Copy of our draft Right of First Refusal Law
- followed by legal analysis and why it does not run afoul of state law or the state constitution
Right of First Refusal Ordinance _________________
AN ORDINANCE requiring that an owner seeking to sell low income rental housing first notify the City that such housing is being offered for sale, establishing procedures for the City or an agency it has designated to make a counter offer, and establishing condemnation procedures for obtaining low income housing deemed important to be retained for public use while ensuring that owners of the property to be condemned receive just compensation.
WHEREAS, there is a significant shortage of affordable housing in Seattle which has forced many people into homelessness in our communities over the last decade; and
WHEREAS, current development pressures now threaten to force the demolition, conversion, or sale of the remaining supply of low income housing, which are a significant source of low income housing in Seattle, and
WHEREAS, such redevelopment also threatens the integrity and physical character of our neighborhoods, and
WHEREAS, such pressures would also cause a dramatic loss of the remaining supply of low income housing and would otherwise produce a new wave of massive displacement of low income residents at a time when vacancy rates are extremely low, rents are high, and our shelters are full, and
WHEREAS, an estimated 2000 rental units in federally assisted housing developments may be eligible to discontinue their use as rental housing for low and very low income people in the future which would further exacerbate an already critical shortage of affordable rental housing; and
WHEREAS, such displacement would greatly overburden the City's limited supply of subsidized housing where waiting lists are already years long for entry into such housing, and
WHEREAS, this ordinance would help preserve the remaining supply of low cost units in the City by giving the City an opportunity to acquire for public use and in perpetuity a large portion of our City's existing low income housing doing so through public purchase or use of condemnation proceedings, thereby preventing displacement and homelessness while ensuring that the existing owners are given just compensation,
NOW THEREFORE, BE IT ORDAINED BY THE CITY OF SEATTLE, AS FOLLOWS:
SECTION l. This chapter may be known and cited as the low income rental housing purchase ordinance.
SECTION 2. An obligation of good faith is imposed on the parties in the conduct of affairs affected by this chapter. Further obligations under this chapter on other parties are also discharged by a failure to act in good faith. If a qualified public housing agency or quasi-public housing agency operating under authorization by the City gives written "notice" to an owner or the owner's agent or representative of low income rental housing or to the Department under this chapter that they have a present and continuing desire to purchase the low income rental housing, an owner may elect or not elect to offer that rental housing for sale to that entity but only in accordance with this chapter.
SECTION 3. "Notice" for the purposes of this section means a written letter signed by an officer of a qualified public housing agency or quasi-public housing agency indicating that said agency is operating on the City's behalf and desires to participate in the purchase of that low income rental housing. This written letter shall also indicate the name of the qualified public housing agency or quasi-public housing agency expressing that interest accompanied by a letter from the City confirming the agency is operating on the City's behalf.
SECTION 4. The following words and phrases used in this chapter shall have the meanings set forth in this section:
(A.)(1) The terms "sold" or "sale" for the purposes of this chapter have their ordinary meaning and include: (i) A conveyance, grant, assignment, quitclaim, or transfer of ownership or title to real property and improvements that comprise low income rental housing (or any low income rental dwelling unit contained in that low income rental housing), for a valuable consideration; (ii) a contract for the conveyance, grant, assignment, quitclaim, or transfer; (iii) a lease with an option to purchase the real property and improvements, or low income rental unit, or any estate or interest therein; or (iv) other contract under which possession of the property is given to the purchaser, or any other person by his or her direction, where title is retained by the vendor as security for the payment of the purchase price. These terms also include any other transfer of the beneficial or equitable interest in the low income rental housing such as a transfer of equity stock or other security evidencing ownership that results in a change in majority interest ownership.
