Existing law creates a housing authority in each county or city, which functions upon the adoption of a specified resolution by the relevant governing body. Existing law authorizes these housing authorities, within their jurisdictions, to construct, reconstruct, improve, alter, or repair all or part of any housing project. Existing law establishes various programs that provide housing assistance.

This bill would enact the Social Housing Act and would create the California Housing Authority as an independent state body, the mission of which would be to ensure that social housing developments that are produced and acquired align with the goals of eliminating the gap between housing production and regional housing needs assessment targets and preserving affordable housing. The bill would prescribe a definition of social housing that would describe, in addition to housing owned by the authority, housing owned by other entities, as specified, provided that all social housing developed or authorized by the authority would be owned by the authority.

This bill would prescribe the composition of the California Housing Authority Board, which would govern the authority, and which would be composed of appointed members and members who would be elected by residents of social housing developments, as specified. The bill would set forth the powers and duties of the authority and the board, including the requirement that the authority and the board annually prepare and submit a business plan and related information to the Governor and Legislature, as specified. The bill would also require the board to provide for regular audits of the authoritys accounts and records, as specified. The bill would require the authority to seek to achieve revenue neutrality, as defined, and would require the authority to seek to recuperate the cost of development and operations over the life of its properties through mechanisms that maximize the number of Californians who can be housed without experiencing rent burden.

This bill would require the authority to prioritize the development of specified property, including vacant parcels and parcels near transit, and would establish a process for the annual determination of required social housing units. Under the bill, social housing would accommodate a mix of household income ranges and would provide specified protections for residents, who would have the right to participate in the operation and management of the units in which they reside.

This bill would require the California Housing Authority to employ 2 leasing models in creating social housing, referred to as the rental model and the ownership model, and would specify the characteristics of both models. Under the rental model, the authority would extend a one-year lease to individuals who commit to a minimum of one year of residence and would require the authority to set rents, as specified. Under the ownership model, the authority would extend a 99-year lease, in the form of a limited equity arrangement, as defined, to individuals who commit to a minimum 5-year term of residence, and would authorize the authority to act as a lender for residents. The bill would specify how the units may be sold and transferred. The bill would establish eligibility requirements for social housing residents and would provide for the selection of residents by lottery, as specified, provided that people who may have been displaced from a property as part of its development would be granted a preference for occupancy. The bill, among other things, would require the authority to accept a local jurisdictions preference for a project parcel if specified conditions are met.

This bill would establish the Social Housing Revolving Loan Fund within the State Treasury to provide, upon appropriation by the Legislature, zero-interest loans for the purposes of constructing housing to accommodate a mix of household incomes. The bill would declare the intent of the Legislature to enact subsequent legislation to provide financing for the activities of the authority through the issuance of general obligation bonds. The bill would authorize the authority to issue revenue bonds, as specified.

SENATE COMMITTEE ON HOUSING

Senator Jesse Arreguín , Chair

2025 - 2026 Regular

Bill No: AB 11 Hearing Date: 6/30/2026

SUBJECT: The Social Housing Act

DIGEST: This bill establishes the California Housing Authority (CHA) for the purposes of developing mixed-income social housing.

ANALYSIS:

Existing law:

1. Defines “social housing” as housing that meets all of the following requirements:
   1. The housing units are owned and managed by a public agency, a local authority, a limited-equity housing cooperative, or a mission-driven nonprofit entity solely for the benefit of residents and households unable to afford market rent.
   2. Each social housing development contains housing units that accommodate a mix of household income ranges, including extremely low- (ELI), very low- (VLI), low- (LI), and moderate-income households unable to afford market rent.
   3. Residents of the housing units enjoy full protection against termination without just cause or for any discriminatory, retaliatory, or other arbitrary reason, and shall be afforded due process prior to being subject to eviction procedures.
   4. The housing units are protected for the duration of their useful life, and the land associated with the housing units is protected permanently, from being sold or transferred to any private person or for-profit entity or a public-private partnership.
   5. Residents have the right to participate directly and meaningfully in decision-making affecting the operation and management of the housing units in which they reside.
2. Defines “social housing development” as both newly constructed units of social housing and market units or other housing units preserved or rehabilitated as social housing.
3. Requires the Department of Housing and Community Development (HCD), no later than December 31, 2026, to complete a California Social Housing Study. The study shall consist of a comprehensive analysis of the opportunities, resources, obstacles, and recommendations for the creation of affordable and social housing at scale, to assist in meeting the need identified in the statewide projections for below market rate housing affordable to households with ELI, VLI, LI, and moderate-incomes in the sixth Regional Housing Needs Assessment cycle.
4. Prohibits, pursuant to the Housing Crisis Act of 2019, specified cities and counties from approving a housing development project that will require the demolition of residential units unless the project will create at least as many units as demolished (i.e., no net loss in housing units). A project shall not be approved if it will demolish protected units, unless all of the following apply:

• 1. The project will replace all existing or demolished protected units.
  2. Any existing tenants will be allowed to occupy their unit until six months before the start of construction activities with proper notice.
  3. The developer agrees to provide both of the following to the occupants of any protected units:
     1. Relocation benefits.
     2. A right of first refusal for a comparable unit available in the new housing development affordable to the household at an affordable rent or an affordable cost.

This bill:

1. Creates the CHA as an independent state entity with the mission of producing and acquiring social housing for all California residents, eliminating the gap between housing production and regional housing needs assessment targets, and preserving affordable housing.
2. Defines “social housing” to mean housing with the following characteristics:
   1. Units are owned by a public entity such as CHA, another public entity, or a housing authority;
   2. All social housing developed by CHA must be owned by CHA;
   3. If a housing unit is in a social housing development, the development contains housing units that accommodate a specified mix of household income ranges;
   4. Units that are owned and managed by a mission-driven not-for-profit private entity must be permanently restricted by deed to be affordable;
   5. Residents of CHA units are given, at a minimum, all protections granted to tenants in private property, as specified, but may be evicted for breaking community standards and for non-payment of rent lasting more than one month;
   6. The housing units must be protected for the duration of their useful life from being sold or transferred to a private for-profit entity to prevent the privatization of social housing; and
   7. Residents of the housing units have the right to participate directly and meaningfully in decision making affecting the operation and management of their housing units.
3. Defines the following terms:
   1. “Revenue neutrality” means a system in which all monetary expenditures that result from the development and operation of CHA units are returned through rents, payments on leasehold mortgages, or other specified subsidies;
   2. “Rent and mortgage cross-subsidization” means a system in which the below-cost rents and leasehold mortgages of certain units are balanced by above-cost payments on others within the same multiunit property;
   3. “Cost rent” means a system in which the rent of a dwelling is calculated on the cost of providing for and maintaining the dwelling, only allowing for limited or no profits;
   4. “Limited equity arrangement” means an ownership model in which residents are extended a long-term lease, take out a subsidized leasehold mortgage from the CHA, make monthly mortgage payments, and commit to resell at a price designed to balance ongoing affordability and resident wealth generation;
   5. “Regional housing needs assessment” or “RHNA” means a representation of housing needs for all income levels as specified;
   6. “Underutilized parcel” means a parcel of property which contains fewer units than the maximum number of units permissible under local zoning regulations;
   7. “Multifamily property” means a revenue-neutral collection of units featuring units dedicated to a range of affordability levels from ELI to above-moderate income. It may be a single building, multiple buildings on the same or adjacent parcels, or multiple buildings across several blocks within a single jurisdiction, or may be defined by the CHA; and
4. Specifies income definitions for the following categories, consistent with existing law: ELI, VLI, LI, moderate-income, and above moderate-income.
5. Provides that CHA has various powers, including the ability to:
   1. Sue and be sued;
   2. Have a seal and alter the seal at its pleasure;
   3. Make and execute contracts and other instruments;
   4. Make rules with respect to its projects, operations, properties, and facilities;
   5. Through its executive officer, appoint specified personnel and set various policies;
   6. Acquire, by grant or purchase, property or any interest therein and own, hold, clear, improve, rehabilitate, sell, assign, exchange, lease, or otherwise dispose of or encumber it;
   7. Enter into development partnerships with municipalities, joint powers of authority, and other public and private entities in order to further its social housing development goals;
   8. Arrange for the planning, opening, grading, or closing of roads or other places, for the furnishing of facilities, or for the furnishing of property or services in connection with a project;
   9. Prepare project plans for any project, and from time to time modify those plans;
   10. Provide advisory, consultative, training, and educational services, technical assistance, and related work as specified;
   11. Accept funding in any form from any source; and
   12. Call upon the Attorney General for legal services as it may require.
6. Requires the CHA to submit an annual business plan to the Governor and the Legislature which must be made available for public comment at least 60 days before publication.
7. Specifies that the CHA board will consist of nine members who will elect a chair and make decisions by majority vote. The board membership will be as follows:
   1. An expert in housing development and finance;
   2. An expert in housing construction;
   3. An expert in property maintenance;
   4. An appointee of the Speaker of the Assembly;
   5. An appointee of the Senate Committee on Rules;
   6. An appointee of the Governor; and
   7. Three representatives of CHA residents, to be appointed initially by specified entities. Following the occupancy of CHA units, resident representatives are to be elected annually according to specified procedures.
8. Tasks the CHA board with the following duties:
   1. Establish a strategy to eliminate the gap between housing production and acquisition and RHNA targets, set objective and performance targets to this goal, and monitor CHA’s success in achieving the targets;
   2. The ability to hire, fire, and monitor performance of an executive officer;
   3. Approving the annual budget prepared by the executive officer;
   4. Integrating risk management into the authority’s strategic planning process and notifying the Governor and the Legislature of specified risks facing CHA;
   5. Adopting and amending regulations, including on resident board elections; and
   6. Holding biannual meetings with resident governance councils.
9. Provides that each CHA-owned multifamily social housing development must form a governance council with specified powers and responsibilities.
10. Requires that the CHA seek to achieve revenue neutrality over the long term and must seek to recuperate the cost of development and operations over the life of its properties through rent cross-subsidization or cost rent.
11. States that the CHA must prioritize development on vacant parcels, certain underutilized parcels without deed-restricted or rent-controlled units, surplus public properties, and parcels near transit.
12. Specifies that if the development requires rehabilitation or demolition of covenanted affordable units, the new development must include a greater number of affordable units.
13. Requires that each multi-unit property must include a variety of mixed income units.
14. Provides that if the development of a property requires the removal of residents, the CHA must cover certain relocation costs and provide displaced residents with the right to live in the new CHA property at their previous rent for one year, or the CHA rent, whichever is lower.
15. Specifies that the CHA will make an annual determination of the required amount of social housing units to be produced as follows:
    1. Annual RHNA targets will be calculated as the total RHNA cycle targets for each jurisdiction divided by the length of the RHNA cycle;
    2. On or before January 1, 2028, and each year thereafter, the CHA will determine the gap between the previous year’s RHNA and actual housing construction; and
    3. Within a given year, the CHA may construct at least the number of units to meet the gap between the previous year’s construction of units and the RHNA targets.
16. Specifies that, in creating housing, the authority shall employ two different leasing models, the rental model and the ownership model, as specified.
17. Provides that, under the CHA rental model, one-year leases will be used, barring extraordinary circumstances.
18. Puts forth the following requirements for CHA ownership units:
    1. The CHA will extend a 99-year limited equity arrangement lease to individuals who commit to five years of residence. After five years, residents can sell the unit, though the CHA will have first right of refusal to purchase. If the CHA does not purchase then it may be sold to an eligible buyer subject to requirements established by the CHA which give the seller a reasonable return on investment;
    2. Upon the death of the owner, the unit may be transferred to the deceased’s heir by device or as any other real property may pass. If a transferee is not eligible to be a resident, the transferee shall sell the unit to the CHA;
    3. The CHA must strive to ensure that residents pay no more than 30% of income for housing and rent adjustments will be applied annually in a way that does not discourage increased earnings. If resident income changes, the property manager will rent to an appropriate income household;
    4. Residents will pay a 15% down payment, with the purchase price set to be affordable for the purchasing household; and
    5. Properties will be sold at the price for which the owner purchased the property, plus documented capital improvements, and adjusted for inflation.
19. Puts forth the following requirements for CHA residency and occupancy and specifies penalties for failure to abide by them:
    1. Unless an above-moderate income unit, it must be the resident’s sole residence;
    2. The applicant must be living or working in California at the time of their application, subject to specified rules;
    3. Allows an applicant with a prior criminal record to reside in CHA units unless there is evidence of a clear and manifest danger to the development or its residents;
    4. Allows the CHA or the applicable governance council to allow subleasing of units;
    5. Permits a resident to terminate their residency due to specified reasons including job relocation, change in household structure, and serious illness; and
    6. Specifies that, with the exception of those displaced during construction, resident selection is by a lottery stratified by income category.
20. Provides that the CHA can conduct ground-up construction and rehabilitation of existing structures and may dedicate space to commercial use with leases to qualifying entities.
21. Specifies that, when appropriate, the state shall gift public lands to the CHA, though the CHA can also purchase land from other entities.
22. States that the CHA must accept a local government’s preference on project location if certain conditions, including cost and community amenity access, are met. Also directs the CHA to seek input from the jurisdiction’s governing body related to specific site development, height, number of units, and development timeline.
23. Specifies that CHA activities must be conducted with a goal of revenue neutrality, establishes the Social Housing Revolving Loan Fund within the State Treasury to provide zero-interest loans for mixed-income housing, and further states that it is the intent of the Legislature to enact legislation to provide financing for the activities of the authority through the issuance of general obligations bonds.

