SECTIONS 50898-50898.2 - California Statutes

HEALTH AND SAFETY CODE

SECTION 50898-50898.2

50898. The Legislature finds and declares all of the following:
(a) As California moves into the next century, revitalization of
our downtown areas is of vital importance to every community in our
state.
(b) Downtown areas generally represent urban cores that are
deficient in housing that is critical to revitalization.
(c) Providing additional housing in downtown areas will allow
workers to live closer to their place of employment and minimize the
number of workers commuting from other areas.
(d) Downtown areas frequently have many older, underutilized
commercial buildings that are well suited for residential, live-work,
and mixed residential and commercial use.
(e) The development of projects that are in close proximity to
transit corridors allows the workforce to use mass transit to commute
to work and minimizes the use of private vehicles, easing traffic
congestion and wear on our highways, and serves to improve air
quality.

50898.1. (a) With the exception of funds allocated for purposes of
subdivision (b), funds appropriated for the purposes of this chapter
shall be distributed by the department pursuant to Chapter 6.7
(commencing with Section 50675) of Part 2, and shall be used for
downtown rebound projects to promote sustainable communities. These
projects shall include residential infill projects, the adaptive
reuse of vacant or underused commercial or industrial structures, and
the development of higher density housing adjacent to existing or
planned mass transit stations, as follows:
(1) Development projects in which vacant sites, or sites that are
scheduled to become vacant, and are located within an established
developed area of a community, are used for multifamily rental
housing in conjunction with higher densities and flexible development
standards that demonstrably reduce infrastructure costs and
environmental consequences.
(2) Development projects rehabilitating existing commercial or
industrial buildings that are at least 30 percent vacant that will
result in at least 40 percent of the building floor area being used
for residential dwelling units, live-work units, or both.
(3) Rental housing developments located within one-quarter mile of
an existing or planned major transit node that are developed at a
density level that meets or exceeds density standards to be developed
by the department. A major transit node is a site where two or more
mass transit modes, or one transit mode with three or more mass
transit lines, are accessible to the public. Priority shall be given
to projects developed within walking distance of schools, major
employment centers, or public amenities, including shopping, parks,
and major entertainment venues.
(b) Funds allocated for purposes of this subdivision shall be used
for planning grants to local governments for either of the following
purposes:
(1) Facilitating infill housing through developing site
inventories, project specific feasibility studies, and strategic
action plans to remove barriers and promote infill housing, mixed-use
developments, and transit corridor development.
(2) Facilitating updates of general plans and zoning ordinances to
encourage adaptive reuse, higher density residential development,
mixed-use development, and residential development located within
walking distance of schools, shopping, transit nodes, and major
employment centers.
(3) Assisting owners of qualified buildings in obtaining seismic
and structural feasibility studies specifically related to the
purpose of adaptive reuse.

50898.2. (a) Funds awarded pursuant to Item 2240-107-0001 of
Section 2.00 of the Budget Act of 2000 for the purposes of the
Downtown Rebound Program established pursuant to this chapter shall
not be subject to the requirements of Chapter 3.5 (commencing with
Section 11340) of Part 1 of Title 2 of the Government Code.
(b) The department may use up to 5 percent of the amounts
appropriated for this program for administration.
(c) With respect to the appropriation in Item 2240-107-0001 of
Section 2.00 of the Budget Act of 2000 for the Downtown Rebound
Program established pursuant to this chapter, the following
provisions shall apply:
(1) Seventy-six percent of that appropriation shall be used by the
department for the purpose of making loans to project sponsors for
the adaptive reuse of vacant or underused commercial or industrial
structures into residential rental housing units for initial rental
to households having an income not exceeding 150 percent of the area
median income. Each project shall be located within an elementary
school attendance boundary where 50 percent or more of the students
are eligible for free meals under the federal school lunch program,
as determined by the local school district at the time of application
to the Downtown Rebound Program. Each project shall also be subject
to the following restrictions:
(A) Loans for units not subject to subparagraph (D) shall be at 5
percent simple interest. Loans for units subject to subparagraph (D)
shall be at 3 percent simple interest. All principal and interest
shall be due and payable in 20 years.
(B) Assistance for units not subject to subparagraph (D) shall not
exceed thirty-five thousand dollars ($35,000) per unit. Assistance
for units subject to subparagraph (D) shall not exceed fifty-five
thousand dollars ($55,000) per unit.
(C) The amount of the loan, in combination with all debt recorded
in a senior position to the loan, shall not exceed 90 percent of the
appraised after-rehabilitation value of the security for the loan.
(D) Twenty percent of the units in the project shall be reserved
for households having an income equal to 50 percent or less of the
area median income, or 40 percent of the units shall be reserved for
households having an income equal to 60 percent or less of the area
median income. The department shall ensure the continued
affordability of all units designated by the sponsor to fulfill these
requirements for a period of 20 years. However, notwithstanding
subparagraph (A), if assistance is provided for these units through
any program funded through Chapter 6.7 (commencing with Section
50675) of Part 2, the units shall be subject to the use restrictions,
limitations, and provisions contained in that chapter. These units
shall be reasonably distributed within each building contained in the
project, with no less than 10 percent of the units in each building
fulfilling the requirements of this subdivision.
(E) The sponsor shall agree to the payment of prevailing wage
rates with respect to construction assisted through the program. In
implementing this subparagraph, it is the intent of the Legislature
that this requirement apply to construction work that is dependent on
the commitment of program funds in order for construction to
proceed. Notwithstanding any other provision of law, the department's
enforcement responsibilities shall be limited to the imposition of
this requirement through the lending documents. The department shall
require, as a condition of loan closing, a signed certificate that
prevailing wages have been, or will be, paid in conformance with the
requirements of Chapter 1 (commencing with Section 1720) of Part 7 of
the Labor Code and that labor records shall be made available to any
enforcement agency upon request.
(2) Two million four hundred thousand dollars ($2,400,000) of that
appropriation shall be used by the department for planning grants as
specified in subdivision (b) of Section 50898.1.
(3) The balance of that appropriation shall be available for uses
authorized by subdivision (a) of Section 50898.1.