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District 7: Los Angeles & Ventura Counties
Contact: Eric Menjivar, Eric.Menjivar@dot.ca.gov
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How are multi-family properties treated under the Roberti Act?
The Roberti Act (Act) treats multi-family properties differently than single-family properties. The Act does not authorize Caltrans to sell multi-family properties to present occupants in the same way that single-family properties are being sold to present occupants. Instead, the Act (Government Code section 54237(d)) directs multi-family properties to be offered to Housing Related Entities. Although this subdivision does not directly mention multi-family properties, its reference to “all other surplus residential properties” clearly includes multi-family properties.
What is the process for Housing Related Entities to purchase surplus properties at a Reasonable Price?
Housing Related Entities (HRE) who respond to the Notice of Conditional Offer Prior to Sale will be given the opportunity to preview the properties prior to submitting a Reasonable Price Statement (Statement). Caltrans is coordinating with tenants to schedule open houses for Phase 1 properties. HREs interested in purchasing a property are required to submit a Statement that will be evaluated by Caltrans with assistance from the Department of Housing and Community Development (HCD). If Caltrans and HCD determine that a Statement identifies a Reasonable Price as defined by the Affordable Sales Program Regulations, then Caltrans will provide a Purchase and Sale Agreement to the HRE that submitted the Statement.
What is the “Reasonable Price”?
The Reasonable Price is defined in the Affordable Sales Program Regulations as “the price which is best suited to the economically feasible use of the property as decent, safe, and sanitary housing at affordable rents and affordable prices established by the entity in accordance with section 1478(c).”
What is the priority order for the sale of multi-family properties?
Multi-family properties, including duplexes, follow the specific priority order in the Affordable Sales Program Regulations. The priority order is:
1. Housing-related Entities (HRE)
> First, HREs that form a limited equity cooperative housing with the current tenants;
> then, the locally-designated HRE;
> followed by any public or private HRE.
2. Current tenants in good standing.
3. Former tenants in good standing.
HREs have first priority to purchase multi-family properties, followed by current tenants in good standing, and then former tenants in good standing. If the property is still available after offering to HREs and to tenants, Caltrans will sell the property at public auction.
What is the process to form a limited equity cooperative housing for multi-family properties?
Housing Related Entities (HRE) that consider forming a limited equity cooperative housing (Co-op) will be given priority to purchase the property. If the HRE determines it is feasible to rehabilitate and develop the property as a Co-op in accordance with Civil Code section 817, the HRE may submit a Statement. If the Statement best identifies the Reasonable Price, the HRE will enter into a Purchase and Sale Agreement with Caltrans. The HRE would then develop a Co-op with first right of occupancy to current tenants.
Multi-family tenants interested in forming a Co-op may want to contact an HRE that has responded to the Notice of Conditional Offer Prior to Sale. Multi-family tenants may contact the Affordable Sales Program Hotline at (213) 897-8184 to inquire about the HREs that have expressed interest in purchasing their specific property.
Are current tenants of multi-family properties allowed to purchase the property and form a limited equity cooperative housing?
The Affordable Sales Program Regulations (Regulations) require multi-family properties to first be offered to Housing Related Entities (HRE). Tenants of multi-family housing cannot purchase the property as an individual under Priority Four; however, nothing in the Regulations prohibits a tenant from forming an HRE and submitting a Reasonable Price Statement to purchase the property at a Reasonable Price. It is strongly recommended that tenants interested in forming an HRE or limited equity cooperative housing seek legal counsel, as Caltrans cannot provide advice on how to do this.
Will current tenants be allowed to continue renting if a Housing Related Entity purchases the property?
Yes. The Affordable Sales Program requires Housing Related Entities (HRE) to rent to current residents regardless of income. An HRE must offer affordable rents to those who qualify and may collect fair market rent from those who do not qualify to rent at an affordable rate. Although these rental rates may differ from the Caltrans rate, the HRE will collect rent that is consistent with state regulation and local ordinances and rules.
What happens if a Housing Related Entity does not purchase the property?
Properties not purchased by a Housing Related Entity will be offered to the next prospective buyer in the priority order pursuant to the Affordable Sales Program Regulations.
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