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(1)Existing law prescribes requirements for the disposal of surplus land by a local agency. Existing law defines local agency for these purposes as every city, county, city and county, and district, including school districts of any kind or class, empowered to acquire and hold real property. Existing law defines surplus land for these purposes as land owned by any local agency that is determined to be no longer necessary for the agencys use, except property being held by the agency for the purpose of exchange. Existing law defines exempt surplus land to mean land that is less than 5,000 square feet in area, less than the applicable minimum legal residential building lot size, or has no record access and is less than 10,000 square feet in area, and that is not contiguous to land owned by a state or local agency and used for park, recreational, open-space, or affordable housing.

This bill would expand the definition of local agency to include sewer, water, utility, and local and regional park districts, joint powers authorities, successor agencies to former redevelopment agencies, housing authorities, and other political subdivisions of this state and any instrumentality thereof that is empowered to acquire and hold real property, thereby requiring these entities to comply with these requirements for the disposal of surplus land. The bill would specify that the term district includes all districts within the state, and that this change is declaratory of existing law. The bill would revise the definition of surplus land to mean land owned in fee simple by any local agency, for which the local agencys governing body takes formal action, in a regular public meeting, declaring that the land is surplus and is not necessary for the agencys use, as defined. The bill would provide that surplus land for these purposes includes land held in the Community Redevelopment Property Trust Fund and land that has been designated in the long-range property management plan, either for sale or for future development, as specified. The bill would also broaden the definition of exempt surplus land to include specified types of lands.

(2)Existing law requires a local agency disposing of surplus land to send, prior to disposing of that property, a written offer to sell or lease the property to specified entities. Existing law requires that a local agency, upon a written request, send a written offer to sell or lease surplus land to a housing sponsor, as defined, for the purpose of developing low- and moderate-income housing. Existing law also requires the local agency to send a written offer to sell or lease surplus land for the purpose of developing property located within an infill opportunity zone, designated as provided, to, among others, a community redevelopment agency.

This bill would instead require, except as provided, the local agency disposing of surplus land to send, prior to disposing of that property or participating in negotiations to dispose of that property, a written notice of availability. The bill would make various related conforming changes. With regards to a housing sponsor, the bill would require that a notice of availability be sent if the housing sponsor has notified the Department of Housing and Community Development of its interest in the land, rather than upon written request. With regards to surplus land to be used for the purpose of developing property located within an infill opportunity zone, as described above, the bill would instead require that the written notice of availability be sent to a successor agency to a former redevelopment agency. The bill would require the Department of Housing and Community Development to maintain an up-to-date listing of all notices of availability throughout the state on its internet website.

(3)After the disposing agency has received a notice from an entity desiring to purchase or lease the land, existing law requires the disposing agency to enter into good faith negotiations to determine a mutually satisfactory sales price or lease terms.

This bill would prohibit the terms agreed to pursuant to these negotiations from doing certain things, including, among other things, disallowing residential use of the site as a condition of the sale or lease.

(4)Existing law requires a local agency to give priority to the development of affordable housing for lower income elderly or disabled persons or households, and other lower income households when disposing of surplus land.

This bill would remove that priority.

(5)If the local agency receives offers from more than one entity that agrees to meet specified requirements related to the provision of affordable housing on the surplus land, existing law requires the local agency to give priority to the entity that proposes to provide the greatest number of units that meet those requirements. Notwithstanding that requirement, existing law requires the local agency to give first priority to an entity in specified circumstances.

In the event that more than one entity proposes the same number of units that meet the above-described affordable housing requirements, this bill would require that priority be given to the entity that proposes the deepest average level of affordability for the affordable units. The bill would authorize a local agency to negotiate concurrently with all entities that provide notice of interest to purchase or lease land for the purpose of developing affordable housing.

(6)Under existing law, failure by a local agency to comply with these requirements for the disposal of surplus land does not invalidate the transfer or conveyance of real property to a purchaser or encumbrancer for value.

This bill would require a local agency, prior to agreeing to terms for the disposition of surplus land, to provide the Department of Housing and Community Development with a specified description of the process followed to dispose of the land in a form prescribed by the Department of Housing and Community Development. The bill would require the Department of Housing and Community Development to, among other things, review the description and submit written findings to the local agency within 30 days of receiving the description if the local agency has disposed of land in violation of specified provisions of law. The bill would require the Department of Housing and Community Development to provide the local agency a reasonable time, as specified, to respond to the departments findings prior to taking certain actions and would require the local agency to take specified actions in response.

This bill would, with certain exceptions, impose a penalty of 50% of the final sale price of the land upon a local agency that disposes of land in violation of specified provisions of law after receiving the notification from the Department of Housing and Community Development to that effect. The bill would authorize specified entities to bring an action against a local agency to enforce these provisions and would allow a local agency 60 days to cure or correct an alleged violation before the action may be brought. The bill would require a penalty assessed pursuant to these provisions to be deposited into a local housing trust fund or, in certain circumstances, the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund, as provided. The bill would make the expenditure of penalty moneys deposited into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund pursuant to these provisions subject to appropriation by the Legislature.

(7)If a local agency does not agree to price and terms with an entity to which notice and an opportunity to purchase or lease are given and disposes of the surplus land to an entity that uses the property for the development of 10 or more residential units, existing law requires the purchasing entity or a successor in interest to provide not less than 15% of the total number of units developed on the parcels at an affordable housing cost or affordable rent to lower income households.

This bill would revise this requirement to apply if the local agency does not agree to price and terms with an entity to which notice of availability of land was given, or if no entity to which a notice of availability was given responds to that notice, and 10 or more residential units are developed on the property.

(8)Existing law requires, on or before December 31 of each year, each local agency to make an inventory of specified lands that are in excess of its foreseeable needs, as provided. Existing law authorizes a board of supervisors of a county to establish a central inventory of all surplus governmental property located in the county.This bill, instead, would require a local agency to make a central inventory of specified surplus land and excess land identified pursuant to the inventory described above on or before December 31 of each year, and would require the local agency to make a description of each parcel and its present uses a matter of public record and to report this information to the Department of Housing and Community Development no later than April 1 of each year, beginning April 1, 2021. The bill would require a local agency, upon request, to provide a list of its surplus governmental properties to a citizen, limited dividend corporation, housing corporation, or nonprofit corporation without charge. The bill would require, by September 30, 2021, the Department of Housing and Community Development to create and maintain a searchable and downloadable public inventory of all publicly owned or controlled lands and their present uses. Under the bill, complying with these requirements would satisfy the above described requirement to make an inventory of lands that are in excess of the local agencys foreseeable needs. (9)

(8)The Planning and Zoning Law requires a city or county to adopt a general plan for land use development within its boundaries that includes, among other things, a housing element. That law requires the planning agency of a city or county to provide by April 1 of each year an annual report to, among other entities, the Department of Housing and Community Development that includes, among other specified information, the number of net new units of housing that have been issued a completed entitlement, a building permit, or a certificate of occupancy thus far in the housing element cycle, as provided.

This bill would require a city or county to include as a part of that report a listing of specified sites owned by the city or county that have been sold, leased, or otherwise disposed of in the prior year.

The Planning and Zoning Law requires that the housing element include, among other things, an inventory of land suitable for residential development to be used to identify sites that can be developed for housing within the planning period and that are sufficient to provide for the jurisdictions share of the regional housing need determined pursuant to specified law.

This bill would require the housing element to provide a description of nonvacant sites owned by the city or county and provide whether there are any plans to dispose of the property during the planning period and how the city or county will comply with specified provisions relating to the disposal of surplus land by a local agency.

(10)

(9)Existing law requires the Department of Housing and Community Development to notify a city or county and authorize notice to the Attorney General when a city or county has taken an action that violates the Housing Accountability Act, specified provisions relating to local housing elements, and the Density Bonus Law.

This bill would also require the Department of Housing and Community Development to notify the city or county and authorizes notice to the Attorney General when the city or county has taken an action that violates these provisions relating to surplus property.

(11)

(10)Existing law makes various findings and declarations as to the need for affordable housing and the use of surplus government land for that purpose.

This bill would revise these findings.

(12)

(11)By adding to the duties of local officials with respect to the disposal of surplus land, and expanding the scope of local agencies subject to the bills requirements, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

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The people of the State of California do enact as follows:SECTION 1.Section 50569 of the Government Code is amended to read:50569.(a)On or before December 31 of each year, each local agency as defined in Section 54951 shall make an inventory of all lands held, owned or controlled by it or any of its departments, agencies or authorities to determine what land, including air rights, if any, is in excess of its foreseeable needs. A description of each parcel found to be so in excess of needs shall be made a matter of public record. Any citizen, limited dividend corporation, housing corporation or nonprofit corporation, shall upon request be provided with a list of said parcels without charge.(b)A local agency that complies with Section 54230 shall be deemed to be in compliance with this section.SEC. 2.SECTION 1.Section 54220 of the Government Code is amended to read:54220.

(a)The Legislature reaffirms its declaration that housing is of vital statewide importance to the health, safety, and welfare of the residents of this state and that provision of a decent home and a suitable living environment for every Californian is a priority of the highest order. The Legislature further declares that a shortage of sites available for housing for persons and families of low and moderate income is a barrier to addressing urgent statewide housing needs and that surplus government land, prior to disposition, should be made available for that purpose.

(b)The Legislature reaffirms its belief that there is an identifiable deficiency in the amount of land available for recreational purposes and that surplus land, prior to disposition, should be made available for park and recreation purposes or for open-space purposes. This article shall not apply to surplus residential property as defined in Section 54236.

(c)The Legislature reaffirms its declaration of the importance of appropriate planning and development near transit stations, to encourage the clustering of housing and commercial development around such stations. Studies of transit ridership in California indicate that a higher percentage of persons who live or work within walking distance of major transit stations utilize the transit system more than those living elsewhere, and that lower income households are more likely to use transit when living near a major transit station than higher income households. The sale or lease of surplus land at less than fair market value to facilitate the creation of affordable housing near transit is consistent with goals and objectives to achieve optimal transportation use. The Legislature also notes that the Federal Transit Administration gives priority for funding of rail transit proposals to areas that are implementing higher density, mixed-use, and affordable development near major transit stations.

SEC. 3.SEC. 2.Section 54221 of the Government Code is amended to read:54221.

As used in this article, the following definitions shall apply:

(a)(1)Local agency means every city, whether organized under general law or by charter, county, city and county, district, including school, sewer, water, utility, and local and regional park districts of any kind or class, joint powers authority, successor agency to a former redevelopment agency, housing authority, or other political subdivision of this state and any instrumentality thereof that is empowered to acquire and hold real property.

(2)The Legislature finds and declares that the term district as used in this article includes all districts within the state, including, but not limited to, all special districts, sewer, water, utility, and local and regional park districts, and any other political subdivision of this state that is a district, and therefore the changes in paragraph (1) made by the act adding this paragraph that specify that the provisions of this article apply to all districts, including school, sewer, water, utility, and local and regional park districts of any kind or class, are declaratory of, and not a change in, existing law.

(b)Surplus land means land owned in fee simple by any local agency for which the local agencys governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agencys use. Land shall be declared either surplus land or exempt surplus land before a local agency may take any action to dispose of it. Surplus land includes land held in the Community Redevelopment Property Trust Fund pursuant to Section 34191.4 of the Health and Safety Code and land that has been designated in the long-range property management plan pursuant to Section 34191.5 of the Health and Safety Code, either for sale or for future development and that was not subject to an exclusive negotiating agreement or legally binding agreement to dispose of the land. Exclusive negotiating agreements or other agreements or contracts for land held in the Community Redevelopment Property Trust Fund shall be subject to this article. Nothing in this article shall be interpreted to require a local agency to dispose of land that is determined to be surplus. Nothing in this article prevents a local agency from obtaining fair market value for the sale or lease of the surplus land consistent with Section 54226.

(c)(1)Except as provided in paragraph (2), use shall include, but not be limited to, land that is being used or is planned to be used for the express purpose of agency work or operations, including utility sites, watershed property, land being used for conservation purposes, land for demonstration, exhibition, or educational purposes related to greenhouse gas emissions, and buffer sites near sensitive governmental uses, including, but not limited to, waste water treatment plants.

(2)Use shall not include commercial uses or activities, including nongovernmental retail, entertainment, or office development. Property held or disposed of for the sole purpose of investment or generation of revenue shall not be considered necessary for the agencys use.

(d)Open-space purposes means the use of land for public recreation, enjoyment of scenic beauty, or conservation or use of natural resources.

(e)Persons and families of low or moderate income has the same meaning as provided in Section 50093 of the Health and Safety Code.

(f)(1)Except as provided in paragraph (2), exempt surplus land means any of the following:

(A)Surplus land that is transferred pursuant to Section 25539.4.

(B)Surplus land that is (i) less than 5,000 square feet in area, (ii) less than the minimum legal residential building lot size for the jurisdiction in which the parcel is located, or 5,000 square feet in area, whichever is less, or (iii) has no record access and is less than 10,000 square feet in area; and is not contiguous to land owned by a state or local agency that is used for open-space or low- and moderate-income housing purposes. If the surplus land is not sold to an owner of contiguous land, it is not considered exempt surplus land and is subject to this article.

(C)Surplus land that a local agency is exchanging for another property necessary for the agencys use.

(D)Surplus land that a local agency is transferring to another local agency for the agencys use.

(E)Surplus land that is a former street, right of way, or easement, and is conveyed to an owner of an adjacent property.

(F)Surplus land that is put out to open, competitive bid by a local agency, provided all entities identified in subdivision (a) of Section 54222 will be invited to participate in the competitive bid process, for either of the following purposes:

(i)A housing development, which may have ancillary commercial ground floor uses, that restricts 100 percent of the residential units to persons and families of low or moderate income, with at least 75 percent of the residential units restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 or 50053 of the Health and Safety Code, for a minimum of 55 years, and in no event shall the maximum affordable sales price or rent level be higher than 20 percent below the median market rents or sales prices for the neighborhood in which the site is located.

(ii)A mixed-use development that is more than one acre in area, that includes not less than 300 housing units, and that restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years.

(G)Surplus land that is subject to legal restrictions that would make housing prohibited or incompatible on the site and that are not imposed by the local agency. An existing nonresidential land use designation on the surplus land is not a legal restriction that would make housing prohibited or incompatible. Nothing in this article limits a local agencys jurisdiction or discretion regarding land use, zoning, or entitlement decisions in connection with the development of surplus land.

(H)Surplus land that was granted by the state in trust to a local agency, that was acquired by the local agency for trust purposes by purchase or exchange, or for which disposal of the land is authorized or required subject to conditions established by statute.

(2)Notwithstanding paragraph (1), a written notice of the availability of surplus land for open-space purposes shall be sent to the entities described in subdivision (b) of Section 54222 prior to disposing of the surplus land, provided the land does not meet the criteria in subparagraph (H) of paragraph (1), if the land is any of the following:

(A)Within a coastal zone.

(B)Adjacent to a historical unit of the State Parks System.

(C)Listed on, or determined by the State Office of Historic Preservation to be eligible for, the National Register of Historic Places.

(D)Within the Lake Tahoe region as defined in Section 66905.5.

SEC. 4.SEC. 3.Section 54222 of the Government Code is amended to read:54222.

Except as provided in Division 23 (commencing with Section 33000) of the Public Resources Code, any local agency disposing of surplus land shall send, prior to disposing of that property or participating in negotiations to dispose of that property, a written notice of availability of the property to all of the following entities:

(a)(1)A written notice of availability for the purpose of developing low- and moderate-income housing shall be sent to any local public entity, as defined in Section 50079 of the Health and Safety Code, within whose jurisdiction the surplus land is located. Housing sponsors, as defined by Section 50074 of the Health and Safety Code, that have notified the Department of Housing and Community Development of their interest in surplus land shall be sent a notice of availability of surplus land for the purpose of developing low- and moderate-income housing. All notices shall be sent by electronic mail, or by certified mail if so requested, and shall include the location and a description of the property.

(2)The Department of Housing and Community Development shall maintain on its internet website an up-to-date listing of all notices of availability throughout the state.

(b)A written notice of availability for open-space purposes shall be sent:

(1)To any park or recreation department of any city within which the land may be situated.

(2)To any park or recreation department of the county within which the land is situated.

(3)To any regional park authority having jurisdiction within the area in which the land is situated.

(4)To the State Resources Agency or any agency that may succeed to its powers.

(c)A written notice of availability of land suitable for school facilities construction or use by a school district for open-space purposes shall be sent to any school district in whose jurisdiction the land is located.

(d)A written notice of availability for the purpose of developing property located within an infill opportunity zone designated pursuant to Section 65088.4 or within an area covered by a transit village plan adopted pursuant to the Transit Village Development Planning Act of 1994 (Article 8.5 (commencing with Section 65460) of Chapter 3 of Division 1 of Title 7) shall be sent to any county, city, city and county, successor agency to a former redevelopment agency, public transportation agency, or housing authority within whose jurisdiction the surplus land is located.

(e)The entity or association desiring to purchase or lease the surplus land for any of the purposes authorized by this section shall notify in writing the disposing agency of its interest in purchasing or leasing the land within 60 days after the agencys notice of availability of the land is sent via certified mail or provided via electronic mail.

(f)For the purposes of this section, participating in negotiations does not include the commissioning of appraisals or other studies to determine value, a request for qualifications, or discussions conducted exclusively among local agency employees and elected officials.

SEC. 5.SEC. 4.Section 54222.3 of the Government Code is amended to read:54222.3.

This article shall not apply to the disposal of exempt surplus land as defined in Section 54221 by an agency of the state or any local agency.

SEC. 6.SEC. 5.Section 54223 of the Government Code is amended to read:54223.

(a)After the disposing agency has received notice of interest from the entity desiring to purchase or lease the land on terms that comply with this article, the disposing agency and the entity shall enter into good faith negotiations to determine a mutually satisfactory sales price and terms or lease terms. If the price or terms cannot be agreed upon after a good faith negotiation period of not less than 90 days, the land may be disposed of without further regard to this article, except that Section 54233 shall apply.

(b)Residential use shall be deemed an acceptable use for the surplus land for the purposes of good faith negotiations with a local agency conducted pursuant to this article. Nothing in this subdivision shall restrict a local agencys jurisdiction or discretion to approve land use, zoning, or entitlement decisions in connection with the surplus land. Except as provided in subdivision (c), terms agreed to pursuant to the negotiations shall not do any of the following:

(1)Disallow residential use of the site as a condition of the sale or lease.

(2)Reduce the allowable number of residential units or the maximum lot coverage below what may be allowed by zoning or general plan requirements.

(3)Require as a condition of sale or lease, any design standards or architectural requirements that would have a substantial adverse effect on the viability or affordability of a housing development for very low, low-, or moderate-income households, other than the minimum standards required by general plan, zoning, and subdivision standards and criteria.

(c)Terms agreed to pursuant to the negotiations required by subdivision (a) may include limitations on residential use or density if, without the limitations, the residential use or density would have a specific, adverse impact, supported by written findings, upon the public health or safety or upon the operation or facilities of a local agency.

SEC. 7.SEC. 6.Section 54225 of the Government Code is amended to read:54225.

Any public agency disposing of surplus land to an entity described in Section 54222 that intends to use the land for park or recreation purposes, for open-space purposes, for school purposes, or for low- and moderate-income housing purposes may provide for a payment period of up to 20 years in any contract of sale or sale by trust deed for the land. The payment period for surplus land disposed of for housing for persons and families of low and moderate income may exceed 20 years, but the payment period shall not exceed the term that the land is required to be used for low- or moderate-income housing.

SEC. 8.SEC. 7.Section 54226 of the Government Code is amended to read:54226.

This article shall not be interpreted to limit the power of any local agency to sell or lease surplus land at fair market value or at less than fair market value, and any sale or lease at or less than fair market value consistent with this article shall not be construed as inconsistent with an agencys purpose. No provision of this article shall be applied when it conflicts with any other provision of statutory law.

SEC. 9.SEC. 8.Section 54227 of the Government Code is amended to read:54227.

(a)In the event that any local agency disposing of surplus land receives a notice of interest to purchase or lease of that land from more than one of the entities to which notice of available surplus land was given pursuant to this article, the local agency shall give first priority to the entity or entities that agree to use the site for housing that meets the requirements of Section 54222.5. If the local agency receives offers from more than one entity that agrees to meet the requirements of Section 54222.5, then the local agency shall give priority to the entity that proposes to provide the greatest number of units that meet the requirements of Section 54222.5. In the event that more than one entity proposes the same number of units that meet the requirements of Section 54222.5, priority shall be given to the entity that proposes the deepest average level of affordability for the affordable units. A local agency may negotiate concurrently with all entities that provide notice of interest to purchase or lease land for the purpose of developing affordable housing that meets the requirements of Section 54222.5.

(b)Notwithstanding subdivision (a), first priority shall be given to an entity that agrees to use the site for park or recreational purposes if the land being offered is already being used and will continue to be used for park or recreational purposes, or if the land is designated for park and recreational use in the local general plan and will be developed for that purpose.

SEC. 10.Section 54230 of the Government Code is amended to read:54230.(a)(1)On or before December 31 of each year, each local agency shall make a central inventory of all surplus land, as defined in subdivision (b) of Section 54221, and all lands in excess of its foreseeable needs, if any, identified pursuant to Section 50569, located in all urbanized areas and urban clusters, as designated by the United States Census Bureau, within the jurisdiction of the local agency that the local agency or any of its departments, agencies, or authorities owns or controls.(2)A local agency shall make a description of each parcel described in paragraph (1) and the present use of the parcel a matter of public record and shall report this information to the Department of Housing and Community Development no later than April 1 of each year, beginning April 1, 2021, in a form prescribed by the Department of Housing and Community Development.(3)A local agency, upon request, shall provide a list of its surplus land and excess land to a citizen, limited dividend corporation, housing corporation, or nonprofit corporation without charge.(b)The Department of Housing and Community Development shall create and maintain a searchable and downloadable public inventory of all publicly owned or controlled lands reported to the Department of Housing and Community Development pursuant to paragraph (2) of subdivision (a) and their present uses in the state on its internet website, which shall be updated on an annual basis. The inventory shall be available no later than September 30, 2021.SEC. 11.SEC. 9.Section 54230.5 of the Government Code is amended to read:54230.5.

(a)(1)A local agency that disposes of land in violation of this article after receiving a notification from the Department of Housing and Community Development pursuant to subdivision (b) that the local agency is in violation of this article shall be liable for a penalty of 50 percent of the final sale price of the land sold in violation of this article. An entity identified in Section 54222 may bring an action to enforce this section. A local agency shall have 60 days to cure or correct an alleged violation before an action may be brought to enforce this section.

(2)A penalty assessed pursuant to this subdivision shall, except as otherwise provided, be deposited into a local housing trust fund. The local agency may elect to instead deposit the penalty moneys into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund. Penalties shall not be paid out of funds already dedicated to affordable housing, including, but not limited to, Low and Moderate Income Housing Asset Funds, funds dedicated to housing for very low, low-, and moderate-income households, and federal HOME Investment Partnerships Program and Community Development Block Grant Program funds. The local agency shall commit and expend the penalty moneys deposited into the local housing trust fund within five years of deposit for the sole purpose of financing newly constructed housing units that are affordable to extremely low, very low, or low-income households.

(3)Five years after deposit of the penalty moneys into the local housing trust fund, if the funds have not been expended, the funds shall revert to the state and be deposited in the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund for the sole purpose of financing newly constructed housing units that are affordable to extremely low, very low, or low-income households. Expenditure of any penalty moneys deposited into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund pursuant to this subdivision shall be subject to appropriation by the Legislature.

(b)(1)Prior to agreeing to terms for the disposition of surplus land, a local agency shall provide to the Department of Housing and Community Development a description of the notices of availability sent, and negotiations conducted with any responding entities, in regard to the disposal of the parcel of surplus land in a form prescribed by the Department of Housing and Community Development. A local agency may submit the form after it has sent notices of availability required by Section 54222 and concluded negotiations with any responding agencies. A local agency shall not be liable for the penalty imposed by subdivision (a) if the Department of Housing and Community Development does not notify the agency that the agency is in violation of this article within 30 days of receiving the description.