(2) The terms "sale" or "sold" do not include: (i) A transfer by gift, devise, or inheritance; (ii) a transfer of a leasehold interest other than of the type described in this subsection; (iii) a cancellation or forfeiture of a vendee's interest in a contract for the sale of low income rental housing; (iv) a deed in lieu of foreclosure of a mortgage; (v) the assumption by a grantee of the balance owing on an obligation that is secured by a mortgage or deed in lieu of forfeiture of the vendee's interest in a contract of sale where no consideration passes otherwise; (vi) the partition of property by tenants in common by agreement or as the result of a court decree; (vii) a transfer, conveyance, or assignment of property or interest in property from one spouse to the other in accordance with the terms of a decree of divorce or dissolution or in fulfillment of a property settlement agreement incident thereto; (viii) the assignment or other transfer of a vendor's interest in a contract for the sale of real property, even though accompanied by a conveyance of the vendor's interest in the real property involved; (ix) transfers by appropriation or decree in condemnation proceedings brought by the United States, the state or any political subdivision thereof, or a municipal corporation; (x) a mortgage or other transfer of an interest in real property (low income rental units) merely to secure a debt, or the assignment thereof; (xi) a transfer or conveyance made under an order of sale by the court in a mortgage or lien foreclosure proceeding or upon execution of a judgment; (xii) a deed in lieu of foreclosure to satisfy a mortgage; (xiii) a conveyance to the federal housing administration or veterans' administration by an authorized mortgagee made under a contract of insurance or guarantee with the federal housing administration or veterans' administration; (xiv) a transfer in compliance with the terms of any lease or contract upon which notice has already been given under this chapter, or where the lease or contract was entered into before April 1,1998; or (xv) a transfer to a corporation or partnership the majority interest of which is wholly owned by the transferor.
(B.) A "qualified public housing agency" means the existing Seattle Housing Authority when it has received authorization from the Department to submit an offer of purchase under provisions of this ordinance, or any newly established public entity created by the City and receiving authorization from the Department to submit an offer of purchase under provisions of this ordinance.
(C.) "Low income rental housing" means any rental housing development containing at least four dwelling units and that includes at least twenty percent of the dwelling units offered at a rent level that is an affordable rent to a low income household or that included at least twenty percent of the dwelling units offered at a rent level that is an affordable rent to a low income household within the last two years prior to the date that an owner is required to make a bona fide offer to sell the development pursuant to Section 5. Affordable rent means that the rent paid by the household does not exceed thirty percent of eighty percent of the median income, adjusted for family size, for the standard metropolitan statistical area in which the rental housing development is located.
(D.) "Dwelling unit" means a structure or that part of a structure which is used as a home, residence, or sleeping place by one (1) person or by two (2) or more persons maintaining a common household, including but not limited to single-family residences and units of multiplexes, and apartment buildings. Where two or more persons occupy a dwelling unit, but have separate rental agreements for use of part of the structure as a sleeping place, those sleeping places and any shared common areas shall be considered separate dwelling units as to each occupant.
(E.) "Low income" means a total household income that is at or below 80 percent of the median income for comparably sized households in the standard metropolitan statistical area in which the development is located.
(F.) "Very low income" means a total household income that is less than fifty percent (50%) of the median income for comparably sized households in the Seattle-Everett SMSA.
(G.) "Extremely low income" means a total household income that is less than thirty percent (30%) of the median income for comparably sized households in the Seattle-Everett SMSA.
(H.) "The Department" means the Office of Housing and Human Services.
(I.) An "indication of intent to sell" means that point in time when an owner of low income rental housing expresses an intent to offer the property for sale or considers any offer to purchase the property. An "indication of intent to sell" as used herein, shall include but not be limited to the following; posts a "for sale" sign on the property, receives an offer from a prospective purchaser, lists the property for sale with an agent or in any real estate or common news publication, contacts an agent and requests assistance in identifying a buyer, engages in discussions over possible sale of the property with a potential buyer, or in any other way advertises, entertains, or receives offers of the property for possible sale.
(J.) An "owner" means an individual, corporation, association, partnership, joint venture, or business entity, which holds title to a federally assisted housing development.
(K.) A "quasi-public agency" means any area non-profit low income housing developer receiving authorization from the Department to submit an offer of purchase under provisions of this ordinance on the City's behalf.