Background

Social Housing. Outside of California, there is no widely shared consensus on how to define social housing. Generally, definitions of social housing distinguish it in various ways from privately-owned, for-profit housing provided through market mechanisms. The Assembly Select Committee on Social Housing held an informational hearing on October 20, 2021 and Rob Weiner from the California Coalition for Rural Housing shared the Organization for Economic Cooperation and Development (OECD) definition of social housing as “the stock of residential rental accommodations provided at sub-market prices and allocated according to specific rules rather than according to market mechanisms.”^[1] Under this definition, there are an estimated 480,000 subsidized housing units available for rent in California, or about 3.5% of the state’s housing stock. These deed-restricted affordable rental units are generally built using a mix of public and private financing and residency is restricted to low-income households that make no more than 80% of county area median income (AMI). Other versions of social housing specify permanent affordability requirements and ownership by the government or a non-profit entity. Most of California’s deed-restricted affordable housing is not publicly owned and the length of affordability requirements varies, though permanent affordability is not required in most cases.

Another variation of social housing involves making accommodations available to all individuals regardless of their household income. In particular, Vienna, Austria is often held up as an example of a large city with widespread mixed-income social housing—an estimated 40% of the city’s housing stock is social housing. In the Viennese model, higher income households pay market rate rents which then subsidize the below market rents for lower-income households. This mechanism is referred to as “cross-subsidization” and it is the same logic that underlies California’s density bonus law, a policy that allows residential developers to receive added density and other concessions and incentives from a local government in exchange for building a certain percentage of affordable units.

In California, “social housing” is defined in statute as a housing development that includes: (1) housing units owned and managed by a public agency, a local authority, a limited-equity housing cooperative, or a mission-driven nonprofit entity solely for the benefit of residents and households unable to afford market rent; (2) housing developments that contains housing units that accommodate a mix of household income ranges, including ELI, VLI, LI, and moderate-income households unable to afford market rent; (3) residents of the housing units enjoy full protection against termination without just cause or for any discriminatory, retaliatory, or other arbitrary reason, and shall be afforded due process prior to being subject to eviction procedures; (4) housing units are protected for the duration of their useful life, and the land associated with the housing units is protected permanently, from being sold or transferred to any private person or for-profit entity or a public-private partnership, and (5) residents have the right to participate directly and meaningfully in decision-making affecting the operation and management of the housing units in which they reside.

SB 555 (Wahab, Chapter 402, Statutes of 2023) required HCD to complete a California Social Housing Study and present the findings to the Legislature by December 31, 2026. The study must consist of a comprehensive analysis of the opportunities, resources, obstacles, and recommendations for the creation of affordable and social housing at scale, to assist in meeting the need identified in the statewide projections for below market rate housing affordable to households with low- and moderate-incomes in the sixth Regional Housing Needs Assessment cycle. HCD has been working on that study to meet the statutory deadline.

Comments

1. Author’s statement. “Housing is too expensive for millions of Californians. More than two in five households are considered rent burdened and spend over 30% of their income on housing, and more than one in five households spend over 50% of their income on housing. Over 97% of cities and counties haven’t produced enough affordable housing, and existing strategies to address the lack of affordable housing have not been nearly enough to meet demand. Affordable housing relies on government subsidies, and there is significantly more demand for them than supply. Social housing is an important tool to ensure housing is affordable to people of all income levels. Social housing is publicly backed, self-sustaining housing that accommodates a mix of household income ranges. Housing is protected from being sold to a private for-profit entity for the duration of its life, and residents are granted the same protections as tenants in private property, if not more. Many countries throughout the world have successful social housing programs, and in the US, there are social housing developments such as in Montgomery County, Maryland using a similar model. Social Housing is how we provide and realize housing as a human right.”
2. Creation of the California Housing Authority (CHA). This bill proposes to establish the CHA as a new, independent entity within state government to develop social housing, which is defined as mixed-income rental and ownership housing that is publicly owned and permanently affordable. The CHA’s mission would be to close the gap between a jurisdiction’s current level of housing production and their RHNA amount while maintaining revenue neutrality. The CHA would be governed by a nine-member board consisting of: three resident representatives living in CHA accommodations, a housing development and finance expert, a housing construction expert, a property maintenance expert, an appointee of the Speaker of the Assembly, an appointee of the Senate Committee on Rules, and an appointee of the Governor. Decisions would be made by majority vote of the board, and the board would have the authority to appoint a board chair and an executive officer.
3. Development of CHA housing. This bill specifies that the CHA could build residential housing to make up the difference between a jurisdiction’s RHNA and the actual amount of housing built. These calculations would be made annually using each local government’s annual progress report (APR) data beginning on January 1, 2029. Development would be prioritized on vacant parcels, surplus public properties, and parcels near transit, though the bill does not indicate a particular distance from transit or the frequency of transit service that would be required for a parcel to be considered “near transit.” Additionally, underutilized parcels (i.e., those containing fewer than the maximum number of allowable units per the jurisdiction’s zoning) would be prioritized for CHA developments so long as they do not contain rent controlled units or deed-restricted affordable housing.

This bill requires the CHA to seek input from the local government about certain aspects of a proposed development, including the number of units and the timeline for completing the project. When the CHA has multiple potential sites for development in a jurisdiction, it would be required to defer to the local government on their preferred site if property acquisition costs and amenities are generally similar and if the site would allow the local government to meet its RHNA targets.

CHA housing developments are required to be mixed-income housing developments, though the specific mix is not spelled out in the bill and there is no intent language indicating minimum proportions of affordable units nor the depth of affordability. The CHA also has the ability to develop mixed-use buildings with commercial space.

California law already defines “social housing” (see Existing Law #1, above). This bill would expand social housing to also include above moderate-income households.

1. Policies governing residency in CHA-built housing. In CHA-built developments, individuals could either rent or purchase a unit through an ownership model, and the CHA unit would need to be the person’s sole residence unless they fall into the above-moderate income category. In the ownership model, CHA provides the resident a 99-year lease and they would need to commit to a minimum of five years of residency in the CHA building. The ownership model requires a down payment of 15% of the purchase price. When a resident in the ownership model wishes to sell their unit, the CHA would have first right of refusal to purchase the unit. If the CHA declines to repurchase the unit then it can be resold to a qualified buyer in a manner that allows the resident to have a reasonable return on investment. The bill states that ownership units would be sold for the original purchase price plus documented capital improvements and an adjustment for inflation.

Renters in CHA units would be required to commit to a year of residency, though exceptions would be allowed in some cases such as illness or employment changes. Renters living in CHA-owned properties are provided tenant protections, including protection against termination of tenancy without just cause. Additionally, the bill specifies that each multifamily social housing development produced by the CHA will have a resident governance council elected by residents of the housing complex. Governance councils will host regular meetings, interact with property management, handle budgeting for development, and represent the community at biannual meetings with the CHA board. Though the bill specifies that the governance council is to be made up of no more than 10% of the overall population for development, it is unclear if this is per unit or per resident. In a 20-unit building with only one individual per unit, there would be only two members on the council, which would pose an issue for any decisions that the two members disagree on.

1. Putting the cart before the horse. As noted in the “Background” section above, in 2023, the Governor signed SB 555 (Wahab, Chapter 402), which requires HCD to complete a California Social Housing Study and present the findings to the Legislature by December 31, 2026. Below is a chart comparing the statutory provisions in SB 555 and the contents of the study for consideration by the legislature.

Given this bill would implement policies and structures for social housing merely six months prior to receiving the recommendations in the study, the committee may wish to consider waiting to move this bill forward.

6) Anti-displacement and anti-demolition protections. This bill authorizes a developer of a mixed income project to demolish existing units, including deed restricted affordable housing, rent and price controlled units, or units rented to low-income tenants in the last 5 years. The bill also requires a developer to replace those units with a greater number of affordable units by income level, and requires the authority to provide temporary relocation costs. The bill does not make clear which entity has oversight over these requirements, nor are there requirements for advance notice of demolition, for the unit offered to a displaced tenant to be of comparable size and rent to their existing demolished unit.

In response to the housing crisis, the Legislature enacted the Housing Crisis Act of 2019 (HCA) (SB 330 (Skinner, Chapter 654, Statutes of 2019) and subsequent amendments to the Act that, among other things, extended its sunset to January 1, 2030 (SB 8 (Skinner, Chapter 161, Statutes of 2021)). The HCA prohibits local governments from reducing the capacity for housing development within their jurisdictions and includes demolition protections designed to ensure that there is no net reduction of housing in the state, especially affordable housing.

Under the HCA, a local government may not approve the demolition of existing housing unless the project creates at least as many new units as the existing project, and cannot demolish affordable housing units protected by law unless the project replaces the units and allows existing residents to occupy their units until six months before construction starts. The developer must also provide relocation assistance and a right of first refusal to the residents in the new development at affordable rates. The HCA details that replaced units must be comparable to demolished units with regards to number of bedrooms and affordable rents.

In lieu of the provisions in this bill, the committee may wish to instead utilize anti-displacement and relocation assistance provisions in the HCA, and prohibit the demolition of housing units that are deed restricted affordable, housing that is subject to any form of rent or price control, or housing that was occupied by tenants in the last 10 years.

1. Show me the money. This bill includes provisions stating that the CHA shall seek to achieve “revenue neutrality” over the long-term. Separate provisions of the bill, however, contemplate the issuance of general obligation bonds to pay for the activities of the authority, as well as revenue bonds to pay for the housing development projects. In California, mixed-income project developers may utilize existing development benefits, including density bonus law, streamlined ministerial approval processes, and upzoning measures to make the inclusion of affordable housing units “pencil-out.” Developing housing that is affordable to very low- and low-income families almost always requires some amount of public investment. The high cost of land and construction, as well as regulatory barriers, in California generally makes it economically impossible to build new housing that can be sold or rented at prices affordable to such households. The private sector sometimes provides financial subsidies or land donations mandatorily through inclusionary zoning policies or voluntarily through density bonus ordinances, described below. In most cases, however, some amount of public financial subsidy is needed from federal, state, and/or local governments.

