(Holden D) Density Bonus Law: purchase of density bonus units by nonprofit housing organizations: civil actions.
Current Text: Amended: 4/12/2023
Status: 10/11/2023-Approved by the Governor. Chaptered by Secretary of State – Chapter 738, Statutes of 2023.
4/17/2023-Re-referred to Com. on APPR.
Summary: Existing law, commonly referred to as the Density Bonus Law, requires a city or county to provide a developer that proposes a housing development within the city or county with a density bonus and other incentives or concessions, as specified, if the developer agrees to construct, among other options, specified percentages of units for moderate-, lower, or very low income households and meets other requirements. Existing property tax law establishes a welfare exemption under which property is exempt from taxation if the property is owned and operated by a nonprofit corporation that is organized and operated for the purpose of building and rehabilitating single-family or multifamily residences for sale, as provided, at cost to low-income families. Existing law requires the developer and the city or county to ensure that (1) a for-sale unit that qualified the developer for the award of the density bonus is initially occupied by a person or family of the required income, offered at an affordable housing cost, as defined, and includes an equity sharing agreement, as specified, or (2) a qualified nonprofit housing organization that is receiving the above-described welfare exemption purchases the unit pursuant to a specified recorded contract that includes an affordability restriction, an equity sharing agreement, as specified, and a repurchase option that requires a subsequent purchaser that desires to sell or convey the property to first offer the nonprofit corporation the opportunity to repurchase the property.
This bill would instead require the developer and the city or county to ensure that (1) the for-sale unit that qualified the developer for the award of the density bonus is to be initially sold to and occupied by a person or family of the required income, (2) the qualified nonprofit housing organization that is receiving the above-described welfare exemption meets specified requirements, including having a determination letter from the Internal Revenue Service affirming its tax-exempt status, as specified, being based in California, and the primary activity of the nonprofit corporation being the development and preservation of affordable home ownership housing in California that incorporates within their contracts for initial purchase a repurchase option that requires a subsequent purchaser that desires to sell or convey the property to first offer the nonprofit corporation the opportunity to repurchase the property pursuant to an equity sharing agreement or a specified recorded contract that includes an affordability restriction, or (3) the city, county, and city and county has sent a list of buyers who are eligible to purchase the unit to the developer starting at the time the building permit is issued until 90 days after the certificate of occupancy or final inspection is issued or completed for that unit. By imposing these requirements on local agencies with respect to density bonuses, this bill would impose a state-mandated local program. This bill contains other related provisions and other existing laws.