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California

California law (CAL. GOV’T CODE §§ 65863.10, 65863.11, 65863.13) extends the “right to make a purchase offer” to tenant associations, local and national nonprofits and public agencies, as well as to profit-motivated organizations, so long as the “qualified entity” is capable and committed to maintaining the low-income use, including renewal of available rent subsidies, for at least thirty years. The statutory rights are triggered by the owner’s decision to take any action that would terminate the federal assistance, or by the lapse of federal, state or local restrictions. Furthermore, the owner is prohibited from selling the property within five years of being eligible to prepay or end participation in a federal, state or local subsidy program, without having extended this right to qualified entities. Owners must give a notice of any proposed termination of subsidies or restrictions to both tenants and specified public entities at least 12 months prior to the anticipated date of termination, and additional information is required at least six months prior. Owners must also provide a separate notice of the right to make a purchase offer to qualified entities that have directly contacted the owner or are on a list maintained by the state. Owners filing a conversion notice may not accept, during the following 180 days, any purchase offers from non-qualified entities, and where a qualified purchaser makes an unaccepted offer during this 180-day period, the owner must provide the qualified entity with a right of first refusal to match the terms of any other sale offer accepted during a second 180-day period. However, the law imposes no general duty on an owner to sell. The law also provides that owners must, upon request, allow all qualified entities to access information about the project’s rent rolls, vacancy rates, operating expenses, capital improvements, project reserves and financial and physical inspection reports. The initial notice of purchase opportunity must state that such information is available upon request. This law is in effect until January 1, 2011, unless the state legislature extends it.

California land use planning law (CAL. GOV’T CODE §§ 65580-65589.8) also contains some provisions that encourage preservation. For example, local governments are required to produce a housing element that analyzes the local assisted housing stock and identifies resources available to help preserve the affordability of the housing.

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