Government Code § 54239.4

If a surplus residential property purchased by a housing-related public entity pursuant to Section 54239.5 or 54239.6 is not resold as provided for in paragraph (17) of subdivision (b) of Section 54239.5 or paragraph (17) of subdivision (b) of Section 54239.6, the property shall be used as affordable housing subject to all the following:

(a)The surplus residential property shall be subject to a covenant recorded against the property to ensure the property’s use as affordable housing pursuant to this section.

(1)In the event that the surplus residential property is sold prior to the expiration of the covenant, the covenant shall remain in effect until the time at which it expires according to the provisions of this

subdivision.

(2)Any housing-related entity purchaser shall comply with monitoring requirements, as determined by the Department of Transportation or the monitoring entity.

(3)For each surplus residential property purchased under this section, the housing-related entity shall cause the property to be used for either of the following:

(A)(i) Low- or moderate-income rental housing for a term of at least 55 years. The purchase and operation of the property shall remain available and affordable for rental by lower income and moderate-income households, as defined by Sections 50052.5 and 50079.5 of the Health and Safety Code, respectively, for a term no shorter than 55 years.

(ii) In the event the housing-related entity is no longer

able to provide affordable housing on the property, the housing-related entity shall either sell the property to a successor housing-related entity that will maintain the property and the operations in compliance with the covenant or transfer the title to the city in which the property is located, which shall subsequently transfer the title and operations to a successor housing-related entity that will maintain the property and the operations in compliance with the covenant. The housing-related entity shall provide first right of occupancy to the present tenants. The rental amount shall be in accordance with income certification if the current tenants qualify as low or moderate income. If the current tenant’s income exceeds the limits for that level, the rent for that tenant shall be no less than the current rent, or adjusted no higher than current market rates for the ZIP Code in which the surplus residential property is located. The housing-related entity shall cause any additional new units added to the

property to be used only for low- or moderate-income rental housing, and the new units shall remain available and affordable for rental by lower income and moderate-income households, as defined by Sections 50052.5 and 50079.5 of the Health and Safety Code, during the covenant period.

(B)If the surplus residential property is a single-family residence, it may be used for owner-occupied affordable housing for a term of at least 45 years. The housing-related entity shall sell the property to a person or family of low or moderate income for ownership and occupancy as affordable housing, as defined in Section 62250, and specifically as the primary residence of that buyer. The housing-related entity shall dedicate profits realized from the sale during the covenant period, as specified in subdivision (b) of Section 54237.7, to the construction of affordable housing within the city in which the surplus residential property is located. The

housing-related entity shall provide first right of refusal to present tenants if they are a person or family of low or moderate income. All subsequent sales of the property during the covenant period shall be to a person or family of low or moderate income for ownership and occupancy as affordable housing, as defined in Section 62250. The property owner shall cause any additional new units added to the property to be used only for low- or moderate-income rental housing, and the new units shall remain available and affordable for rental by lower income and moderate-income households, as defined by Sections 50052.5 and 50079.5 of the Health and Safety Code, during the covenant period. The monitoring entity shall ensure that subsequent sales are made in compliance with this subdivision by conducting and certifying the income qualifications of the buyer(s) prior to purchase and sales contracts being consummated and prior to the opening of escrow.

(b)The Department of Transportation may designate in regulations to, or delegate by agreement to, a public agency to monitor the purchasers’ compliance with the terms, conditions, and restrictions required by this section.

(1)If the monitoring is not performed by a state agency, the monitoring entity shall prepare and submit to the Legislature reports that describe how the purchasers complied with this section and how they were monitored for compliance. The first report shall be submitted five years after the first property is sold pursuant to this section, and subsequent reports shall be submitted every five years thereafter until the last covenant expires. A report to be submitted pursuant to this paragraph shall be submitted in compliance with Section 9795.

(2)The monitoring entity may charge the property owner a fee to recover the cost of this monitoring and

reporting.