(2)The Department of Housing and Community Development shall do all of the following:

(A)Review information submitted pursuant to paragraph (1).

(B)Submit written findings to the local agency within 30 days of receipt of the description required by paragraph (1) from the local agency if the local agency has disposed of land in violation of this article.

(C)Review, adopt, amend, or repeal guidelines to establish uniform standards to implement this section. The guidelines adopted pursuant to this subdivision are not subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2.

(D)Provide the local agency reasonable time, but not less than 30 days, to respond to the findings before taking any other action authorized by this section.

(3)(A)The local agency shall consider findings made by the Department of Housing and Community Development pursuant to subparagraph (B) of paragraph (2) and shall do one of the following:

(i)Correct any issues identified by the Department of Housing and Community Development.

(ii)Adopt a resolution with findings explaining the reason its process for disposing of surplus land complies with this article and addressing the Department of Housing and Community Developments findings.

(B)If the local agency does not correct issues identified by the Department of Housing and Community Development, does not adopt a resolution with findings explaining the reason its process for disposing of surplus land complies with this article and addressing the Department of Housing and Community Developments findings, or if the Department of Housing and Community Development finds that the local resolution is deficient in addressing the issues identified by the Department of Housing and Community Development, the Department of Housing and Community Development shall notify the local agency, and may notify the Attorney General, that the local agency is in violation of this article.

(c)The failure by a local agency to comply with this article shall not invalidate the transfer or conveyance of real property to a purchaser or encumbrancer for value.

(d)This section shall not be construed to limit any other remedies authorized under law.

SEC. 12.SEC. 10.Section 54233 of the Government Code is amended to read:54233.

If the local agency does not agree to price and terms with an entity to which notice of availability of land was given pursuant to this article, or if no entity to which a notice of availability was given pursuant to this article responds to that notice, and 10 or more residential units are developed on the property, not less than 15 percent of the total number of residential units developed on the parcels shall be sold or rented at affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, or affordable rent, as defined in Section 50053 of the Health and Safety Code, to lower income households, as defined in Section 50079.5 of the Health and Safety Code. Rental units shall remain affordable to, and occupied by, lower income households for a period of at least 55 years. The initial occupants of all ownership units shall be lower income households, and the units shall be subject to an equity sharing agreement consistent with the provisions of paragraph (2) of subdivision (c) of Section 65915. These requirements shall be contained in a covenant or restriction recorded against the surplus land prior to land use entitlement of the project, and the covenant or restriction shall run with the land and shall be enforceable, against any owner who violates a covenant or restriction and each successor in interest who continues the violation, by any of the entities described in subdivisions (a) to (f), inclusive, of Section 54222.5.

SEC. 13.Section 65400 of the Government Code is amended to read:65400.(a)After the legislative body has adopted all or part of a general plan, the planning agency shall do both of the following:(1)Investigate and make recommendations to the legislative body regarding reasonable and practical means for implementing the general plan or element of the general plan, so that it will serve as an effective guide for orderly growth and development, preservation and conservation of open-space land and natural resources, and the efficient expenditure of public funds relating to the subjects addressed in the general plan.(2)Provide by April 1 of each year an annual report to the legislative body, the Office of Planning and Research, and the Department of Housing and Community Development that includes all of the following:(A)The status of the plan and progress in its implementation.(B)The progress in meeting its share of regional housing needs determined pursuant to Section 65584 and local efforts to remove governmental constraints to the maintenance, improvement, and development of housing pursuant to paragraph (3) of subdivision (c) of Section 65583.The housing element portion of the annual report, as required by this paragraph, shall be prepared through the use of standards, forms, and definitions adopted by the Department of Housing and Community Development. The department may review, adopt, amend, and repeal the standards, forms, or definitions, to implement this article. Any standards, forms, or definitions adopted to implement this article shall not be subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2. Before and after adoption of the forms, the housing element portion of the annual report shall include a section that describes the actions taken by the local government towards completion of the programs and status of the local governments compliance with the deadlines in its housing element. That report shall be considered at an annual public meeting before the legislative body where members of the public shall be allowed to provide oral testimony and written comments.The report may include the number of units that have been substantially rehabilitated, converted from nonaffordable to affordable by acquisition, and preserved consistent with the standards set forth in paragraph (2) of subdivision (c) of Section 65583.1. The report shall document how the units meet the standards set forth in that subdivision.(C)The number of housing development applications received in the prior year.(D)The number of units included in all development applications in the prior year.(E)The number of units approved and disapproved in the prior year.(F)The degree to which its approved general plan complies with the guidelines developed and adopted pursuant to Section 65040.2 and the date of the last revision to the general plan.(G)A listing of sites rezoned to accommodate that portion of the citys or countys share of the regional housing need for each income level that could not be accommodated on sites identified in the inventory required by paragraph (1) of subdivision (c) of Section 65583 and Section 65584.09. The listing of sites shall also include any additional sites that may have been required to be identified by Section 65863.(H)A listing of sites owned by the city or county and included in the inventory prepared pursuant to Section 65583.2 that have been sold, leased, or otherwise disposed of in the prior year. The list shall include the entity to whom each site was transferred and the intended use for the site. (I)The number of net new units of housing, including both rental housing and for-sale housing, that have been issued a completed entitlement, a building permit, or a certificate of occupancy, thus far in the housing element cycle, and the income category, by area median income category, that each unit of housing satisfies. That production report shall, for each income category described in this subparagraph, distinguish between the number of rental housing units and the number of for-sale units that satisfy each income category. The production report shall include, for each entitlement, building permit, or certificate of occupancy, a unique site identifier which must include the assessors parcel number, but may include street address, or other identifiers.(J)The number of applications submitted pursuant to subdivision (a) of Section 65913.4, the location and the total number of developments approved pursuant to subdivision (b) of Section 65913.4, the total number of building permits issued pursuant to subdivision (b) of Section 65913.4, the total number of units including both rental housing and for-sale housing by area median income category constructed using the process provided for in subdivision (b) of Section 65913.4.(K)The Department of Housing and Community Development shall post a report submitted pursuant to this paragraph on its internet website within a reasonable time of receiving the report.(b)If a court finds, upon a motion to that effect, that a city, county, or city and county failed to submit, within 60 days of the deadline established in this section, the housing element portion of the report required pursuant to subparagraph (B) of paragraph (2) of subdivision (a) that substantially complies with the requirements of this section, the court shall issue an order or judgment compelling compliance with this section within 60 days. If the city, county, or city and county fails to comply with the courts order within 60 days, the plaintiff or petitioner may move for sanctions, and the court may, upon that motion, grant appropriate sanctions. The court shall retain jurisdiction to ensure that its order or judgment is carried out. If the court determines that its order or judgment is not carried out within 60 days, the court may issue further orders as provided by law to ensure that the purposes and policies of this section are fulfilled. This subdivision applies to proceedings initiated on or after the first day of October following the adoption of forms and definitions by the Department of Housing and Community Development pursuant to paragraph (2) of subdivision (a), but no sooner than six months following that adoption.SEC. 14.SEC. 11.Section 65583.2 of the Government Code, as amended by Section 3 of Chapter 958 of the Statutes of 2018, is amended to read:65583.2.

(a)A citys or countys inventory of land suitable for residential development pursuant to paragraph (3) of subdivision (a) of Section 65583 shall be used to identify sites throughout the community, consistent with paragraph (9) of subdivision (c) of Section 65583, that can be developed for housing within the planning period and that are sufficient to provide for the jurisdictions share of the regional housing need for all income levels pursuant to Section 65584. As used in this section, land suitable for residential development includes all of the sites that meet the standards set forth in subdivisions (c) and (g):

(1)Vacant sites zoned for residential use.

(2)Vacant sites zoned for nonresidential use that allows residential development.

(3)Residentially zoned sites that are capable of being developed at a higher density, including the airspace above sites owned or leased by a city, county, or city and county.

(4)Sites zoned for nonresidential use that can be redeveloped for residential use, and for which the housing element includes a program to rezone the site, as necessary, rezoned for, to permit residential use, including sites owned or leased by a city, county, or city and county.

(b)The inventory of land shall include all of the following:

(1)A listing of properties by assessor parcel number.

(2)The size of each property listed pursuant to paragraph (1), and the general plan designation and zoning of each property.

(3)For nonvacant sites, a description of the existing use of each property. If a site subject to this paragraph is owned by the city or county, the description shall also include whether there are any plans to dispose of the property during the planning period and how the city or county will comply with Article 8 (commencing with Section 54220) of Chapter 5 of Part 1 of Division 2 of Title 5.

(4)A general description of any environmental constraints to the development of housing within the jurisdiction, the documentation for which has been made available to the jurisdiction. This information need not be identified on a site-specific basis.

(5)(A)A description of existing or planned water, sewer, and other dry utilities supply, including the availability and access to distribution facilities.

(B)Parcels included in the inventory must have sufficient water, sewer, and dry utilities supply available and accessible to support housing development or be included in an existing general plan program or other mandatory program or plan, including a program or plan of a public or private entity providing water or sewer service, to secure sufficient water, sewer, and dry utilities supply to support housing development. This paragraph does not impose any additional duty on the city or county to construct, finance, or otherwise provide water, sewer, or dry utilities to parcels included in the inventory.

(6)Sites identified as available for housing for above moderate-income households in areas not served by public sewer systems. This information need not be identified on a site-specific basis.

(7)A map that shows the location of the sites included in the inventory, such as the land use map from the jurisdictions general plan, for reference purposes only.

(c)Based on the information provided in subdivision (b), a city or county shall determine whether each site in the inventory can accommodate the development of some portion of its share of the regional housing need by income level during the planning period, as determined pursuant to Section 65584. The inventory shall specify for each site the number of units that can realistically be accommodated on that site and whether the site is adequate to accommodate lower income housing, moderate-income housing, or above moderate-income housing. A nonvacant site identified pursuant to paragraph (3) or (4) of subdivision (a) in a prior housing element and a vacant site that has been included in two or more consecutive planning periods that was not approved to develop a portion of the localitys housing need shall not be deemed adequate to accommodate a portion of the housing need for lower income households that must be accommodated in the current housing element planning period unless the site is zoned at residential densities consistent with paragraph (3) of this subdivision and the site is subject to a program in the housing element requiring rezoning within three years of the beginning of the planning period to allow residential use by right for housing developments in which at least 20 percent of the units are affordable to lower income households. A city that is an unincorporated area in a nonmetropolitan county pursuant to clause (ii) of subparagraph (B) of paragraph (3) shall not be subject to the requirements of this subdivision to allow residential use by right. The analysis shall determine whether the inventory can provide for a variety of types of housing, including multifamily rental housing, factory-built housing, mobilehomes, housing for agricultural employees, supportive housing, single-room occupancy units, emergency shelters, and transitional housing. The city or county shall determine the number of housing units that can be accommodated on each site as follows:

(1)If local law or regulations require the development of a site at a minimum density, the department shall accept the planning agencys calculation of the total housing unit capacity on that site based on the established minimum density. If the city or county does not adopt a law or regulation requiring the development of a site at a minimum density, then it shall demonstrate how the number of units determined for that site pursuant to this subdivision will be accommodated.

(2)The number of units calculated pursuant to paragraph (1) shall be adjusted as necessary, based on the land use controls and site improvements requirement identified in paragraph (5) of subdivision (a) of Section 65583, the realistic development capacity for the site, typical densities of existing or approved residential developments at a similar affordability level in that jurisdiction, and on the current or planned availability and accessibility of sufficient water, sewer, and dry utilities.

(A)A site smaller than half an acre shall not be deemed adequate to accommodate lower income housing need unless the locality can demonstrate that sites of equivalent size were successfully developed during the prior planning period for an equivalent number of lower income housing units as projected for the site or unless the locality provides other evidence to the department that the site is adequate to accommodate lower income housing.

(B)A site larger than 10 acres shall not be deemed adequate to accommodate lower income housing need unless the locality can demonstrate that sites of equivalent size were successfully developed during the prior planning period for an equivalent number of lower income housing units as projected for the site or unless the locality provides other evidence to the department that the site can be developed as lower income housing. For purposes of this subparagraph, site means that portion of a parcel or parcels designated to accommodate lower income housing needs pursuant to this subdivision.

(C)A site may be presumed to be realistic for development to accommodate lower income housing need if, at the time of the adoption of the housing element, a development affordable to lower income households has been proposed and approved for development on the site.

(3)For the number of units calculated to accommodate its share of the regional housing need for lower income households pursuant to paragraph (2), a city or county shall do either of the following:

(A)Provide an analysis demonstrating how the adopted densities accommodate this need. The analysis shall include, but is not limited to, factors such as market demand, financial feasibility, or information based on development project experience within a zone or zones that provide housing for lower income households.

(B)The following densities shall be deemed appropriate to accommodate housing for lower income households:

(i)For an incorporated city within a nonmetropolitan county and for a nonmetropolitan county that has a micropolitan area: sites allowing at least 15 units per acre.

(ii)For an unincorporated area in a nonmetropolitan county not included in clause (i): sites allowing at least 10 units per acre.

(iii)For a suburban jurisdiction: sites allowing at least 20 units per acre.

(iv)For a jurisdiction in a metropolitan county: sites allowing at least 30 units per acre.

(d)For purposes of this section, a metropolitan county, nonmetropolitan county, and nonmetropolitan county with a micropolitan area shall be as determined by the United States Census Bureau. A nonmetropolitan county with a micropolitan area includes the following counties: Del Norte, Humboldt, Lake, Mendocino, Nevada, Tehama, and Tuolumne and other counties as may be determined by the United States Census Bureau to be nonmetropolitan counties with micropolitan areas in the future.

(e)(1)Except as provided in paragraph (2), a jurisdiction shall be considered suburban if the jurisdiction does not meet the requirements of clauses (i) and (ii) of subparagraph (B) of paragraph (3) of subdivision (c) and is located in a Metropolitan Statistical Area (MSA) of less than 2,000,000 in population, unless that jurisdictions population is greater than 100,000, in which case it shall be considered metropolitan. A county, not including the City and County of San Francisco, shall be considered suburban unless the county is in an MSA of 2,000,000 or greater in population in which case the county shall be considered metropolitan.

(2)(A)(i)Notwithstanding paragraph (1), if a county that is in the San Francisco-Oakland-Fremont California MSA has a population of less than 400,000, that county shall be considered suburban. If this county includes an incorporated city that has a population of less than 100,000, this city shall also be considered suburban. This paragraph shall apply to a housing element revision cycle, as described in subparagraph (A) of paragraph (3) of subdivision (e) of Section 65588, that is in effect from July 1, 2014, to December 31, 2028, inclusive.

(ii)A county subject to this subparagraph shall utilize the sum existing in the countys housing trust fund as of June 30, 2013, for the development and preservation of housing affordable to low- and very low income households.

(B)A jurisdiction that is classified as suburban pursuant to this paragraph shall report to the Assembly Committee on Housing and Community Development, the Senate Committee on Housing, and the Department of Housing and Community Development regarding its progress in developing low- and very low income housing consistent with the requirements of Section 65400. The report shall be provided three times: once, on or before December 31, 2019, which report shall address the initial four years of the housing element cycle, a second time, on or before December 31, 2023, which report shall address the subsequent four years of the housing element cycle, and a third time, on or before December 31, 2027, which report shall address the subsequent four years of the housing element cycle and the cycle as a whole. The reports shall be provided consistent with the requirements of Section 9795.

(f)A jurisdiction shall be considered metropolitan if the jurisdiction does not meet the requirements for suburban area above and is located in an MSA of 2,000,000 or greater in population, unless that jurisdictions population is less than 25,000 in which case it shall be considered suburban.

(g)(1)For sites described in paragraph (3) of subdivision (b), the city or county shall specify the additional development potential for each site within the planning period and shall provide an explanation of the methodology used to determine the development potential. The methodology shall consider factors including the extent to which existing uses may constitute an impediment to additional residential development, the citys or countys past experience with converting existing uses to higher density residential development, the current market demand for the existing use, an analysis of any existing leases or other contracts that would perpetuate the existing use or prevent redevelopment of the site for additional residential development, development trends, market conditions, and regulatory or other incentives or standards to encourage additional residential development on these sites.

(2)In addition to the analysis required in paragraph (1), when a city or county is relying on nonvacant sites described in paragraph (3) of subdivision (b) to accommodate 50 percent or more of its housing need for lower income households, the methodology used to determine additional development potential shall demonstrate that the existing use identified pursuant to paragraph (3) of subdivision (b) does not constitute an impediment to additional residential development during the period covered by the housing element. An existing use shall be presumed to impede additional residential development, absent findings based on substantial evidence that the use is likely to be discontinued during the planning period.

(3)Notwithstanding any other law, and in addition to the requirements in paragraphs (1) and (2), sites that currently have residential uses, or within the past five years have had residential uses that have been vacated or demolished, that are or were subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of low or very low income, subject to any other form of rent or price control through a public entitys valid exercise of its police power, or occupied by low or very low income households, shall be subject to a policy requiring the replacement of all those units affordable to the same or lower income level as a condition of any development on the site. Replacement requirements shall be consistent with those set forth in paragraph (3) of subdivision (c) of Section 65915.

(h)The program required by subparagraph (A) of paragraph (1) of subdivision (c) of Section 65583 shall accommodate 100 percent of the need for housing for very low and low-income households allocated pursuant to Section 65584 for which site capacity has not been identified in the inventory of sites pursuant to paragraph (3) of subdivision (a) on sites that shall be zoned to permit owner-occupied and rental multifamily residential use by right for developments in which at least 20 percent of the units are affordable to lower income households during the planning period. These sites shall be zoned with minimum density and development standards that permit at least 16 units per site at a density of at least 16 units per acre in jurisdictions described in clause (i) of subparagraph (B) of paragraph (3) of subdivision (c), shall be at least 20 units per acre in jurisdictions described in clauses (iii) and (iv) of subparagraph (B) of paragraph (3) of subdivision (c) and shall meet the standards set forth in subparagraph (B) of paragraph (5) of subdivision (b). At least 50 percent of the very low and low-income housing need shall be accommodated on sites designated for residential use and for which nonresidential uses or mixed uses are not permitted, except that a city or county may accommodate all of the very low and low-income housing need on sites designated for mixed uses if those sites allow 100 percent residential use and require that residential use occupy 50 percent of the total floor area of a mixed-use project.

(i)For purposes of this section and Section 65583, the phrase use by right shall mean that the local governments review of the owner-occupied or multifamily residential use may not require a conditional use permit, planned unit development permit, or other discretionary local government review or approval that would constitute a project for purposes of Division 13 (commencing with Section 21000) of the Public Resources Code. Any subdivision of the sites shall be subject to all laws, including, but not limited to, the local government ordinance implementing the Subdivision Map Act. A local ordinance may provide that use by right does not exempt the use from design review. However, that design review shall not constitute a project for purposes of Division 13 (commencing with Section 21000) of the Public Resources Code. Use by right for all rental multifamily residential housing shall be provided in accordance with subdivision (f) of Section 65589.5.

(j)Notwithstanding any other provision of this section, within one-half mile of a Sonoma-Marin Area Rail Transit station, housing density requirements in place on June 30, 2014, shall apply.

(k)For purposes of subdivisions (a) and (b), the department shall provide guidance to local governments to properly survey, detail, and account for sites listed pursuant to Section 65585.

(l)This section shall remain in effect only until December 31, 2028, and as of that date is repealed.

SEC. 15.SEC. 12.Section 65583.2 of the Government Code, as amended by Section 4 of Chapter 958 of the Statutes of 2018, is amended to read:65583.2.

(1)Vacant sites zoned for residential use.

(2)Vacant sites zoned for nonresidential use that allows residential development.

(3)Residentially zoned sites that are capable of being developed at a higher density, and sites owned or leased by a city, county, or city and county.

(4)Sites zoned for nonresidential use that can be redeveloped for residential use, and for which the housing element includes a program to rezone the sites, as necessary, to permit residential use, including sites owned or leased by a city, county, or city and county.

(b)The inventory of land shall include all of the following:

(1)A listing of properties by assessor parcel number.

(2)The size of each property listed pursuant to paragraph (1), and the general plan designation and zoning of each property.

(5)(A)A description of existing or planned water, sewer, and other dry utilities supply, including the availability and access to distribution facilities.

(6)Sites identified as available for housing for above moderate-income households in areas not served by public sewer systems. This information need not be identified on a site-specific basis.

(7)A map that shows the location of the sites included in the inventory, such as the land use map from the jurisdictions general plan for reference purposes only.

(3)For the number of units calculated to accommodate its share of the regional housing need for lower income households pursuant to paragraph (2), a city or county shall do either of the following:

(B)The following densities shall be deemed appropriate to accommodate housing for lower income households:

(i)For an incorporated city within a nonmetropolitan county and for a nonmetropolitan county that has a micropolitan area: sites allowing at least 15 units per acre.

(ii)For an unincorporated area in a nonmetropolitan county not included in clause (i): sites allowing at least 10 units per acre.

(iii)For a suburban jurisdiction: sites allowing at least 20 units per acre.

(iv)For a jurisdiction in a metropolitan county: sites allowing at least 30 units per acre.

(e)A jurisdiction shall be considered suburban if the jurisdiction does not meet the requirements of clauses (i) and (ii) of subparagraph (B) of paragraph (3) of subdivision (c) and is located in a Metropolitan Statistical Area (MSA) of less than 2,000,000 in population, unless that jurisdictions population is greater than 100,000, in which case it shall be considered metropolitan. A county, not including the City and County of San Francisco, shall be considered suburban unless the county is in an MSA of 2,000,000 or greater in population in which case the county shall be considered metropolitan.

(h)The program required by subparagraph (A) of paragraph (1) of subdivision (c) of Section 65583 shall accommodate 100 percent of the need for housing for very low and low-income households allocated pursuant to Section 65584 for which site capacity has not been identified in the inventory of sites pursuant to paragraph (3) of subdivision (a) on sites that shall be zoned to permit owner-occupied and rental multifamily residential use by right for developments in which at least 20 percent of the units are affordable to lower income households during the planning period. These sites shall be zoned with minimum density and development standards that permit at least 16 units per site at a density of at least 16 units per acre in jurisdictions described in clause (i) of subparagraph (B) of paragraph (3) of subdivision (c), shall be at least 20 units per acre in jurisdictions described in clauses (iii) and (iv) of subparagraph (B) of paragraph (3) of subdivision (c), and shall meet the standards set forth in subparagraph (B) of paragraph (5) of subdivision (b). At least 50 percent of the very low and low-income housing need shall be accommodated on sites designated for residential use and for which nonresidential uses or mixed uses are not permitted, except that a city or county may accommodate all of the very low and low-income housing need on sites designated for mixed uses if those sites allow 100 percent residential use and require that residential use occupy 50 percent of the total floor area of a mixed uses project.

(j)For purposes of subdivisions (a) and (b), the department shall provide guidance to local governments to properly survey, detail, and account for sites listed pursuant to Section 65585.

(k)This section shall become operative on December 31, 2028.