The state has taken action to spur housing development in the last few years, including: increasing the amount of land on which housing can be built within existing cities by directly making multifamily housing types legal in more places, requiring local governments to increase development capacity via the Regional Housing Needs Allocation (RHNA) process; expediting and simplifying the local housing approval process at the pre-entitlement, entitlement, and postentitlement phases; creating multiple pathways for by-right approvals for multifamily housing projects, ADUs, deed-restricted affordable housing, and market-rate housing; authorizing housing to be developed in non-residential areas and for greater densities near transit stops; and reforming DBL. These reforms have resulted in greater certainty and shortened approval timelines and more housing project types, which also significantly reduces overall costs of development. This has also given developers greater certainty and ability to seek approvals in traditionally exclusive jurisdictions.

Public subsidy is often required to fill the financial gap on affordable units. For example, density bonus law (DBL) requires public entities to reduce or even eliminate local requirements for a projects that include affordable units, if the waiver or concession of standards would increase financial feasibility of the project and allow a developer to include more total units in a project than would otherwise be allowed by the local zoning. Allowing more total units permits the developer to spread the cost of the affordable units more broadly over the market-rate units. The specific goal of DBL is to cover the financing gap of affordable housing with regulatory incentives, rather than additional financial subsidy.

According to the Assembly Appropriations Committee analysis, in addition to tens of millions of dollars required to stand up and run a new agency, the estimated capital costs of implementing this bill are unknown, but are “likely in the low billions of dollars (GF and bond funds) for the construction and development of social housing units.  This bill states legislative intent to issue GO bonds to finance the activities of the CHA, but no timeframe or dollar amount is indicated.”

The committee may wish to consider the precedent this bill would establish and whether limited public resources should be used to subsidize market rate units when affordable housing programs that serve lower-income and homeless families – Multifamily Housing Program, CalHome, Joe Serna Farmworker Housing Program – are not adequately funded or have no funding.

9) If at first you don’t succeed… This is the author’s fourth attempt to establish a social housing process for mixed income housing at the state level. In 2023, AB 309 (Lee) reached the Governor’s desk, but was vetoed.

10) Opposition. Public Advocates, California Community Land Trust Network, Housing Now, and Policy Link are opposed unless this bill is “amended to conform with SB 555 (Wahab) and to ensure that the bill will produce below-market affordable units in proportion to the unmet need.” This coalition requests that this bill be amended to match the definition of “social housing” in SB 555 and to tie the affordability of the units produced by the CHA to be proportional to the gaps in housing at each income level.” Several cities wrote in to express concerns about the CHA overriding local ability to weigh in on the approval of social housing projects and concerns that this program would undermine the housing element planning process.

11) Double-referral. This bill was also referred to the Committee on Governmental Organization.

Related/Prior Legislation

AB 2281 (Lee, 2024) — would have enacted the Social Housing Act and established the CHA for the purposes of developing mixed-income social housing. This bill was held in Assembly Appropriations Committee.

AB 309 (Lee, 2023) — would have created the Social Housing Program within the Department of General Services (DGS) to identify and develop up to three social housing projects on state-owned surplus land deemed suitable for housing, as specified. This bill was vetoed by the Governor.

I am returning Assembly Bill 309 without my signature.

This bill would create the Social Housing Program in the Department of General Services (DGS). The program would identify and produce three social housing projects on excess state-owned property through development or acquisition. This bill infringes on state sovereignty over state-owned real property by establishing a new process for local government review of state projects authorized under the bill and could potentially cost the state several hundred million dollars in capital expenditures.

State-owned sites identified as suitable for housing development already are being developed as affordable housing through the State Excess Sites program. This program, instituted through Executive Order (EO) N-06-19 and further codified through AB 2233 (Quirk-Silva, Chapter 438, Statutes of 2022) and SB 561 (Dodd, Chapter 446, Statutes of 2022), has already awarded state land for 17 residential or mixed-use projects with significant affordable housing components.

While I appreciate the author's commitment to build more affordable housing in the state, this bill creates new additional cost pressures and must be considered in the annual budget in the context of all state funding priorities.

In partnership with the Legislature, we enacted a budget that closed a shortfall of more than $30 billion through balanced solutions that avoided deep program cuts and protected education, health care, climate, public safety, and social service programs that are relied on by millions of Californians. This year, however, the Legislature sent me bills outside of this budget process that, if all enacted, would add nearly $19 billion of unaccounted costs in the budget, of which $11 billion would be ongoing.

With our state facing continuing economic risk and revenue uncertainty, it is important to remain disciplined when considering bills with significant fiscal implications, such as this measure. For these reasons, I cannot sign this bill.

SB 555 (Wahab, Chapter 402, Statutes of 2023) — requires HCD, no later than December 31, 2026, to develop, adopt, and submit to the Legislature a Social Housing Study for achieving the social housing unit goals

AB 2053 (Lee, 2022) — would have established the California Housing Authority (CHA) for the purposes of developing mixed-income social housing. This bill failed passage in the Senate Governance and Finance Committee.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

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

June 24, 2026.)

SUPPORT:

Aids Healthcare Foundation
California School Employees Association
CDP Rural Caucus
CFT- a Union of Educators & Classified Professionals, AFT, AFL-CIO
City of Alameda
Culver City Democratic Club
Democrats of Rossmoor
Fremont for Everyone
Santa Clara Valley Water District

OPPOSITION:

California Community Land Trust Network

City of Camarillo

City of Lomita

City of Thousand Oaks

City of Yorba Linda

Fieldstead and Company, INC.

Housing Now!

League of California Cities

New Livable California Dba Livable California

Orange County Council of Governments

Policylink

Public Advocates

-- END --

1. https://www.assembly.ca.gov/media/assembly-select-committee-social-housing-20211020/video ↑

SENATE COMMITTEE ON HOUSING

Senator Aisha Wahab, Chair

2025 - 2026 Regular

Bill No: AB 11 Hearing Date: 6/30/2026

SUBJECT: The Social Housing Act

DIGEST: This bill establishes the California Housing Authority (CHA) for the purposes of developing mixed-income social housing.

ANALYSIS:

Existing law:

1. Defines “social housing” as housing that meets all of the following requirements:
   1. The housing units are owned and managed by a public agency, a local authority, a limited-equity housing cooperative, or a mission-driven nonprofit entity solely for the benefit of residents and households unable to afford market rent.
   2. Each social housing development contains housing units that accommodate a mix of household income ranges, including extremely low- (ELI), very low- (VLI), low- (LI), and moderate-income households unable to afford market rent.
   3. Residents of the housing units enjoy full protection against termination without just cause or for any discriminatory, retaliatory, or other arbitrary reason, and shall be afforded due process prior to being subject to eviction procedures.
   4. The housing units are protected for the duration of their useful life, and the land associated with the housing units is protected permanently, from being sold or transferred to any private person or for-profit entity or a public-private partnership.
   5. Residents have the right to participate directly and meaningfully in decision-making affecting the operation and management of the housing units in which they reside.
2. Defines “social housing development” as both newly constructed units of social housing and market units or other housing units preserved or rehabilitated as social housing.
3. Requires the Department of Housing and Community Development (HCD), no later than December 31, 2026, to complete a California Social Housing Study. The study shall consist of a comprehensive analysis of the opportunities, resources, obstacles, and recommendations for the creation of affordable and social housing at scale, to assist in meeting the need identified in the statewide projections for below market rate housing affordable to households with ELI, VLI, LI, and moderate-incomes in the sixth Regional Housing Needs Assessment cycle.
4. Prohibits, pursuant to the Housing Crisis Act of 2019, specified cities and counties from approving a housing development project that will require the demolition of residential units unless the project will create at least as many units as demolished (i.e., no net loss in housing units). A project shall not be approved if it will demolish protected units, unless all of the following apply:

• 1. The project will replace all existing or demolished protected units.
  2. Any existing tenants will be allowed to occupy their unit until six months before the start of construction activities with proper notice.
  3. The developer agrees to provide both of the following to the occupants of any protected units:
     1. Relocation benefits.
     2. A right of first refusal for a comparable unit available in the new housing development affordable to the household at an affordable rent or an affordable cost.

This bill:

