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SB-423 • 2026

Housing: real property transfer taxes: affordability covenants.

Housing: real property transfer taxes: affordability covenants.

Budget Elections Housing Taxes
Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
Gonzalez
Last action
2025-09-11
Official status
(Corrected September 30).
Effective date
Not listed

Plain English Breakdown

The bill's provisions about housing agreements do not override other laws related to foreclosures, but it does exempt modified agreements from certain restrictions.

Housing: Real Property Transfer Taxes and Firefighter Pilot Program

The bill allows state or local agencies to modify housing agreements under certain conditions, limits real property transfer taxes in Los Angeles for specific properties, and creates a pilot program allowing formerly incarcerated individuals to work as firefighters with the County of Los Angeles Fire Department.

What This Bill Does

  • Allows state or local agencies administering affordable housing programs to enter into or change regulatory agreements regarding curing an event of default if certain conditions are met.
  • Exempts modified housing agreements from conflicting land use restrictions, declarations of restrictive covenants, deed restrictions, or similar instruments.
  • Limits the real property transfer tax rate in Los Angeles for properties issued a certificate of occupancy within the last 15 years unless they meet specific disaster-related criteria.
  • Creates a pilot program allowing formerly incarcerated individuals to work as firefighters with the County of Los Angeles Fire Department for five years upon appropriation by the Legislature.

Who It Names or Affects

  • State or local agencies involved in affordable housing programs
  • Homeowners and property buyers in Los Angeles
  • Formerly incarcerated individuals interested in firefighting work

Terms To Know

Affordable Housing Program
A program that helps provide homes for people who cannot afford regular market prices.
Documentary Transfer Tax
A tax charged when real property is transferred or sold, based on the value of the transaction.

Limits and Unknowns

  • The bill's provisions about housing agreements do not override other laws related to foreclosures.
  • Some parts of the bill are specific to Los Angeles and may not apply in other cities.
  • The firefighter pilot program will only operate if funding is provided by the Legislature.

Bill History

  1. 2025-09-11 California Legislative Information

    (Corrected September 30).

  2. 2025-09-11 California Legislative Information

    September 11 set for first hearing canceled at the request of author.

  3. 2025-09-10 California Legislative Information

    Joint Rule 62(a) suspended.

  4. 2025-09-10 California Legislative Information

    Re-referred to Com. on L. GOV. pursuant to Assembly Rule 77.2.

  5. 2025-09-09 California Legislative Information

    Ordered to third reading.

  6. 2025-09-09 California Legislative Information

    Read third time and amended.

  7. 2025-09-09 California Legislative Information

    Joint Rule 61(a)(13) suspended. (Ayes 60. Noes 20. Page 3128.)

  8. 2025-09-08 California Legislative Information

    Ordered to third reading.

  9. 2025-09-08 California Legislative Information

    From inactive file.

  10. 2025-09-08 California Legislative Information

    Assembly Rule 78 suspended.

  11. 2025-09-04 California Legislative Information

    Ordered to inactive file on request of Assembly Member Aguiar-Curry.

  12. 2025-09-03 California Legislative Information

    Read second time. Ordered to third reading.

  13. 2025-09-02 California Legislative Information

    Read second time and amended. Ordered to second reading.

  14. 2025-08-29 California Legislative Information

    From committee: Do pass as amended. (Ayes 11. Noes 0.) (August 29).

  15. 2025-08-20 California Legislative Information

    August 20 set for first hearing. Placed on APPR. suspense file.

  16. 2025-07-15 California Legislative Information

    From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 13. Noes 0.) (July 14). Re-referred to Com. on APPR.

  17. 2025-07-02 California Legislative Information

    From committee: Do pass and re-refer to Com. on NAT. RES. with recommendation: To consent calendar. (Ayes 9. Noes 0.) (July 1). Re-referred to Com. on NAT. RES.

  18. 2025-06-16 California Legislative Information

    Referred to Coms. on PUB. S. and NAT. RES.

  19. 2025-06-05 California Legislative Information

    In Assembly. Read first time. Held at Desk.

  20. 2025-06-04 California Legislative Information

    Read third time. Passed. (Ayes 39. Noes 0. Page 1503.) Ordered to the Assembly.

  21. 2025-05-27 California Legislative Information

    Read second time. Ordered to third reading.

  22. 2025-05-23 California Legislative Information

    Read second time and amended. Ordered to second reading.

  23. 2025-05-23 California Legislative Information

    From committee: Do pass as amended. (Ayes 6. Noes 0. Page 1199.) (May 23).

  24. 2025-05-16 California Legislative Information

    Set for hearing May 23.

  25. 2025-05-12 California Legislative Information

    May 12 hearing: Placed on APPR. suspense file.

  26. 2025-05-06 California Legislative Information

    Set for hearing May 12.

  27. 2025-05-05 California Legislative Information

    Read second time and amended. Re-referred to Com. on APPR.