SECTION 5. Within 72 hours after an owner of low income rental housing expresses an "indication of intent to sell" that property, the owner shall formally notify all affected households and the City of a potential sale of that property. Notification to households of the affected low income rental housing shall be in the form of a written letter with copies hand delivered or posted on the door of each household's unit, and mailed by certified letter to each household. This announcement shall also indicate to each affected household that they are encouraged to contact the City's Office of Housing if they are interested in seeing the City exercise its authority to purchase their housing in accordance with this chapter and that this will enable the City to retain said housing at low income rent levels. The letter provided to tenants under this subsection shall also include the number of the Department and a contact within the Department that can be reached for assistance. Notification by the owner to the Department shall be in the form of a written letter, mailed as a certified letter, to the Department Director followed by a phone call to the Director of the Department. The letter to the Department will include a copy of the letter delivered to the affected households. The letter to the Department will also indicate how the City, or an entity authorized by the City, may access information from the owner regarding competing offers, terms of sale, and any other property information they may need to make a purchase of the property under terms of this chapter. The information provided to the Department shall also inform them of the 30-day deadline in which they or their authorized entity have the opportunity to present an offer of purchase for the property as is required under Section 6 of this chapter.
SECTION 6. In those cases where an owner of low income rental housing has given notice of an intent to sell under provisions of this chapter, and a qualified public housing agency or quasi-public agency authorized by the City under this chapter has given notice of its intent to purchase that low income housing within 30 days of the owners notice of intent to sell, the owner shall be obligated to undertake discussions with that entity and to entertain bonified offers for purchase by that entity. The owner shall also be obligated to make available to that entity any competing offers, terms of sale, and any other property information they may need in order for that entity to make a bonified purchase offer for that property. If, within sixty days after an owner has received a notice of its intent to purchase, the qualified public housing agency or quasi-public housing agency operating under authorization by the City tenders to the owner of low income rental housing an amount equal to two percent of the agreed purchase price, refundable only according to this chapter, together with a fully executed purchase and sale agreement at least as favorable to the owner of low income rental housing as any competing offers, the respective owner shall give due consideration to the entity's offer of purchase. Due consideration shall mean that the owner is obligated to have at least one face-to-face discussion with that entity's designated representatives and give itself a minimum of 30 days from the date the offer was presented by that entity for consideration of their offer. Until the expiration of this 30-day period, the owner of that low income housing may not enter into a purchase and sale agreement, or any other agreement with third parties that would pre-empt the designated entities right to due consideration of its offer. If, at the end of that 30 day period, the owner has not chosen to accept said offer, the owner shall be free to enter into agreements with other parties, provided that a written notice of rejection of the entity's offer is forwarded at that time to the entity and to the Department stating reasons for that rejection. In the event that a designated entity giving notice of intent to purchase has not made a bonified offer within sixty days of the owners expression of intent to sell, the owner shall be free at that time to entertain and accept competing offers for sale of the property.
SECTION 7. Any earnest money or other financial contribution that has been made to the owner by a qualified public housing agency or quasi-public housing agency in order to secure a purchase and sale agreement, or that is required under terms of a purchase and sale agreement drawn up between the owner and the original purchaser, including the amounts to be paid under Section 6 of this chapter, shall be refundable, subject to the provisions of this section, regardless of terms contained in any purchase and sale agreement drawn up between that owner and the original purchaser. Under provisions of this section, the purchase and sale agreement executed by the qualified public housing agency or quasi-public housing agency shall include terms that provide for full refunds of earnest money or other cash securities provided that the tenant organization withdraws their offer to purchase within 90 days from the date of execution of their purchase and sale agreement. If terms of the purchase and sale agreement drawn up between the owner and original purchaser allow for refunds beyond 90 days from the date of execution of the purchase and sale agreement, then these terms shall prevail in the qualified public housing agency or quasi-public housing agency executed purchase and sale agreement. That purchase and sale agreement shall also include provisions which allow the qualified public housing agency or quasi-public housing agency a minimum of 240 days in which to obtain full financing needed to close their sale, or if terms contained in any purchase and sale agreement drawn up between the owner and the original purchaser provide for a longer period of time, then these provisions shall be included in the purchase and sale agreement between the owner and the qualified public housing agency or quasi-public housing agency.
