LA County could soon see an increase in the number of affordable housing units and small open spaces and parks thanks to a proposed update to the sale process for tax-defaulted properties.
On Tuesday, the Board of Supervisors approved a motion by Supervisor Sheila Kuehl and co-authored by Janice Hahn that would revise the Chapter 8 sale process for tax-defaulted properties in the County. The proposed amendments will make it easier for nonprofit organizations and public agencies to purchase and repurpose properties in the public’s interest.
The Chapter 8 Program, authorized for all counties under Chapter 8 of the State Revenue & Taxation Code, allows eligible entities, including nonprofits and public agencies, to pull commercial and residential properties off the Tax Auction List. Parcels are sold for the minimum bid price plus minor administrative fees, which is significantly less than what the properties would sell for at auction. Qualified organizations must use the properties for governmental purposes, or for the benefit of low-income persons.
The County also has significant new resources at its disposal to create much-needed open space and affordable housing through the Board’s Affordable Housing Plan, as well as Measure A (Countywide Parks and Open Space Parcel Tax) and Measure H (Homeless Sales Tax).
However, despite these new funding sources and the availability of around 2,000 Chapter 8 properties per year, only a dozen or so have actually been purchased by eligible entities in the past. This is potentially due to limited information sharing, outdated technology, and lack of familiarity with the process.
Tuesday’s motion calls for the formation of a working group comprised of County departments, including the Treasurer and Tax Collector, the Community Development Commission and the Chief Executive Officer, plus community-based nonprofit housing providers, to develop a set standard of information on tax-defaulted properties that is more accessible than the current, dated, non-searchable database. The motion also calls for developing a regular reporting protocol for public agencies and nonprofits with updated schedules for auctionable properties throughout the year. Finally, the motion calls for the working group to assess the potential to develop a new Chapter 8 Affordable Housing Development Project, to facilitate the purchase, entitlement and development process for affordable housing projects and to deliver a related report.
Expanding use of the Chapter 8 program could help to alleviate the shortage of available affordable housing, open space, and parks across LA County. It could also provide single and multi-family housing for low-income individuals, families, and individuals experiencing homelessness.
A similar initiative in Oakland has shown initial success in increasing the number of homes for low-to-moderate income buyers, and reducing blight from abandoned properties in neighborhoods across the city. Since its adoption, twenty-six parcels have been slated for sale and rental throughout the Oakland area.