SEC. 16.Section 65584.04 of the Government Code is amended to read:65584.04.(a)At least two years prior to a scheduled revision required by Section 65588, each council of governments, or delegate subregion as applicable, shall develop, in consultation with the department, a proposed methodology for distributing the existing and projected regional housing need to cities, counties, and cities and counties within the region or within the subregion, where applicable pursuant to this section. The methodology shall further the objectives listed in subdivision (d) of Section 65584.(b)(1)No more than six months prior to the development of a proposed methodology for distributing the existing and projected housing need, each council of governments shall survey each of its member jurisdictions to request, at a minimum, information regarding the factors listed in subdivision (e) that will allow the development of a methodology based upon the factors established in subdivision (e).(2)With respect to the objective in paragraph (5) of subdivision (d) of Section 65584, the survey shall review and compile information that will allow the development of a methodology based upon the issues, strategies, and actions that are included, as available, in an Analysis of Impediments to Fair Housing Choice or an Assessment of Fair Housing completed by any city or county or the department that covers communities within the area served by the council of governments, and in housing elements adopted pursuant to this article by cities and counties within the area served by the council of governments.(3)The council of governments shall seek to obtain the information in a manner and format that is comparable throughout the region and utilize readily available data to the extent possible.(4)The information provided by a local government pursuant to this section shall be used, to the extent possible, by the council of governments, or delegate subregion as applicable, as source information for the methodology developed pursuant to this section. The survey shall state that none of the information received may be used as a basis for reducing the total housing need established for the region pursuant to Section 65584.01.(5)If the council of governments fails to conduct a survey pursuant to this subdivision, a city, county, or city and county may submit information related to the items listed in subdivision (e) prior to the public comment period provided for in subdivision (d).(c)The council of governments shall electronically report the results of the survey of fair housing issues, strategies, and actions compiled pursuant to paragraph (2) of subdivision (b). The report shall describe common themes and effective strategies employed by cities and counties within the area served by the council of governments, including common themes and effective strategies around avoiding the displacement of lower-income households. The council of governments shall also identify significant barriers to affirmatively furthering fair housing at the regional level and may recommend strategies or actions to overcome those barriers. A council of governments or metropolitan planning organization, as appropriate, may use this information for any other purpose, including publication within a regional transportation plan adopted pursuant to Section 65080 or to inform the land use assumptions that are applied in the development of a regional transportation plan.(d)Public participation and access shall be required in the development of the methodology and in the process of drafting and adoption of the allocation of the regional housing needs. Participation by organizations other than local jurisdictions and councils of governments shall be solicited in a diligent effort to achieve public participation of all economic segments of the community as well as members of protected classes under Section 12955. The proposed methodology, along with any relevant underlying data and assumptions, an explanation of how information about local government conditions gathered pursuant to subdivision (b) has been used to develop the proposed methodology, how each of the factors listed in subdivision (e) is incorporated into the methodology, and how the proposed methodology furthers the objectives listed in subdivision (e) of Section 65584, shall be distributed to all cities, counties, any subregions, and members of the public who have made a written or electronic request for the proposed methodology and published on the council of governments, or delegate subregions, internet website. The council of governments, or delegate subregion, as applicable, shall conduct at least one public hearing to receive oral and written comments on the proposed methodology.(e)To the extent that sufficient data is available from local governments pursuant to subdivision (b) or other sources, each council of governments, or delegate subregion as applicable, shall include the following factors to develop the methodology that allocates regional housing needs:(1)Each member jurisdictions existing and projected jobs and housing relationship. This shall include an estimate based on readily available data on the number of low-wage jobs within the jurisdiction and how many housing units within the jurisdiction are affordable to low-wage workers as well as an estimate based on readily available data, of projected job growth and projected household growth by income level within each member jurisdiction during the planning period.(2)The opportunities and constraints to development of additional housing in each member jurisdiction, including all of the following:(A)Lack of capacity for sewer or water service due to federal or state laws, regulations or regulatory actions, or supply and distribution decisions made by a sewer or water service provider other than the local jurisdiction that preclude the jurisdiction from providing necessary infrastructure for additional development during the planning period.(B)The availability of land suitable for urban development or for conversion to residential use, the availability of underutilized land, and opportunities for infill development and increased residential densities. The council of governments may not limit its consideration of suitable housing sites or land suitable for urban development to existing zoning ordinances and land use restrictions of a locality, but shall consider the potential for increased residential development under alternative zoning ordinances and land use restrictions. The determination of available land suitable for urban development may exclude lands where the Federal Emergency Management Agency (FEMA) or the Department of Water Resources has determined that the flood management infrastructure designed to protect that land is not adequate to avoid the risk of flooding.(C)Lands preserved or protected from urban development under existing federal or state programs, or both, designed to protect open space, farmland, environmental habitats, and natural resources on a long-term basis, including land zoned or designated for agricultural protection or preservation that is subject to a local ballot measure that was approved by the voters of that jurisdiction that prohibits or restricts conversion to non-agricultural uses.(D)County policies to preserve prime agricultural land, as defined pursuant to Section 56064, within an unincorporated and land within an unincorporated area zoned or designated for agricultural protection or preservation that is subject to a local ballot measure that was approved by the voters of that jurisdiction that prohibits or restricts its conversion to non-agricultural uses.(3)The distribution of household growth assumed for purposes of a comparable period of regional transportation plans and opportunities to maximize the use of public transportation and existing transportation infrastructure.(4)Agreements between a county and cities in a county to direct growth toward incorporated areas of the county and land within an unincorporated area zoned or designated for agricultural protection or preservation that is subject to a local ballot measure that was approved by the voters of the jurisdiction that prohibits or restricts conversion to non-agricultural uses.(5)The loss of units contained in assisted housing developments, as defined in paragraph (9) of subdivision (a) of Section 65583, that changed to non-low-income use through mortgage prepayment, subsidy contract expirations, or termination of use restrictions.(6)The percentage of existing households at each of the income levels listed in subdivision (e) of Section 65584 that are paying more than 30 percent and more than 50 percent of their income in rent.(7)The rate of overcrowding.(8)The housing needs of farmworkers.(9)The housing needs generated by the presence of a private university or a campus of the California State University or the University of California within any member jurisdiction.(10)The loss of units during a state of emergency that was declared by the Governor pursuant to the California Emergency Services Act (Chapter 7 (commencing with Section 8550) of Division 1 of Title 2), during the planning period immediately preceding the relevant revision pursuant to Section 65588 that have yet to be rebuilt or replaced at the time of the analysis.(11)The regions greenhouse gas emissions targets provided by the State Air Resources Board pursuant to Section 65080.(12)Any other factors adopted by the council of governments, that further the objectives listed in subdivision (d) of Section 65584, provided that the council of governments specifies which of the objectives each additional factor is necessary to further. The council of governments may include additional factors unrelated to furthering the objectives listed in subdivision (d) of Section 65584 so long as the additional factors do not undermine the objectives listed in subdivision (d) of Section 65584 and are applied equally across all household income levels as described in subdivision (f) of Section 65584 and the council of governments makes a finding that the factor is necessary to address significant health and safety conditions.(f)The council of governments, or delegate subregion, as applicable, shall explain in writing how each of the factors described in subdivision (e) was incorporated into the methodology and how the methodology furthers the objectives listed in subdivision (d) of Section 65584. The methodology may include numerical weighting. This information and any other supporting materials used in determining the methodology, shall be posted on the council of governments, or delegate subregions, internet website.(g)The following criteria shall not be a justification for a determination or a reduction in a jurisdictions share of the regional housing need:(1)Any ordinance, policy, voter-approved measure, or standard of a city or county that directly or indirectly limits the number of residential building permits issued by a city or county.(2)Prior underproduction of housing in a city or county from the previous regional housing need allocation, as determined by each jurisdictions annual production report submitted pursuant to subparagraph (I) of paragraph (2) of subdivision (a) of Section 65400.(3)Stable population numbers in a city or county from the previous regional housing needs cycle.(h)Following the conclusion of the public comment period described in subdivision (d) on the proposed allocation methodology, and after making any revisions deemed appropriate by the council of governments, or delegate subregion, as applicable, as a result of comments received during the public comment period, and as a result of consultation with the department, each council of governments, or delegate subregion, as applicable, shall publish a draft allocation methodology on its internet website and submit the draft allocation methodology, along with the information required pursuant to subdivision (e), to the department.(i)Within 60 days, the department shall review the draft allocation methodology and report its written findings to the council of governments, or delegate subregion, as applicable. In its written findings the department shall determine whether the methodology furthers the objectives listed in subdivision (d) of Section 65584. If the department determines that the methodology is not consistent with subdivision (d) of Section 65584, the council of governments, or delegate subregion, as applicable, shall take one of the following actions:(1)Revise the methodology to further the objectives listed in subdivision (d) of Section 65584 and adopt a final regional, or subregional, housing need allocation methodology.(2)Adopt the regional, or subregional, housing need allocation methodology without revisions and include within its resolution of adoption findings, supported by substantial evidence, as to why the council of governments, or delegate subregion, believes that the methodology furthers the objectives listed in subdivision (d) of Section 65584 despite the findings of the department.(j)If the departments findings are not available within the time limits set by subdivision (i), the council of governments, or delegate subregion, may act without them.(k)Upon either action pursuant to subdivision (i), the council of governments, or delegate subregion, shall provide notice of the adoption of the methodology to the jurisdictions within the region, or delegate subregion, as applicable, and to the department, and shall publish the adopted allocation methodology, along with its resolution and any adopted written findings, on its internet website.(l)The department may, within 90 days, review the adopted methodology and report its findings to the council of governments, or delegate subregion.(m)(1)It is the intent of the Legislature that housing planning be coordinated and integrated with the regional transportation plan. To achieve this goal, the allocation plan shall allocate housing units within the region consistent with the development pattern included in the sustainable communities strategy.(2)The final allocation plan shall ensure that the total regional housing need, by income category, as determined under Section 65584, is maintained, and that each jurisdiction in the region receive an allocation of units for low- and very low income households.(3)The resolution approving the final housing need allocation plan shall demonstrate that the plan is consistent with the sustainable communities strategy in the regional transportation plan and furthers the objectives listed in subdivision (d) of Section 65584.SEC. 17.Section 65585 of the Government Code is amended to read:65585.(a)In the preparation of its housing element, each city and county shall consider the guidelines adopted by the department pursuant to Section 50459 of the Health and Safety Code. Those guidelines shall be advisory to each city or county in the preparation of its housing element.(b)(1)At least 90 days prior to adoption of its housing element, or at least 60 days prior to the adoption of an amendment to this element, the planning agency shall submit a draft element or draft amendment to the department.(2)The planning agency staff shall collect and compile the public comments regarding the housing element received by the city, county, or city and county, and provide these comments to each member of the legislative body before it adopts the housing element.(3)The department shall review the draft and report its written findings to the planning agency within 90 days of its receipt of the draft in the case of an adoption or within 60 days of its receipt in the case of a draft amendment.(c)In the preparation of its findings, the department may consult with any public agency, group, or person. The department shall receive and consider any written comments from any public agency, group, or person regarding the draft or adopted element or amendment under review.(d)In its written findings, the department shall determine whether the draft element or draft amendment substantially complies with this article.(e)Prior to the adoption of its draft element or draft amendment, the legislative body shall consider the findings made by the department. If the departments findings are not available within the time limits set by this section, the legislative body may act without them.(f)If the department finds that the draft element or draft amendment does not substantially comply with this article, the legislative body shall take one of the following actions:(1)Change the draft element or draft amendment to substantially comply with this article.(2)Adopt the draft element or draft amendment without changes. The legislative body shall include in its resolution of adoption written findings which explain the reasons the legislative body believes that the draft element or draft amendment substantially complies with this article despite the findings of the department.(g)Promptly following the adoption of its element or amendment, the planning agency shall submit a copy to the department.(h)The department shall, within 90 days, review adopted housing elements or amendments and report its findings to the planning agency.(i)(1)(A)The department shall review any action or failure to act by the city, county, or city and county that it determines is inconsistent with an adopted housing element or Section 65583, including any failure to implement any program actions included in the housing element pursuant to Section 65583. The department shall issue written findings to the city, county, or city and county as to whether the action or failure to act substantially complies with this article, and provide a reasonable time no longer than 30 days for the city, county, or city and county to respond to the findings before taking any other action authorized by this section, including the action authorized by subparagraph (B).(B)If the department finds that the action or failure to act by the city, county, or city and county does not substantially comply with this article, and if it has issued findings pursuant to this section that an amendment to the housing element substantially complies with this article, the department may revoke its findings until it determines that the city, county, or city and county has come into compliance with this article.(2)The department may consult with any local government, public agency, group, or person, and shall receive and consider any written comments from any public agency, group, or person, regarding the action or failure to act by the city, county, or city and county described in paragraph (1), in determining whether the housing element substantially complies with this article.(j)The department shall notify the city, county, or city and county and may notify the Office of the Attorney General that the city, county, or city and county is in violation of state law if the department finds that the housing element or an amendment to this element, or any action or failure to act described in subdivision (i), does not substantially comply with this article or that any local government has taken an action in violation of the following:(1)Housing Accountability Act (Section 65589.5 of the Government Code).(2)Section 65863 of the Government Code.(3)Chapter 4.3 (commencing with Section 65915) of Division 1 of Title 7 of the Government Code.(4)Section 65008 of the Government Code.(5)Article 8 (commencing with Section 54220) of Chapter 5 of Part 1 of Division 2 of Title 5 of the Government Code.SEC. 13.Section 65585 of the Government Code is amended to read:65585.

(a)In the preparation of its housing element, each city and county shall consider the guidelines adopted by the department pursuant to Section 50459 of the Health and Safety Code. Those guidelines shall be advisory to each city or county in the preparation of its housing element.

(b)(1)At least 90 days prior to adoption of its housing element, or at least 60 days prior to the adoption of an amendment to this element, the planning agency shall submit a draft element or draft amendment to the department.

(2)The planning agency staff shall collect and compile the public comments regarding the housing element received by the city, county, or city and county, and provide these comments to each member of the legislative body before it adopts the housing element.

(3)The department shall review the draft and report its written findings to the planning agency within 90 days of its receipt of the draft in the case of an adoption or within 60 days of its receipt in the case of a draft amendment.

(c)In the preparation of its findings, the department may consult with any public agency, group, or person. The department shall receive and consider any written comments from any public agency, group, or person regarding the draft or adopted element or amendment under review.

(d)In its written findings, the department shall determine whether the draft element or draft amendment substantially complies with this article.

(e)Prior to the adoption of its draft element or draft amendment, the legislative body shall consider the findings made by the department. If the departments findings are not available within the time limits set by this section, the legislative body may act without them.

(f)If the department finds that the draft element or draft amendment does not substantially comply with this article, the legislative body shall take one of the following actions:

(1)Change the draft element or draft amendment to substantially comply with this article.

(2)Adopt the draft element or draft amendment without changes. The legislative body shall include in its resolution of adoption written findings which explain the reasons the legislative body believes that the draft element or draft amendment substantially complies with this article despite the findings of the department.

(g)Promptly following the adoption of its element or amendment, the planning agency shall submit a copy to the department.

(h)The department shall, within 90 days, review adopted housing elements or amendments and report its findings to the planning agency.

(i)(1)(A)The department shall review any action or failure to act by the city, county, or city and county that it determines is inconsistent with an adopted housing element or Section 65583, including any failure to implement any program actions included in the housing element pursuant to Section 65583. The department shall issue written findings to the city, county, or city and county as to whether the action or failure to act substantially complies with this article, and provide a reasonable time no longer than 30 days for the city, county, or city and county to respond to the findings before taking any other action authorized by this section, including the action authorized by subparagraph (B).

(B)If the department finds that the action or failure to act by the city, county, or city and county does not substantially comply with this article, and if it has issued findings pursuant to this section that an amendment to the housing element substantially complies with this article, the department may revoke its findings until it determines that the city, county, or city and county has come into compliance with this article.

(2)The department may consult with any local government, public agency, group, or person, and shall receive and consider any written comments from any public agency, group, or person, regarding the action or failure to act by the city, county, or city and county described in paragraph (1), in determining whether the housing element substantially complies with this article.

(j)The department shall notify the city, county, or city and county and may notify the Office of the Attorney General that the city, county, or city and county is in violation of state law if the department finds that the housing element or an amendment to this element, or any action or failure to act described in subdivision (i), does not substantially comply with this article or that any local government has taken an action in violation of the following:

(1)Housing Accountability Act (Section 65589.5 of the Government Code). 65589.5).

(2)Section 65863 of the Government Code. 65863.

(3)Chapter 4.3 (commencing with Section 65915) of Division 1 of Title 7 of the Government Code. 65915).

(4)Section 65008 of the Government Code. 65008.

(5)Article 8 (commencing with Section 54220) of Chapter 5 of Part 1 of Division 2 of Title 5.

(k)Commencing July 1, 2019, prior to the Attorney General bringing any suit for a violation of the provisions identified in subdivision (j) related to housing element compliance and seeking remedies available pursuant to this subdivision, the department shall offer the jurisdiction the opportunity for two meetings in person or via telephone to discuss the violation, and shall provide the jurisdiction written findings regarding the violation. This paragraph does not affect any action filed prior to the effective date of this section. The requirements set forth in this subdivision shall not apply to any suits brought for a violation or violations of paragraphs (1), (3), and (4) of subdivision (j).

(l)In any action or special proceeding brought by the Attorney General relating to housing element compliance pursuant to subdivision (j), the Attorney General shall request, upon a finding of the court that the housing element does not substantially comply with the requirements of this article pursuant to this section, that the court issue an order or judgment directing the jurisdiction to bring its housing element into substantial compliance with the requirements of this article. The court shall retain jurisdiction to ensure that its order or judgment is carried out, and once a court determines that the housing element of the jurisdiction substantially complies with this article, it shall have the same force and effect, for all purposes, as the departments determination that the housing element substantially complies with this article.

(1)If the jurisdiction has not complied with the order or judgment after twelve 12 months, the court shall conduct a status conference. Following the status conference, upon a determination that the jurisdiction failed to comply with the order or judgment compelling substantial compliance with the requirements of this article, the court shall impose fines on the jurisdiction, which shall be deposited into the Building Homes and Jobs Trust Fund. Any fine levied pursuant to this paragraph shall be in a minimum amount of ten thousand dollars ($10,000) per month, but shall not exceed one hundred thousand dollars ($100,000) per month, except as provided in paragraphs (2) and (3). In the event that the jurisdiction fails to pay fines imposed by the court in full and on time, the court may require the State Controller to intercept any available state and local funds and direct such funds to the Building Homes and Jobs Trust Fund to correct the jurisdictions failure to pay. The intercept of the funds by the Controller for this purpose shall not violate any provision of the California Constitution.

(2)If the jurisdiction has not complied with the order or judgment after three months following the imposition of fees described in paragraph (1), the court shall conduct a status conference. Following the status conference, if the court finds that the fees imposed pursuant to paragraph (1) are insufficient to bring the jurisdiction into compliance with the order or judgment, the court may multiply the fine determined pursuant to paragraph (1) by a factor of three. In the event that the jurisdiction fails to pay fines imposed by the court in full and on time, the court may require the State Controller to intercept any available state and local funds and direct such funds to the Building Homes and Jobs Trust Fund to correct the jurisdictions failure to pay. The intercept of the funds by the Controller for this purpose shall not violate any provision of the California Constitution.

(3)If the jurisdiction has not complied with the order or judgment six months following the imposition of fees described in paragraph (1), the court shall conduct a status conference. Upon a determination that the jurisdiction failed to comply with the order or judgment, the court may impose the following:

(A)If the court finds that the fees imposed pursuant to paragraph (1) and paragraph (2) are insufficient to bring the jurisdiction into compliance with the order or judgement, the court may multiply the fine determined pursuant to paragraph (1) by a factor of six. In the event that the jurisdiction fails to pay fines imposed by the court in full and on time, the court may require the State Controller to intercept any available state and local funds and direct such funds to the Building Homes and Jobs Trust Fund to correct the jurisdictions failure to pay. The intercept of the funds by the Controller for this purpose shall not violate any provision of the California Constitution.

(B)The court may order remedies available pursuant to Section 564 of the Code of Civil Procedure, under which the agent of the court may be appointed with all the powers necessary to bring the jurisdictions housing element into substantial compliance pursuant to this article in order to remedy identified deficiencies. The court shall determine whether the housing element of the jurisdiction substantially complies with this article and, once the court makes that determination, it shall have the same force and effect, for all purposes, as the departments determination that the housing element substantially complies with this article. An agent appointed pursuant to this paragraph shall have expertise in planning in California.

(4)This subdivision shall not limit a courts discretion to apply any and all remedies in an action or special proceeding filed by a party other than the state for a violation of any law identified in subdivision (j).

(m)In determining the application of the remedies available under subdivision (l), the court shall consider whether there are any mitigating circumstances delaying the jurisdiction from coming into compliance with state housing law. The court may consider whether a city, county, or city and county is making a good faith effort to come into substantial compliance or is facing substantial undue hardships.

(n)The Office of the Attorney General may seek all remedies available under law including those set forth in this section.

SEC. 18.SEC. 14.

If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.

Date	Status
Oct 9, 2019	Chaptered by Secretary of State - Chapter 664, Statutes of 2019.
Oct 9, 2019	Approved by the Governor.
Sep 25, 2019	Enrolled and presented to the Governor at 3:30 p.m.
Sep 12, 2019	Senate amendments concurred in. To Engrossing and Enrolling.
Sep 11, 2019	In Assembly. Concurrence in Senate amendments pending.
Sep 11, 2019	Read third time. Passed. Ordered to the Assembly.
Sep 9, 2019	Read second time. Ordered to third reading.
Sep 6, 2019	Read third time and amended. Ordered to second reading.
Sep 3, 2019	Read second time. Ordered to third reading.
Aug 30, 2019	From committee: Amend, and do pass as amended. (Ayes 5. Noes 2.) (August 30).
Aug 12, 2019	In committee: Referred to APPR. suspense file.
Jul 3, 2019	Withdrawn from committee.
Jul 3, 2019	From committee: Do pass and re-refer to Com. on G.O. (Ayes 8. Noes 3.) (July 2). Re-referred to Com. on G.O.
Jun 27, 2019	Read second time and amended. Re-referred to Com. on HOUSING.
Jun 26, 2019	From committee: Amend, and do pass as amended and re-refer to Com. on HOUSING. (Ayes 4. Noes 3.) (June 26).
Jun 12, 2019	Referred to Coms. on GOV. & F., HOUSING and G.O.
May 30, 2019	In Senate. Read first time. To Com. on RLS. for assignment.
May 29, 2019	Read third time. Passed. Ordered to the Senate.
May 20, 2019	Read second time. Ordered to third reading.
May 16, 2019	From committee: Amend, and do pass as amended. (Ayes 12. Noes 4.) (May 16).
May 16, 2019	Joint Rule 62(a), file notice suspended.
May 15, 2019	In committee: Set, first hearing. Referred to APPR. suspense file.
May 13, 2019	Joint Rule 62(a), file notice suspended. (Page 1609.)
Apr 25, 2019	Coauthors revised.
Apr 22, 2019	Re-referred to Com. on H. & C.D.
Apr 11, 2019	Read second time and amended.
Apr 10, 2019	From committee: Amend, and do pass as amended and re-refer to Com. on H. & C.D. (Ayes 5. Noes 1.) (April 10).
Apr 1, 2019	Re-referred to Com. on L. GOV.
Mar 28, 2019	From committee chair, with author's amendments: Amend, and re-refer to Com. on L. GOV. Read second time and amended.
Mar 14, 2019	Referred to Com. on L. GOV.
Feb 25, 2019	Read first time.
Feb 23, 2019	From printer. May be heard in committee March 25.
Feb 22, 2019	Introduced. To print.

Date	Description	Location	Votes
Sep 12, 2019	AB 1486 Ting Concurrence in Senate Amendments	Assembly Floor	59 17 2 Passed
Sep 11, 2019	Assembly 3rd Reading AB1486 Ting et al. By Beall	Senate Floor	27 12 0 Passed
Aug 30, 2019	Do pass as amended	Senate Standing Committee on Appropriations	5 2 0 Passed
Aug 12, 2019	Placed on suspense file	Senate Standing Committee on Appropriations	7 0 0 Passed
Jul 2, 2019	Do pass, but first be re-referred to the Committee on [Governmental Organization]	Senate Standing Committee on Housing	8 3 0 Passed
Jun 26, 2019	Do pass as amended, but first amend, and re-refer to the Committee on [Housing]	Senate Standing Committee on Governance and Finance	4 3 0 Passed
May 29, 2019	AB 1486 Ting Assembly Third Reading	Assembly Floor	52 20 7 Passed
May 16, 2019	Do pass as amended.	Assembly Standing Committee on Appropriations	12 4 2 Passed
Apr 24, 2019	Do pass and be re-referred to the Committee on [Appropriations]	Assembly Standing Committee on Housing and Community Development	5 1 2 Passed
Apr 10, 2019	Do pass as amended and be re-referred to the Committee on [Housing and Community Development]	Assembly Standing Committee on Local Government	5 2 0 Passed

Key

Pro

Against

Did Not Vote

SENATE COMMITTEE ON HOUSING

Senator Scott Wiener, Chair

2019 - 2020 Regular

Bill No: AB 1486 Hearing Date: 7/2/2019

Author:	Ting
Version:	6/27/2019 Amended
Urgency:	No	Fiscal:	Yes
Consultant:	Erin Riches

SUBJECT: Surplus land

DIGEST: This bill expands Surplus Land Act requirements for local agencies, requires local governments to include specified information relating to surplus lands in their housing elements and annual progress reports (APRs), and requires the state Department of Housing and Community Development (HCD) to establish a database of surplus lands, as specified.