SECTION 8. In the case of low income housing covered under this chapter but where the owner does not accept an offer of purchase by a qualified entity designated by the City under this chapter, the City shall establish procedures for the exercise of its condemnation powers so that it may acquire all or a portion of these low income properties for public use, in accordance with applicable state and local laws including Chapter 8.12 RCW which outline the City's powers of eminent domain and in accordance with the following procedures and criteria:
(A.) On the effective date of this ordinance, the City shall authorize the Department to create a 5-member "preservation" commission, consisting of five citizens appointed by the Department, for purposes of meeting monthly in order to select specific applicable properties covered under this section that will be the subject of condemnation proceedings by the City. The commission shall include at least one low income tenant, two low income housing advocates and two professionals with low income preservation experience. The commission shall consider for condemnation only those properties covered under the first paragraph of this section, provided that they also contain at least 20 or more low income units on that property, and are brought to the commission's attention upon request by the Department or any of the entities given authority by the City under Section 13 of this chapter to make purhase offer consistent with Section 5,6, and 7 of this Chapter. The Department will be charged with setting up a reasonable process and structure for the commission's review of such properties and provide necessary technical assistance and the minimal amount of staffing necessary to facilitate implementation of their duties under this section. Properties shall be subject to City condemnation under provisions of this chapter based on a decision by a majority of commission members that said low income property would otherwise be lost and that the property is an invaluable low income housing asset that must be retained for public use. When making this determination, the commission shall adhere to the following additional guidelines:
(1.) To facilitate it's responsibility to select properties for condemnation under the requirements of this section, the Commission will at its inception, establish a scoring system for ranking which properties brought to its attention are most worthy of preservation under this section. This ranking criteria will be subject to yearly review and revision if deemed necessary by the Commission. The Department shall assist in evaluating these criteria and making recommendations to the Commission. Properties with a greater number of very low income units to be lost (priced at or below 30 percent of median) and where there is significant public concern being demonstrated shall be given the greatest weight in such a ranking process but other factors shall also be considered including type of units that would otherwise be lost, where the property is located and whether or not racial diversity as defined under the city's comprehensive plan and federal fair housing statutes would be advanced, the need for that type of unit, and the populations being served by those units.
(2.) The commission shall also approve for condemnation only those properties where there is qualified entity under provisions of this chapter that has presented itself to the Commission and demonstrated to the Commission and Department's satisfaction that it is capable of assuming the role of lessee, or owner of said property consistent with the provisions of this chapter, and that said entity has the ability to assemble financing, consistent with the provisions of this chapter. If more than one qualified entity has stepped forward and is capable of assuming the role of owner or lessee under the provisions of this paragraph, it shall be the Commission's responsibility to select among those entities based on what entity the Commission believes is most capable of assuming the role of owner or lessee.
(3.) Not less than one property a month shall be chosen for condemnation by the Commission unless no properties have been brought to the commission's attention meeting conditions for consideration under the provisions of this section.
(B.) In the event a property has been designated by the Commission for condemnation and a qualified public or quasi-public entity is selected to become the owner/lessee, the Department shall forward this recommendation to the Law Department and it shall be the Law Department's responsibility to begin and prosecute proceedings on that property in the manner provided by law to condemn, take, damage and appropriate in fee simple said property and to proceed with due haste in initiating such proceedings so as to ensure that said property is acquired and the public's interest has been served. Said lands, rights, and privileges and other property are to be appropriated and taken only after just compensation has been made or paid into court for the owners thereof, in the manner provided by law
(C.) The Department shall also be charged under this section with the responsibility of assisting the qualified entity that has been selected by the Commission to become owner or lessee resulting from a condemnation proceeding under this section. Financing brought by the designated entity may include at the Department's discretion use of city housing funds designated for purposes of facilitating purchase or lease of low income housing under this chapter. The Department shall in advance of a condemnation proceeding establish agreements with the designated entity in order to ensure that the identified entity fulfills its purchase responsibility and that they meet the provisions outlined in Section 9 of this chapter before condemnation is pursued on said property.