1. Creates the CHA as an independent state entity with the mission of producing and acquiring social housing for all California residents, eliminating the gap between housing production and regional housing needs assessment targets, and preserving affordable housing.
2. Defines “social housing” to mean housing with the following characteristics:
   1. Units are owned by a public entity such as CHA, another public entity, or a housing authority;
   2. All social housing developed by CHA must be owned by CHA;
   3. If a housing unit is in a social housing development, the development contains housing units that accommodate a specified mix of household income ranges;
   4. Units that are owned and managed by a mission-driven not-for-profit private entity must be permanently restricted by deed to be affordable;
   5. Residents of CHA units are given, at a minimum, all protections granted to tenants in private property, as specified, but may be evicted for breaking community standards and for non-payment of rent lasting more than one month;
   6. The housing units must be protected for the duration of their useful life from being sold or transferred to a private for-profit entity to prevent the privatization of social housing; and
   7. Residents of the housing units have the right to participate directly and meaningfully in decision making affecting the operation and management of their housing units.
3. Defines the following terms:
   1. “Revenue neutrality” means a system in which all monetary expenditures that result from the development and operation of CHA units are returned through rents, payments on leasehold mortgages, or other specified subsidies;
   2. “Rent and mortgage cross-subsidization” means a system in which the below-cost rents and leasehold mortgages of certain units are balanced by above-cost payments on others within the same multiunit property;
   3. “Cost rent” means a system in which the rent of a dwelling is calculated on the cost of providing for and maintaining the dwelling, only allowing for limited or no profits;
   4. “Limited equity arrangement” means an ownership model in which residents are extended a long-term lease, take out a subsidized leasehold mortgage from the CHA, make monthly mortgage payments, and commit to resell at a price designed to balance ongoing affordability and resident wealth generation;
   5. “Regional housing needs assessment” or “RHNA” means a representation of housing needs for all income levels as specified;
   6. “Underutilized parcel” means a parcel of property which contains fewer units than the maximum number of units permissible under local zoning regulations;
   7. “Multifamily property” means a revenue-neutral collection of units featuring units dedicated to a range of affordability levels from ELI to above-moderate income. It may be a single building, multiple buildings on the same or adjacent parcels, or multiple buildings across several blocks within a single jurisdiction, or may be defined by the CHA; and
4. Specifies income definitions for the following categories, consistent with existing law: ELI, VLI, LI, moderate-income, and above moderate-income.
5. Provides that CHA has various powers, including the ability to:
   1. Sue and be sued;
   2. Have a seal and alter the seal at its pleasure;
   3. Make and execute contracts and other instruments;
   4. Make rules with respect to its projects, operations, properties, and facilities;
   5. Through its executive officer, appoint specified personnel and set various policies;
   6. Acquire, by grant or purchase, property or any interest therein and own, hold, clear, improve, rehabilitate, sell, assign, exchange, lease, or otherwise dispose of or encumber it;
   7. Enter into development partnerships with municipalities, joint powers of authority, and other public and private entities in order to further its social housing development goals;
   8. Arrange for the planning, opening, grading, or closing of roads or other places, for the furnishing of facilities, or for the furnishing of property or services in connection with a project;
   9. Prepare project plans for any project, and from time to time modify those plans;
   10. Provide advisory, consultative, training, and educational services, technical assistance, and related work as specified;
   11. Accept funding in any form from any source; and
   12. Call upon the Attorney General for legal services as it may require.
6. Requires the CHA to submit an annual business plan to the Governor and the Legislature which must be made available for public comment at least 60 days before publication.
7. Specifies that the CHA board will consist of nine members who will elect a chair and make decisions by majority vote. The board membership will be as follows:
   1. An expert in housing development and finance;
   2. An expert in housing construction;
   3. An expert in property maintenance;
   4. An appointee of the Speaker of the Assembly;
   5. An appointee of the Senate Committee on Rules;
   6. An appointee of the Governor; and
   7. Three representatives of CHA residents, to be appointed initially by specified entities. Following the occupancy of CHA units, resident representatives are to be elected annually according to specified procedures.
8. Tasks the CHA board with the following duties:
   1. Establish a strategy to eliminate the gap between housing production and acquisition and RHNA targets, set objective and performance targets to this goal, and monitor CHA’s success in achieving the targets;
   2. The ability to hire, fire, and monitor performance of an executive officer;
   3. Approving the annual budget prepared by the executive officer;
   4. Integrating risk management into the authority’s strategic planning process and notifying the Governor and the Legislature of specified risks facing CHA;
   5. Adopting and amending regulations, including on resident board elections; and
   6. Holding biannual meetings with resident governance councils.
9. Provides that each CHA-owned multifamily social housing development must form a governance council with specified powers and responsibilities.
10. Requires that the CHA seek to achieve revenue neutrality over the long term and must seek to recuperate the cost of development and operations over the life of its properties through rent cross-subsidization or cost rent.
11. States that the CHA must prioritize development on vacant parcels, certain underutilized parcels without deed-restricted or rent-controlled units, surplus public properties, and parcels near transit.
12. Specifies that if the development requires rehabilitation or demolition of covenanted affordable units, the new development must include a greater number of affordable units.
13. Requires that each multi-unit property must include a variety of mixed income units.
14. Provides that if the development of a property requires the removal of residents, the CHA must cover certain relocation costs and provide displaced residents with the right to live in the new CHA property at their previous rent for one year, or the CHA rent, whichever is lower.
15. Specifies that the CHA will make an annual determination of the required amount of social housing units to be produced as follows:
    1. Annual RHNA targets will be calculated as the total RHNA cycle targets for each jurisdiction divided by the length of the RHNA cycle;
    2. On or before January 1, 2028, and each year thereafter, the CHA will determine the gap between the previous year’s RHNA and actual housing construction; and
    3. Within a given year, the CHA may construct at least the number of units to meet the gap between the previous year’s construction of units and the RHNA targets.
16. Specifies that, in creating housing, the authority shall employ two different leasing models, the rental model and the ownership model, as specified.
17. Provides that, under the CHA rental model, one-year leases will be used, barring extraordinary circumstances.
18. Puts forth the following requirements for CHA ownership units:
    1. The CHA will extend a 99-year limited equity arrangement lease to individuals who commit to five years of residence. After five years, residents can sell the unit, though the CHA will have first right of refusal to purchase. If the CHA does not purchase then it may be sold to an eligible buyer subject to requirements established by the CHA which give the seller a reasonable return on investment;
    2. Upon the death of the owner, the unit may be transferred to the deceased’s heir by device or as any other real property may pass. If a transferee is not eligible to be a resident, the transferee shall sell the unit to the CHA;
    3. The CHA must strive to ensure that residents pay no more than 30% of income for housing and rent adjustments will be applied annually in a way that does not discourage increased earnings. If resident income changes, the property manager will rent to an appropriate income household;
    4. Residents will pay a 15% down payment, with the purchase price set to be affordable for the purchasing household; and
    5. Properties will be sold at the price for which the owner purchased the property, plus documented capital improvements, and adjusted for inflation.
19. Puts forth the following requirements for CHA residency and occupancy and specifies penalties for failure to abide by them:
    1. Unless an above-moderate income unit, it must be the resident’s sole residence;
    2. The applicant must be living or working in California at the time of their application, subject to specified rules;
    3. Allows an applicant with a prior criminal record to reside in CHA units unless there is evidence of a clear and manifest danger to the development or its residents;
    4. Allows the CHA or the applicable governance council to allow subleasing of units;
    5. Permits a resident to terminate their residency due to specified reasons including job relocation, change in household structure, and serious illness; and
    6. Specifies that, with the exception of those displaced during construction, resident selection is by a lottery stratified by income category.
20. Provides that the CHA can conduct ground-up construction and rehabilitation of existing structures and may dedicate space to commercial use with leases to qualifying entities.
21. Specifies that, when appropriate, the state shall gift public lands to the CHA, though the CHA can also purchase land from other entities.
22. States that the CHA must accept a local government’s preference on project location if certain conditions, including cost and community amenity access, are met. Also directs the CHA to seek input from the jurisdiction’s governing body related to specific site development, height, number of units, and development timeline.
23. Specifies that CHA activities must be conducted with a goal of revenue neutrality, establishes the Social Housing Revolving Loan Fund within the State Treasury to provide zero-interest loans for mixed-income housing, and further states that it is the intent of the Legislature to enact legislation to provide financing for the activities of the authority through the issuance of general obligations bonds.

Background

Social Housing. Outside of California, there is no widely shared consensus on how to define social housing. Generally, definitions of social housing distinguish it in various ways from privately-owned, for-profit housing provided through market mechanisms. The Assembly Select Committee on Social Housing held an informational hearing on October 20, 2021 and Rob Weiner from the California Coalition for Rural Housing shared the Organization for Economic Cooperation and Development (OECD) definition of social housing as “the stock of residential rental accommodations provided at sub-market prices and allocated according to specific rules rather than according to market mechanisms.”^[1] Under this definition, there are an estimated 480,000 subsidized housing units available for rent in California, or about 3.5% of the state’s housing stock. These deed-restricted affordable rental units are generally built using a mix of public and private financing and residency is restricted to low-income households that make no more than 80% of county area median income (AMI). Other versions of social housing specify permanent affordability requirements and ownership by the government or a non-profit entity. Most of California’s deed-restricted affordable housing is not publicly owned and the length of affordability requirements varies, though permanent affordability is not required in most cases.

Another variation of social housing involves making accommodations available to all individuals regardless of their household income. In particular, Vienna, Austria is often held up as an example of a large city with widespread mixed-income social housing—an estimated 40% of the city’s housing stock is social housing. In the Viennese model, higher income households pay market rate rents which then subsidize the below market rents for lower-income households. This mechanism is referred to as “cross-subsidization” and it is the same logic that underlies California’s density bonus law, a policy that allows residential developers to receive added density and other concessions and incentives from a local government in exchange for building a certain percentage of affordable units.

In California, “social housing” is defined in statute as a housing development that includes: (1) housing units owned and managed by a public agency, a local authority, a limited-equity housing cooperative, or a mission-driven nonprofit entity solely for the benefit of residents and households unable to afford market rent; (2) housing developments that contains housing units that accommodate a mix of household income ranges, including ELI, VLI, LI, and moderate-income households unable to afford market rent; (3) residents of the housing units enjoy full protection against termination without just cause or for any discriminatory, retaliatory, or other arbitrary reason, and shall be afforded due process prior to being subject to eviction procedures; (4) housing units are protected for the duration of their useful life, and the land associated with the housing units is protected permanently, from being sold or transferred to any private person or for-profit entity or a public-private partnership, and (5) residents have the right to participate directly and meaningfully in decision-making affecting the operation and management of the housing units in which they reside.

SB 555 (Wahab, Chapter 402, Statutes of 2023) required HCD to complete a California Social Housing Study and present the findings to the Legislature by December 31, 2026. The study must consist of a comprehensive analysis of the opportunities, resources, obstacles, and recommendations for the creation of affordable and social housing at scale, to assist in meeting the need identified in the statewide projections for below market rate housing affordable to households with low- and moderate-incomes in the sixth Regional Housing Needs Assessment cycle. HCD has been working on that study to meet the statutory deadline.

Comments

1. Author’s statement. “Housing is too expensive for millions of Californians. More than two in five households are considered rent burdened and spend over 30% of their income on housing, and more than one in five households spend over 50% of their income on housing. Over 97% of cities and counties haven’t produced enough affordable housing, and existing strategies to address the lack of affordable housing have not been nearly enough to meet demand. Affordable housing relies on government subsidies, and there is significantly more demand for them than supply. Social housing is an important tool to ensure housing is affordable to people of all income levels. Social housing is publicly backed, self-sustaining housing that accommodates a mix of household income ranges. Housing is protected from being sold to a private for-profit entity for the duration of its life, and residents are granted the same protections as tenants in private property, if not more. Many countries throughout the world have successful social housing programs, and in the US, there are social housing developments such as in Montgomery County, Maryland using a similar model. Social Housing is how we provide and realize housing as a human right.”
2. Creation of the California Housing Authority (CHA). This bill proposes to establish the CHA as a new, independent entity within state government to develop social housing, which is defined as mixed-income rental and ownership housing that is publicly owned and permanently affordable. The CHA’s mission would be to close the gap between a jurisdiction’s current level of housing production and their RHNA amount while maintaining revenue neutrality. The CHA would be governed by a nine-member board consisting of: three resident representatives living in CHA accommodations, a housing development and finance expert, a housing construction expert, a property maintenance expert, an appointee of the Speaker of the Assembly, an appointee of the Senate Committee on Rules, and an appointee of the Governor. Decisions would be made by majority vote of the board, and the board would have the authority to appoint a board chair and an executive officer.
3. Development of CHA housing. This bill specifies that the CHA could build residential housing to make up the difference between a jurisdiction’s RHNA and the actual amount of housing built. These calculations would be made annually using each local government’s annual progress report (APR) data beginning on January 1, 2029. Development would be prioritized on vacant parcels, surplus public properties, and parcels near transit, though the bill does not indicate a particular distance from transit or the frequency of transit service that would be required for a parcel to be considered “near transit.” Additionally, underutilized parcels (i.e., those containing fewer than the maximum number of allowable units per the jurisdiction’s zoning) would be prioritized for CHA developments so long as they do not contain rent controlled units or deed-restricted affordable housing.

This bill requires the CHA to seek input from the local government about certain aspects of a proposed development, including the number of units and the timeline for completing the project. When the CHA has multiple potential sites for development in a jurisdiction, it would be required to defer to the local government on their preferred site if property acquisition costs and amenities are generally similar and if the site would allow the local government to meet its RHNA targets.

CHA housing developments are required to be mixed-income housing developments, though the specific mix is not spelled out in the bill and there is no intent language indicating minimum proportions of affordable units nor the depth of affordability. The CHA also has the ability to develop mixed-use buildings with commercial space.

California law already defines “social housing” (see Existing Law #1, above). This bill would expand social housing to also include above moderate-income households.

1. Policies governing residency in CHA-built housing. In CHA-built developments, individuals could either rent or purchase a unit through an ownership model, and the CHA unit would need to be the person’s sole residence unless they fall into the above-moderate income category. In the ownership model, CHA provides the resident a 99-year lease and they would need to commit to a minimum of five years of residency in the CHA building. The ownership model requires a down payment of 15% of the purchase price. When a resident in the ownership model wishes to sell their unit, the CHA would have first right of refusal to purchase the unit. If the CHA declines to repurchase the unit then it can be resold to a qualified buyer in a manner that allows the resident to have a reasonable return on investment. The bill states that ownership units would be sold for the original purchase price plus documented capital improvements and an adjustment for inflation.

Renters in CHA units would be required to commit to a year of residency, though exceptions would be allowed in some cases such as illness or employment changes. Renters living in CHA-owned properties are provided tenant protections, including protection against termination of tenancy without just cause. Additionally, the bill specifies that each multifamily social housing development produced by the CHA will have a resident governance council elected by residents of the housing complex. Governance councils will host regular meetings, interact with property management, handle budgeting for development, and represent the community at biannual meetings with the CHA board. Though the bill specifies that the governance council is to be made up of no more than 10% of the overall population for development, it is unclear if this is per unit or per resident. In a 20-unit building with only one individual per unit, there would be only two members on the council, which would pose an issue for any decisions that the two members disagree on.