ANALYSIS:

Existing law under the Surplus Land Act:

Requires DGS, when disposing of surplus state real property, to first offer it to local agencies, then to non-profit affordable housing sponsors, prior to offering it for sale to private entities or individuals.
Requires DGS to maintain a list of surplus state real property on its website. DGS shall provide local agencies and, upon request, members of the public with electronic notification of updates to this list.
Requires any local agency, when disposing of surplus land, to first offer it for sale or lease for the purpose of developing low- and moderate-income housing. First priority must be given to affordable housing for lower income seniors or disabled persons or households, and other lower income households.
Requires each local agency, on or before December 31 of each year, to make an inventory of all lands it holds, owns, or controls, including a description of each parcel found to be in excess of its needs.
Defines “surplus land” as land owned by any local agency that is determined to be no longer necessary for the agency’s use, except property being held by the agency for the purpose of exchange or property meeting other exemptions.

Existing housing element law:

Requires every city and county to prepare and adopt a general plan, including a housing element, to guide the future growth of a community. The housing element must identify and analyze existing and projected housing needs, identify adequate sites with appropriate zoning to meet the housing needs of all income segments of the community, and ensure that regulatory systems provide opportunities for, and do not unduly constrain, housing development.
Requires each city and county to submit an annual progress report (APR) to HCD and the Office of Planning and Research that includes specified information relating to progress in meeting the jurisdiction’s share of regional housing needs pursuant to its housing element.

This bill:

Surplus Lands Act

Clarifies the public agencies to which the Surplus Land Act applies and revises the definition of “surplus land.”
Expands the list of exemptions from the Surplus Land Act to include, among other things, surplus land that is put out to open, competitive bid by a local agency for either:
1. A housing development that restricts 100% of units to low- or moderate-income households, with at least 75% of units restricted to low-income, for at least 55 years, with a maximum affordable sales price or rent level that does not exceed 20% below median market rents or sales prices for the neighborhood in which the development is located.
2. A mixed-use development that includes at least 300 units and restricts at least 25% of the units to lower-income households, with an affordable sales price or rent level, for at least 55 years.
Requires a local agency that is disposing of surplus land for purpose of developing low- and moderate-income housing to send a notice of availability, as specified, to housing sponsors that have notified HCD (rather than the appropriate council of governments) of their interest. Requires HCD to maintain a list of all notices of availability on its website.
Prohibits the negotiations between a disposing agency and interested entities to determine price and terms to:
1. Disallow residential use of the site as a condition of its sale or lease.
2. Reduce the allowable number of residential units or the maximum lot coverage below what may be allowed by zoning or general plan requirements.
3. Require as a condition of sale or lease, any design standards or architectural requirements that would have a substantial adverse effect on the viability or affordability of a housing development for very low-, low-, or moderate-income households, other than the minimum standards required by general plan, zoning, and subdivision standards and criteria.

Surplus land database

Requires, rather than authorizes, each local agency to make a central inventory of all its surplus land on or before December 31^st of each year, as specified.
Requires each local agency to report to HCD by April 1^st of each year, beginning in 2021, a description of each surplus land parcel, in a form prescribed by HCD.
Requires each local agency to, upon request, provide a list of its surplus lands free of charge.
Requires HCD to create by September 30, 2021, and to maintain, and annually update, a searchable and downloadable public inventory on its website of all publicly owned or controlled lands, and their present uses, as reported to HCD.

Surplus Land Act violations

Requires a local agency, prior to agreeing to the terms for the disposition of surplus land, to provide specified information about its disposition process to HCD. Requires HCD to submit to the local agency, within 30 days, written findings of any process violations that have occurred. Provides the local agency at least 30 days to either correct the violations or adopt a resolution with findings explaining why the process is not in violation.
Provides that a local agency that disposes of land in violation of this bill following a notification from HCD is liable for a penalty of up to 50% of the final sale price. Penalty assessments shall be deposited into a local housing trust fund, the state Building Homes and Jobs Fund, or the Housing Rehabilitation Loan Fund, as specified.
Adds Surplus Land Act violations to the list of violations HCD may notify the Attorney General about.

Housing element and APR requirements

Requires a housing element’s site inventory to include, for non-vacant sites that are owned by the city or county, a description of whether there are plans to dispose of the property during the planning period and how the city or county will comply with the Surplus Lands Act. Sunsets this provision on Dec. 31, 2028.
Requires a local agency’s APR to include a list of sites owned by the city or county, and included in its housing element inventory, that have been sold, leased, or otherwise disposed of in the prior year. The list shall include the entity to whom each site was transferred and the intended use for the site.

COMMENTS

Purpose of the bill. The author states that California is facing an affordable housing crisis and unused public land has the potential to promote affordable housing development throughout the state. This bill clarifies and strengthens provisions in the Surplus Land Act that will promote the use of public land for affordable housing projects.
Affordable housing gets right of first refusal on surplus lands. Under the state Surplus Land Act, if land is no longer needed or is not being held for exchange, a local agency must follow certain procedures prior to disposal of this “surplus” land. Prior to disposing of surplus land, local agencies must make a written offer to sell or lease surplus land for the purpose of developing low- or moderate-income housing to “housing sponsors” upon written request, as well as any local public entity within the jurisdiction where the surplus land is located.
Housing element inventory of adequate sites. Existing law requires every city and county to prepare a housing element as part of its general plan. This is done every eight years by local governments located within the territory of a metropolitan planning organization (MPO), and every five years by local governments in rural non-MPO regions. Each community’s fair share of housing is determined through the regional housing needs allocation (RHNA) process, which is composed of three main stages: (1) the Department of Finance and HCD develop regional housing needs estimates; (b) councils of government (COGs) allocated housing within each region based on the estimates; and (c) cities and counties incorporate their allocations into their housing elements. The housing element must contain an inventory of land suitable for residential development, which is used to identify sites that can be developed for housing within the planning period and are sufficient to provide for the locality’s share of the regional housing need for all income levels.
Governor’s Executive Order. The Governor’s Proposed Budget noted that the state has identified many state-owned properties that are suitable for housing development. The Governor issued an executive order in January that, among other things, directed DGS, HCD, and the California Housing Finance Agency (CalHFA) to work together to prioritize affordable housing development for these parcels. On April 11, 2019, the Governor announced that the Administration has completed an initial review of state-owned property. HCD and DGS have developed a screening tool to further evaluate these properties, and will work with other state agencies to determine the viability of specific parcels for affordable housing development. The Administration will partner with local cities to release at least three Requests for Proposals (RFPs) for new housing construction within a year, with the first parcel identified and an RFP issued by September 30, 2019. The Administration has partnered with the mayors of Chico, Fresno, Oakland, Sacramento, San Diego, and San Francisco to work on expedited development of housing on state-owned properties in those areas.
Connecting surplus lands and housing production. As noted above, the Surplus Land Act requires local agencies to prioritize affordable housing when disposing of surplus land. In 2014, the Act was amended (AB 2135, Ting) to require surplus land sold for affordable housing to provide at least 25% of the units at a cost affordable to low-income households. AB 2135 also required surplus land sold outside the housing preference system to provide at least 15% of the units at a cost affordable to low-income households. According to the author, local governments have attempted to circumvent this statute. These conflicts have delayed the sale of surplus sites and stunted affordable housing development. This bill aims to ensure that opportunities to create new affordable housing through surplus lands, are realized.
How many databases do we need? In addition to this bill, the Legislature is currently considering a number of bills requiring HCD to either create a statewide database or to collaborate with another agency to create one, including:

AB 67

(L. Rivas/Chiu)

Amended 5/17/19

AB 1255

(R. Rivas)

Amended 4/11/19

AB 1483

(Grayson)

Amended 6/24/19

AB 1486

(Ting)

Amended 6/27/19

SB 6

(Beall/McGuire)

Amended 4/23/19

Requires HCD, in collaboration with the Homeless Coordinating and Financing Council, to create a statewide integrated data warehouse.

Requires DGS to create a database of local surplus lands, including infill sites and high-density sites, as reported to DGS in a format prescribed by HCD and included in housing elements.

Requires HCD, or another state entity designated by HCD, to create a statewide parcel geographic database from information submitted in APRs.

Requires HCD to maintain an inventory of all publicly owned or controlled lands and their present uses.

Requires DGS to create a database of sites identified in local housing elements submitted to HCD, along with state surplus land sites.

At minimum, the authors of the bills creating databases for surplus lands may wish to consider aligning their bills to avoid duplication.

Opposition concerns. Opponents state that this bill imposes onerous new requirements on the disposition of surplus land and does not take into consideration the unique needs of various local agencies and special districts.
Triple-referral. This bill was also referred to the Governance and Finance Committee, which passed it on a 4-3 vote on June 26th, and the Governmental Organization Committee, which will hear it next.

Related Legislation:

SB 6 (Beall, 2019) — requires DGS, in coordination with HCD, to create a database of state and local surplus lands available for residential development as identified by local governments in their housing elements. This bill is in the Assembly Accountability and Administrative Review Committee.

AB 1255 (R. Rivas, 2019) — requires local governments to include an inventory of surplus lands in their housing elements and annually report the inventory to DGS, and requires DGS to create a searchable database of this information. This bill will also be heard in this committee today.

AB 1483 (Grayson, 2019) — adds a number of requirements to APRs; requires HCD or another state entity to establish a statewide parcel geographic database; requires cities and counties to post specified housing-related information on their websites; and requires HCD to develop a strategy and standards for state housing data. This bill will also be heard in this committee today.

AB 1484 (Grayson, 2019) — requires cities and counties to post information about all fees imposed on a housing development project on their websites. This bill is in the Governance and Finance Committee.

AB 2065 (Ting, 2018) — would have revised and expanded provisions of the Surplus Land Act. This bill was held on the Assembly Appropriations Committee suspense file.

AB 2135 (Ting, Chapter 677, Statutes of 2014) — required that surplus local government land sold under preference for affordable housing provide at least 25% of the units at affordable housing cost to low-income households. Requires that such land sold outside the preference system for residential use provide at least 15% of the units at affordable housing cost to low-income households.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

POSITIONS: (Communicated to the committee before noon on Wednesday,

June 26, 2019.)

SUPPORT:

East Bay Housing Organizations (Co-Sponsor)
Non-Profit Housing Association of Northern California (Co-Sponsor)
Bay Area Council

Bay Area Housing Advocacy Coalition
Bay Area Regional Health Inequities Initiative
Building Industry Association Of The Bay Area
Burbank Housing Development Corporation
California Apartment Association
California Coalition For Rural Housing
California Community Builders
California Housing Consortium
California Housing Partnership
California Rural Legal Assistance Foundation
California YIMBY
Chan Zuckerberg Initiative
Community Legal Services In East Palo Alto
EAH Housing
East Bay Asian Local Development Corporation
Enterprise Community Partners, Inc.
Greenbelt Alliance
Habitat For Humanity California
Habitat For Humanity East Bay/Silicon Valley
Hamilton Families
Housing California
Midpen Housing
North Bay Leadership Council
Related California
San Diego Housing Federation
San Francisco Foundation
San Francisco Housing Action Coalition
Silicon Valley At Home

Silicon Valley Community Foundation
Southern California Association Of Nonprofit Housing
TMG Partners
Transform

Tenderloin Neighborhood Development
Urban Displacement Project, UC-Berkeley
Western Center On Law & Poverty, Inc.

OPPOSITION:

Association Of California Healthcare Districts
Association Of California Water Agencies
California Association Of Sanitation Agencies
California Municipal Utilities Association
California Special Districts Association
California State Association Of Counties
Cambria Community Services District
Central Contra Costa Sanitary District
Chino Valley Independent Fire District
Coachella Valley Water District
Costa Mesa Sanitary District
Crestline Sanitation District
Cucamonga Valley Water District
Denair Community Services District
Desert Recreation District
Dublin San Ramon Services District
East Contra Costa Fire Protection District
Eastern Kern County Resource Conservation District
El Dorado Hills Community Services District
Fallbrook Public Utilities District
Fresno Mosquito And Vector Control District
Garberville Sanitary District
Georgetown Divide Public Utility District
Goleta Sanitary District
Goleta West Sanitary District
Greenfield County Water District
Helix Water District
Humboldt Bay Municipal Water District
Ironhouse Sanitary District
Irvine Ranch Water District
Kern County Cemetery District
Leucadia Wastewater District
Mckinleyville Community Services District
Merced County Mosquito Abatement District
Mesa Water District
Montara Water And Sanitary District
Mt. View Sanitary District
North County Fire Protection District
North Tahoe Fire Protection District
Northern Salinas Valley Mosquito Abatement District
Oceano Community Services District
Ojai Valley Sanitary District
Orange County Cemetery District
Orange County Mosquito And Vector Control District
Orange County Water District
Palo Verde Cemetery District
Rainbow Municipal Water District
Reclamation District 1000
Rural County Representatives Of California
San Bernardino Valley Water District
San Juan Water District

San Marcos; City Of
San Ramon Valley Fire Protection District

Sanitation Districts of Los Angeles County

Santa Clara County
Santa Margarita Water District
Silveyville Cemetery District

Solano County
Solano Irrigation District
South Coast Water District
Stallion Springs Community Services District
Stege Sanitary District
Tahoe City Public Utility District
Templeton Community Services District
Three Valleys Municipal Water District
Town Of Discovery Bay Community Services District
Tulare Mosquito Abatement District
Tulare Public Cemetery District
Urban Counties Of California
Valley Center Municipal Water District
Ventura Port District
Visalia Public Cemetery District

Vista Irrigation District
West County Wastewater District
West Side Recreation & Park District
Yucaipa Valley Water District

-- END --

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1486

Author:(Ting)

As Amended Ver:September 6, 2019

Majority vote

SUMMARY:

Imposes additional requirements on the process that local agencies must use when disposing of surplus property.

The Senate Amendments:

Delete provisions related to state surplus property and the Department of General Services.
Revise, for purposes of the Surplus Land Act (Act) the definition of "surplus land" to be any land owned by a local agency that the local agency declares is not necessary for the agency's use. Defines "use" to include, but is not limited to, and that is being used or is planned to be used for the express purpose of agency work or operations pursuant to a written plan, including utility sites, watershed property, land being used for conservation purposes, land for demonstration, exhibition, or educational purposes related to greenhouse gas emissions, and buffer sites near sensitive governmental uses, including, but not limited to, waste water treatment plants; however, "use" does not include commercial or industrial use or activities, as defined, except that use may include these activities for special districts if it directly furthers the agency's operations or is expressly authorized by statute governing the local agency.
Expand the list of exemptions from the Act.
Require a local agency that is disposing of surplus land for purpose of developing low- and moderate-income housing to send a notice of availability, as specified, to housing sponsors that have notified the Departments of Housing and Community Development (HCD) of their interest.
Require HCD to maintain a list of all notices of availability on its Web site.
Prohibit a local agency from participating in negotiations, as defined, prior to notifying the entities that request notification of the availability of surplus land, and make other changes to the negotiations process contained in the Act.
Sunset, as of December 31, 2028, the requirement for a housing element's site inventory to include, for non-vacant sites that are owned by the city or county, a description of whether there are plans to dispose of the property during the planning period and how the city or county will comply with the Act.
Require a local agency, prior to agreeing to the terms for the disposition of surplus land, to provide specified information about its disposition process to HCD. Require HCD to submit to the local agency, within 30 days, written findings of any process violations that have occurred. Provide the local agency at least 30 days to either correct the violations or adopt a resolution with findings explaining why the process is not in violation.
Provide that a local agency that disposes of land in violation of this bill following a notification from HCD is liable for a penalty of 30% of the final sale price for a first violation and 50% for subsequent violations. Require penalty assessments shall be deposited into a local housing trust fund, the state Building Homes and Jobs Fund, or the Housing Rehabilitation Loan Fund, as specified. Allow specified individuals to bring an action.
Add violations of the Act to the list of violations of which HCD may notify the Attorney General.

COMMENTS:

Executive Order on Surplus Property. On January 15, 2019, Governor Gavin Newsom signed Executive Order N-06-19 that required DGS to create an inventory of all state-owned parcels that are in excess of state agencies' foreseeable needs by, among other things, conducting a comprehensive survey of all state-owned land, and required that the inventory be completed by April 30, 2019. The Executive Order also required DGS, HCD and the Housing Finance Agency to collaborate to develop two new screening tools for prioritizing affordable housing development on excess state land by March 29, 2019, and to issue requests for proposals on individual parcels and accept proposals from developers of affordable housing.

According to the Author:

According to the author, "California is facing an affordable housing crisis and unused public land has the potential to promote affordable housing development throughout the state. AB 1486 clarifies and strengthens provisions in the Surplus Lands Act that will promote the use of public land for affordable housing projects."

Arguments in Support:

Supporters argue that many local agencies have attempted to circumvent both the letter and intent of the Surplus Lands Act, and that this bill will bring greater clarity and improvement to the enforcement of the Act.

Arguments in Opposition:

Opposition to prior versions of the bill point to the process of disposing of surplus land and other requirements being far too onerous on local agencies.

FISCAL COMMENTS:

According to the Senate Appropriations Committee:

HCD estimates costs of $1.17 million in 2020-21 and $1.1 million ongoing for 6.5 PY of new staff to conduct outreach and provide technical assistance to local agencies, maintain notices of availability on its website, conduct compliance activities (including potential referrals of noncompliance to the Attorney General), and provide continual updates on compliance processes and submission/review status. (General Fund)
Unknown, potentially significant, state-mandated costs for local agencies to revise procedures for identifying and disposing of surplus lands, and provide specified information to HCD. To the extent an affected local agency files a successful claim with the Commission on State Mandates, these costs would be state-reimbursable. (General Fund)
Any mandated costs incurred by local governments related to the requirement to include specified excess land inventory information in the housing element are not reimbursable by the state because local governments have authority to levy fees to cover the costs of planning mandates.
Unknown, potential penalty revenue gains, to the extent local agencies dispose of land in violation of the Surplus Land Act and enforcement actions are finalized. Revenues could be deposited into local housing trust funds, or into specified state funds. The latter would occur at a local agency's discretion, or if funds deposited into a local housing trust fund remain unspent after five years. (Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund)

VOTES:

ASM LOCAL GOVERNMENT: 6-2-0

YES: Aguiar-Curry, Bloom, Boerner Horvath, Ramos, Luz Rivas, Robert Rivas

NO: Lackey, Voepel

ASM HOUSING AND COMMUNITY DEVELOPMENT: 5-1-2

YES: Chiu, Gabriel, Gloria, Limón, Quirk-Silva

NO: Kiley

ABS, ABST OR NV: Diep, Maienschein

ASM APPROPRIATIONS: 12-4-2

YES: Gonzalez, Bloom, Bonta, Calderon, Carrillo, Chau, Eggman, Gabriel, Eduardo Garcia, Petrie-Norris, Quirk, Robert Rivas

NO: Bigelow, Brough, Fong, Obernolte

ABS, ABST OR NV: Diep, Maienschein

ASSEMBLY FLOOR: 53-20-7

YES: Aguiar-Curry, Arambula, Bauer-Kahan, Berman, Bloom, Boerner Horvath, Bonta, Burke, Calderon, Carrillo, Cervantes, Chau, Chiu, Chu, Cooper, Eggman, Friedman, Gabriel, Cristina Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Levine, Limón, Low, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Salas, Santiago, Smith, Mark Stone, Ting, Weber, Wicks, Wood, Rendon

NO: Bigelow, Brough, Chen, Choi, Cunningham, Dahle, Diep, Flora, Fong, Frazier, Gallagher, Kiley, Lackey, Mathis, Mayes, Melendez, Obernolte, Patterson, Voepel, Waldron

ABS, ABST OR NV: Cooley, Daly, Eduardo Garcia, Kamlager-Dove, Maienschein, Quirk, Blanca Rubio

SENATE FLOOR: 28-12-0

YES: Allen, Archuleta, Atkins, Beall, Bradford, Caballero, Dodd, Durazo, Galgiani, Glazer, Lena Gonzalez, Hertzberg, Hill, Hueso, Jackson, Leyva, McGuire, Mitchell, Monning, Pan, Portantino, Roth, Rubio, Skinner, Stern, Umberg, Wieckowski, Wiener

NO: Bates, Borgeas, Chang, Dahle, Grove, Hurtado, Jones, Moorlach, Morrell, Nielsen, Stone, Wilk

UPDATED:

VERSION: September 6, 2019

CONSULTANT: Debbie Michel / L. GOV. / (916) 319-3958 FN: 0002382

SENATE RULES COMMITTEE

Office of Senate Floor Analyses

(916) 651-1520 Fax: (916) 327-4478

AB 1486

THIRD READING

Bill No: AB 1486

Author: Ting (D), et al.

Amended: 9/6/19 in Senate

Vote: 21

SENATE GOVERNANCE & FIN. COMMITTEE: 4-3, 6/26/19

AYES: McGuire, Beall, Hertzberg, Wiener

NOES: Moorlach, Hurtado, Nielsen

SENATE HOUSING COMMITTEE: 8-3, 7/2/19

AYES: Wiener, Caballero, Durazo, McGuire, Roth, Skinner, Umberg, Wieckowski

NOES: Morrell, Bates, Moorlach

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/30/19

AYES: Portantino, Bradford, Durazo, Hill, Wieckowski

NOES: Bates, Jones

ASSEMBLY FLOOR: 53-20, 5/29/19 - See last page for vote

SUBJECT: Surplus land

SOURCE: Nonprofit Housing Association of Northern California

San Diego Housing Federation

DIGEST:

This bill imposes additional requirements on the process that public agencies must use when disposing of surplus property.

Senate Floor Amendments of 9/6/19 exempt some special district lands if the district’s statute expressly authorizes sale or use for commercial or retail purposes, specified land transferred to local governments, modify the penalty provisions to only impose a penalty of 30% of the land value and 50% for future violations, grandfather in specified properties under the existing surplus land act, and make other minor and clarifying amendments.

ANALYSIS:

Existing law:

The Surplus Land Act:

Requires any local agency, when disposing of surplus land, to first offer it for sale or lease for the purpose of developing low- and moderate-income housing. First priority must be given to affordable housing for lower income seniors or disabled persons or households, and other lower income households.
Requires each local agency, on or before December 31 of each year, to make an inventory of all lands it holds, owns, or controls, including a description of each parcel found to be in excess of its needs.
Defines “surplus land” as land owned by any local agency that is determined to be no longer necessary for the agency’s use, except property being held by the agency for the purpose of exchange or property meeting other exemptions.

Housing element law:

Requires every city and county to prepare and adopt a general plan, including a housing element, to guide the future growth of a community. The housing element must identify and analyze existing and projected housing needs, identify adequate sites with appropriate zoning to meet the housing needs of all income segments of the community, and ensure that regulatory systems provide opportunities for, and do not unduly constrain, housing development.
Requires each city and county to submit an annual progress report (APR) to the Department of Housing and Community Development (HCD) and the Office of Planning and Research that includes specified information relating to progress in meeting the jurisdiction’s share of regional housing needs pursuant to its housing element.

