Community Stabilization Act.

Assembly Member Harabedian's Community Stabilization Act establishes a new financial mechanism to stabilize property values in disaster-affected areas through the Governor's Office of Business and Economic Development (GO-Biz). The program allows qualified investors to purchase tradable securities that fund the acquisition and management of residential properties damaged by disasters, with proceeds allocated to qualifying investment entities.

The legislation creates the continuously appropriated Community Stabilization Fund to finance property purchases in regions under state disaster declarations. Qualifying investment entities, including nonprofit organizations, charities, and local public entities, may use these funds to acquire damaged residential properties at prices based on pre-disaster valuations minus insurance proceeds. These entities must maintain the properties for up to 10 years while seeking opportunities for redevelopment that preserve the area's socioeconomic composition.

The program structures profit distribution with 90 percent allocated to qualified investors, 5 percent to GO-Biz, and 5 percent to qualifying investment entities as administrative fees. Investors may defer up to 30 percent of capital gains for 10 years or until achieving returns through property refinancing or sales. Investment entities must provide annual public disclosures detailing property management, transactions, and operational data. Local jurisdictions retain authority to limit participating entities within their disaster-declared areas, with priority given to regions maintaining fewer restrictions during multiple declarations.

The bill takes immediate effect as an urgency statute to address rebuilding needs in Los Angeles and Ventura counties following January 2025 wildfires. This framework aims to prevent distressed property sales while maintaining community stability through regulated investment and development practices.