1. Putting the cart before the horse. As noted in the “Background” section above, in 2023, the Governor signed SB 555 (Wahab, Chapter 402), which requires HCD to complete a California Social Housing Study and present the findings to the Legislature by December 31, 2026. Below is a chart comparing the statutory provisions in SB 555 and the contents of the study for consideration by the legislature.

Given this bill would implement policies and structures for social housing merely six months prior to receiving the recommendations in the study, the committee may wish to consider waiting to move this bill forward.

6) Anti-displacement and anti-demolition protections. This bill authorizes a developer of a mixed income project to demolish existing units, including deed restricted affordable housing, rent and price controlled units, or units rented to low-income tenants in the last 5 years. The bill also requires a developer to replace those units with a greater number of affordable units by income level, and requires the authority to provide temporary relocation costs. The bill does not make clear which entity has oversight over these requirements, nor are there requirements for advance notice of demolition, for the unit offered to a displaced tenant to be of comparable size and rent to their existing demolished unit.

In response to the housing crisis, the Legislature enacted the Housing Crisis Act of 2019 (HCA) (SB 330 (Skinner, Chapter 654, Statutes of 2019) and subsequent amendments to the Act that, among other things, extended its sunset to January 1, 2030 (SB 8 (Skinner, Chapter 161, Statutes of 2021)). The HCA prohibits local governments from reducing the capacity for housing development within their jurisdictions and includes demolition protections designed to ensure that there is no net reduction of housing in the state, especially affordable housing.

Under the HCA, a local government may not approve the demolition of existing housing unless the project creates at least as many new units as the existing project, and cannot demolish affordable housing units protected by law unless the project replaces the units and allows existing residents to occupy their units until six months before construction starts. The developer must also provide relocation assistance and a right of first refusal to the residents in the new development at affordable rates. The HCA details that replaced units must be comparable to demolished units with regards to number of bedrooms and affordable rents.

In lieu of the provisions in this bill, the committee may wish to instead utilize anti-displacement and relocation assistance provisions in the HCA, and prohibit the demolition of housing units that are deed restricted affordable, housing that is subject to any form of rent or price control, or housing that was occupied by tenants in the last 10 years.

1. Show me the money. This bill includes provisions stating that the CHA shall seek to achieve “revenue neutrality” over the long-term. Separate provisions of the bill, however, contemplate the issuance of general obligation bonds to pay for the activities of the authority, as well as revenue bonds to pay for the housing development projects. In California, mixed-income project developers may utilize existing development benefits, including density bonus law, streamlined ministerial approval processes, and upzoning measures to make the inclusion of affordable housing units “pencil-out.” Developing housing that is affordable to very low- and low-income families almost always requires some amount of public investment. The high cost of land and construction, as well as regulatory barriers, in California generally makes it economically impossible to build new housing that can be sold or rented at prices affordable to such households. The private sector sometimes provides financial subsidies or land donations mandatorily through inclusionary zoning policies or voluntarily through density bonus ordinances, described below. In most cases, however, some amount of public financial subsidy is needed from federal, state, and/or local governments.

The state has taken action to spur housing development in the last few years, including: increasing the amount of land on which housing can be built within existing cities by directly making multifamily housing types legal in more places, requiring local governments to increase development capacity via the Regional Housing Needs Allocation (RHNA) process; expediting and simplifying the local housing approval process at the pre-entitlement, entitlement, and postentitlement phases; creating multiple pathways for by-right approvals for multifamily housing projects, ADUs, deed-restricted affordable housing, and market-rate housing; authorizing housing to be developed in non-residential areas and for greater densities near transit stops; and reforming DBL. These reforms have resulted in greater certainty and shortened approval timelines and more housing project types, which also significantly reduces overall costs of development. This has also given developers greater certainty and ability to seek approvals in traditionally exclusive jurisdictions.

Public subsidy is often required to fill the financial gap on affordable units. For example, density bonus law (DBL) requires public entities to reduce or even eliminate local requirements for a projects that include affordable units, if the waiver or concession of standards would increase financial feasibility of the project and allow a developer to include more total units in a project than would otherwise be allowed by the local zoning. Allowing more total units permits the developer to spread the cost of the affordable units more broadly over the market-rate units. The specific goal of DBL is to cover the financing gap of affordable housing with regulatory incentives, rather than additional financial subsidy.

According to the Assembly Appropriations Committee analysis, in addition to tens of millions of dollars required to stand up and run a new agency, the estimated capital costs of implementing this bill are unknown, but are “likely in the low billions of dollars (GF and bond funds) for the construction and development of social housing units.  This bill states legislative intent to issue GO bonds to finance the activities of the CHA, but no timeframe or dollar amount is indicated.”

The committee may wish to consider the precedent this bill would establish and whether limited public resources should be used to subsidize market rate units when affordable housing programs that serve lower-income and homeless families – Multifamily Housing Program, CalHome, Joe Serna Farmworker Housing Program – are not adequately funded or have no funding.

9) If at first you don’t succeed… This is the author’s fourth attempt to establish a social housing process for mixed income housing at the state level. In 2023, AB 309 (Lee) reached the Governor’s desk, but was vetoed.

10) Opposition. Public Advocates, California Community Land Trust Network, Housing Now, and Policy Link are opposed unless this bill is “amended to conform with SB 555 (Wahab) and to ensure that the bill will produce below-market affordable units in proportion to the unmet need.” This coalition requests that this bill be amended to match the definition of “social housing” in SB 555 and to tie the affordability of the units produced by the CHA to be proportional to the gaps in housing at each income level.” Several cities wrote in to express concerns about the CHA overriding local ability to weigh in on the approval of social housing projects and concerns that this program would undermine the housing element planning process.

11) Double-referral. This bill was also referred to the Committee on Governmental Organization.

Related/Prior Legislation

AB 2281 (Lee, 2024) — would have enacted the Social Housing Act and established the CHA for the purposes of developing mixed-income social housing. This bill was held in Assembly Appropriations Committee.

AB 309 (Lee, 2023) — would have created the Social Housing Program within the Department of General Services (DGS) to identify and develop up to three social housing projects on state-owned surplus land deemed suitable for housing, as specified. This bill was vetoed by the Governor.

I am returning Assembly Bill 309 without my signature.

This bill would create the Social Housing Program in the Department of General Services (DGS). The program would identify and produce three social housing projects on excess state-owned property through development or acquisition. This bill infringes on state sovereignty over state-owned real property by establishing a new process for local government review of state projects authorized under the bill and could potentially cost the state several hundred million dollars in capital expenditures.

State-owned sites identified as suitable for housing development already are being developed as affordable housing through the State Excess Sites program. This program, instituted through Executive Order (EO) N-06-19 and further codified through AB 2233 (Quirk-Silva, Chapter 438, Statutes of 2022) and SB 561 (Dodd, Chapter 446, Statutes of 2022), has already awarded state land for 17 residential or mixed-use projects with significant affordable housing components.

While I appreciate the author's commitment to build more affordable housing in the state, this bill creates new additional cost pressures and must be considered in the annual budget in the context of all state funding priorities.

In partnership with the Legislature, we enacted a budget that closed a shortfall of more than $30 billion through balanced solutions that avoided deep program cuts and protected education, health care, climate, public safety, and social service programs that are relied on by millions of Californians. This year, however, the Legislature sent me bills outside of this budget process that, if all enacted, would add nearly $19 billion of unaccounted costs in the budget, of which $11 billion would be ongoing.

With our state facing continuing economic risk and revenue uncertainty, it is important to remain disciplined when considering bills with significant fiscal implications, such as this measure. For these reasons, I cannot sign this bill.

SB 555 (Wahab, Chapter 402, Statutes of 2023) — requires HCD, no later than December 31, 2026, to develop, adopt, and submit to the Legislature a Social Housing Study for achieving the social housing unit goals

AB 2053 (Lee, 2022) — would have established the California Housing Authority (CHA) for the purposes of developing mixed-income social housing. This bill failed passage in the Senate Governance and Finance Committee.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

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

June 24, 2026.)

SUPPORT:

Aids Healthcare Foundation
California School Employees Association
CDP Rural Caucus
CFT- a Union of Educators & Classified Professionals, AFT, AFL-CIO
City of Alameda
Culver City Democratic Club
Democrats of Rossmoor
Fremont for Everyone
Santa Clara Valley Water District

OPPOSITION:

California Community Land Trust Network

City of Camarillo

City of Lomita

City of Thousand Oaks

City of Yorba Linda

Fieldstead and Company, INC.

Housing Now!

League of California Cities

New Livable California Dba Livable California

Orange County Council of Governments

Policylink

Public Advocates

-- END --

1. https://www.assembly.ca.gov/media/assembly-select-committee-social-housing-20211020/video ↑

SENATE COMMITTEE ON HOUSING

Senator Aisha Wahab, Chair

2025 - 2026 Regular

Bill No: AB 11 Hearing Date: July 1, 2025

SUBJECT: The Social Housing Act

DIGEST: This bill establishes the California Housing Authority (CHA) for the purposes of developing mixed-income social housing.

ANALYSIS:

Existing law:

1. Defines “social housing” as housing that meets all of the following requirements:
   1. The housing units are owned and managed by a public agency, a local authority, a limited-equity housing cooperative, or a mission-driven nonprofit entity solely for the benefit of residents and households unable to afford market rent.
   2. Each social housing development contains housing units that accommodate a mix of household income ranges, including extremely low- (ELI), very low- (VLI), low- (LI), and moderate-income households unable to afford market rent.
   3. Residents of the housing units enjoy full protection against termination without just cause or for any discriminatory, retaliatory, or other arbitrary reason, and shall be afforded due process prior to being subject to eviction procedures.
   4. The housing units are protected for the duration of their useful life, and the land associated with the housing units is protected permanently, from being sold or transferred to any private person or for-profit entity or a public-private partnership.
   5. Residents have the right to participate directly and meaningfully in decision-making affecting the operation and management of the housing units in which they reside.
2. Defines “social housing development” as both newly constructed units of social housing and market units or other housing units preserved or rehabilitated as social housing.
3. Requires the Department of Housing and Community Development (HCD), no later than December 31, 2026, to complete a California Social Housing Study. The study shall consist of a comprehensive analysis of the opportunities, resources, obstacles, and recommendations for the creation of affordable and social housing at scale, to assist in meeting the need identified in the statewide projections for below market rate housing affordable to households with ELI, VLI, LI, and moderate-incomes in the sixth Regional Housing Needs Assessment cycle.
4. Prohibits, pursuant to the Housing Crisis Act of 2019, specified cities and counties from approving a housing development project that will require the demolition of residential units unless the project will create at least as many units as demolished (i.e., no net loss in housing units). A project shall not be approved if it will demolish protected units, unless all of the following apply:

• 1. The project will replace all existing or demolished protected units.
  2. Any existing tenants will be allowed to occupy their unit until six months before the start of construction activities with proper notice.
  3. The developer agrees to provide both of the following to the occupants of any protected units:
     1. Relocation benefits.
     2. A right of first refusal for a comparable unit available in the new housing development affordable to the household at an affordable rent or an affordable cost.