This bill:

Surplus Lands Act

Clarifies the public agencies to which the Surplus Land Act applies and adds successor agencies, joint powers authorities, housing authorities, and any other political subdivision of the state.
Revises the definition of “surplus land” to be any land owned by a local agency that the local agency declares is not necessary for the agency’s use. Defines “use” to include, but is not limited to, and that is being used or is planned to be used for the express purpose of agency work or operations pursuant to a written plan, including utility sites, watershed property, land being used for conservation purposes, land for demonstration, exhibition, or educational purposes related to greenhouse gas emissions, and buffer sites near sensitive governmental uses, including, but not limited to, waste water treatment plants. However, “use” does not include commercial or industrial use or activities, as defined, except that use may include these activities for special districts if it directly furthers the agency’s operations or is expressly authorized by statute governing the local agency. Additionally, defines surplus land to include land formerly owned by redevelopment agencies.
Expands the list of exemptions from the Surplus Land Act to include, among other exemptions:
1. Land that is put out to open, competitive bid by a local agency for either:
  1. A housing development that restricts 100% of units to low- or moderate-income households, with at least 75% of units restricted to low-income, for at least 55 years, with a maximum affordable sales price or rent level that does not exceed 20% below median market rents or sales prices for the neighborhood in which the development is located.
  2. A mixed-use development that includes at least 300 units and restricts at least 25% of the units to lower-income households, with an affordable rent or sale price, for at least 55 years for rental housing, or 45 years for ownership.
2. Land that is subject to legal restrictions that would make housing prohibited on the site and that are not imposed by the local agency, as specified.
3. Land that was granted by the state in trust to a local agency, that was acquired by the local agency for trust purposes by purchase or exchange, or for which disposal of the land is authorized or required subject to conditions established by statute.
4. Land transferred to a local agency pursuant to specified provisions of existing law and that plans minimum density of affordable housing.
Requires a local agency that is disposing of surplus land for purpose of developing low- and moderate-income housing to send a notice of availability, as specified, to housing sponsors that have notified HCD (rather than the appropriate council of governments) of their interest. Requires HCD to maintain a list of all notices of availability on its Web site.
Prohibits a local agency from participating in negotiations, as defined, prior to notifying the entities that request notification of the availability of surplus land.
Prohibits the negotiations between a disposing agency and interested entities to determine price and terms to:
1. Disallow residential use of the site as a condition of its sale or lease, except where the condition is required to mitigate impacts to public health and safety or agency operations.
2. Reduce the allowable number of residential units or the maximum lot coverage below what may be allowed by zoning or general plan requirements.
3. Require as a condition of sale or lease, any design standards or architectural requirements that would have a substantial adverse effect on the viability or affordability of a housing development for very low-, low-, or moderate-income households, other than the minimum standards required by general plan, zoning, and subdivision standards and criteria.
Provides that the prohibitions in 6) do not restrict a local agency’s discretion regarding land use decisions, as specified.
Requires a local agency to give preference in exclusive negotiations to those affordable housing entities that propose the deepest level of affordability.
Requires a housing element’s site inventory to include, for non-vacant sites that are owned by the city or county, a description of whether there are plans to dispose of the property during the planning period and how the city or county will comply with the Surplus Lands Act. Sunsets this provision on Dec. 31, 2028.
Grandfathers in certain properties to the process under existing law, as follows:
1. If a local agency has entered into an agreement to dispose of property by September 30, 2019 and disposes of the property by December 31, 2022.
2. Former RDA properties that enter into an agreement for the property by December 31, 2020 and disposes of the property by December 31, 2022.
3. These dates may be extended for properties under litigation until 6 months after the litigation is resolved.
Requires a city or county to include in its annual progress report to HCD a list of properties sold, leased, or disposed of in the prior year, with specified information.

Surplus Land Act violations

Requires a local agency, prior to agreeing to the terms for the disposition of surplus land, to provide specified information about its disposition process to HCD. Requires HCD to submit to the local agency, within 30 days, written findings of any process violations that have occurred. Provides the local agency at least 30 days to either correct the violations or adopt a resolution with findings explaining why the process is not in violation.
Provides that a local agency that disposes of land in violation of this bill following a notification from HCD is liable for a penalty of 30% of the final sale price for a first violation and 50% for subsequent violations. Penalty assessments shall be deposited into a local housing trust fund, the state Building Homes and Jobs Fund, or the Housing Rehabilitation Loan Fund, as specified. Allows specified individuals to bring an action.
Adds Surplus Land Act violations to the list of violations of which HCD may notify the Attorney General.
Requires HCD to make available educational resources and materials to inform each agency of its obligations under the Surplus Land Act and adopt guidelines for this penalty process, among other requirements, by January 1, 2021.

Background

Public agencies are major landlords in some communities, owning significant pieces of real estate. When properties become surplus to their needs, public officials want to sell the land to recoup their investments. The Surplus Land Act spells out the steps public agencies must follow when they want to dispose of land they no longer need. It requires state departments and local governments to give a “first right of refusal” to other governments and some nonprofit groups. The statute’s implicit public policy is that real property should remain in public ownership if it’s still useful for certain favored purposes.

Before state and local officials can dispose of surplus land, they must send a written offer to sell or lease surplus land to various public agencies and nonprofit groups, referred to as “housing sponsors,” if they want to sell or lease the property for:

Low- and moderate-income housing.
Park and recreation.
School facilities or open space.
Enterprise zones.
Infill opportunity zones or transit village plans.

If another agency or housing sponsor wants to buy or lease the surplus land for one of these purposes, it must tell the disposing agency within 60 days. The two entities have an additional 90 days to negotiate a mutually satisfactory price in good faith. If they can’t agree, the agency that owns the surplus land can sell the land on the private market. The Act says that nothing in its provisions prevent a local agency from disposing of the land at or below fair market value, where not in conflict with other law.

The Surplus Land Act’s provisions don’t apply to “exempt surplus land,” which means either:

Land that a county transfers at less than fair market value for affordable housing development; or
Small parcels that are sold to contiguous property owners.

Counties have the option of developing a central inventory of all the surplus land in that county. Under a separate provision of law, local governments must annually make an inventory of all land that it holds to determine what land, including air rights, if any, is in excess of its foreseeable needs and describe the excess parcels. The local government must make this list available for free to entities that request it.

State agencies must make a similar list of excess land and send it to the Department of General Services (DGS). Land reported as excess must then be transferred to DGS, which requests authorization to sell the land from the Legislature if it isn’t needed by other state agencies.

In 2014, the Legislature updated the Surplus Land Act to enhance the affordable housing requirements under the law (AB 2135, Ting, Chapter 677, Statutes of 2014). Specifically, if a local agency sells the land for housing, a few inclusionary requirements apply. First, if the land is to be used for low- or moderate-income housing, at least 25 percent of the units must be offered at an affordable housing cost or rent. If the local agency doesn’t come to terms with a housing sponsor or other local agency, and a housing project with 10 or more units is subsequently built on the land, at least 15 percent of the units must be affordable.

The 2014 changes to the Act were intended to expand the supply of land available for affordable housing. Since then, reports of some local agencies attempting to avoid the requirements of the Surplus Land Act have emerged. In one high-profile case in 2015, the City of Oakland attempted to sell property to a market-rate developer despite interest from affordable housing developers. Affordable housing advocates want the Legislature to increase the requirements on local agencies that want to dispose of surplus property.

Comments

Purpose of the bill. According to the author, “California is facing a housing crisis and unused public land has the potential to promote affordable housing development throughout the state. AB 1486 clarifies and strengthens provisions in the Surplus Land Act that will promote the use of public land for affordable housing.”
Robbing Peter to pay Paul. Local governments hold property for a variety of reasons, and they dispose of it for many reasons as well. Faced with tight budgets, state departments and local governments should be selling their surplus real estate for the highest possible prices, thereby recouping the public's investments. Recent legislation has eaten away at the ability of public agencies to maximize the value of their land: because any public land sold to a residential developer must include affordable housing if there was an affordable housing developer who wanted it, the value of that land is lower to other developers. AB 1486 goes a step further and imposes additional restrictions that could delay property sales, reduces the value that local governments can get for their land, and increases the red tape that the agencies and potential buyers must wade through before they can complete a transaction. By doing so, AB 1486 potentially undermines the services that local agencies provide to their constituents: if public agencies can’t get the maximum sale price because of constraints on public land, they’ll have less money to put towards other important programs. Additionally, cities and counties have broad authority to look out for the welfare of their citizens and to take actions to ensure their wellbeing. Accordingly, some local agencies might consider selling land for economic development to be an important and valuable use of property, even though it might not be necessary for the agency’s use. AB 1486 could impair these legitimate actions by local agencies.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee:

HCD estimates costs of $1.17 million in 2020-21 and $1.1 million ongoing for 6.5 PY of new staff to conduct outreach and provide technical assistance to local agencies, maintain notices of availability on its Web site, conduct compliance activities (including potential referrals of noncompliance to the Attorney General), and provide continual updates on compliance processes and submission/review status. (General Fund)
Unknown, potentially significant, state-mandated costs for local agencies to revise procedures for identifying and disposing of surplus lands, and provide specified information to HCD. To the extent an affected local agency files a successful claim with the Commission on State Mandates, these costs would be state-reimbursable. (General Fund)
Any mandated costs incurred by local governments related to the requirement to include specified excess land inventory information in the housing element are not reimbursable by the state because local governments have authority to levy fees to cover the costs of planning mandates.
Unknown, potential penalty revenue gains, to the extent local agencies dispose of land in violation of the Surplus Land Act and enforcement actions are finalized. Revenues could be deposited into local housing trust funds, or into specified state funds. The latter would occur at a local agency’s discretion, or if funds deposited into a local housing trust fund remain unspent after five years. (Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund)

SUPPORT: (Verified 9/9/19)

Nonprofit Housing Association of Northern California (co-source)

San Diego Housing Federation (co-source)

Association of Bay Area Governments

Bay Area Council

Bay Area Housing Advocacy Coalition

Bay Area Regional Health Inequities Initiative

Bridge Housing Corporation

Building Industry Association of the Bay Area

Burbank Housing Development Corporation

California Apartment Association

California Building Industry Association

California Community Builders

California Housing Consortium

California Rural Legal Assistance Foundation

California YIMBY

Chan Zuckerberg Initiative

Community Legal Services in East Palo Alto

EAH Housing

East Bay Asian Local Development Corporation

East Bay Housing Organizations

Enterprise Community Partners

Greenbelt Alliance

Habitat for Humanity California

Habitat for Humanity East Bay/Silicon Valley

Hamilton Families

Metropolitan Transportation Commission

Midpen Housing Corporation

North Bay Leadership Council

Oakland Metropolitan Chamber of Commerce

Related California

San Francisco Foundation

San Francisco Housing Action Coalition

Silicon Valley at Home

Silicon Valley Community Foundation

Southern California Association of Nonprofit Housing

Tenderloin Neighborhood Development Corporation

TMG Partners

Transform

Urban Displacement Project, UC Berkeley

Western Center on Law & Poverty

Working Partnerships USA

OPPOSITION: (Verified 9/10/19)

Beaumont-Cherry Valley Water District

Byron Bethany Irrigation District

Calaveras Public Utility District

Cambria Community Services District

Central Contra Costa Sanitary District

Chino Valley Independent Fire District

City of Concord

City of San Marcos

Coachella Valley Water District

Costa Mesa Sanitary District

County of Santa Clara

County of Solano

Crestline Sanitation District

Cucamonga Valley Water District

Denair Community Services District

Desert Recreation District

Dublin San Ramon Services District

East Contra Costa Fire Protection District

Eastern Kern County Resource Conservation District

Edgemont Community Services Districts

El Dorado Hills Community Services District

Fallbrook Public Utilities District

Fresno Mosquito and Vector Control District

Garberville Sanitary District

Georgetown Divide Public Utility District

Goleta Sanitary District

Goletta West Sanitary District

Greenfield County Water District

Helix Water District

Humboldt Bay Municipal Water District

Ironhouse Sanitary District

Kern County Cemetery District

Leucadia Wastewater District

McKinleyville Community Services District

Merced County Mosquito Abatement District

Montara Water and Sanitary District

Mt. View Sanitary District

North County Fire Protection District

Northern Salinas Valley Mosquito Abatement District

Oceano Community Services District

Ojai Valley Sanitary District

Olivehurst Public Utility District

Orange County Cemetery District

Orange County Mosquito Abatement and Vector Control District

Palo Verde Cemetery District

Rainbow Municipal Water District

Reclamation District 1000

Rio Linda Elverta Community Water District

Ross Valley Sanitary District

San Bernardino Valley Water District

San Juan Water District San Ramon Valley Fire Protection District

Silveyville Cemetery District

Solano Irrigation District

South Coast Water District

Stallion Springs Community Services District

Stege Sanitary District

Stockton East Water District

Tahoe City Public Utility District

Templeton Community Services District

Three Valleys Municipal Water District

Town of Discovery Bay Community Services District

Transportation Agency for Monterey County

Valley Center Municipal Water District

Ventura Port District

Visalia Public Cemetery District

Vista Irrigation District

West County Wastewater District

West Side Recreation & Park District

Yucaipa Valley Water District

ASSEMBLY FLOOR: 53-20, 5/29/19

AYES: Aguiar-Curry, Arambula, Bauer-Kahan, Berman, Bloom, Boerner Horvath, Bonta, Burke, Calderon, Carrillo, Cervantes, Chau, Chiu, Chu, Cooper, Eggman, Friedman, Gabriel, Cristina Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Levine, Limón, Low, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Salas, Santiago, Smith, Mark Stone, Ting, Weber, Wicks, Wood, Rendon

NOES: Bigelow, Brough, Chen, Choi, Cunningham, Dahle, Diep, Flora, Fong, Frazier, Gallagher, Kiley, Lackey, Mathis, Mayes, Melendez, Obernolte, Patterson, Voepel, Waldron

NO VOTE RECORDED: Cooley, Daly, Eduardo Garcia, Kamlager-Dove, Maienschein, Quirk, Blanca Rubio

Prepared by: Anton Favorini-Csorba / GOV. & F. / (916) 651-4119

9/10/19 10:13:56

**** END ****

SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

AB 1486 (Ting) - Surplus land


Version:	Policy Vote:
Urgency:	Mandate:
Hearing Date:	Consultant:

Bill Summary:

AB 1486 would expand the requirements of the Surplus Land Act, imposing new duties on local agencies when disposing of surplus lands and specifying penalties for compliance failures, as specified. The bill would require each local agency to compile a central inventory of surplus lands it owns that are located in urban areas within its jurisdiction, as specified, and annually forward the inventory to the Department of Housing and Community Development (HCD). The bill would also require HCD to use that information to create a searchable and downloadable inventory of publicly-owned surplus lands, and their present uses, by September 30, 2021, as specified.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 30, 2019

Fiscal Impact:

HCD estimates costs of $1.17 million in 2020-21 and $1.1 million ongoing for 6.5 PY of new staff to conduct outreach and provide technical assistance to local agencies, maintain notices of availability on its website, conduct compliance activities (including potential referrals of noncompliance to the Attorney General), and provide continual updates on compliance processes and submission/review status. (General Fund)
Unknown, potentially significant, state-mandated costs for local agencies to revise procedures for identifying and disposing of surplus lands, and provide specified information to HCD. To the extent an affected local agency files a successful claim with the Commission on State Mandates, these costs would be state-reimbursable. (General Fund)
Any mandated costs incurred by local governments related to the requirement to include specified excess land inventory information in the housing element are not reimbursable by the state because local governments have authority to levy fees to cover the costs of planning mandates.
Unknown, potential penalty revenue gains, to the extent local agencies dispose of land in violation of the Surplus Land Act and enforcement actions are finalized. Revenues could be deposited into local housing trust funds, or into specified state funds. The latter would occur at a local agency’s discretion, or if funds deposited into a local housing trust fund remain unspent after five years. (Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund)

Author Amendments:

Delete provisions of the bill that would have done the following:

Required each local agency to: (1) make a central inventory of all its surplus land on or before December 31^st of each year; (2) report to HCD by April 1^st of each year, beginning in 2021, a description of each surplus land parcel and its current use, in a form prescribed by HCD; and (3) provide a list of its surplus lands, upon request and free of charge.
Required HCD to create by September 30, 2021, and to create and maintain, and annually update, a searchable and downloadable public inventory on its website of all publicly owned or controlled lands, and their present uses, as reported to HCD.

-- END --

SENATE RULES COMMITTEE

Office of Senate Floor Analyses

(916) 651-1520 Fax: (916) 327-4478

AB 1486

THIRD READING

Bill No: AB 1486

Author: Ting (D), et al.

Amended: 8/30/19 in Senate

Vote: 21

SENATE GOVERNANCE & FIN. COMMITTEE: 4-3, 6/26/19

AYES: McGuire, Beall, Hertzberg, Wiener

NOES: Moorlach, Hurtado, Nielsen

SENATE HOUSING COMMITTEE: 8-3, 7/2/19

AYES: Wiener, Caballero, Durazo, McGuire, Roth, Skinner, Umberg, Wieckowski

NOES: Morrell, Bates, Moorlach

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/30/19

AYES: Portantino, Bradford, Durazo, Hill, Wieckowski

NOES: Bates, Jones

ASSEMBLY FLOOR: 53-20, 5/29/19 - See last page for vote

SUBJECT: Surplus land

SOURCE: Nonprofit Housing Association of Northern California

San Diego Housing Federation

DIGEST:

This bill imposes additional requirements on the process that public agencies must use when disposing of surplus property.

ANALYSIS:

Existing law:

The Surplus Land Act:

Requires any local agency, when disposing of surplus land, to first offer it for sale or lease for the purpose of developing low- and moderate-income housing. First priority must be given to affordable housing for lower income seniors or disabled persons or households, and other lower income households.
Requires each local agency, on or before December 31 of each year, to make an inventory of all lands it holds, owns, or controls, including a description of each parcel found to be in excess of its needs.
Defines “surplus land” as land owned by any local agency that is determined to be no longer necessary for the agency’s use, except property being held by the agency for the purpose of exchange or property meeting other exemptions.

Housing element law:

Requires every city and county to prepare and adopt a general plan, including a housing element, to guide the future growth of a community. The housing element must identify and analyze existing and projected housing needs, identify adequate sites with appropriate zoning to meet the housing needs of all income segments of the community, and ensure that regulatory systems provide opportunities for, and do not unduly constrain, housing development.
Requires each city and county to submit an annual progress report (APR) to the Department of Housing and Community Development (HCD) and the Office of Planning and Research that includes specified information relating to progress in meeting the jurisdiction’s share of regional housing needs pursuant to its housing element.

This bill:

Surplus Lands Act

Clarifies the public agencies to which the Surplus Land Act applies and adds successor agencies, joint powers authorities, housing authorities, and any other political subdivision of the state.
Revises the definition of “surplus land” to be any land owned by a local agency that the local agency declares is not necessary for the agency’s use. Defines “use” to include, but is not limited to, and that is being used or is planned to be used for the express purpose of agency work or operations, including utility sites, watershed property, land being used for conservation purposes, land for demonstration, exhibition, or educational purposes related to greenhouse gas emissions, and buffer sites near sensitive governmental uses, including, but not limited to, waste water treatment plants. However, “use” does not include commercial use or activities, as defined. Additionally, defines surplus land to include land formerly owned by redevelopment agencies.
Expands the list of exemptions from the Surplus Land Act to include, among other exemptions:
1. Land that is put out to open, competitive bid by a local agency for either:
  1. A housing development that restricts 100% of units to low- or moderate-income households, with at least 75% of units restricted to low-income, for at least 55 years, with a maximum affordable sales price or rent level that does not exceed 20% below median market rents or sales prices for the neighborhood in which the development is located.
  2. A mixed-use development that includes at least 300 units and restricts at least 25% of the units to lower-income households, with an affordable sales price or rent level, for at least 55 years.
2. Land that is subject to legal restrictions that would make housing prohibited or incompatible on the site and that are not imposed by the local agency, as specified.
3. Land that was granted by the state in trust to a local agency, that was acquired by the local agency for trust purposes by purchase or exchange, or for which disposal of the land is authorized or required subject to conditions established by statute.
Requires a local agency that is disposing of surplus land for purpose of developing low- and moderate-income housing to send a notice of availability, as specified, to housing sponsors that have notified HCD (rather than the appropriate council of governments) of their interest. Requires HCD to maintain a list of all notices of availability on its website.
Prohibits a local agency from participating in negotiations, as defined, prior to notifying the entities that request notification of the availability of surplus land.
Prohibits the negotiations between a disposing agency and interested entities to determine price and terms to:
1. Disallow residential use of the site as a condition of its sale or lease, except where the condition is required to mitigate impacts to public health and safety or agency operations.
2. Reduce the allowable number of residential units or the maximum lot coverage below what may be allowed by zoning or general plan requirements.
3. Require as a condition of sale or lease, any design standards or architectural requirements that would have a substantial adverse effect on the viability or affordability of a housing development for very low-, low-, or moderate-income households, other than the minimum standards required by general plan, zoning, and subdivision standards and criteria.
Provides that the prohibitions in 6) do not restrict a local agency’s discretion regarding land use decisions, as specified.
Requires a local agency to give preference in exclusive negotiations to those affordable housing entities that propose the deepest level of affordability.
Requires a housing element’s site inventory to include, for non-vacant sites that are owned by the city or county, a description of whether there are plans to dispose of the property during the planning period and how the city or county will comply with the Surplus Lands Act. Sunsets this provision on Dec. 31, 2028.

Surplus Land Act violations

Requires a local agency, prior to agreeing to the terms for the disposition of surplus land, to provide specified information about its disposition process to HCD. Requires HCD to submit to the local agency, within 30 days, written findings of any process violations that have occurred. Provides the local agency at least 30 days to either correct the violations or adopt a resolution with findings explaining why the process is not in violation.
Provides that a local agency that disposes of land in violation of this bill following a notification from HCD is liable for a penalty of up to 50% of the final sale price. Penalty assessments shall be deposited into a local housing trust fund, the state Building Homes and Jobs Fund, or the Housing Rehabilitation Loan Fund, as specified.
Adds Surplus Land Act violations to the list of violations of which HCD may notify the Attorney General.

Background

Low- and moderate-income housing.
Park and recreation.
School facilities or open space.
Enterprise zones.
Infill opportunity zones or transit village plans.

The Surplus Land Act’s provisions don’t apply to “exempt surplus land,” which means either:

Land that a county transfers at less than fair market value for affordable housing development; or
Small parcels that are sold to contiguous property owners.

