Community Stabilization Act.

Assembly Member Harabedian's Community Stabilization Act establishes a new securities program through the California Infrastructure and Economic Development Bank to stabilize property values in disaster-affected areas. The program allows qualified investors to purchase tradable securities that fund the acquisition and management of residential properties by approved investment entities until properties can be resold at fair market value.

The legislation creates the continuously appropriated Community Stabilization Fund to receive proceeds from security sales. Qualifying investment entities - including nonprofits, charities, and certain government instrumentalities - must use these funds to purchase residential properties damaged or destroyed in state-declared disaster areas. Purchase prices are calculated based on property value minus insurance coverage for structures. Properties must be maintained but cannot be leased, and entities must prioritize redevelopment that preserves the area's socioeconomic composition.

The program implements a profit-sharing structure where 90 percent of gains from property sales or refinancing go to qualified investors, with 5 percent each allocated to the bank and investment entities for administrative costs. Investment entities must meet strict eligibility criteria, maintain transparent reporting, and can be removed for non-compliance. Qualified investors may defer up to 30 percent of capital gains for 10 years or until returns are realized. The bill includes an urgency clause for immediate implementation to address recovery needs in Los Angeles and Ventura Counties affected by January 2025 wildfires.