Density Bonus Law: purchase of density bonus units by nonprofit housing organizations.

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-income or, lower, or very low income households and meets other requirements. Existing law requires the developer and the city or county to ensure that the initial occupant of a for-sale unit that qualified the developer for the award of the density bonus is a person or family of very low, low, or moderate income. Existing law requires the Department of Housing and Community Development to notify a city or county, and authorizes the department to notify the Attorney General, that the city or county has taken an action that violates specified provisions of law, including the Density Bonus Law. Existing law authorizes the Attorney General to seek all remedies available under law. 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. This bill, instead, would require 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. By imposing these requirements on local agencies with respect to density bonuses, this bill would impose a state-mandated local program. Existing law requires a city, county, or city and county to adopt an ordinance that specifies how it will implement the Density Bonus Law. Existing law provides incentive and concession calculations, and provides an exemption from the calculations, as adjusted in 2020, for a city, county, or city and county that has adopted an ordinance or a housing program, or both an ordinance and a housing program, that incentivizes the development of affordable housing that allows for density bonuses that exceed the density bonuses required by the Density Bonus Law, as provided. This bill would update cross references in those provisions. This bill would incorporate additional changes to Section 65915 of the Government Code proposed by SB 290 to be operative only if this bill and SB 290 are enacted and this bill is enacted last. 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.