Comments

Purpose of the bill. According to the author, “California is facing a housing crisis and unused public land has the potential to promote affordable housing development throughout the state. AB 1486 clarifies and strengthens provisions in the Surplus Land Act that will promote the use of public land for affordable housing.”
Robbing Peter to pay Paul. Local governments hold property for a variety of reasons, and they dispose of it for many reasons as well. Faced with tight budgets, state departments and local governments should be selling their surplus real estate for the highest possible prices, thereby recouping the public's investments. Recent legislation has eaten away at the ability of public agencies to maximize the value of their land: because any public land sold to a residential developer must include affordable housing if there was an affordable housing developer who wanted it, the value of that land is lower to other developers. AB 1486 goes a step further and imposes additional restrictions that will delay property sales, reduces the value that local governments can get for their land, and increases the red tape that the agencies and potential buyers must wade through before they can complete a transaction. By doing so, AB 1486 potentially undermines the services that local agencies provide to their constituents: if public agencies can’t get the maximum sale price because of constraints on public land, they’ll have less money to put towards other important programs. For example, water agencies that want to subsidize the water rates of low-income customers can’t use ratepayer dollars to do so because of Constitutional limitations; instead, they rely on other types of revenues, including from property sales and leases. Additionally, cities and counties have broad authority to look out for the welfare of their citizens and to take actions to ensure their wellbeing. Accordingly, some local agencies might consider selling land for economic development to be an important and valuable use of property, even though it might not be necessary for the agency’s use. AB 1486 could impair these legitimate actions by local agencies.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee:

HCD estimates costs of $1.17 million in 2020-21 and $1.1 million ongoing for 6.5 PY of new staff to conduct outreach and provide technical assistance to local agencies, maintain notices of availability on its website, conduct compliance activities (including potential referrals of noncompliance to the Attorney General), and provide continual updates on compliance processes and submission/review status. (General Fund)
Unknown, potentially significant, state-mandated costs for local agencies to revise procedures for identifying and disposing of surplus lands, and provide specified information to HCD. To the extent an affected local agency files a successful claim with the Commission on State Mandates, these costs would be state-reimbursable. (General Fund)
Any mandated costs incurred by local governments related to the requirement to include specified excess land inventory information in the housing element are not reimbursable by the state because local governments have authority to levy fees to cover the costs of planning mandates.
Unknown, potential penalty revenue gains, to the extent local agencies dispose of land in violation of the Surplus Land Act and enforcement actions are finalized. Revenues could be deposited into local housing trust funds, or into specified state funds. The latter would occur at a local agency’s discretion, or if funds deposited into a local housing trust fund remain unspent after five years. (Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund)

SUPPORT: (Verified 8/30/19)

Nonprofit Housing Association of Northern California (co-source)

San Diego Housing Federation (co-source)

Association of Bay Area Governments

Bay Area Council

Bay Area Housing Advocacy Coalition

Bay Area Regional Health Inequities Initiative

Bridge Housing Corporation

Building Industry Association of the Bay Area

Burbank Housing Development Corporation

California Apartment Association

California Building Industry Association

California Community Builders

California Housing Consortium

California Rural Legal Assistance Foundation

California YIMBY

Chan Zuckerberg Initiative

Community Legal Services in East Palo Alto

EAH Housing

East Bay Asian Local Development Corporation

East Bay Housing Organizations

Enterprise Community Partners

Greenbelt Alliance

Habitat for Humanity California

Habitat for Humanity East Bay/Silicon Valley

Hamilton Families

Metropolitan Transportation Commission

Midpen Housing Corporation

North Bay Leadership Council

Oakland Metropolitan Chamber of Commerce

Related California

San Francisco Foundation

San Francisco Housing Action Coalition

Silicon Valley at Home

Silicon Valley Community Foundation

Southern California Association of Nonprofit Housing

Tenderloin Neighborhood Development Corporation

TMG Partners

Transform

Urban Displacement Project, UC Berkeley

Western Center on Law & Poverty

Working Partnerships USA

OPPOSITION: (Verified 8/30/19)

Association of California Healthcare Districts

Association of California Water Agencies

Beaumont-Cherry Valley Water District

Byron Bethany Irrigation District

Calaveras Public Utility District

California Association of Sanitation Districts

California Municipal Utilities Association

California Special Districts Association

Cambria Community Services District

Central Contra Costa Sanitary District

Chino Valley Independent Fire District

City of Concord

City of San Marcos

Coachella Valley Water District

Costa Mesa Sanitary District

County of Santa Clara

County of Solano

Crestline Sanitation District

Cucamonga Valley Water District

Denair Community Services District

Desert Recreation District

Dublin San Ramon Services District

East Contra Costa Fire Protection District

Eastern Kern County Resource Conservation District

Edgemont Community Services Districts

El Dorado Hills Community Services District

Fallbrook Public Utilities District

Fresno Mosquito and Vector Control District

Garberville Sanitary District

Georgetown Divide Public Utility District

Goleta Sanitary District

Goletta West Sanitary District

Greenfield County Water District

Helix Water District

Humboldt Bay Municipal Water District

Ironhouse Sanitary District

Irvine Ranch Water District

Kern County Cemetery District

Leucadia Wastewater District

McKinleyville Community Services District

Merced County Mosquito Abatement District

Mesa Water District

Montara Water and Sanitary District

Mt. View Sanitary District

North County Fire Protection District

Northern Salinas Valley Mosquito Abatement District

Oceano Community Services District

Ojai Valley Sanitary District

Olivehurst Public Utility District

Orange County Cemetery District

Orange County Mosquito Abatement and Vector Control District

Orange County Water District

Palo Verde Cemetery District

Rainbow Municipal Water District

Reclamation District 1000

Rio Linda Elverta Community Water District

Ross Valley Sanitary District

San Bernardino Valley Water District

San Juan Water District San Ramon Valley Fire Protection District

Sanitation Districts of Los Angeles County

Santa Margarita Water District

Silveyville Cemetery District

Solano Irrigation District

South Coast Water District

Stallion Springs Community Services District

Stege Sanitary District

Stockton East Water District

Tahoe City Public Utility District

Templeton Community Services District

Three Valleys Municipal Water District

Town of Discovery Bay Community Services District

Transportation Agency for Monterey County

Tulare Mosquito Abatement District

Valley Center Municipal Water District

Ventura Port District

Visalia Public Cemetery District

Vista Irrigation District

West County Wastewater District

West Side Recreation & Park District

Yucaipa Valley Water District

ASSEMBLY FLOOR: 53-20, 5/29/19

NOES: Bigelow, Brough, Chen, Choi, Cunningham, Dahle, Diep, Flora, Fong, Frazier, Gallagher, Kiley, Lackey, Mathis, Mayes, Melendez, Obernolte, Patterson, Voepel, Waldron

NO VOTE RECORDED: Cooley, Daly, Eduardo Garcia, Kamlager-Dove, Maienschein, Quirk, Blanca Rubio

Prepared by: Anton Favorini-Csorba / GOV. & F. / (916) 651-4119

9/3/19 9:06:28

**** END ****

SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

AB 1486 (Ting) - Surplus land


Version:	Policy Vote:
Urgency:	Mandate:
Hearing Date:	Consultant:

Bill Summary:

Fiscal Impact:

HCD estimates costs of $2.18 million in 2020-21 and $2 million ongoing for 12.5 PY of new staff to provide technical assistance to local agencies, create a form for local agencies to report inventories, maintain notices of availability on its website, review and respond to annual land inventory submissions, conduct compliance activities (including potential referrals of noncompliance to the Attorney General), and develop and maintain a database with enhanced parcel-level mapping capabilities. (General Fund)
Unknown, potentially significant, state-mandated costs for local agencies to revise procedures for identifying and disposing of surplus lands, create an annual central inventory of surplus land parcels and their uses, provide specified information to HCD, and make the inventory available to the public without charge. To the extent an affected local agency files a successful claim with the Commission on State Mandates, these costs would be state-reimbursable. (General Fund)
Any mandated costs incurred by local governments related to the requirement to include specified excess land inventory information in the housing element are not reimbursable by the state because local governments have authority to levy fees to cover the costs of planning mandates.
Unknown, potential penalty revenue gains, to the extent local agencies dispose of land in violation of the Surplus Land Act and enforcement actions are finalized. Revenues could be deposited into local housing trust funds, or into specified state funds. The latter would occur at a local agency’s discretion, or if funds deposited into a local housing trust fund remain unspent after five years. (Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund)

Background:

Existing law, the Surplus Land Act, requires local agencies (cities, counties, special districts, and school districts) to compile an inventory of all lands under the agency’s control that are in excess of its foreseeable needs at the end of each calendar year. Existing law prescribes a process for disposing of surplus property that is no longer necessary for a local agency’s use to certain entities for preferred purposes prior to offering the land on the open market. Existing law requires any local agency disposing of surplus land to first offer it for sale or lease for the purpose of developing low- and moderate-income housing. Prior to disposing of surplus property, the local agency must send a written offer to sell or lease the property to specified entities, such as housing authorities, affordable housing developers, specified parks and recreation entities, school districts, and transportation entities, depending on the proposed use of the land. An interested agency must notify the disposing agency in writing of its intent to purchase the land within 60 days.

Existing law requires the disposing agency, upon receipt of a notice of intent to purchase from one of the preferred entities, to enter into good faith negotiations to determine a mutually satisfactory sales price or lease terms. If an agreement is not reached within 90 days, the surplus land may be sold on the open market. Existing law explicitly states that nothing in the disposal procedure limits the power of any local agency to sell or lease surplus land at fair market value or at less than fair market value, nor does it empower any local agency to sell or lease surplus land at less than fair market value.

Existing law requires cities and counties to prepare a general plan comprised of seven mandatory elements, including a housing element that includes an identification of existing and projected housing needs. The housing element must include an inventory of land suitable for residential development, which is used to identify sites that can be developed for housing within the planning period that is sufficient to meet the regional housing needs for all income levels. Housing elements must be updated every eight years in urban areas, and every five years in more rural areas. Existing law requires each city and county to submit an annual progress report (APR) to HCD that includes specified information relating to progress in meeting the jurisdiction’s share of regional housing needs pursuant to its housing element.

Existing law requires each local agency, by December 31 of each year, to make an inventory of all lands it holds, owns, or controls that are in excess of its current needs, including a description of those lands. Existing law authorizes a county board of supervisors to establish a central inventory of all surplus governmental property located in the county.

Proposed Law:

AB 1486 would expand the requirements on local agencies regarding the disposal of surplus lands, make HCD responsible for certain enforcement actions related to the Surplus Land Act, and require HCD to create and maintain a statewide searchable and downloadable inventory of publicly-owned surplus lands. Specifically, this bill does the following:

Surplus Lands Act:

Revises the definition of “local agency” to explicitly include sewer, water, utility, and local and regional park districts, joint powers authorities, successor agencies to former redevelopment agencies, housing authorities, and other political subdivisions of the state. The bill declares this change is declaratory of existing law.
Revises the definition of “surplus land” and requires local agency governing bodies to take a formal action to declare land as surplus or exempt before taking action to dispose of it, as specified.
Specifies that commercial uses, including nongovernmental retail, entertainment, or office development do not qualify as exempt uses, for purposes of the Act.
Expands the list of exemptions from the Surplus Land Act to include, among other things, surplus land that is put out to open, competitive bid by a local agency for either:
1. A housing development that restricts 100% of units to low- or moderate-income households, with at least 75% of units restricted to low-income, for at least 55 years, with a maximum affordable sales price or rent level that does not exceed 20% below median market rents or sales prices for the neighborhood in which the development is located.
2. A mixed-use development that includes at least 300 units and restricts at least 25% of the units to lower-income households, with an affordable sales price or rent level, for at least 55 years.
Requires a local agency that is disposing of surplus land for purpose of developing low- and moderate-income housing to send a notice of availability, as specified, to local public entities and housing sponsors that have notified HCD of their interest. The bill also requires HCD to maintain a list of all notices of availability on its website.
Prohibits the negotiations between a disposing agency and interested entities to determine price and terms to:
1. Disallow residential use of the site as a condition of its sale or lease.
2. Reduce the allowable number of residential units or the maximum lot coverage below what may be allowed by zoning or general plan requirements.
3. Require as a condition of sale or lease, any design standards or architectural requirements that would have a substantial adverse effect on the viability or affordability of a housing development for very low-, low-, or moderate-income households, other than the minimum standards required by general plan, zoning, and subdivision standards and criteria.

Surplus land database

Requires each local agency to make a central inventory of all its surplus land on or before December 31^st of each year, as specified.
Requires each local agency to report to HCD by April 1^st of each year, beginning in 2021, a description of each surplus land parcel and its current use, in a form prescribed by HCD.
Requires each local agency to, upon request, provide a list of its surplus lands free of charge.
Requires HCD to create by September 30, 2021, and to create and maintain, and annually update, a searchable and downloadable public inventory on its website of all publicly owned or controlled lands, and their present uses, as reported to HCD.

Surplus Land Act violations

Requires a local agency, prior to agreeing to the terms for the disposition of surplus land, to provide specified information about its disposition process to HCD. Requires HCD to submit to the local agency, within 30 days, written findings of any process violations that have occurred. Provides the local agency at least 30 days to either correct the violations or adopt a resolution with findings explaining why the process is not in violation.
Provides that a local agency that disposes of land in violation of this bill following a notification from HCD is liable for a penalty of up to 50% of the final sale price. Penalty assessments shall be deposited into a local housing trust fund, the state Building Homes and Jobs Fund, or the Housing Rehabilitation Loan Fund, as specified.
Adds Surplus Land Act violations to the list of violations HCD may refer to the Attorney General.

Housing element and APR requirements

Requires a housing element’s site inventory to include, for non-vacant sites that are owned by the city or county, a description of whether there are plans to dispose of the property during the planning period and how the city or county will comply with the Surplus Lands Act.
Requires a local agency’s APR to include a list of sites owned by the city or county, and included in its housing element inventory, that have been sold, leased, or otherwise disposed of in the prior year. The list shall include the entity to whom each site was transferred and the intended use for the site.

Related Legislation:

SB 6 (Beall), which is currently pending in the Assembly Appropriations Committee, would require DGS to create a database of state excess properties and local lands available for residential development, as specified. The bill would require HCD to annually provide DGS with information on local properties suitable for development, as identified by a local government in its housing element.

AB 1255 (R. Rivas), which is currently pending in this Committee, require each city and county to include an inventory of excess lands in its housing element that separately identifies infill and high-density sites, and to annually furnish the Department of General Services with a list of those sites. The bill would also require DGS to create a searchable database of those local excess lands, as specified.

AB 1483 (Grayson), which has been referred to this Committee, would add a number of requirements to APRs; require HCD or another state entity to establish a statewide parcel geographic database; require cities and counties to post specified housing-related information on their websites; and require HCD to develop a strategy and standards for state housing data.

AB 2065 (Ting), which was held on the Assembly Appropriations Committee’s Suspense File last year, would have made numerous changes to the Surplus Land Act, including expanding the types of local agencies required to comply with the Act, requiring a “written notice of availability” of property to specified entities prior to disposal of property, and specifying that the existing 15% affordability requirement applies whenever surplus public land is used for housing.

AB 2135 (Ting), Chap. 677/2014, required that surplus land offered for sale or lease for the development of low- and moderate-income housing under a preference program must provide at least 25 percent of the units at an affordable housing cost, as specified, and land sold for development of 10 or more residential units outside the preference system must provide at least 15 percent of the units at an affordable housing cost.

Staff Comments:

This bill imposes numerous new mandates on cities, counties, all special districts, and school districts with respect to surplus lands. Some of the mandated duties are likely to be eligible for state-reimbursement, subject to a determination by the Commission on State Mandates, with certain exceptions.

The bill requires a city or county to include additional information in its housing element land inventory on plans to dispose of any city or county owned surplus properties and how the local agency will comply with the requirements of the Surplus Land Act. Any mandated local costs related to enhanced housing element requirements would not be subject to state reimbursement because local agencies have the authority to charge and adjust planning and permitting fees as necessary to cover administrative costs. Existing law authorizes planning and zoning fees to “include the costs reasonably necessary to prepare and revise the plans and policies that a local agency is required to adopt before it can make any necessary findings and determinations,” which includes the housing element. Case law and previous decisions by the Commission on State Mandates support the position that local governments’ planning costs are not reimbursable when the state imposes new planning mandates.

AB 1486 prohibits a local agency from using surplus land for specified commercial purposes, and other provisions may impact the value of surplus lands. As such, the bill could result in a reduction in local revenues. Staff notes that a loss of revenue in itself does not constitute a state mandate necessitating reimbursement. The Commission has found in previous cases that there must be an expenditure of local government proceeds of taxes and not just a reduction of that revenue in order to qualify for reimbursement. County of Sonoma v. Commission on State Mandates (2000) 84 Cal.App.4th 1264 involved statutes that reduced the local agency’s receipt of tax revenues and transferred the reduced portion to the Educational Revenue Augmentation Fund for distribution to schools. In that case, the court held that the amount reduced was not reimbursable since there was no expenditure of tax proceeds, and that that the statutes did not result in “increased actual expenditures.” Staff notes, however, that any revenue reductions experienced by a local agency that is supported by ratepayers, such as enterprise special districts, may result in increased rates to offset revenue losses.

Recommended Amendments:

This bill has chaptering conflicts with SB 6 (Beall), SB 13 (Wieckowski), SB 182 (Jackson), SB 235 (Dodd), SB 672 (Hill), AB 139 (Quirk-Silva), AB 725 (Wicks), AB 738 (Mullin), AB 957 (Housing Committee), AB 1483 (Grayson), AB 1568 (McCarty), AB 1730 (Gonzalez), and AB 1786 (O’Donnell). Of particular note is the conflict with AB 101 (Budget Committee), Chap. 159/2019, a housing trailer bill that has already been enacted. The author should consider amending the bill to address those conflicts prior to final consideration on the Senate Floor.

-- END --

SENATE COMMITTEE ON GOVERNANCE AND FINANCE

Senator Mike McGuire, Chair

2019 - 2020 Regular

Bill No:	AB 1486	Hearing Date:	6/26/19
Author:	Ting	Tax Levy:	No
Version:	5/16/19	Fiscal:	Yes
Consultant:	Favorini-Csorba

Surplus land

Imposes additional requirements on the process that public agencies must use when disposing of surplus property.

Background

Low- and moderate-income housing.
Park and recreation.
School facilities or open space.
Enterprise zones.
Infill opportunity zones or transit village plans.

The Surplus Land Act’s provisions don’t apply to “exempt surplus land,” which means either:

Land that a county transfers at less than fair market value for affordable housing development; or
Small parcels that are sold to contiguous property owners.

In 2014, the Legislature updated the Surplus Land Act to enhance the affordable housing requirements under the law (AB 2135, Ting). Specifically, if a local agency sells the land for housing, a few inclusionary requirements apply. First, if the land is to be used for low- or moderate-income housing, at least 25 percent of the units must be offered at an affordable housing cost or rent. If the local agency doesn’t come to terms with a housing sponsor or other local agency, and a housing project with 10 or more units is subsequently built on the land, at least 15 percent of the units must be affordable.

Proposed Law

Assembly Bill 1486 expands the requirements and application of the Surplus Land Act in numerous ways.

Local agency surplus land. AB 1486 expands the definition of “surplus land” to mean land owned by any local agency that is not necessary for the agency’s governmental operations, which the bill defines to mean land that is being used for the express purpose of agency work or operations, including utility sites, watershed property, land being used for conservation purposes, and buffer sites near sensitive governmental uses, including, but not limited to, waste water treatment plants. Surplus land also includes land held in a Community Redevelopment Property Trust Fund and land that has been designated in a long-range property management plan either for sale or for retention for future development and that was not subject to an exclusive negotiating agreement or legally binding agreement to dispose of the land.

AB 1486 presumes land to be “surplus land” when a local agency initiates an action to dispose of it. However, AB 1486 also expands the definition of “exempt surplus land” to include:

Surplus land held by the local agency for the express purpose of exchange for another property necessary for its governmental operations;
Surplus land held by the local agency for the express purpose of transfer to another local agency for its governmental operations;
Surplus land that is put out to open, competitive bid by a local agency for specified affordable housing developments.
Surplus land that is subject to legal restrictions that would make housing prohibited or incompatible on the site due to state or federal statutes, voter-approved measures, or other legal restrictions that are not imposed by the local agency. AB 1486 provides that existing zoning alone is not a legal restriction that would make housing prohibited or incompatible.

When disposing of surplus land for the purpose of developing low- and moderate-income housing, AB 1486 requires a local agency to send a notice of availability of surplus land located in an urbanized area to housing sponsors that have notified the applicable regional council of governments (COG), or in the case of a local agency without a COG, the Department of Housing and Community Development (HCD), of their interest. This requirement replaces the requirement in current law to send a written offer to housing sponsors that request an offer. The notice of availability that AB 1486 requires must be sent by first class mail and, if possible, email. The bill also makes conforming changes to require notices of availability for land that a local agency disposes for other purposes.

AB 1486 specifies that negotiations between a disposing agency and an entity desiring to purchase or lease land must be limited to sales price and lease terms, including the amount and timing of any payments.

If a local agency receives notices of interest in the land from multiple entities that proposed the same number of housing units, first priority must be given to the entity that proposes the deepest average level of affordability for the affordable units. AB 1486 defines priority to mean that the local agency must negotiate exclusively with that entity. However, AB 1486 allows a local agency to negotiate concurrently with all entities that provide notice of interest to purchase or lease land for the purpose of developing affordable housing.

AB 1486 says that if a local agency fails to comply with provisions of the Surplus Land Act, the sale or transfer of the property is invalidated unless the local agency makes an alternative site available that can accommodate an equal or greater number of housing units as the original site.

AB 1486 also clarifies that the existing 15percent minimum affordability requirement applies whenever surplus land is used for housing; reiterates the types of agencies that must comply with the Surplus Land Act; and adds the Surplus Land Act to provisions that allow HCD to notify the city or county and notify the Office of the Attorney General that that city or county is in violation of state law.

Local reporting requirements. AB 1486 modifies the existing requirement for local agencies to make an inventory of excess lands to also include all lands not needed for its governmental operations, and requires this information to be reported to HCD no later than April 1 of each year, beginning in 2021. The bill also requires HCD to create and maintain a searchable and downloadable public inventory of all publicly owned or controlled lands and their present uses in the state on its internet website by September 30, 2021, which must be updated annually.

AB 1486 also requires a city or county, by April 1 of each year, in the Annual Progress Report submitted to HCD and the Governor’s Office of Planning and Research, to additionally include a listing of sites owned or leased by the city or county that have been sold, leased or otherwise disposed of in the prior year, and a listing of sites with leases that expired in the prior year. The bill also specifies that the list must include the entity to whom each site was transferred and the intended use for the site.

AB 1486 requires, in a city or county’s identification of sites required pursuant to Housing Element law, the description of nonvacant sites to also include whether the city or county plans to dispose of the property during the planning period, and how the agency will comply with the Surplus Land Act.

State surplus land. AB 1486 clarifies the existing requirement that each state agency must review the land it owns in excess its foreseeable needs “for governmental operations,” and defines “governmental operations” consistent with the definition for local agencies. AB 1486 requires DGS, when authority is granted for the sale or other disposition of lands declared excess, and DGS has determined that the use of land is not needed by any other state agency, to sell the land or otherwise dispose of it. DGS must also dispose of 10 percent or more of the land designated as unneeded by other state agencies each year and try to conclude the pending disposition of surplus land within 24 months.

Zoning. AB 1486 provides that surplus land disposed of by DGS or a local agency shall be permitted for a residential use if the project is 100% affordable housing, exclusive of managers’ units.

AB 1486 makes other technical and conforming changes and includes findings and declarations to support its purposes.

State Revenue Impact

No estimate.

Comments

1. Purpose of the bill. According to the author, “California is facing a housing crisis and unused public land has the potential to promote affordable housing development throughout the state. AB 1486 clarifies and strengthens provisions in the Surplus Land Act that will promote the use of public land for affordable housing.”

2. Robbing Peter to pay Paul. Local governments hold property for a variety of reasons, and they dispose of it for many reasons as well. Faced with tight budgets, state departments and local governments should be selling their surplus real estate for the highest possible prices, thereby recouping the public's investments. Recent legislation has eaten away at the ability of public agencies to maximize the value of their land: because any public land sold to a residential developer must include affordable housing, the value of that land is lower to a potential developer. AB 1486 goes a step further and imposes additional restrictions that will delay property sales, reduces the value that local governments can get for their land, and increases the red tape that the agencies and potential buyers must wade through before they can complete a transaction. By doing so, AB 1486 potentially undermines the services that local agencies provide to their constituents: if public agencies can’t get the maximum sale price because of constraints on public land, they’ll have less money to put towards other important programs. For example, water agencies that want to subsidize the water rates of low-income customers can’t use ratepayer dollars to do so because of Constitutional limitations; instead, they rely on other types of revenues, including from property sales and leases. Similarly, AB 1486 restricts DGS’s ability to appropriately time the disposal of state surplus land, potentially resulting in lower sales

prices that could have a General Fund impact. To provide some protection against potential revenue losses, the Committee may wish to consider amending AB 1486 to eliminate the restrictions on state agencies and specify that nothing in the bill requires a local agency to sell surplus land or receive less than fair market value for its property.