This bill:

1. Creates the CHA as an independent state entity with the mission of producing and acquiring social housing for all California residents, eliminating the gap between housing production and regional housing needs assessment targets, and preserving affordable housing.
2. Defines “social housing” to mean housing with the following characteristics:
   1. Units are owned by a public entity such as CHA, another public entity, or a housing authority;
   2. All social housing developed by CHA must be owned by CHA;
   3. If a housing unit is in a social housing development, the development contains housing units that accommodate a specified mix of household income ranges;
   4. Units that are owned and managed by a mission-driven not-for-profit private entity must be permanently restricted by deed to be affordable;
   5. Residents of CHA units are given, at a minimum, all protections granted to tenants in private property, as specified, but may be evicted for breaking community standards and for non-payment of rent lasting more than one month;
   6. The housing units must be protected for the duration of their useful life from being sold or transferred to a private for-profit entity to prevent the privatization of social housing; and
   7. Residents of the housing units have the right to participate directly and meaningfully in decision making affecting the operation and management of their housing units.
3. Defines the following terms:
   1. “Revenue neutrality” means a system in which all monetary expenditures that result from the development and operation of CHA units are returned through rents, payments on leasehold mortgages, or other specified subsidies;
   2. “Rent and mortgage cross-subsidization” means a system in which the below-cost rents and leasehold mortgages of certain units are balanced by above-cost payments on others within the same multiunit property;
   3. “Cost rent” means a system in which the rent of a dwelling is calculated on the cost of providing for and maintaining the dwelling, only allowing for limited or no profits;
   4. “Limited equity arrangement” means an ownership model in which residents are extended a long-term lease, take out a subsidized leasehold mortgage from the CHA, make monthly mortgage payments, and commit to resell at a price designed to balance ongoing affordability and resident wealth generation;
   5. “Regional housing needs assessment” or “RHNA” means a representation of housing needs for all income levels as specified;
   6. “Underutilized parcel” means a parcel of property which contains fewer units than the maximum number of units permissible under local zoning regulations;
   7. “Multifamily property” means a revenue-neutral collection of units featuring units dedicated to a range of affordability levels from ELI to above-moderate income. It may be a single building, multiple buildings on the same or adjacent parcels, or multiple buildings across several blocks within a single jurisdiction, or may be defined by the CHA; and
4. Specifies income definitions for the following categories, consistent with existing law: ELI, VLI, LI, moderate-income, and above moderate-income.
5. Provides that CHA has various powers, including the ability to:
   1. Sue and be sued;
   2. Have a seal and alter the seal at its pleasure;
   3. Make and execute contracts and other instruments;
   4. Make rules with respect to its projects, operations, properties, and facilities;
   5. Through its executive officer, appoint specified personnel and set various policies;
   6. Acquire, by grant or purchase, property or any interest therein and own, hold, clear, improve, rehabilitate, sell, assign, exchange, lease, or otherwise dispose of or encumber it;
   7. Enter into development partnerships with municipalities, joint powers of authority, and other public and private entities in order to further its social housing development goals;
   8. Arrange for the planning, opening, grading, or closing of roads or other places, for the furnishing of facilities, or for the furnishing of property or services in connection with a project;
   9. Prepare project plans for any project, and from time to time modify those plans;
   10. Provide advisory, consultative, training, and educational services, technical assistance, and related work as specified;
   11. Accept funding in any form from any source; and
   12. Call upon the Attorney General for legal services as it may require.
6. Requires the CHA to submit an annual business plan to the Governor and the Legislature which must be made available for public comment at least 60 days before publication.
7. Specifies that the CHA board will consist of nine members who will elect a chair and make decisions by majority vote. The board membership will be as follows:
   1. An expert in housing development and finance;
   2. An expert in housing construction;
   3. An expert in property maintenance;
   4. An appointee of the Speaker of the Assembly;
   5. An appointee of the Senate Committee on Rules;
   6. An appointee of the Governor; and
   7. Three representatives of CHA residents, to be appointed initially by specified entities. Following the occupancy of CHA units, resident representatives are to be elected annually according to specified procedures.
8. Tasks the CHA board with the following duties:
   1. Establish a strategy to eliminate the gap between housing production and acquisition and RHNA targets, set objective and performance targets to this goal, and monitor CHA’s success in achieving the targets;
   2. The ability to hire, fire, and monitor performance of an executive officer;
   3. Approving the annual budget prepared by the executive officer;
   4. Integrating risk management into the authority’s strategic planning process and notifying the Governor and the Legislature of specified risks facing CHA;
   5. Adopting and amending regulations, including on resident board elections; and
   6. Holding biannual meetings with resident governance councils.
9. Provides that each CHA-owned multifamily social housing development must form a governance council with specified powers and responsibilities.
10. Requires that the CHA seek to achieve revenue neutrality over the long term and must seek to recuperate the cost of development and operations over the life of its properties through rent cross-subsidization or cost rent.
11. States that the CHA must prioritize development on vacant parcels, certain underutilized parcels without deed-restricted or rent-controlled units, surplus public properties, and parcels near transit.
12. Specifies that if the development requires rehabilitation or demolition of covenanted affordable units, the new development must include a greater number of affordable units.
13. Requires that each multi-unit property must include a variety of mixed income units.
14. Provides that if the development of a property requires the removal of residents, the CHA must cover certain relocation costs and provide displaced residents with the right to live in the new CHA property at their previous rent for one year, or the CHA rent, whichever is lower.
15. Specifies that the CHA will make an annual determination of the required amount of social housing units to be produced as follows:
    1. Annual RHNA targets will be calculated as the total RHNA cycle targets for each jurisdiction divided by the length of the RHNA cycle;
    2. On or before January 1, 2028, and each year thereafter, the CHA will determine the gap between the previous year’s RHNA and actual housing construction; and
    3. Within a given year, the CHA may construct at least the number of units to meet the gap between the previous year’s construction of units and the RHNA targets.
16. Specifies that, in creating housing, the authority shall employ two different leasing models, the rental model and the ownership model, as specified.
17. Provides that, under the CHA rental model, one-year leases will be used, barring extraordinary circumstances.
18. Puts forth the following requirements for CHA ownership units:
    1. The CHA will extend a 99-year limited equity arrangement lease to individuals who commit to five years of residence. After five years, residents can sell the unit, though the CHA will have first right of refusal to purchase. If the CHA does not purchase then it may be sold to an eligible buyer subject to requirements established by the CHA which give the seller a reasonable return on investment;
    2. Upon the death of the owner, the unit may be transferred to the deceased’s heir by device or as any other real property may pass. If a transferee is not eligible to be a resident, the transferee shall sell the unit to the CHA;
    3. The CHA must strive to ensure that residents pay no more than 30% of income for housing and rent adjustments will be applied annually in a way that does not discourage increased earnings. If resident income changes, the property manager will rent to an appropriate income household;
    4. Residents will pay a 15% down payment, with the purchase price set to be affordable for the purchasing household; and
    5. Properties will be sold at the price for which the owner purchased the property, plus documented capital improvements, and adjusted for inflation.
19. Puts forth the following requirements for CHA residency and occupancy and specifies penalties for failure to abide by them:
    1. Unless an above-moderate income unit, it must be the resident’s sole residence;
    2. The applicant must be living or working in California at the time of their application, subject to specified rules;
    3. Allows an applicant with a prior criminal record to reside in CHA units unless there is evidence of a clear and manifest danger to the development or its residents;
    4. Allows the CHA or the applicable governance council to allow subleasing of units;
    5. Permits a resident to terminate their residency due to specified reasons including job relocation, change in household structure, and serious illness; and
    6. Specifies that, with the exception of those displaced during construction, resident selection is by a lottery stratified by income category.
20. Provides that the CHA can conduct ground-up construction and rehabilitation of existing structures and may dedicate space to commercial use with leases to qualifying entities.
21. Specifies that, when appropriate, the state shall gift public lands to the CHA, though the CHA can also purchase land from other entities.
22. States that the CHA must accept a local government’s preference on project location if certain conditions, including cost and community amenity access, are met. Also directs the CHA to seek input from the jurisdiction’s governing body related to specific site development, height, number of units, and development timeline.
23. Specifies that CHA activities must be conducted with a goal of revenue neutrality, establishes the Social Housing Revolving Loan Fund within the State Treasury to provide zero-interest loans for mixed-income housing, and further states that it is the intent of the Legislature to enact legislation to provide financing for the activities of the authority through the issuance of general obligations bonds.

Background

Social Housing. Outside of California, there is no widely shared consensus on how to define social housing. Generally, definitions of social housing distinguish it in various ways from privately-owned, for-profit housing provided through market mechanisms. The Assembly Select Committee on Social Housing held an informational hearing on October 20, 2021 and Rob Weiner from the California Coalition for Rural Housing shared the Organization for Economic Cooperation and Development (OECD) definition of social housing as “the stock of residential rental accommodations provided at sub-market prices and allocated according to specific rules rather than according to market mechanisms.”^[1] Under this definition, there are an estimated 480,000 subsidized housing units available for rent in California, or about 3.5% of the state’s housing stock. These deed-restricted affordable rental units are generally built using a mix of public and private financing and residency is restricted to low-income households that make no more than 80% of county area median income (AMI). Other versions of social housing specify permanent affordability requirements and ownership by the government or a non-profit entity. Most of California’s deed-restricted affordable housing is not publicly owned and the length of affordability requirements varies, though permanent affordability is not required in most cases.

Another variation of social housing involves making accommodations available to all individuals regardless of their household income. In particular, Vienna, Austria is often held up as an example of a large city with widespread mixed-income social housing—an estimated 40% of the city’s housing stock is social housing. In the Viennese model, higher income households pay market rate rents which then subsidize the below market rents for lower-income households. This mechanism is referred to as “cross-subsidization” and it is the same logic that underlies California’s density bonus law, a policy that allows residential developers to receive added density and other concessions and incentives from a local government in exchange for building a certain percentage of affordable units.

In California, “social housing” is defined in statute as a housing development that includes: (1) housing units owned and managed by a public agency, a local authority, a limited-equity housing cooperative, or a mission-driven nonprofit entity solely for the benefit of residents and households unable to afford market rent; (2) housing developments that contains housing units that accommodate a mix of household income ranges, including ELI, VLI, LI, and moderate-income households unable to afford market rent; (3) residents of the housing units enjoy full protection against termination without just cause or for any discriminatory, retaliatory, or other arbitrary reason, and shall be afforded due process prior to being subject to eviction procedures; (4) housing units are protected for the duration of their useful life, and the land associated with the housing units is protected permanently, from being sold or transferred to any private person or for-profit entity or a public-private partnership, and (5) residents have the right to participate directly and meaningfully in decision-making affecting the operation and management of the housing units in which they reside.

SB 555 (Wahab, Chapter 402, Statutes of 2023) required HCD to complete a California Social Housing Study and present the findings to the Legislature by December 31, 2026. The study must consist of a comprehensive analysis of the opportunities, resources, obstacles, and recommendations for the creation of affordable and social housing at scale, to assist in meeting the need identified in the statewide projections for below market rate housing affordable to households with low- and moderate-incomes in the sixth Regional Housing Needs Assessment cycle. HCD has been working on that study to meet the statutory deadline.

