and criteria for such prices, terms, conditions and
restrictions. The selling agency shall provide repairs required by
lenders and government housing assistance programs, or, at the option
of the agency, provide the present occupants with a replacement
dwelling pursuant to Section 54237.5.
   (c) If single-family residences are offered to their present
occupants pursuant to paragraphs (2) and (3) of subdivision (a) the
occupants shall certify their income to the selling agency.  When
such single-family residences are offered to present occupants at a
price which is less than fair market value, the selling agency may
verify such certifications, in accordance with procedures utilized
for verification of incomes of purchasers and occupants of housing
financed by the California Housing Finance Agency.  The income
limitations and term of residency requirements of paragraphs (2) and
(3) of subdivision (a) shall not apply to sales that are described as
mitigation measures in an environmental study prepared pursuant to
the Public Resources Code, if such study was initiated prior to the
enactment of this measure.
   (d) All other surplus residential properties, and all properties
described in paragraphs (1), (2), and (3) of subdivision (a) which
are not purchased by the former owners or the present occupants shall
be then offered to housing-related private and public entities at a
reasonable price, which is best suited to economically feasible use
of the property as decent, safe, and sanitary housing at affordable
rents and affordable prices for persons and families of low or
moderate  income, on the condition that the purchasing entity shall
cause the property to be rehabilitated and developed as limited
equity cooperative housing with first right of occupancy to present
occupants, except that where the development of such cooperative or
cooperatives is not feasible, the purchasing agency shall cause the
property to be used for low and moderate income rental or
owner-occupied housing, with first right of occupancy to the present
tenants.  The price of the property in no case shall be less than the
price paid by the agency for original acquisition unless the
acquisition price was greater than current fair market value, and
shall not be greater than fair market value.  Subject to the
foregoing, it shall be set at the level necessary to provide housing
at affordable rents and affordable prices for present tenants and
persons and families of low or moderate income. When such residential
property is offered at a price which is less than fair market value,
the selling agency shall impose such terms, conditions and
restrictions as will assure that such housing will remain available
to persons and families of low or moderate income.  The Department of
Housing and Community Development shall provide to the selling
agency recommendations of standards and criteria for such prices,
terms, conditions and restrictions.
   (e) Any surplus residential properties not sold pursuant to
subdivisions (a) to (d), inclusive, shall then be sold at fair market
value, with priority given first to purchasers who are present
occupants and then to purchasers who will be owner occupants.
54237.5.  Notwithstanding the requirement to provide repairs in
subdivision (b) of Section 54237, the selling agency may, at its
option, provide the present occupants with a replacement dwelling if
all of the following conditions exist:
   (a) Providing a replacement dwelling is less expensive than
providing the repairs required by subdivision (b) of Section 54237.
   (b) The replacement dwelling is determined to have all of the
following characteristics:
   (1) Is decent, safe, and sanitary.
   (2) Is suitable to the occupancy needs of the household as
provided under regulations of the United States Department of Housing
and Urban Development issued pursuant to Section 8 of the United
States Housing Act of 1937.
   (3) Is open to all persons regardless of race, color, religion,
sex, or national origin and consistent with requirements of Title 8
of the Civil Rights Act of 1978.
   (4) Is in an area not generally less desirable than the dwelling
to be acquired in regard to public utilities and public and
commercial facilities.
   (5) Is reasonably accessible to the displaced person's place of
employment.
   (6) Is in an equal or better neighborhood.
   (7) Is affordable, as defined in subdivision (a) of Section 54236,
to the displaced person.
   (c) The offer is made at an affordable price that is not less than
the price paid by the agency for original acquisition of the unit
now occupied by the displaced person or the replacement unit,
whichever is less, and is not more than market value.
   (d) The replacement dwelling is a newly constructed or a vacant
residential unit.  No resident shall be displaced pursuant to Section
7260 for the purpose of creating a replacement unit.
54238.  In the event a purchaser of surplus residential property
does not comply with terms, conditions, and restrictions imposed
pursuant to Section 54237 of this article, to assure that such
housing will remain available to persons and families of low or
moderate income, the state agencies which sold the property may
require that the purchasers pay the state the difference between the
actual price paid by the purchaser for the property and the fair
market value of such property, at the time of the agency's
determination of noncompliance, plus 6 percent interest on such
amount for the period of time the land has been held by the
purchaser.  This section does not limit the right to seek injunctive
relief to enforce the provisions of this article.
54238.3.  (a) This article shall apply only to surplus residential
properties which were acquired for a state project, for which at
least 20 dwelling units were acquired and owned by the state on
January 1, 1980, or on the date the properties were declared to be
surplus, whichever date occurs later.  For the purpose of this
section, a freeway route and its interchanges shall be considered one
state project.  Except for State Highway Route 7 in Los Angeles
County, this article shall not apply to freeway routes rescinded on
or after January 1, 1984.
   (b) Any person who is displaced from any dwelling located on such
residential property that is also located within the right-of-way of
a freeway route or its interchanges for which the property was
declared surplus on or after January 1, 1984, and who occupied that
dwelling for at least 90 days prior to the date the property was
declared surplus, shall be eligible to receive the relocation
advisory assistance provided by Section 7261, the relocation benefits
provided by paragraph (1) of subdivision (a) or subdivision (b) of
Section 7262, the payments authorized by subdivision (b) or (c) of
Section 7264, and the right for review of decision as provided by
Section 7266 if the person is forced to relocate from the dwelling,
as a direct result of the state agency's disposal of the excess real
property, within 90 days of the recordation of the deed from the
state agency to a new owner.
   (c) Whenever a state surplus residential property disposal
project, as described in subdivision (b), includes 50 or more
dwelling units, a Relocation Liaison shall be appointed by the
Secretary of the Business, Transportation and Housing Agency.  The
term of the appointment shall be of sufficient duration for the
Relocation Liaison to fulfill the assignment, not to exceed 180 days,
and shall begin on the date that the property is declared to be
surplus.  The Relocation Liaison shall have the following assigned
duties and responsibilities:
   (1) Meet with the eligible persons and explain to them the
benefits defined in subdivision (b).
   (2) In conjunction with the state agency, assist in obtaining
replacement housing for eligible persons.
   (3) Assist eligible persons in completing and processing claims
for benefits.
   The state agency which is disposing of the surplus residential
property shall be responsible for underwriting all reasonable costs
as determined by the secretary associated with the operation of the
Relocation Liaison's office necessary to perform all duties assigned
to it.
54238.4.  This article is intended to benefit persons and families
subject to displacement and persons and families of low or moderate
income.  The article shall be liberally construed to permit such
persons or families to enforce the rights, duties, and benefits
created by the article.
54238.5.  Failure to comply with the provisions of this article
shall not invalidate the transfer, sale, or conveyance to a bona fide
purchaser for value or an encumbrancer for value.
54238.6.  If a provision of this article or the application thereof
to any person or circumstances is held invalid, such invalidity shall
not affect other provisions or applications of this article which
can be given effect without the invalid provision or application
thereof, and to this end the provisions of this article are
severable.
54238.7.  Except those properties the Department of Transportation
has in escrow as of August 15, 1997, to sell, the Department of
Transportation shall not dispose of any surplus property in the City
of South Pasadena prior to January 31, 1998.