3. Who decides? Local officials are elected to best serve their constituents, and accordingly, current law provides local governments a lot of flexibility to dispose of land as they see fit. AB 1486 declares all land surplus that isn’t being used for governmental operations, defined narrowly to mean only land that is currently being used for the express purpose of agency work or operations. But cities and counties have broad authority to look out for the welfare of their citizens and to take actions to ensure their wellbeing. Accordingly, some local agencies might consider selling land for economic development to be an important and valuable use of property, even though it might not be necessary for the agency’s “operations.” Furthermore, the bill’s definition means that land reserved for future or planned uses would be designated as surplus. Finally, it is unclear who determines whether land is declared not necessary for government operations. The Committee may wish to consider amending AB 1486 to expand the uses of land that would not trigger a designation of surplus land and to specify that the local agency determines what land it needs, rather than leaving unspecified the entity that determines when land is no longer needed for an agency’s use.

4. Give me some space. Local agencies impose restrictions on surplus lands for a variety of reasons. For example, some agencies reserve land to act as buffer sites between government activities (such as wastewater treatment) and other land uses that might affect, or be affected by, those activities. Local agencies therefore sometimes sell land with restrictions that may preclude incompatible uses on the site. However, AB 1486 prohibits local agencies from negotiating on terms other than price and timing of payments and automatically rezones surplus land sites to allow residential use if the project is 100% affordable. Accordingly, local governments may not be able to impose necessary restrictions on residential use that are protective of the agency and the public. This may result in housing being developed on surplus land in areas that may undermine the local agency operations or expose future residents to environmental harms. The Committee may wish to consider amending AB 1486 to delete the provisions that rezone surplus land as residential and to allow local agencies to make findings that restrictions on residential use are needed to protect the public or local agency operations.

5. Practical considerations. AB 1486 raises several operational concerns, outlined below:

AB 1486 prohibits local agencies from participating in negotiations prior to sending a notice of availability to housing sponsors or other entities that get first crack at the land. However, the bill leaves “participating in negotiations” undefined. Some local agencies have raised concerns that it is unclear whether they could conduct informal surveys of land value to test the waters without running afoul of this provision.
AB 1486 invalidates the sale of property if it is found that the local agency violated the Surplus Land Act, unless the local agency makes an alternative site available that can accommodate an equal or greater number of housing units as the original site. This provision is intended to give the Act some teeth, but it also potentially penalizes innocent parties that may have purchased the land not knowing that the local agency has violated the Act. Furthermore, if such violations are discovered at a later date, the purchaser may have invested significant capital in the property, only to find the transfer of ownership invalidated. To encourage compliance with the Act while avoiding the negative consequences of this provision, the Committee may wish to consider amending AB 1486 to reinstate the provision of existing law that says that transfers cannot be invalidated and instead include an alternative penalty structure that also allows a local agency to cure an inadvertent error.
AB 1486 requires local agencies to physically mail notices of availability to any housing sponsor that notifies the COG that they want to hear about surplus lands. But COGs can span broad areas, and some developers that sign up for notices may only be interested in land in one small part of the region. Accordingly, AB 1486 requires local governments to send out countless mailed notices that are likely to be ignored. This costs more money and is less convenient for agencies and developers alike than emailing the notices or posting them online in a readily searchable and accessible form. The Committee may wish to consider amending AB 1486 to instead designate HCD as the official keeper of the list of interested parties and to require electronic notification instead of mailing when a surplus parcel becomes available.

6. The Ghost of Redevelopment. State law regulates the use and disposition of properties owned by former Redevelopment Agencies (RDAs) and directs “successor agencies” to oversee the wind-down of RDA affairs and the payment of RDA obligations. Once a successor agency takes over for an RDA, it reviews the RDA’s outstanding assets and obligations, and develops a plan to resolve those obligations and a Long-Range Property Management Plan (LRPMP) to address how successor agencies plan to use or dispose of former RDAs’ real properties. Successor agencies can dispose of assets by selling them to other governments or interested parties, provided that they are disposed of expeditiously and in a manner that maximizes value to the local governments that receive money as a result of the dissolution of RDAs. The successor agency can also transfer ownership of assets that were constructed and used for a governmental purpose, such as police and fire stations, to the appropriate public jurisdiction. Revenue from properties sold goes towards repaying former RDA’s obligations. AB 1486 explicitly designates former RDA-owned land as surplus. By doing so, it requires these lands to go through the Surplus Lands Act disposition process before they can be sold, which may slow down or impair the ability of successor agencies to dispose of former RDA properties and use the resulting revenue to pay off obligations. As a result, AB 1486 could lengthen the time that it takes to pay off RDA obligations. The Committee may wish to consider amending AB 1486 to exclude RDA properties from the Surplus Lands Act.

7. Mandate. The California Constitution requires the state to reimburse local governments for the costs of new or expanded state mandated local programs. Because AB 1486 imposes additional duties on local agencies, Legislative Counsel says that it imposes a new state mandate. AB 1486 says that if the Commission on State Mandates determines that it creates a state-mandated local program, the state must reimburse local agencies by following the existing statutory process for mandate claims.

8. Related legislation. AB 1255 (R. Rivas) requires cities and counties to include an inventory of surplus sites that are infill, “high-density” sites in the housing element and requires DGS to create a searchable database of surplus sites. AB 1255 is currently pending in the Senate Housing Committee. AB 2065 (Ting, 2018) would have amended the Surplus Lands Act expand the types of local agencies required to comply with the Act, require a “written notice of availability” of property to specified entities prior to disposal of property, require that notice to be sent to housing sponsors that have notified both HCD and the COG of their interest in surplus

land, placed parameters on the negotiations to dispose of the property, and would have provided that the existing 15 percent affordability requirements applies whenever surplus public land is used for housing. AB 2065 died in the Assembly Appropriations Committee. Most of the changes that were contained in AB 2065 are in also in AB 1486.

9. Triple Referral. The Senate Rules Committee has ordered a triple referral of AB 1486: first to the Senate Governance and Finance Committee to consider issues related to local agencies; second to the Senate Housing Committee to hear issues related to housing; and finally to the Senate Governmental Organization Committee, which has jurisdiction over state agencies.

Assembly Actions

Assembly Local Government Committee: 6-2

Assembly Housing and Community Development Committee: 5-1

Assembly Appropriations Committee: 12-4

Assembly Floor: 53-20

Support and Opposition

(6/21/19)

Support: Bay Area Regional Health Inequities Initiative; Building Industry Association of the Bay Area; California Community Builders; Chan Zuckerberg Initiative; Enterprise Community Partners, Inc.; Habitat for Humanity California; Hamilton Families; Midpen Housing Corporation; North Bay Leadership Council; Related California; San Francisco Foundation; TMG Partners; Transform.

Opposition: Association Of California Healthcare Districts; Association Of California Water Agencies; California Association Of Sanitation Agencies; California Municipal Utilities Association; California Special Districts Association; California State Association Of Counties; Irvine Ranch Water District; Mesa Water District; Orange County Water District; Rural County Representatives Of California; Santa Margarita Water District; Urban Counties Of California; Vista Irrigation District

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1486

Author:(Ting)

As Amended Ver:May 16, 2019

Majority vote

SUMMARY:

Expands surplus land requirements for both the state and local agencies.

Major Provisions

Clarifies, for both state agencies and local agencies, that surplus land means land that is in excess of its foreseeable needs or is not necessary for the agency's governmental operations.
Modifies procedures for local agencies for notification of surplus lands, and modifies how the local agency can negotiate with the interested party or parties on that land.
Specifies for both state agencies and local agencies that any surplus land disposed of by a public agency shall be permitted for residential use, notwithstanding local zoning designations, if 100% of the units, except for units occupied by onsite management staff, or sold or rented at an affordable housing costs, as defined, or an affordable rent, as defined, to lower income households.
Requires each local agency to make a central inventory of all surplus governmental property located in all urbanized areas within the jurisdiction of the local agency to determine what land is in excess of its foreseeable needs for its governmental operations on an annual basis, and report this information to the Department of Housing and Community Development (HCD) starting April 1, 2021.
Requires HCD to create and maintain a searchable and downloadable public inventory of all publicly owned or controlled lands and their present uses in the state on its internet website, which shall be updated on an annual basis. Requires the inventory to be available no later than September 30, 2021.
Requires, in a city or county's identification of sites, if a piece of property is owned by the city or county preparing the housing element, the description of nonvacant sites to also include whether there are any plans to dispose of the property during the planning period, and how the agency will comply with the Surplus Land Act.
Adds the Surplus Land Act to provisions that allow HCD to notify the city or county and notify the Office of the Attorney General that that city or county is in violation of state law.

COMMENTS:

This bill significantly expands requirements for local agencies in how they deal with surplus property pursuant to the local Surplus Lands Act, and modifies requirements for state surplus land. This bill is sponsored by the Nonprofit Housing Association of Northern California and the San Diego Housing Federation.

According to the Author:

"California is facing an affordable housing crisis and unused public land has the potential to promote affordable housing development throughout the state. AB 1486 clarifies and strengthens provisions in the Surplus Lands Act that will promote the use of public land for affordable housing projects."

Arguments in Support:

Arguments in Opposition:

Opponents note that the bill would place onerous new requirements on public agencies disposing of surplus land.

FISCAL COMMENTS:

According the Assembly Appropriations Committee:

Minor costs (General Fund (GF)) to DGS for providing notifications to additional entities.
Unknown, likely substantial, onetime costs (GF) to HCD to create a searchable and downloadable public inventory of publicly owned or controlled lands and their present uses on its website by September 30, 2021.
Unknown costs (GF) to HCD to maintain and update the database on an annual basis.
Unknown state-mandated costs (GF) to each local agency to develop an inventory of local lands as required in the bill. These costs are potentially reimbursable by the state subject to a determination by the Commission on State Mandates.

VOTES:

ASM LOCAL GOVERNMENT: 6-2-0

YES: Aguiar-Curry, Bloom, Boerner Horvath, Ramos, Luz Rivas, Robert Rivas

NO: Lackey, Voepel

ASM HOUSING AND COMMUNITY DEVELOPMENT: 5-1-2

YES: Chiu, Gabriel, Gloria, Limón, Quirk-Silva

NO: Kiley

ABS, ABST OR NV: Diep, Maienschein

ASM APPROPRIATIONS: 12-4-2

YES: Gonzalez, Bloom, Bonta, Calderon, Carrillo, Chau, Eggman, Gabriel, Eduardo Garcia, Petrie-Norris, Quirk, Robert Rivas

NO: Bigelow, Brough, Fong, Obernolte

ABS, ABST OR NV: Diep, Maienschein

UPDATED:

VERSION: May 16, 2019

CONSULTANT: Debbie Michel / L. GOV. / (916) 319-3958 FN: 0000890

Date of Hearing: May 16, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1486

Author:(Ting) – As Amended Ver:April 11, 2019

Policy Committee:	Local Government	Vote:	6 - 2
	Housing and Community Development		5 - 1

Urgency: No State Mandated Local Program: Yes Reimbursable: Yes

SUMMARY:

This bill makes various changes to the local and surplus lands act, including the following:

Specifies that the definition of “surplus” land is land not needed for the agency’s own “governmental operations,” and then defines this term
Allows any surplus land disposed of by a public agency to be permitted for residential use, regardless of local zoning designations, if 100% of the units are sold or rented at an affordable housing cost or affordable rent.
Lists numerous exemptions on what is considered “exempt surplus land.”
Modifies procedures for notification of surplus lands and for how a local agency can negotiate with an interested party or parties on that land.

The bill also requires each local agency, as the bill defines such agencies, to make an inventory of all lands held, owned or controlled by it in excess of its foreseeable needs for its governmental operations, and report this information to the Department of Housing and Community Development (HCD) each year. The bill also places additional requirements on cities and counties to develop an inventory of land suitable for residential development to account for these surplus lands and allows HCD to notify the Attorney General if a city or county is in violation of provisions of the Surplus Lands Act.

FISCAL EFFECT:

Unknown, potentially significant costs (GF), likely in the hundreds of thousands of dollars, to DGS for workload associated with the new responsibilities in the bill including drafting sales agreements that meet affordable housing requirements, evaluating affordability levels, enforcement and oversight of affordable housing provisions, and an increased number of negotiations and notifications. These costs will vary depending on the number of surplus properties available for disposal at any given time.
Unknown, potentially significant impact on state surplus property revenues. DGS notes this bill deletes provisions of existing law that specify when DGS is required to obtain fair market value for a surplus property. This could increase pressure to sell a surplus property at less than fair market value – even for uses that aren’t given priority in the bill – and could result in reduced surplus property revenues.
DGS further notes the bill deletes the existing law requirement to first offer surplus property to local agencies and instead gives highest priority to affordable housing use. To the extent the bill reduces such sales to local agencies at fair market value, it could reduce surplus property revenues.

COMMENTS:

Purpose. According to the author:

California is facing an affordable housing crisis and unused public land has the potential to promote affordable housing development throughout the state. AB 1486 clarifies and strengthens provisions in the Surplus Lands Act that will promote the use of public land for affordable housing projects.

Background. If land is no longer needed or is not being held for exchange, a local agency must follow certain procedures prior to disposal of this "surplus" land. The intent behind the disposal procedures is to promote the use of surplus land towards affordable housing, parks and recreation purposes, open-space purposes, and transit-oriented development. The disposal procedures provide a right of first refusal to entities agreeing to use the land for, amongst other things, affordable housing.
Governor’s Executive Order. Earlier this year, the governor issued Executive Order N-06-19 directing DGS to create a digitized inventory, no later than April 30, 2019, of all state land in excess of state agencies foreseeable needs. DGS, Department of Housing and Community Development (HCD) and the California Housing Finance Agency (CalHFA) are directed to develop two new screening tools for prioritizing affordable housing development on excess state lands – where housing is most likely to be economically feasible and where underproduction is impacting housing affordably. DGS and HCD will issue requests to develop parcels that are suitable for affordable housing.
Related legislation. AB 1255 (R. Rivas), of this legislative session, requires cities and counties to include an inventory of surplus sites that are infill, “high-density” sites in their housing elements and requires DGS to create a searchable database of surplus sites. The bill is pending in this committee.
Previous legislation.

AB 2135 (Ting), Chapter 644, Statues of 2014, amended the procedure for the disposal of surplus land by local agencies and expanded the provisions relating to the prioritization of affordable housing development if the surplus land will be used for residential development.

AB 2065 (Ting), of the 2017-18 Legislative Session, would have expanded the types of local agencies required to comply with the Surplus Lands Act, required a “written notice of availability” of property to specified entities prior to disposal of property, required that notice to be sent to housing sponsors that have notified both HCD and the COG of their interest in surplus land, placed parameters on the negotiations to dispose of the property, and would have provided that the existing 15% affordability requirement applies whenever surplus public land is used for housing. AB 2065 was held on this committee’s Suspense File.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 24, 2019

ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT

David Chiu, Chair

ABPCA Bill Id:AB 1486 (

Author:Ting) – As Amended Ver:April 11, 2019

SUBJECT: Local agencies: surplus land

SUMMARY: Expands surplus property requirements for both the state and local agencies. Specifically, this bill:

Expands the provisions of the Surplus Lands Act for local agencies, as follows:
1. Expands the definition of “local agency” in the Surplus Land Act to additionally include sewer, water, and utility districts, local and regional park districts, joint powers authority, successor agency to a former redevelopment agency (RDA), housing authority, or other political subdivision of this state and instrumentality thereof that is empowered to acquire and hold real property. Declares, for purposes of this definition, that the term “district” as defined, is declaratory of, and not a change in, existing law;
2. Revises the definition of “surplus land” to mean land owned by any local agency that is not necessary for the agency’s governmental operations. Defines “governmental operations” to mean land that is being used for the express purpose of agency work or operations, including utility sites, watershed property, land being used for conservation purposes, and buffer sites near sensitive governmental uses, including, but not limited to, waste water treatment plants.
3. Requires that land shall be presumed to be “surplus land” when a local agency initiates an action to dispose of it. Declares that “surplus land” includes land held in the Community Redevelopment Property Trust Fund, as specified, and land that has been designated in the long-range property management plan, as specified, either for sale or for retention for future development and that was not subject to an exclusive negotiating agreement or legally binding agreement to dispose of the land, as specified.
4. Expands the definition of “exempt surplus land” to include:
  1. Surplus land held by the local agency for the express purpose of exchange for another property necessary for its governmental operations;
  2. Surplus land held by the local agency for the express purpose of transfer to another local agency for its governmental operations;
  3. Surplus land that is put out to open, competitive bid by a local agency, provided all entities, as specified, will be invited to participate in the bid process, for either of the following purposes:
    1. A housing development, which may have ancillary commercial ground floor uses, that restricts 100% of the residential units to persons and families of low or moderate income, with at least 75% of the residential units restricted to lower income households, as defined, with an affordable sales price or an affordable rent, as defined, for a minimum of 55 years, and in no event shall the maximum affordable sales price or rent level be higher than 20% below the median market rents or sales prices for the neighborhood in which the site is located; or,
    2. A mixed-use development that is more than one acre in area, that includes not less than 300 housing units, and that restricts at least 25% of the residential units to lower income households, as defined, with an affordable sales price or an affordable rent, as defined, for a minimum of 55 years;
  4. Surplus land that is subject to legal restrictions that would make housing prohibited or incompatible on the site due to state or federal statutes, voter-approved measures, or other legal restrictions that are not imposed by the local agency. States that existing zoning alone is not a legal restriction that would make housing prohibited or incompatible;
5. Requires a written notice of availability to be sent to housing sponsors that have notified the applicable regional council of governments (COG), or in the case of a local agency without a COG, the Department of Housing and Community Development (HCD), of their interest in surplus land. Expands the notice to also include electronic mail (email), if possible;
6. Specifies that any surplus land disposed of by a public agency shall be permitted for residential use, notwithstanding local zoning designations, if 100% of the units, except for units occupied by onsite management staff, are sold or rented at an affordable housing costs, as defined, or an affordable rent, as defined, to lower income households. Provides that this provision shall not apply to exempt surplus land;
7. Specifies that negotiations between a disposing agency and an entity desiring to purchase or lease land, as specified, shall be limited to sales price and lease terms, including the amount and timing of any payments;
8. Requires, in the event that the disposing agency receives notices of interest from multiple entities that proposed the same number of housing units, that first priority shall be given to the entity that proposes the deepest average level of affordability for the affordable units. Allows a local agency to negotiate concurrently with all entities that provide notice of interest to purchase or lease land for the purpose of developing affordable housing;
9. Provides that the failure by a local agency to comply with the provisions of the Surplus Land Act shall invalidate the transfer or conveyance of real property to a purchase or encumbrancer for value, unless the local agency makes an alternative site available, as specified, that can accommodate an equal or greater number of housing units as the original site; and,
10. Clarifies that the existing 15% minimum affordability requirement applies whenever surplus land is used for housing;
Modifies an existing requirement in law that requires each local agency to make an inventory of all lands held, owned, or controlled by it or any of its departments to determined what land is in excess of its foreseeable needs for its governmental operations, and requires this information to be reported to HCD no later than April 1 of each year, beginning 2021.
Requires HCD to create and maintain a searchable and downloadable public inventory of all publicly owned or controlled lands and their present uses in the state on its internet website, which shall be updated on an annual basis. Requires the inventory to be available no later than September 30, 2021.
Requires a city or county, by April 1 of each year, in the Annual Progress Report submitted to HCD and the Governor’s Office of Planning and Research (OPR), to additionally include a listing of sites owned or leased by the city or county that have been sold, leased or otherwise disposed of in the prior year, and a listing of sites with leases that expired in the prior year. Specifies that the list shall include the entity to whom each site was transferred and the intended use for the site.
Expands, in a city or county’s identification of sites required pursuant to Housing Element law, the requirements for cities and counties to additionally include information about certain sites owned by a local agency (as defined by the Surplus Land Act), thereby requiring cities and counties to account for sites owned by a special district or school district, including the following:
1. Residentially zoned zones that are capable of being developed at a higher density owned or leased by any local agency; and,
2. Sites zoned for nonresidential use that can be redeveloped for residential use, and for which the housing element includes a program to rezone the site, as necessary, to permit residential use, includes sites owned or leased by a local agency.
Requires, in a city or county’s identification of sites, if a piece of property is owned by the city or county preparing the housing element, the description of nonvacant sites to also include whether there are any plans to dispose of the property during the planning period, and how the agency will comply with the Surplus Land Act.
Adds the Surplus Land Act to provisions that allow HCD to notify the city or county and notify the Office of the Attorney General that that city or county is in violation of state law.
Modifies requirements for state surplus property, as follows:
1. Clarifies the existing requirement that each state agency shall make a review of all proprietary state lands, as specified that that agency has jurisdiction to determine what, if any, land is in excess its foreseeable needs for governmental operations. Defines “governmental operations” to mean land that is being used for the express purpose of agency work or operations, including utility sites, watershed property, land being used for conservation purposes, and buffer sites near sensitive governmental uses, including, but not limited to, waste water treatment plants;
2. Requires DGS, when authority is granted for the sale or other disposition of lands declared excess, and DGS has determined that the use of land is not needed by any other state agency, to sell the land or otherwise dispose of it, as specified, and modifies this process;
3. Requires, for land that DGS has determined is not needed by any other state agency, DGS to request authorization to dispose of no less than 10% of the land on an annual basis pursuant to 8)b), above;
4. Requires that surplus land that DGS has disposed of to be permitted by right, regardless of local zoning designations, for a residential use if 100% of the residential units, except for the units occupied by onsite management staff, are sold or rented at an affordable housing cost, or affordable rent, as defined, to lower income households, as defined. Excludes land that is defined as exempt or that is ineligible for any public financing for affordable housing; and,
5. Requires DGS to make every effort to conclude the pending disposition of surplus land pursuant to 8)c), above, that is has received authorization to dispose of within 24 months of the date the sale, exchange, or transfer of land was approved by DGS.
Provides that reimbursement to local agencies and school districts shall be made, if the Commission on State Mandates determines that this act contains costs mandated by the state.

EXISTING LAW:

Requires each local agency, on or before December 31 of each year, to make an inventory of all lands held, owned or controlled by it or any of its departments, agencies, or authorities, to determine what land, including air rights, if any, is in excess of its foreseeable needs. Requires a description of each parcel found to be in excess of needs to be made a matter of public record. Allows any citizen, limited dividend corporation, housing corporation or nonprofit corporation, upon request, to be provided with a list of said parcels without charge.
Defines “surplus land” as land owned by any local agency that is determined to be no longer necessary for the agency’s use, except property being held by the agency for the purpose of exchange or property meeting other exemptions.
Requires that a local agency must provide a written offer to sell or lease surplus land for the purpose of developing low- or moderate-income housing to "housing sponsors" upon written request, as well as any local public entity within the jurisdiction where the surplus land is located.
Provides that a local agency wishing to dispose of surplus land must also provide a written offer to additional entities, depending on the type of proposed usage, for park and recreational purposes, school facilities construction or use by a school district for open space purposes, enterprise purposes, and infill opportunity zones or transit village plans.
Allows a county to establish a central inventory of surplus property.

FISCAL EFFECT: Unknown.

COMMENTS:

Purpose of this bill: According to the author, “California is facing an affordable housing crisis and unused public land has the potential to promote affordable housing development throughout the state. AB 1486 clarifies and strengthens provisions in the Surplus Lands Act that will promote the use of public land for affordable housing projects.”

Surplus Lands Act: If land is no longer needed or is not being held for exchange, a local agency must follow certain procedures prior to disposal of this "surplus" land. The intent behind the disposal procedures is to promote the use of surplus land towards affordable housing, parks and recreation purposes, open-space purposes, and transit-oriented development. The disposal procedures provide a Right of First Refusal to entities agreeing to use the land for, amongst other things, affordable housing.

Prior to disposing of surplus land, local agencies must make a written offer to sell or lease surplus land for the purpose of developing low- or moderate-income housing to "housing sponsors" upon written request, as well as any local public entity within the jurisdiction where the surplus land is located. A local agency wishing to dispose of surplus land must also provide a written offer to additional entities, depending on the type of proposed development, for park and recreational purposes, school facilities construction or use by a school district for open space purposes, enterprise purposes, and infill opportunity zones, or transit village plans.

