(a) If the department determines that real property or an interest therein, previously or hereafter acquired by the state for highway purposes, is no longer necessary for those purposes, the department may sell, contract to sell, sell by trust deed, or exchange the real property or interest therein in the manner and upon terms, standards, and conditions established by the commission. The payment period in a contract of sale or sale by trust deed shall not extend longer than 10 years from the time the contract of sale or trust deed is executed, and a transaction involving a contract of sale or sale by trust deed to private parties shall require a downpayment of at least 30 percent of the purchase price, except as follows:

(1) For improved and unimproved real property sold or exchanged for the purpose of housing for persons and families of low or moderate income, as defined in Section 50093 of the Health and Safety Code, the payment period shall not exceed 40 years and the downpayment shall be at least 5 percent of the purchase price. All contracts of sale or sales by trust deed, for the purpose of housing for persons and families of low or moderate income shall bear interest. The rate of interest for the contract or sale shall be computed annually, and shall be the same as the average rate returned by the Pooled Money Investment Board for the past five fiscal years immediately preceding the year in which the payment is made. The contract of sale and sales by trust deeds shall not be utilized if the proposed development or sale qualifies for financing from other sources and if the financing makes feasible the provision of low- and moderate-income housing.

(2) Improved residential property sold to a local public agency pursuant to paragraph (1), if subsequently sold or transferred to a nonprofit housing organization, shall have the endorsement of the city in which the parcels are located, or the county if the parcels are located in an unincorporated area, that the housing shall remain at affordable housing costs to persons and families of low or moderate income and very low income households for the longest feasible time, but for not less than 15 years, as determined by the city or county, as applicable. By endorsing the sale, the city or county accepts the responsibility of ensuring the housing remains affordable. The local public agency shall record in the office of the county recorder covenants or restrictions implementing this subdivision. Notwithstanding any other provision of law, the covenants or restrictions shall run with the land and shall be enforceable against the original purchaser from the department and successors in interest.

(b) A conveyance under this section shall be approved by the commission and shall be executed on behalf of the state by the director and the purchase price shall be paid into the State Treasury to the credit of any fund, available to the department for highway purposes, which the commission designates.

(c) Any such real property or interest therein may in like manner be exchanged, either as whole or part consideration, for any other real property or interest therein needed for state highway purposes.

(Amended by Stats. 2008, Ch. 179, Sec. 208. Effective January 1, 2009.)