SECTION 9. To ensure that low income housing acquired under the provisions of this ordinance remains in public use, the qualified public housing agency or quasi-public housing agency authorized by the City to purchase or lease low income rental housing under provisions of this chapter shall agree to obligate itself under a contractual relationship with the City to maintain that low income housing for low income, very low income, and extremely low income persons and families for the remaining useful life of the development in at least the approximate percentages that those persons and families occupied that development at the date the owner submits a bona fide offer for sale or at least the approximate percentages specified in existing use restrictions, whichever is higher, and agree to seek any additional subsidies that may reasonably be available to attain the most affordable rents and highest percentages of occupancy by those persons and families. In addition, this entity operating on the City's behalf shall agree under a contractual relationship with the City to maintain this housing in a form which explicitly bars private uses on the site other than ground floor commercial rents necessary to cover operations and financing costs pursuant to maintenance and operation, debt coverage, and other explicit project related expenses. The entity shall be precluded through such an agreement from making all or any part of the property available for future sale for private ownership and/or uses. The entity shall also be required under this agreement to return all excess revenues that may accrue above operating expenses to the City such as any excess revenue generated above costs obtained from commercial or residential rents on the site, to be used solely for public facilities, programs, and uses. A memorandum of this obligation shall be recorded in the King County Department of Records. The responsibility for identifying a qualified public housing agency or quasi-public housing agency to make an offer for sale under provisions of this ordinance shall rest solely the Department in accordance with this chapter and based on that entities ability to meet the following criteria:
(1) Their ability to demonstrate to the City that it possesses the financial and organizational capacity to acquire the development and manage the housing and related facilities for their remaining useful life, either by itself, or in cooperation with others.
(2) Have no person among its officers, directors, or holding legal or beneficial ownership with a financial interest in that low income rental housing or with a prior financial interest in that low income rental housing: PROVIDED THAT an eligible purchaser may have on its board participation by bona fide tenants of that housing and not be disqualified pursuant to this subsection.
(3) If it is not economically feasible for a development to continue to conform to the use and occupancy restrictions described in this subsection, a purchaser shall be entitled to remove one or more units from the rent and occupancy requirements as may be necessary for the development to become economically feasible, provided that once the development is again economically feasible, the purchaser shall designate the next available units as low income units up to the original number of those units: PROVIDED That any removal of units authorized herein is subject to the prior review and approval of the City.
SECTION 10. The provisions of this chapter may be enforced either in law or in equity by the Department, or City Attorney on behalf of the Department.
SECTION 11. In addition to any other sanction or remedial procedure which may be available,any other failure to comply with the requirements of this chapter shall be subject to a civil penalty of up to twenty-five thousand dollars for each dwelling unit in a development that is subject to this chapter. The penalty shall be recovered in a civil action brought on behalf of the City by the City Attorney. Any civil penalties collected under this section shall be deposited in a housing fund managed by the Department to facilitate the provisions of this ordinance.
SECTION 12. The City shall also give priority for use of a portion of its housing funds each year in an amount of no less than 2 million dollars in order to facilitate purchase and/or condemnation of existing low income housing under provisions of this law, giving priority for use of these funds in cases involving properties covered under provisions of this chapter where the Department determines there is a significant number of affected low income units that otherwise would be lost and where the public interest is clearly at stake given the degree of impact on the community. Any of these prioritized funds not used annually for the purpose of effectuating this ordinance may be reprogrammed, or carried over to the following year, but in any event no less than two million of the housing funds it receives annually shall be made available each year and prioritized to facilitate purchase or lease of existing low income housing under provisions of this law. These funds may be used to facilitate condemnation proceedings under this chapter and/or to assist a qualified public housing agency or quasi-public housing agency in making their initial payment of two percent of the purchase price, payment of deposits, other upfront cash requirements, and other costs necessary to assist these entities in making payment of the full purchase price, provided that at least a majority of these monies be in the form of loans (at little or no interest) that are repaid to the City.