If one of these entities is interested in buying or leasing the land, it must notify the local agency within 60 days of receipt of the offer. If a notified entity is interested but cannot agree with the agency upon the price or terms, the local agency must enter into good faith negotiations with the entity for at least 60 days. If 60 days have passed without an agreement, then the local agency may sell or lease the land without further regard to the Right of First Refusal requirements under the disposal procedures.

If the land is going to be used for residential development and a local agency receives multiple offers from notified entities, the local agency is required to give first priority to the entity that agrees to use the site for affordable housing for low- or moderate-income individuals and families. In the event that a local agency enters into a contract to sell or lease the land to a notified entity for park or recreation purposes, open-space purposes, school purposes, or for low- and moderate- income housing purposes, that contract may provide for a payment period of up to 20 years. While nothing in the disposal procedure limits the power of a local agency to sell or lease surplus land at fair market value or at less than fair market value, it also provides that nothing in the procedure shall be interpreted to empower any local agency to sell or lease surplus land at less than fair market value.

Governor’s Executive Order: Surplus Land: Earlier this year, the Governor issued Executive Order N-06-19 directing DGS to create a digitized inventory of all state land in excess of state agencies foreseeable needs no later than April 30, 2019. DGS, Department of Housing and Community Development (HCD), and the California Housing Finance Agency (CalHFA) are directed to develop two new screening tools for prioritizing affordable housing development on excess state lands – where housing is most likely to be economically feasible and where underproduction is impacting housing affordably. This screening tool will be used to map areas in the state on excess surplus sites where housing development is feasible and will help address underproduction. State agencies are encouraged to exchange excess state land with local governments for affordable housing and preservation. DGS and HCD will issue requests to develop parcels that are suitable for affordable housing.

This bill makes various changes to the local and surplus lands act, including the following:

1. Specifies that the definition of “surplus” land is land not needed for the agency’s own governmental operations, and then defines this term;
2. Allows any surplus land disposed of by a public agency to be permitted for residential use, regardless of local zoning designations, if 100% of the units are sold or rented at an affordable housing cost or affordable rent.
3. Lists out numerous exemptions on what is considered “exempt surplus land;”
4. Modifies procedures for notification of surplus lands, and how the local agency can negotiate with the interested party or parties on that land; and,
5. Allows any surplus land disposed of by a public agency to be permitted for residential use, regardless of local zoning designations, if 100% of the units are sold or rented at an affordable housing cost or affordable rent.

Required local inventory of surplus land: The bill also requires all local agencies, as the bill defines, to make an inventory of all lands held, owned, or controlled by it, in excess of its foreseeable needs for its governmental operations, and report this information to HCD each year. The bill also places additional requirements on cities and counties in the provisions of law that require a city or county to develop an inventory of land suitable for residential development to account for these surplus lands, and allows HCD to notify the Attorney General if a city or county is in violation of provisions of the Surplus Lands Act.

Oppose unless amended: Several organizations representing counties, special districts, water districts have expressed concerns and requested amendments to address the following issues:

The definition of “governmental operations” does not take into consideration instances where a public agency owns land for a public purpose but does not use the land in its daily operations. These groups request that the bill be amended to define “surplus property” as land used for achieving the agency’s public purpose rather than governmental operations, and that the bill establish a public process for agencies to declare land in their possession that is surplus.
AB 1486 requires a local agency to notice the availability of a property before participating in any formal or informal negotiations to dispose of the land. Informal negotiations allow an agency to determine the viability of the land for the agency’s public purpose, available alternatives, and potential market value. These groups request an amendment to limit notice to negotiations when a decision has been made to dispose of a surplus property.
AB 1486 invalidates the transfer of surplus land if a public agency does not comply with the requirements of the SLA. This provision could make surplus land less marketable and penalize purchasers.

Technical amendment:

On page 25, amend lines 3 through 8 as follows:

(b) The Department of Housing and Community Development shall create and maintain a searchable and downloadable public inventory of all ~~publicly owned or controlled~~ surplus lands and their present uses in the state on its internet website, which shall be updated on an annual basis. The inventory shall be available no later than September 30, 2021.

Related legislation:

AB 1255 (R. Rivas) (2019) requires cities and counties to include an inventory of surplus sites that are infill, “high-density” sites in the housing element, and requires Department of General Services (DGS) to create a searchable database of surplus sites. This bill passed out of this committee 8-0.

Previous legislation:

AB 2065 (Ting, 2018), would have amended the Surplus Lands Act expand the types of local agencies required to comply with the Act, require a “written notice of availability” of property to specified entities prior to disposal of property, require that notice to be sent to housing sponsors that have notified both HCD and the COG of their interest in surplus land, placed parameters on the negotiations to dispose of the property, and would have provided that the existing 15% affordability requirements applies whenever surplus public land is used for housing. AB 2065 was held in the Appropriations Committee. Most of the changes contained in 2065 are in also in AB 1486.

Double referred: This bill is double referred. It was heard in the Assembly Committee on Local Government and passed out on a vote of 6-2 on April 10. 2019.

REGISTERED SUPPORT / OPPOSITION:

Support

Bay Area Housing Advocacy Coalition

California Apartment Association

Greenbelt Alliance

Habitat for Humanity California

Hamilton Families

Oakland Tenant Union

Southern California Association of NonProfit Housing

Tenderloin Neighborhood Development Corporation

Transform

Opposition

None on file

Oppose Unless Amended

Association of California Healthcare Districts

Association of California Water Agencies

California Association of Sanitation Agencies

California Land Title Association

California Municipal Utilities association

California Special Districts Association

California State Association of Counties

Desert Recreation Districts

Irvine Ranch Water District

Mesa Water District

Orange County Water District

Rural County Representatives of California

Santa Margarita Water District

Stege Sanitary District

Urban Counties of California

Analysis Prepared by: Lisa Engel / H. & C.D. / (916) 319-2085

Date of Hearing: April 10, 2019

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Cecilia Aguiar-Curry, Chair

ABPCA Bill Id:AB 1486 (

Author:Ting) – As Amended Ver:March 28, 2019

SUBJECT: Local agencies: surplus land.

SUMMARY: Expands surplus property requirements for both the state and local agencies. Specifically, this bill:

Expands the provisions of the Surplus Lands Act for local agencies, as follows:
1. Expands the definition of “local agency” in the Surplus Land Act to additionally include sewer, water, and utility districts, local and regional park districts, joint powers authority, successor agency to a former redevelopment agency (RDA), housing authority, or other political subdivision of this state and instrumentality thereof that is empowered to acquire and hold real property. Declares, for purposes of this definition, that the term “district” as defined, is declaratory of, and not a change in, existing law;
2. Revises the definition of “surplus land” to mean land owned by any local agency that is not necessary for the agency’s governmental operations. Defines “governmental operations” to mean land that is being used for the express purpose of agency work or operations, including utility sites, watershed property, land being used for conservation purposes, and buffer sites near sensitive governmental uses, including, but not limited to, waste water treatment plants.
3. Defines “dispose of” to mean sell, lease, transfer, or otherwise convey any interest in real property owned by a local agency.
4. Requires that land shall be presumed to be “surplus land” when a local agency initiates an action to dispose of it. Declares that “surplus land” includes land held in the Community Redevelopment Property Trust Fund, as specified, and land that has been designated in the long-range property management plan, as specified, either for sale or for retention for future development and that was not subject to an exclusive negotiating agreement or legally binding agreement to dispose of the land, as specified.
5. Expands the definition of “exempt surplus land” to include:
  1. Surplus land held by the local agency for the express purpose of exchange for another property necessary for its governmental operations;
  2. Surplus land held by the local agency for the express purpose of transfer to another local agency for its governmental operations;
  3. A lease of land expressly designated for a local agency’s future governmental operations that is leased on an interim basis prior to development;
  4. An easement for utility, conservation, or governmental purposes;
  5. A lease of land with an existing structure and lease furthering an express governmental operation of the local agency, including but not limited to, a concession lease on recreational property;
  6. A financing lease in furtherance of governmental operations, including, but not limited to, a lease and lease-back transaction;
  7. A lease of undeveloped land, provided that the construction of any permanent structure is not permitted under the lease;
  8. A short-term lease of one year or less that may be renewed or extended on an annual basis for temporary or seasonal activities;
  9. A lease of more than one year, but less than 10 years, that is not eligible for renewal or extension;
  10. The renewal of an existing lease of one or more years for the same purpose, provided the lease was in effect as of January 1, 2018;
  11. Leases of existing agency-owned facilities for short-term use, such as park facilities, community rooms, and other uses where a facility is being rented on a temporary, short term basis of days or months;
  12. Surplus land that is put out to open, competitive bid by a local agency, provided all entities, as specified, will be invited to participate in the bid process, for either of the following purposes:
    1. A housing development, which may have ancillary commercial ground floor uses, that restricts 100% of the residential units to persons and families of low or moderate income, with at least 75% of the residential units restricted to lower income households, as defined, with an affordable sales price or an affordable rent, as defined, for a minimum of 55 years, and in no event shall the maximum affordable sales price or rent level be higher than 20% below the median market rents or sales prices for the neighborhood in which the site is located; or,
    2. A mixed-use development that is more than one acre in area, that includes not less than 300 housing units, and that restricts at least 25% of the residential units to lower income households, as defined, with an affordable sales price or an affordable rent, as defined, for a minimum of 55 years;
  13. Surplus land that is subject to legal restrictions that would make housing prohibited or incompatible on the site due to state or federal statutes, voter-approved measures, or other legal restrictions that are not imposed by the local agency. States that existing zoning alone is not a legal restriction that would make housing prohibited or incompatible;
6. Requires a written notice of availability to be sent to housing sponsors that have notified the applicable regional council of governments (COG), or in the case of a local agency without a COG, the Department of Housing and Community Development (HCD), of their interest in surplus land. Expands the notice to also include electronic mail (email), if possible;
7. Specifies that any surplus land disposed of by a public agency shall be permitted for residential use, notwithstanding local zoning designations, if 100% of the units, except for units occupied by onsite management staff, or sold or rented at an affordable housing costs, as defined, or an affordable rent, as defined, to lower income households. Provides that this provision shall not apply to exempt surplus land;
8. Specifies that negotiations between a disposing agency and an entity desiring to purchase or lease land, as specified, shall be limited to sales price and lease terms, including the amount and timing of any payments;
9. Requires, in the event that the disposing agency receives notices of interest from multiple entities that proposed the same number of housing units, that first priority shall be given to the entity that proposes the deepest average level of affordability for the affordable units. Allows a local agency to negotiate concurrently with all entities that provide notice of interest to purchase or lease land for the purpose of developing affordable housing;
10. Provides that the failure by a local agency to comply with the provisions of the Surplus Land Act shall invalidate the transfer or conveyance of real property to a purchase or encumbrancer for value, unless the local agency makes an alternative site available, as specified, that can accommodate an equal or greater number of housing units as the original site; and,
11. Clarifies that the existing 15% minimum affordability requirement applies whenever surplus land is used for housing;
Modifies an existing requirement in law that requires each local agency to make an inventory of all lands held, owned, or controlled by it or any of its departments to determined what land is in excess of its foreseeable needs for its governmental operations, and requires this information to be reported to HCD no later than April 1, of each year, beginning 2021.
Requires HCD to create and maintain a searchable and downloadable public inventory of all publicly owned or controlled lands and their present uses in the state on its internet website, which shall be updated on an annual basis. Requires the inventory to be available no later than September 30, 2021.
Requires a city or county, by April 1 of each year, in the Annual Progress Report submitted to HCD and the Governor’s Office of Planning and Research (OPR), to additionally include a listing of sites owned or leased by the city or county that have been sold, leased or otherwise disposed of in the prior year, and a listing of sites with leases that expired in the prior year. Specifies that the list shall include the entity to whom each site was transferred and the intended use for the site.
Expands, in a city or county’s identification of sites required pursuant to Housing Element law, the requirements for cities and counties to additionally include information about certain sites owned by a local agency (as defined by the Surplus Land Act), thereby requiring cities and counties to account for sites owned by a special district or school district, including the following:
1. Residentially zoned zones that are capable of being developed at a higher density owned or lease by any local agency; and,
2. Sites zoned for nonresidential use that can be redeveloped for residential use, and for which the housing element includes a program to rezone the site, as necessary, rezoned for, to permit residential use, includes sites owned or leased by a local agency.
Requires, in a city or county’s identification of sites, if a piece of property is owned by the city or county preparing the housing element, the description of nonvacant sites to also include whether there are any plans to dispose of the property during the planning period, and how the agency will comply with the Surplus Land Act.
Adds the Surplus Land Act to provisions that allow HCD to notify the city or county and notify the Office of the Attorney General that that city or county is in violation of state law.
Modifies requirements for state surplus property, as follows:
1. Clarifies the existing requirement that each state agency shall make a review of all proprietary state lands, as specified that that agency has jurisdiction to determine what, if any, land is in excess its foreseeable needs for governmental operations;
2. Requires DGS, when authority is granted for the sale or other disposition of lands declared excess, and DGS has determined that the use of land is not needed by any other state agency, to sell the land or otherwise dispose of it, as specified, and modifies this process;
3. Requires, for land that DGS has determined is not needed by any other state agency, DGS to request authorization to dispose of no less than 10% of the land on an annual basis pursuant to 8)b), above;
4. Requires that surplus land that DGS has disposed of to be permitted by right, regardless of local zoning designations, for a residential use if 100% of the residential units, except for the units occupied by onsite management staff, are sold or rented at an affordable housing cost, or affordable rent, as defined, to lower income households, as defined; and,
5. Requires DGS to make every effort to conclude the pending disposition of surplus land pursuant to 8)c), above, that is has received authorization to dispose of within 24 months of the date the sale, exchange, or transfer of land was approved by DGS.
Provides that reimbursement to local agencies and school districts shall be made, if the Commission on State Mandates determines that this act contains costs mandated by the state.

EXISTING LAW:

Requires each local agency, on or before December 31 of each year, to make an inventory of all lands held, owned or controlled by it or any of its departments, agencies, or authorities, to determine what land, including air rights, if any, is in excess of its foreseeable needs. Requires a description of each parcel found to be so in excess of needs to be made a matter of public record. Allows any citizen, limited dividend corporation, housing corporation or nonprofit corporation, upon request, to be provided with a list of said parcels without charge.
Defines “surplus land” as land owned by any local agency that is determined to be no longer necessary for the agency’s use, except property being held by the agency for the purpose of exchange or property meeting other exemptions.
Requires that a local agency must provide a written offer to sell or lease surplus land for the purpose of developing low- or moderate-income housing to "housing sponsors" upon written request, as well as any local public entity within the jurisdiction where the surplus land is located.
Provides that a local agency wishing to dispose of surplus land must also provide a written offer to additional entities, depending on the type of proposed usage, for park and recreational purposes, school facilities construction or use by a school district for open space purposes, enterprise purposes, and infill opportunity zones or transit village plans.
Allows a county to establish a central inventory of surplus property.

FISCAL EFFECT: This bill is keyed fiscal and contains a state-mandated local program.

COMMENTS:

Bill Summary. This bill makes numerous changes to the local Surplus Lands Act, and to state surplus land statutes. For the local Surplus Lands Act, this bill significantly expands the Act to:
1. Specify that the definition of “surplus” land is land not needed for the agency’s own governmental operations, and then defines this term;
2. Modifies the definition of “disposal” to mean sell, lease, transfer, or otherwise convey any interest in real property owned by a local agency, thus expanding the Act to local agency leases;
3. Lists out numerous exemptions on what is considered “exempt surplus land;”
4. Modifies procedures for notification of surplus lands, and how the local agency can negotiate with the interested party or parties on that land; and,
5. Allows any surplus land disposed of by a public agency to be permitted for residential use, regardless of local zoning designations, if 100% of the units are sold or rented at an affordable housing cost or affordable rent.

In addition to these provisions, the bill also requires all local agencies, as the bill defines, to make an inventory of all lands held, owned, or controlled by it, in excess of its foreseeable needs for its governmental operations, and report this information to HCD each year. The bill also places additional requirements on cities and counties in the provisions of law that require a city or county to develop an inventory of land suitable for residential development to account for these surplus lands, and allows HCD to notify the Attorney General if a city or county is in violation of provisions of the Surplus Lands Act.

This bill is sponsored by the Nonprofit Housing Association of Northern California and the San Diego Housing Federation.

Author’s Statement. According to the author, “California is facing an affordable housing crisis and unused public land has the potential to promote affordable housing development throughout the state. AB 1486 clarifies and strengthens provisions in the Surplus Lands Act that will promote the use of public land for affordable housing projects.”
Executive Order on Surplus Property. On January 15, 2019, Governor Gavin Newsom signed Executive Order N-06-19 that requires DGS to create an inventory of all state-owned parcels that are in excess of state agencies’ foreseeable needs by, among other things, conducting a comprehensive survey of all state-owned land, and required that the inventory be completed by April 30, 2019. The Executive Order also requires DGS, HCD and the Housing Finance Agency to collaborate to develop two new screening tools for prioritizing affordable housing development on excess state land by March 29, 2019, and to issue requests for proposals on individual parcels and accept proposals from developers of affordable housing.
Prior and Related Legislation. AB 2135 (Ting), Chapter 644, Statues of 2014, amended the procedure for the disposal of surplus land by local agencies and expanded the provisions relating to the prioritization of affordable housing development if the surplus land will be used for residential development.

AB 1255 (R. Rivas), currently pending in this Committee, requires cities and counties to include an inventory of surplus sites that are infill, “high-density” sites in the housing element, and requires Department of General Services (DGS) to create a searchable database of surplus sites.

Policy Considerations. The Committee may wish to consider the following issues:
1. Local Agency Leases. Opposition from local governments argue that the bill redefines and substantially broadens the term “dispose of” to include the sale, lease, transfer, or other conveyance of an interest in real property, which would pose many problems for public agencies. According to these groups, the bill narrowly exempts certain very specific leasing scenarios from the requirements of the bill, but fails to address the global problems associated with making the surplus land requirements applicable to leasing or conveyance of easements of other nonpossessory interests. They write that local governments lease property in a wide array of circumstances in support of their governmental operations and public purposes, not all of which can be predicted or micromanaged in advance as this bill attempts. They ask that the author amend the definition of “disposal” in AB 1486 to apply only to the sale of surplus land.
2. Parameters of 100% Affordable Housing Provisions. Concerns have been raised about the broad nature of the provisions related to allowing any surplus land disposed of by a public agency to be permitted for residential use, regardless of local zoning designations, if 100% of the units are sold or rented at an affordable housing cost or affordable rent. The sponsor notes that these provisions are intended to apply to projects that receive some level of state subsidy.
3. Implementation Issues. There are several technical implementation issues that should be addressed, including consistency in terminology. These issues include:
  1. Local Inventory Required in Provisions other than the Surplus Lands Act. This bill expands the provisions of the local Surplus Lands Act, yet requires an inventory to be completed by local agencies in a completely unrelated section of laws. In order to address this issue, the provisions of Government Code Section 50569 should be deleted and then added into Government Code 54230, which is in the Surplus Lands Act.
  2. Governmental Operations Definition. The bill creates a new definition of “governmental operations” in the Surplus Lands Act. This term is also added to the DGS section of the bill, however there is no definition included in this unrelated code section. For consistency, it should be added.
  3. Housing Element Language. This bill requires cities and counties to inventory the surplus land of all local agencies in the bill’s requirements for cities and counties to make an inventory of land suitable for residential development. This should be corrected to return back to existing law so that the impact is only on a city or county.
Committee Amendments. In order to address these issues, the Committee may wish to consider the following amendments:
1. Remove new “dispose of” definition added by the bill, and delete corresponding lease exemption language contained in local Surplus Land Act provisions.
2. Include language in the 100% affordable units section to specify that “This provision shall not apply if the site is ineligible for any public financing for affordable housing.”
3. Fix the implementation issues listed above.
Arguments in Support. Supporters argue that many local agencies have attempted to circumvent both the letter and intent of the Surplus Lands Act, and that this bill will bring greater clarity and improvement to the enforcement of the Act.
Arguments in Opposition. Opponents argue that the new definition of “disposal” is problematic for many public agencies that have valid reasons to lease or otherwise protect land they own, and note that the bill would place onerous new requirements on public agencies disposing of surplus land.
Double-Referral. This bill is double-referred to the Housing and Community Development Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

Nonprofit Housing Association of Northern California [SPONSOR]

San Diego Housing Federation [SPONSOR]

Bay Area Council
Building Industry Association of the Bay Area
Burbank Housing Development Corporation
California Community Builders
California Housing Consortium
California Rural Legal Assistance Foundation
California YIMBY
Chan Zuckerberg Initiative
Community Legal Services In East Palo Alto
EAH Housing
East Bay Asian Local Development Corporation
East Bay Housing Organizations
Enterprise Community Partners, Inc.
Habitat For Humanity East Bay/Silicon Valley
Housing California
North Bay Leadership Council
Related California
San Diego Housing Federation

San Francisco Foundation (if amended)
San Francisco Housing Action Coalition
Silicon Valley At Home (Sv@Home)
TMG Partners
Urban Displacement Project, UC-Berkeley
Western Center on Law & Poverty, Inc.

Working Partnerships USA (if amended)

Opposition

Association of California Healthcare Districts (unless amended)

Association of California Water Agencies (unless amended)

California Association of Sanitation Agencies (unless amended)

California Land Title Association (unless amended)

California Municipal Utilities Association (unless amended)

California Special Districts Association (unless amended)

California State Association of Counties (unless amended)

Chino Valley Independent Fire District (unless amended)

Coachella Valley Water District

Costa Mesa Sanitary District (unless amended)

Crestline Sanitation District (unless amended)

Cucamonga Valley Water District (unless amended)

Eastern Kern County Resource Conservation District (unless amended)
El Dorado Hills Community Services District (unless amended)

Opposition (continued)

Fresno County Mosquito And Vector Control District (unless amended)
Georgetown Divide Public Utility District (unless amended)
Goleta Sanitary Water Resource Recovery District (unless amended)
Goleta West Sanitary District (unless amended)
Greenfield County Water District (unless amended)
Humboldt Bay Municipal Water District (unless amended)

Indian Wells Valley Water District (unless amended)

Irvine Ranch Water District (unless amended)

Kern County Cemetery District (unless amended)
Leucadia Wastewater District (unless amended)
Mckinleyville Community Services District (unless amended)
Merced County Mosquito Abatement District (unless amended)

Mesa Water District (unless amended)

North County Fire Protection District (unless amended)
North Tahoe Fire Protection District (unless amended)

Northern Salinas Valley Mosquito Abatement District
Orange County Mosquito Abatement District (unless amended)

Orange County Water District (unless amended)

Palo Verde Cemetery District (unless amended)

Placentia Library District (unless amended)

Rainbow Municipal Water District

Rural County Representatives of California (unless amended)

Santa Margarita Water District (unless amended)
San Bernardino Valley Water District (unless amended)
South Coast Water District (unless amended)
Stallion Springs Community Services District (unless amended)
Tahoe City Public Utility District (unless amended)
Three Valleys Municipal Water District (unless amended)
Town of Discovery Bay Community Services District (unless amended)

Tulare Public Cemetery District (unless amended)

Urban Counties of California (unless amended)

Valley Center Municipal Water District (unless amended)
Ventura Port District (unless amended)
Vista Irrigation District (unless amended)
West Side Recreation and Park District (unless amended)

Yucaipa Valley Water District

Analysis Prepared by: Debbie Michel / L. GOV. / (916) 319-3958

Authors shown for version:
Amended Senate (8/30/2019)

AB 1486: Surplus land.

SENATE COMMITTEE ON HOUSING

AB 1255 (R. Rivas, 2019) — requires local governments to include an inventory of surplus lands in their housing elements and annually report the inventory to DGS, and requires DGS to create a searchable database of this information. This bill will also be heard in this committee today.

POSITIONS: (Communicated to the committee before noon on Wednesday,

June 26, 2019.)

SUPPORT:

CONCURRENCE IN SENATE AMENDMENTS

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