Comments

1. Author’s statement. “Housing is too expensive for millions of Californians. More than two in five households are considered rent burdened and spend over 30% of their income on housing, and more than one in five households spend over 50% of their income on housing. Over 97% of cities and counties haven’t produced enough affordable housing, and existing strategies to address the lack of affordable housing have not been nearly enough to meet demand. Affordable housing relies on government subsidies, and there is significantly more demand for them than supply. Social housing is an important tool to ensure housing is affordable to people of all income levels. Social housing is publicly backed, self-sustaining housing that accommodates a mix of household income ranges. Housing is protected from being sold to a private for-profit entity for the duration of its life, and residents are granted the same protections as tenants in private property, if not more. Many countries throughout the world have successful social housing programs, and in the US, there are social housing developments such as in Montgomery County, Maryland using a similar model. Social Housing is how we provide and realize housing as a human right.”
2. Creation of the California Housing Authority (CHA). This bill proposes to establish the CHA as a new, independent entity within state government to develop social housing, which is defined as mixed-income rental and ownership housing that is publicly owned and permanently affordable. The CHA’s mission would be to close the gap between a jurisdiction’s current level of housing production and their RHNA amount while maintaining revenue neutrality. The CHA would be governed by a nine-member board consisting of: three resident representatives living in CHA accommodations, a housing development and finance expert, a housing construction expert, a property maintenance expert, an appointee of the Speaker of the Assembly, an appointee of the Senate Committee on Rules, and an appointee of the Governor. Decisions would be made by majority vote of the board, and the board would have the authority to appoint a board chair and an executive officer.
3. Development of CHA housing. This bill specifies that the CHA could build residential housing to make up the difference between a jurisdiction’s RHNA and the actual amount of housing built. These calculations would be made annually using each local government’s annual progress report (APR) data beginning on January 1, 2029. Development would be prioritized on vacant parcels, surplus public properties, and parcels near transit, though the bill does not indicate a particular distance from transit or the frequency of transit service that would be required for a parcel to be considered “near transit.” Additionally, underutilized parcels (i.e., those containing fewer than the maximum number of allowable units per the jurisdiction’s zoning) would be prioritized for CHA developments so long as they do not contain rent controlled units or deed-restricted affordable housing.

This bill requires the CHA to seek input from the local government about certain aspects of a proposed development, including the number of units and the timeline for completing the project. When the CHA has multiple potential sites for development in a jurisdiction, it would be required to defer to the local government on their preferred site if property acquisition costs and amenities are generally similar and if the site would allow the local government to meet its RHNA targets.

CHA housing developments are required to be mixed-income housing developments, though the specific mix is not spelled out in the bill and there is no intent language indicating minimum proportions of affordable units nor the depth of affordability. The CHA also has the ability to develop mixed-use buildings with commercial space.

California law already defines “social housing” (see Existing Law #1, above). The committee may wish to consider replacing the definition of “social housing” in this bill with the one in existing law and that is currently being implemented by HCD.

1. Policies governing residency in CHA-built housing. In CHA-built developments, individuals could either rent or purchase a unit through an ownership model, and the CHA unit would need to be the person’s sole residence unless they fall into the above-moderate income category. In the ownership model, CHA provides the resident a 99-year lease and they would need to commit to a minimum of five years of residency in the CHA building. The ownership model requires a down payment of 15% of the purchase price. When a resident in the ownership model wishes to sell their unit, the CHA would have first right of refusal to purchase the unit. If the CHA declines to repurchase the unit then it can be resold to a qualified buyer in a manner that allows the resident to have a reasonable return on investment. The bill states that ownership units would be sold for the original purchase price plus documented capital improvements and an adjustment for inflation.

Renters in CHA units would be required to commit to a year of residency, though exceptions would be allowed in some cases such as illness or employment changes. Renters living in CHA-owned properties are provided tenant protections, including protection against termination of tenancy without just cause. Additionally, the bill specifies that each multifamily social housing development produced by the CHA will have a resident governance council elected by residents of the housing complex. Governance councils will host regular meetings, interact with property management, handle budgeting for development, and represent the community at biannual meetings with the CHA board. Though the bill specifies that the governance council is to be made up of no more than 10% of the overall population for development, it is unclear if this is per unit or per resident. In a 20-unit building with only one individual per unit, there would be only two members on the council, which would pose an issue for any decisions that the two members disagree on.

5) Putting the cart before the horse. As noted in the “Background” section above, in 2023, the Governor signed SB 555 (Wahab, Chapter 402), which requires HCD to complete a California Social Housing Study and present the findings to the Legislature by December 31, 2026. The committee may wish to consider waiting to make policy decisions before receiving the recommendations from HCD. Alternatively, the committee may wish to consider requiring that the CHA may only got into effect, upon appropriation by the Legislature to establish the CHA, provided the agency’s structure and powers are consistent with the recommendations by HCD.

6) Anti-displacement and anti-demolition protections. This bill authorizes a developer of a mixed income project to demolish existing units, including deed restricted affordable housing, rent and price controlled units, or units rented to low-income tenants in the last 5 years. The bill also requires a developer to replace those units with a greater number of affordable units by income level, and requires the authority to provide temporary relocation costs. The bill does not make clear which entity has oversight over these requirements, nor are there requirements for advance notice of demolition, for the unit offered to a displaced tenant to be of comparable size and rent to their existing demolished unit.

In response to the housing crisis, the Legislature enacted the Housing Crisis Act of 2019 (HCA) (SB 330 (Skinner, Chapter 654, Statutes of 2019) and subsequent amendments to the Act that, among other things, extended its sunset to January 1, 2030 (SB 8 (Skinner, Chapter 161, Statutes of 2021)). The HCA prohibits local governments from reducing the capacity for housing development within their jurisdictions and includes demolition protections designed to ensure that there is no net reduction of housing in the state, especially affordable housing.

Under the HCA, a local government may not approve the demolition of existing housing unless the project creates at least as many new units as the existing project, and cannot demolish affordable housing units protected by law unless the project replaces the units and allows existing residents to occupy their units until six months before construction starts. The developer must also provide relocation assistance and a right of first refusal to the residents in the new development at affordable rates. The HCA details that replaced units must be comparable to demolished units with regards to number of bedrooms and affordable rents.

In lieu of the provisions in this bill intended to replace demolished housing, the committee may wish to instead require the anti-displacement and relocation assistance provisions in the HCA, and prohibit the demolition of housing units that are deed restricted affordable, housing that is subject to any form of rent or price control, or housing that was occupied by tenants in the last 10 years.

7) Show me the money. This bill includes provisions stating that the CHA shall seek to achieve “revenue neutrality” over the long-term. Separate provisions of the bill, however, contemplate the issuance of general obligation bonds to pay for the activities of the authority, as well as revenue bonds to pay for the housing development projects. In California, mixed-income project developers may utilize existing benefits, including density bonus law and streamlined ministerial approval processes, to make the inclusion of affordable housing units “pencil-out.” Developing housing that is affordable to very low- and low-income families almost always requires some amount of public investment. The high cost of land and construction, as well as regulatory barriers, in California generally makes it economically impossible to build new housing that can be sold or rented at prices affordable to such households. The private sector sometimes provides financial subsidies or land donations mandatorily through inclusionary zoning policies or voluntarily through density bonus ordinances, described below. In most cases, however, some amount of public financial subsidy is needed from federal, state, and/or local governments. Given the high demand for more funding for existing successful affordable housing and homelessness programs operated at the state level, the committee may wish to consider the strain that implementing this new program would have on already limited resources to instead pay for mixed-income housing projects, when state funds could be instead used for 100% affordable housing projects.

According to the Assembly Appropriations Committee analysis, in addition to tens of millions of dollars required to stand up and run a new agency, the estimated capital costs of implementing this bill are unknown, but are “likely in the low billions of dollars (GF and bond funds) for the construction and development of social housing units.  This bill states legislative intent to issue GO bonds to finance the activities of the CHA, but no timeframe or dollar amount is indicated. In addition, the Legislature lacks the ability to issue GO bonds without voter approval and, thus, subsequent legislation would be needed to put a GO bond measure before the voters.”

As noted by the Governor’s veto message of a prior similar bill, the committee may wish to consider whether consideration of this bill is more appropriate in the budget (see veto message below in “Related/Prior Legislation”). Given that social housing is defined in state law to apply to low- and moderate-income households, the committee may also wish to consider whether revenue neutrality provisions should be removed.

9) If at first you don’t succeed… This is the author’s fourth attempt to establish a social housing process for mixed income housing at the state level. In 2023, AB 309 (Lee) reached the Governor’s desk, but was vetoed.

10) Opposition. Public Advocates, California Community Land Trust Network, Housing Now, and Policy Link are opposed unless this bill is “amended to conform with SB 555 (Wahab) and to ensure that the bill will produce below-market affordable units in proportion to the unmet need.” This coalition requests that this bill be amended to match the definition of “social housing” in SB 555 and to tie the affordability of the units produced by the CHA to be proportional to the gaps in housing at each income level.” Several cities wrote in to express concerns about the CHA overriding local ability to weigh in on the approval of social housing projects and concerns that this program would undermine the housing element planning process.

11) Double-referral. This bill was also referred to the Committee on Governmental Organization.

Related/Prior Legislation

AB 2281 (Lee, 2024) — would have enacted the Social Housing Act and established the CHA for the purposes of developing mixed-income social housing. This bill was held in Assembly Appropriations Committee.

AB 309 (Lee, 2023) — would have created the Social Housing Program within the Department of General Services (DGS) to identify and develop up to three social housing projects on state-owned surplus land deemed suitable for housing, as specified. This bill was vetoed by the Governor.

I am returning Assembly Bill 309 without my signature.

This bill would create the Social Housing Program in the Department of General Services (DGS). The program would identify and produce three social housing projects on excess state-owned property through development or acquisition. This bill infringes on state sovereignty over state-owned real property by establishing a new process for local government review of state projects authorized under the bill and could potentially cost the state several hundred million dollars in capital expenditures.

State-owned sites identified as suitable for housing development already are being developed as affordable housing through the State Excess Sites program. This program, instituted through Executive Order (EO) N-06-19 and further codified through AB 2233 (Quirk-Silva, Chapter 438, Statutes of 2022) and SB 561 (Dodd, Chapter 446, Statutes of 2022), has already awarded state land for 17 residential or mixed-use projects with significant affordable housing components.

While I appreciate the author's commitment to build more affordable housing in the state, this bill creates new additional cost pressures and must be considered in the annual budget in the context of all state funding priorities.

In partnership with the Legislature, we enacted a budget that closed a shortfall of more than $30 billion through balanced solutions that avoided deep program cuts and protected education, health care, climate, public safety, and social service programs that are relied on by millions of Californians. This year, however, the Legislature sent me bills outside of this budget process that, if all enacted, would add nearly $19 billion of unaccounted costs in the budget, of which $11 billion would be ongoing.

With our state facing continuing economic risk and revenue uncertainty, it is important to remain disciplined when considering bills with significant fiscal implications, such as this measure. For these reasons, I cannot sign this bill.

SB 555 (Wahab, Chapter 402, Statutes of 2023) — requires HCD, no later than December 31, 2026, to develop, adopt, and submit to the Legislature a Social Housing Study for achieving the social housing unit goals

AB 2053 (Lee, 2022) — would have established the California Housing Authority (CHA) for the purposes of developing mixed-income social housing. This bill failed passage in the Senate Governance and Finance Committee.

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

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

June 25, 2025.)

SUPPORT:

Aids Healthcare Foundation

CDP Rural Caucus

CFT- a Union of Educators & Classified Professionals, AFT, AFL-CIO

City of Alameda

Culver City Democratic Club

Democrats of Rossmoor

Fremont for Everyone

OPPOSITION:

California Community Land Trust Network

City of Camarillo

City of Thousand Oaks

City of Yorba Linda

Housing Now!

Orange County Council of Governments

Policylink

Public Advocates

-- END --

1. https://www.assembly.ca.gov/media/assembly-select-committee-social-housing-20211020/video ↑

ASSEMBLY THIRD READING

ATR Bill Id:AB 11

Author:(Lee)

As Introduced Ver:December 2, 2024

Majority vote

SUMMARY

Establishes the California Housing Authority (CHA) for the purposes of developing mixed-income social housing.

