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HEALTH AND SAFETY CODE
SECTION 37910-37913

37910. This part shall be known and may be cited as the Marks-Foran
Residential Rehabilitation Act of 1973.

37911. The Legislature hereby finds and declares that it is
necessary and essential that cities, counties, and cities and
counties, and redevelopment agencies and housing authorities within
such cities, counties, and cities and counties, be authorized to make
long-term, low-interest loans to finance residential rehabilitation
in depressed residential areas in order to encourage the upgrading of
property in such areas. Unless such local agencies intervene to
provide some form of assistance to finance residential
rehabilitation, many depressed residential areas will deteriorate at
an accelerated pace because property owners are not able to obtain
rehabilitation loans from private sources.
The Legislature further finds and declares that many depressed
residential areas contain scattered vacant parcels and residences
that are so severely deteriorated that they must be demolished. The
existence of such conditions in residential rehabilitation areas
often impedes the progress of residential rehabilitation and
improvement. It is, therefore, necessary that local agencies be
authorized to include new construction in the form of residential
infill construction as an integral part of a residential
rehabilitation financing program.
The Legislature also finds and declares that preservation of
existing housing stock is a primary purpose of this part. Much
housing exists that can be preserved if moved from one location to
another. It is, therefore, necessary that local agencies be
authorized to include such preservation in the form of move-on
residences.