  28. 2025-05-01 California Legislative Information

    From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 7. Noes 0. Page 969.) (April 30).

  29. 2025-04-25 California Legislative Information

    Set for hearing April 30.

  30. 2025-04-24 California Legislative Information

    April 28 hearing postponed by committee.

  31. 2025-04-24 California Legislative Information

    Set for hearing April 28.

  32. 2025-04-23 California Legislative Information

    From committee: Do pass and re-refer to Com. on N.R. & W. (Ayes 5. Noes 1. Page 841.) (April 22). Re-referred to Com. on N.R. & W.

  33. 2025-04-09 California Legislative Information

    Set for hearing April 22.

  34. 2025-04-02 California Legislative Information

    Re-referred to Coms. on PUB. S. and N.R. & W.

  35. 2025-03-26 California Legislative Information

    From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS.

  36. 2025-02-26 California Legislative Information

    Referred to Com. on RLS.

  37. 2025-02-19 California Legislative Information

    From printer. May be acted upon on or after March 21.

  38. 2025-02-18 California Legislative Information

    Introduced. Read first time. To Com. on RLS. for assignment. To print.

Official Summary Text

SB 423, as amended,
Smallwood-Cuevas
Gonzalez.
Inmate firefighters: local handcrew pilot program.
Housing: real property transfer taxes: affordability covenants.
(1) Existing law, the Zenovich-Moscone-Chacon Housing and Home Finance Act, among other things, establishes the Department of Housing and Community Development and requires it to administer various programs intended to promote the development of housing and to provide housing assistance and home loans. Existing law sets forth various general powers of the department in implementing these programs, including authorizing the department to enter into long-term contracts or agreements of up to 30 years for the purpose of servicing loans or grants or enforcing regulatory agreements or other security documents. Existing law creates the California Housing Finance Agency within the Business, Consumer Services, and Housing Agency and authorizes the agency to make loans to finance affordable
housing.
This bill would allow a state or local agency administering an affordable housing program to enter into or modify a provision of a regulatory agreement regarding curing an event of default, if prescribed conditions apply. The bill would exempt a regulatory agreement entered into or altered pursuant to its provisions from any conflicting land use restriction, declaration of restrictive covenants, deed restriction, or similar instrument, as provided. The bill would specify that its provisions are not to be construed to supersede any other law governing the foreclosure of deeds of trust or mortgages and the extinguishment of junior interests.
The bill would include findings that these changes proposed by this bill address a matter of statewide concern rather than a municipal affair and,
therefore, apply to all cities, including charter cities.
(2) Existing statutory law, enacted by Proposition 62, as approved by the voters at the November 4, 1986, statewide general election, prohibits a local government or district from imposing any transaction tax or sales tax on the sale of real property within the city, county, or district, except as provided. The California Constitution authorizes cities organized under a charter to make and enforce all ordinances and regulations with respect to municipal affairs, which supersede inconsistent general laws. Existing law, the Documentary Transfer Tax Act, authorizes the imposition of a tax by a county or city, as provided, with respect to specified instruments that transfer specified interests in real property.
This bill would prohibit the City of Los Angeles from imposing a documentary transfer tax greater than a specified rate on a
deed, instrument, or writing that conveys real property that was issued its first certificate of occupancy within the previous 15 years, except as provided. The bill would authorize the City of Los Angeles to impose a documentary transfer tax at greater than a specified rate on a deed, instrument, or writing that conveys real property unless the real property is a single-family housing property, as defined, and meets specified conditions, including that the dwelling unit on the single-family housing property was destroyed by a disaster that resulted in a declared local emergency. The bill would make these provisions operative on a specified date, but only if certain conditions are satisfied, as provided.
This bill would make legislative findings and declarations as to the necessity of a special statute for the City of Los Angeles.
Existing law establishes in the Natural Resources Agency the Department of Forestry and Fire Protection, and requires the department to be responsible for, among other things, fire protection and prevention, as provided. Existing law establishes the California Conservation Corps and requires the corps to implement and administer various training and educational programs, including the California Conservation Camp program. Under existing law, inmates and wards in the California Conservation Camp program work on projects
supervised by the department. Existing law requires the department to use inmates and wards assigned to conservation camps in performing fire prevention, fire control, and other work at the department.
This
bill would authorize, upon appropriation by the Legislature, the fire chief of the County of Los Angeles Fire Department to establish the Local Handcrew Pilot Program for 5 years and would authorize the fire chief to enroll in the pilot program formerly incarcerated individuals who have successfully completed specified programs or work. The bill would require the fire chief to develop metrics for evaluating the efficacy and success of the pilot program, to evaluate the efficacy and success of the pilot program using those metrics, and to report the findings of the evaluation to the Legislature and the Governor, as provided.
This bill would make legislative findings and declarations as to the necessity of a special
statute for the County of Los Angeles.

Current Bill Text

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