Section 13. In the case of low income housing that falls under this chapter, the Department shall be responsible for compiling a list of qualified public housing agencies or quasi-public housing agencies eligible to participate in purchase of that housing in accordance with Sections 5,6, and 7 of this chapter. It also shall be the Department's responsibility to select from that larger list one or more qualified public housing agencies or quasi-public housing agencies that will make a purchase offer under sections 5,6, and 7 of this chapter. The Department shall also be responsible for providing reasonable levels of technical assistance to these entities it authorizes to submit an offer of purchase under Sections 5,6, and 7 of this chapter and be responsible for reviewing and approving terms of their offers to an owners of said property covered under this chapter in accordance with Section 9 of this chapter. The Department shall make a good faith effort to assist them in the purchase of low income rental housing under provisions of this chapter.
SECTION 14. If any provision of this ordinance or its application to any person or circumstance is held invalid, the remainder of the ordinance or the application of the provisions to other persons or circumstances is not affected.
NEW SECTION. Sec. 15. Sections 1 through 15 of this ordinance shall constitute a new chapter of the City Municipal Code.
A Legally-Defensible Right of First Refusal Law - To Control the Loss of Low Income Housing in Seattle
1. Notification Requirements: When an owner wishes to sell a low income housing property of 20 or more low income rental units, that owner must first notify the tenants in that building of the fact that the property will be put up for sale. The said tenants must also be given 60 days in which to present an offer of purchase. The owner is not bound to sell to the tenants but must at least give "due consideration" when an offer is presented by the tenants.
2. Creation of a 5-member Housing Preservation Commission to recommend and authorize use of the City's condemnation powers when the commission determines that a rental building of 20 or more low income units (threatened with speculative sale)is too valuable to be lost to such a sale and redevelopment and thus must subsequently be secured by the City under a condemnation process (guaranteeing full market value to the underlying owner), ie., that said low income housing must be obtained and retained in public use for low income people as determined by the Commission.
Rationale and Legal Justification:
While condemnation for acquisition of housing by the City has seldom been done if at all, there is nothing - nothing - in the state law prohibiting the City from doing so.
In fact, here are some state laws which make it clear that acquisition of low income housing falls within the scope of the city’s municipal powers:
1. RCW 8.12.030 (related to eminent domain spelling out when and how the City can proceed with condemnation and for what reasons - I've highlighted the key provisions below and end of this para.)
8.12.030 Condemnation authorized -- Purposes enumerated.
Every city and town and each unclassified city and town within the state of Washington, is hereby authorized and empowered to condemn land and property, including state, county and school lands and property for streets, avenues, alleys, highways, bridges, approaches, culverts, drains, ditches, public squares, public markets, city and town halls, jails and other public buildings, and for the opening and widening, widening and extending, altering and straightening of any street, avenue, alley or highway, and to damage any land or other property for any such purpose or for the purpose of making changes in the grade of any street, avenue, alley or highway, or for the construction of slopes or retaining walls for cuts and fills upon real property abutting on any street, avenue, alley or highway now ordered to be, or such as shall hereafter be ordered to be opened, extended, altered, straightened or graded, or for the purpose of draining swamps, marshes, tidelands, tide flats or ponds, or filling the same, within the limits of such city, and to condemn land or property, or to damage the same, either within or without the limits of such city for public parks, drives and boulevards, hospitals, pesthouses, drains and sewers, garbage crematories and destructors and dumping grounds for the destruction, deposit or burial of dead animals, manure, dung, rubbish, and other offal, and for aqueducts, reservoirs, pumping stations and other structures for conveying into and through such city a supply of fresh water, and for the purpose of protecting such supply of fresh water from pollution, and to condemn land and other property and damage the same for such and for any other public use after just compensation having been first made or paid into court for the owner in the manner prescribed by this chapter.