37912. Unless the context otherwise requires, the following
definitions shall govern the construction of this part:
(a) "Bonds" means any bonds, notes, interim certificates,
debentures, or other obligations issued by a local agency pursuant to
this part and which are payable exclusively from the revenues, as
defined in subdivision (k), and from any other funds specified in
this part upon which the bonds may be made a charge and from which
they are payable.
(b) "Citizen participation" means action by the local agency to
provide persons who will be affected by residential rehabilitation
financed under the provisions of this part with opportunities to be
involved in planning and carrying out the residential rehabilitation
program. "Citizen participation" shall include, but not be limited
to, all of the following and in the order provided below:
(1) Holding a public meeting prior to the original hearing by the
legislative body for the purpose of considering selection of the area
for designation and determining the method of notice to property
owners which will be used pursuant to paragraph (3).
(2) Consultation with an elected or appointed citizen advisory
board of a proposed residential rehabilitation area. The members of
the board shall include, to the greatest extent feasible,
representatives of resident owners, nonresident owners, and resident
tenants of both single-family and multiple-family residential
structures who are not apartment managers, resident agents, or
employees of property owners. The duties of the board are to develop
a plan for public improvements and the rules and regulations for
implementation of the proposed residential rehabilitation program.
(3) Dissemination of information relating to the time and location
of the hearing, boundaries of the proposed residential
rehabilitation area, and a general description of the proposed
residential rehabilitation program by one of the following methods as
determined by the legislative body at the public meeting provided in
paragraph (1):
(A) At least seven days prior to the original hearing, by mailing
to all real property owners within the proposed residential
rehabilitation area at the address shown on the latest assessment
roll and by distribution to residents of the proposed residential
rehabilitation area in a manner determined to be appropriate by the
local agency.
(B) After express findings by the legislative body at the public
meeting provided in paragraph (1) at lower expense and effective
notice at least equal to the mailed and distributed notice provided
in subparagraph (A), by a method determined by the legislative body
which includes, but is not limited to, publication of such notice
pursuant to Section 6066 of the Government Code and posting of such
notice at no less than three prominent places within the proposed
residential redevelopment area and distribution to residents of the
proposed residential rehabilitation area in a manner determined to be
appropriate by the local agency.
"Citizen participation" also includes any other means of citizen
involvement determined appropriate by the legislative body.
Public meetings and consultations held to implement the
requirements of citizen participation shall be conducted by a
planning or rehabilitation official designated by the legislative
body. Public meetings shall be held at times and places convenient to
residents and property owners.
(c) "Financing" means the lending of moneys or any other thing of
value, or the purchase of a loan previously made by a qualified
mortgage lender in accordance with rules and regulations of the local
agency, for the purpose of residential rehabilitation and may, in
the discretion of the legislative body, include any or all of the
following:
(1) Refinancing of outstanding indebtedness of the participating
party with respect to property which is subject to residential
rehabilitation by such participating party.
(2) Financing or refinancing the cost incurred by a participating
party in acquiring real property for the purpose of residential
rehabilitation, including residential infill construction and move-on
residences.
(3) Financing the acquisition of residences within a residential
rehabilitation area which have been previously rehabilitated or
constructed with financing pursuant to this part.
(d) "Legislative body" means the city council, board of
supervisors, or other legislative body of the local agency.
(e) "Local agency" means any of the following:
(1) Any city, county, or city and county.
(2) Any redevelopment agency functioning pursuant to Part 1
(commencing with Section 33000).
(3) Any housing authority functioning pursuant to Part 2
(commencing with Section 34200).
(f) "Move-on residence" means a previously occupied single family
or multifamily residential structure moved from a location to a
vacant lot inside a residential rehabilitation area, or outside a
residential rehabilitation area if the single-family or multifamily
residential structure is for occupancy for persons or families of low
or moderate income.
(g) "Participating party" means any person, company, corporation,
partnership, limited liability company, firm, local agency, political
subdivision of the state, or other entity or group of entities
requiring financing for residential rehabilitation pursuant to the
provisions of this part. No elective officer of the state or any of
its political subdivisions and no employee or member of the agency
issuing bonds shall be eligible to be a participating party under the
provision of this part.
(h) "Qualified mortgage lender" means a mortgage lender authorized
by a local agency to do business with the agency and to aid in
financing pursuant to this part on behalf of the agency, for which
service the qualified mortgage lender will be reasonably compensated.
Such a mortgage lender shall be a state or national bank, federal or
state-chartered savings and loan association, or trust company or
mortgage banker which is capable of providing service or otherwise
aiding in the financing authorized by this part. Nothing in any
other provision of state law shall prevent such a lender from serving
as a qualified mortgage lender pursuant to this part.
(i) "Residential rehabilitation" includes the following:
(1) The construction, reconstruction, renovation, replacement,
extension, repair, betterment, equipping, developing, embellishing,
or otherwise improving residences consistent with standards of
strength, effectiveness, fire resistance, durability, and safety, so
that such structures are satisfactory and safe to occupy for
residential purposes and are not conducive to ill health,
transmission of disease, infant mortality, juvenile delinquency, or
crime because of any one or more of the following factors:
(A) Defective design and character of physical construction.
(B) Faulty interior arrangement and exterior spacing.
(C) Inadequate provision for ventilation, lighting, and
sanitation.
(D) Obsolescence, deterioration, and dilapidation.
(2) Residential infill construction, where authorized by the
comprehensive residential rehabilitation financing program.
(3) A qualified home improvement loan, which has the same meaning
as Section 103 (A) of the Federal Internal Revenue Code of 1954, as
amended by Public Law 96-499, December 5, 1980.
(4) With respect to a move-on residence, where authorized by the
comprehensive residential rehabilitation financing program, the
acquisition prior to relocation of, movement of, installation of, and
rehabilitation of, a move-on residence and purchase of a move-on
residence that has previously been rehabilitated with financing under
this part.
(5) Acquisition of real property for the purpose of rehabilitation
or residential infill construction pursuant to paragraph (1), (2),
or (4), if authorized by the comprehensive residential rehabilitation
financing program.
(6) Purchase of residences within a residential rehabilitation
area which have been previously rehabilitated or constructed with
financing under this part, if authorized by the comprehensive
residential rehabilitation financing program.
(7) Relocation payments required or authorized by Section 37922.2
or by Section 7265.3 of the Government Code in connection with
rehabilitation of a residence financed pursuant to this part, or in
connection with demolition of a structure for the purpose of making
land available for residential infill construction financed pursuant
to this part. The cost of relocation payments may be included in the
principal amount of a loan made to a participating party or may be
paid directly from bond proceeds.
(j) "Residential infill construction" means the construction of
new single-family or multifamily residences, excluding commercial or
mixed residential and commercial structures and residential hotels,
on vacant lots in residential rehabilitation areas, including lots
cleared by demolition of an existing structure. However, the cost of
demolition of existing structures shall not be eligible for
financing under this part, and it is the intent of the Legislature
that local agencies shall adopt lending policies and criteria which
will encourage rehabilitation of existing residences in residential
rehabilitation areas wherever possible.
(k) "Residence" means real property improved with a residential
structure and, in residential rehabilitation areas only, also
includes real property improved with a commercial or mixed
residential and commercial structure which, in the judgment of the
local agency, is an integral part of a residential neighborhood.
"Residence" also includes condominium and cooperative dwelling units,
and includes both real property improved with single-family
residential structures and real property improved with
multiple-family residential structures.
"Residence" also includes residential hotels in which not less
than one-half of the occupied dwelling units are occupied on a
nontransient basis. A dwelling unit shall be deemed to be used on a
nontransient basis for such purpose if the term of the tenancy is one
month or longer or if the tenant has resided in the unit for more
than 30 days. In a residential hotel, individual dwelling units
shall lack either cooking facilities or individual sanitary
facilities, or both. However, for purposes of this subdivision, a
residential hotel does not include dormitories, fraternity and
sorority houses, hospitals, sanitariums, rest homes, or trailer parks
and courts.
(l) "Rehabilitation standards" means the applicable local or state
standards for the rehabilitation of residences located in
residential rehabilitation areas or rehabilitated pursuant to Section
37922.1, including any higher standards adopted by the local agency
as part of its residential rehabilitation financing program.
(m) "Revenues" means all amounts received as repayment of
principal, interest, and all other charges received for, and all
other income and receipts derived by, the local agency from the
financing of residential rehabilitation, including moneys deposited
in a sinking, redemption, or reserve fund or other fund to secure the
bonds or to provide for the payment of the principal of, or interest
on, the bonds and such other moneys as the legislative body may, in
its discretion, make available therefor.
(n) "Residential rehabilitation area" means the geographical area
designated by the local agency as one for inclusion in a
comprehensive residential rehabilitation financing program pursuant
to the provisions of this part.

37912.5. Unless the context otherwise requires, "systematic
enforcement," as used in this part, means the enforcement of
rehabilitation standards in accordance with a systematic program of
making inspections of dwelling structures in accordance with
objective criteria for selection or order of selection of dwelling
structures to be inspected. Systematic enforcement may be limited to
rental or multifamily dwellings. It does not refer to a policy of
responding only to complaints and requests for inspections. It does
not include inspections where violations are not cited. It does not
include the concentrated enforcement of rehabilitation standards in a
designated geographic area within the jurisdiction.

37913. Local agencies operating rehabilitation programs pursuant to
this part shall submit a report to the California Debt Advisory
Commission pursuant to the requirements of Section 8855.5 of the
Government Code.
Local agencies may contract with the Department of Housing and
Community Development for technical assistance in the operation of
rehabilitation programs conducted pursuant to this part.

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