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

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 the for-sale unit that qualified the developer for the award of the density bonus is (1) initially sold to and occupied by a person or family of the required income, or (2) if the unit is not purchased by an income-qualified person or family within 180 days after the issuance of the certificate of occupancy, 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. By imposing these requirements on local agencies with respect to density bonuses, this bill would impose a state-mandated local program. This bill would prohibit a developer from selling a unit constructed pursuant to a local inclusionary zoning ordinance that is intended for owner-occupancy by persons or families of extremely low, very low, low, or moderate income to a purchaser that is not a person or family of extremely low, very low, low, or moderate income, but would authorize a developer to sell that unit to a qualified nonprofit housing corporation, as defined, that will ensure owner occupancy pursuant to the income limitation recorded on the deed or other instrument defining the terms of conveyance eligibility, if the unit has not been purchased by an income-qualifying person or family within 180 days of the issuance of the certificate of occupancy. The bill would specify that every unit offered in a manner inconsistent with this requirement is a violation and that violators are exclusively subject to a civil penalty of not more than $15,000. The bill would authorize the civil penalty to be assessed and recovered in a civil action brought in the name of the people of the State of California by the county counsel or city attorney for the jurisdiction in which the violation occurred in a court of competent jurisdiction. This bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities. 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 no reimbursement is required by this act for a specified reason. This bill would incorporate additional changes to Section 65915 of the Government Code proposed by SB 713 and AB 1287 to be operative only if this bill and either or both of those bills are enacted and this bill is enacted last.