2. The recent Supreme Court Decision striking down the mobile home right of first refusal”
While RCW 8.12.030 (quoted above) clearly indicates that the City has authority to condemn for public uses and this language does not preclude condemnation by the City of housing so long as it is demonstrate that the use of the property is for public use. Also, this conclusion is supported by the Supreme Court Decision (which I've also attached and highlighted key sections in yellow) on the mobile home right of first refusal law. To avoid the takings without just compensation, a city must go through a condemnation proceedings. This is how we've redrafted our city-wide right of first refusal law...which I also will attach. Tom Carr agreed this appeared to be a proper way to go.
* RCW 35.21.010 General corporate powers
(1) Municipal corporations may sue….be sued, contract or be contracted with, acquire, hold, process or dispose of property
* RCW 35.21.685 (clearly identifies housing as a municipal purpose
“A city or town may assist in development or preservation of publicly or privately owned housing for persons of low income by providing loans, grants of general municipal funds….they may be made to finance all or a portion of the costs of construction, reconstruction, acquisition, or rehabilitation of housing that will be occupied by a person or family of low income (defined as at or below 80 percent of median)
While the above provisions spell out a city’s authority to acquire housing, here are some other important RCW’s spelling out the city’s authority to lease, transfer, sell off that property to a public or even a non-profit corporation.
* RCW 35.21.730
Public corporations -- Powers of cities, towns, and counties -- Administration.
In order to improve the administration of authorized federal grants or programs, to improve governmental efficiency and services, or to improve the general living conditions in the urban areas of the state, any city, town, or county may by lawfully adopted ordinance or resolution:
(1) Transfer to any public corporation, commission, or authority created hereunder, with or without consideration, any funds, real or personal property, property interests, or services;
Interests in land for purposes of conservation, protection, preservation, etc. -- Ownership by certain entities --
A development right, easement, covenant, restriction, or other right, or any interest less than the fee simple, to protect, preserve, maintain, improve, restore, limit the future use of, or conserve for open space purposes, any land or improvement on the land, whether the right or interest be appurtenant or in gross, may be held or acquired by any state agency, federal agency, county, city, town, or metropolitan municipal corporation, nonprofit historic preservation corporation, or nonprofit nature conservancy corporation. Any such right or interest shall constitute and be classified as real property. All instruments for the conveyance thereof shall be substantially in the form required by law for the conveyance of any land or other real property.
It is preferable from our perspective to have the City directly initiate condemnation proceedings as it has done over 2500 times in the last 50 years. Yes it is true - a housing authority under state law may also initiate condemnation proceedings directly (you’ve cited those RCW’s) by passing a resolution (they do it via a resolution) authorizing their attorney's to go to court...but so may the City. For obvious reasons, it is preferable in our ordinance that this responsibility be placed in the hands of the City.
Not withstanding past conversations with the previous Sidran Law Department, the RCW’s we’ve identified above make it very clear that the City can do so essentially for purposes of securing any property "for public use"....whatever that public use may be including housing...it's essentially up to the courts in a condemnation proceeding to determine if the public use is valid. Also, I have found nothing in City law or in the Charter barring the City from doing so.
Note also that under the Housing Maintenance Ordinance and landlord tenant law, the City gives itself broad authority to place abandoned buildings in receivership (by going to court to get approval for placement of a building in receivership - a judge appoints a non-profit to re-open, repair, and manage a building that is abandoned) See SMC 22.220.210
Our condemnation component – How it works:
So, when drafting an ordinance authorizing condemnation, I've borrowed from the template always used when the City passes an ordinances authorizing condemnation - the City Council uses this authority 3-4 times a year according to the City's web site. Since it is not the practice of the City to assume management and operation responsibilities of low income housing, under Sections 4,5,6, of our condemnation ordinance.....the City Attorney is not authorized to move ahead with condemnation proceedings until the Office of Housing has worked out an arrangement with SHA or a non-profit - a binding agreement in which this 'selected' entity agrees to assume either ownership or the role of longterm lessee and agrees to come up with financing and agrees to maintain the building in public use for very low income housing for the life of the building. See these provisions in our draft.
Note that in accordance with RCW 35.21.730 quoted above and RCW 64.04.130 quoted above the City has authority to transfer properties to other public corporations subject to procedures outlined in these laws.
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