Major Provisions

1. Creates the CHA as an independent state entity with the mission of producing and acquiring social housing for all California residents, eliminating the gap between housing production and regional housing needs assessment targets, and preserving affordable housing.
2. Defines "social housing" to mean housing with the following characteristics:
   1. Units are owned by a public entity such as the CHA, a public entity, or a housing authority;
   2. All social housing developed by the authority must be owned by the authority;
   3. If a housing unit is in a social housing development, the development contains housing units that accommodate a specified mix of household income ranges;
   4. Units that are owned and managed by a mission-driven not-for-profit private entity must be permanently restricted by deed to be affordable;
   5. Residents of CHA units are given, at a minimum, all protections granted to tenants in private property, as specified, but may be evicted for breaking community standards and for non-payment of rent lasting more than one month;
   6. The housing units must be protected for the duration of their useful life from being sold or transferred to a private for-profit entity to prevent the privatization of social housing; and
   7. Residents of the housing units have the right to participate directly and meaningfully in decision making affecting the operation and management of their housing units.
3. Provides that CHA has various powers.
4. Specifies that the CHA board will consist of nine members who will elect a chair and make decisions by majority vote.
5. Requires that the CHA seek to achieve revenue neutrality over the long term and must seek to recuperate the cost of development and operations over the life of its properties through rent cross-subsidization or cost rent.
6. States that the CHA must prioritize development on vacant parcels, certain underutilized parcels without deed-restricted or rent-controlled units, surplus public properties, and parcels near transit.
7. Specifies that if the development requires rehabilitation or demolition of covenanted affordable units, the new development must include a greater number of affordable units.
8. Requires that each multi-unit property must include a variety of mixed income units.
9. Provides that if the development of a property requires the removal of residents, the CHA must cover certain relocation costs and provide displaced residents with the right to live in the new CHA property for their previous rent for one year, or the CHA rent, whichever is lower.
10. Specifies that the CHA will make an annual determination of the required amount of social housing units to be produced as follows:
    1. Annual RHNA targets will be calculated as the total RHNA cycle targets for each jurisdiction divided by the length of the RHNA cycle;
    2. On or before January 1, 2028, and each year thereafter, the CHA will determine the gap between the previous year's RHNA and actual housing construction; and
    3. Within a given year, the CHA may construct at least the number of units to meet the gap between the previous year's construction of units and the RHNA targets.
11. Specifies that, in creating housing, the authority shall employ two different leasing models, the rental model and the ownership model, as specified.
12. States that the CHA must accept a local government's preference on project location if certain conditions, including cost and community amenity access, are met. Also directs the CHA to seek input from the jurisdiction's governing body related to specific site development, height, number of units, and development timeline.

COMMENTS

Background on Social Housing: There is no widely shared consensus on how to define social housing. However, all definitions of social housing distinguish it in various ways from privately-owned, for-profit housing provided through market mechanisms. The Assembly Select Committee on Social Housing held an informational hearing on October 20, 2021 and Rob Weiner from the California Coalition for Rural Housing shared the Organization for Economic Cooperation and Development (OECD) definition of social housing as "the stock of residential rental accommodations provided at sub-market prices and allocated according to specific rules rather than according to market mechanisms."

Under this definition, there are an estimated 480,000 subsidized housing units available for rent in California, or about 3.5% of the state's housing stock. These deed-restricted affordable rental units are generally built using a mix of public and private financing and residency is restricted to low-income households that make no more than 80% of county area median income (AMI). Other versions of social housing specify permanent affordability requirements and ownership by the government or a non-profit entity. Most of California's deed-restricted affordable housing is not publicly owned and the length of affordability requirements varies, though permanent affordability is not required in most cases.

Another variation of social housing involves making accommodations available to all individuals regardless of their household income. In particular, Vienna, Austria is often held up as an example of a large city with widespread mixed-income social housing—an estimated 40% of the city's housing stock is social housing. In the Viennese model higher income households pay market rate rents which then subsidize the below market rents for lower-income households. This mechanism is referred to as "cross-subsidization" and it is the same logic that underlies California's density bonus law, a policy that allows residential developers to receive added density and other concessions and incentives from a local government in exchange for building a certain percentage of affordable units.

Development of CHA Housing: This bill specifies that the CHA could build residential housing to make up the different between a jurisdiction's RHNA and the actual amount of housing built. These calculations would be made annually using each local government's APR data beginning on January 1, 2029. Development would be prioritized on vacant parcels, surplus public properties, and parcels near transit, though the bill does not indicate a particular distance from transit or the frequency of transit service that would be required for a parcel to be considered "near transit." Additionally, underutilized parcels (i.e., those containing fewer than the maximum number of allowable units per the jurisdiction's zoning) would be prioritized for CHA developments so long as they do not contain rent controlled units or deed-restricted affordable housing.

This bill requires the CHA to seek input from the local government about certain aspects of a proposed development, including the number of units and the timeline for completing the project. When the CHA has multiple potential sites for development in a jurisdiction it would need to defer to the local government on their preferred site if property acquisition costs and amenities are generally similar and if the site would allow the local government to meet its RHNA targets. If a CHA development would lead to the displacement of existing residents, those households would be eligible for relocation assistance and would have the first right of refusal to live in a CHA housing unit.

CHA housing developments are required to be mixed-income housing developments, though the specific mix is not spelled out in the bill and there is no intent language indicating minimum proportions of affordable units nor the depth of affordability. The CHA also has the ability to develop mixed-use buildings with commercial space.

Policies Governing Residency in CHA-Built Housing: In CHA-built developments, individuals could either rent or purchase a unit through an ownership model and the CHA unit would need to be the person's sole residence unless they fall into the above-moderate income category. In the ownership model, CHA provides the resident a 99-year lease and they would need to commit to a minimum of five years of residency in the CHA building. The ownership model requires a down payment of 15% of the purchase price. When a resident in the ownership model wishes to sell their unit, the CHA would have first right of refusal to purchase the unit. If the CHA declines to repurchase the unit then it can be resold to a qualified buyer in a manner that allows the resident to have a reasonable return on investment. The bill states that ownership units would be sold for the original purchase price plus documented capital improvements and an adjustment for inflation.

Renters in CHA units would be required to commit to a year of residency, though exceptions would be allowed in some cases such as illness or employment changes. Renters living in CHA-owned properties are provided tenant protections including protection against termination of tenancy without just cause. Additionally, the bill specifies that each multifamily social housing development produced by the CHA will have a resident governance council elected by residents of the housing complex. Governance councils will host regular meetings, interact with property management, handle budgeting for development, and represent the community at biannual meetings with the CHA board. Though the bill specifies that the governance council is to be made up of no more than 10% of the overall population for development, it is unclear if this is per unit or per resident. In a 20-unit building with only one individual per unit, there would be only two members on the council, which would pose an issue for any decisions that the two members disagree on.

Financing Start-Up Costs and Revenue Neutrality: This bill states that the CHA would operate according to principles of revenue neutrality, though it does not specify the time period over which revenue neutrality would be achieved. Presumably a significant amount of start-up capital would be needed to create the CHA and it would have ongoing expenses including the costs of developing and managing mixed-income housing, mortgage servicing, staff time, facilities, legal services, and IT. This bill also includes language stating that it is the intent of the Legislature to fund the CHA's activities through the issuance of general obligations bonds, though no specific timeline or dollar amount for bond issuance is included in the bill text. However, because the Legislature lacks the ability to issue general obligation bonds without voter approval, another bill would need to pass with a two-thirds vote of both houses of the Legislature to put the question of CHA general obligation bond issuance before the voters. The author has introduced a social housing bond that would accompany this bill – AB 590 (Lee). The bill also includes language giving the CHA the ability to issue revenue bonds that would ostensibly be secured with the rental income generated from CHA-provided housing, but such bonds could only be issued after a reliable stream of rental income is being generated from CHA-owned properties.

Policy Considerations: Without further specificity on initial start-up costs and the timeframe for achieving revenue neutrality it is challenging – if not impossible – to predict the amount of housing the CHA could be reasonably expected to produce. It is also unclear how long it would take for the first units of CHA housing to be built given that the state has not historically undertaken direct construction of rental or ownership housing. The state also generally does not directly manage rental or ownership housing outside of some limited exceptions, such as student housing for California State University campuses and employee housing for a small number of state parks employees.

Moreover, since the goal of the bill is to close the gap between a jurisdiction's RHNA goals and the actual production of housing, presumably a CHA development would not be able to include units from a particular income category (e.g., above moderate) if the jurisdiction has already exceeded their RHNA targets for that category. This may provide an incentive for jurisdictions to quickly approve above moderate income housing to make CHA developments less economically feasible. One way to avoid such an outcome would be to drop the bill's revenue neutrality goal and instead focus the CHA's mission on producing affordable units for low-income households in a more cost-effective manner than the existing affordable housing development process.

According to the Author

According to the author, Housing is too expensive for millions of Californians. More than two in five households are considered rent burdened and spend over 30% of their income on housing, and more than one in five households spend over 50% of their income on housing. Over 97% of cities and counties haven't produced enough affordable housing, and existing strategies to address the lack of affordable housing have not been nearly enough to meet demand. Affordable housing relies on government subsidies, and there is significantly more demand for them than supply.

Social housing is an important tool to ensure housing is affordable to people of all income levels. Social housing is publicly backed, self-sustaining housing that accommodates a mix of household income ranges. Housing is protected from being sold to a private for-profit entity for the duration of its life, and residents are granted the same protections as tenants in private property, if not more. Many countries throughout the world have successful social housing programs, and in the US, there are social housing developments such as in Montgomery County, Maryland using a similar model. Social Housing is how we provide and realize housing as a human right.

Arguments in Support

According to the California School Employees Association, "California is in the midst of a protracted housing shortage, in 2018 we ranked 49th among the United States in housing per resident. Fifty-five percent of renters are rent burdened, meaning that they spend more than thirty percent of their income on rent. There is a significant shortage of housing that is available to low income Californians, per the California Housing Partnership there are only 480,000 subsidized housing units in California, or about ten percent of the total need. AB 11 would help to create more social housing in California. Social housing is publicly backed mixed-income housing that has already shown its effectiveness in the parts of the United States and beyond. Creating more housing with an eye towards social-economic diversity and affordability can help to alleviate California's housing shortage as well as build a more a more equitable housing environment."

Arguments in Opposition

According to the League of Cities, "AB 11 would disregard this state mandated planning process and force cities to allow housing developments in nearly all areas of a city. This seriously questions the rationale for the regional housing needs allocation (RHNA) process. If the California Housing Authority can build housing on any parcel they own or acquire, why should cities go through the multiyear planning process to identify sites suitable for new housing units for those plans to be ignored and housing built on sites never considered for new housing. Additionally, as a state entity, the California Housing Authority would have full control over the properties they own and would not be required to abide by local zoning, design standards, density requirements, height limitations, parking requirements, or other development standards."

FISCAL COMMENTS

According to the Assembly Committee on Appropriations,

1. Estimated General Fund (GF) costs of an unknown amount, but likely in the tens of millions of dollars annually, to establish and operate a new state entity, the CHA, which would be responsible for the construction, acquisition and maintenance of mixed-income social housing developments. It is unclear how the CHA would interact with other departments with overlapping missions such as the Department of Housing and Community Development (HCD) and the California Housing Finance Agency (CalHFA).
2. Estimated capital costs of an unknown amount, but likely in the low billions of dollars (GF and bond funds) for the construction and development of social housing units. This bill states legislative intent to issue GO bonds to finance the activities of the CHA, but no timeframe or dollar amount is indicated. In addition, the Legislature lacks the ability to issue GO bonds without voter approval and, thus, subsequent legislation would be needed to put a GO bond measure before the voters.

VOTES

ASM HOUSING AND COMMUNITY DEVELOPMENT: 7-3-2

YES: Haney, Caloza, Garcia, Kalra, Lee, Quirk-Silva, Wicks

NO: Patterson, Ávila Farías, Ta

ABS, ABST OR NV: Tangipa, Wilson

ASM APPROPRIATIONS: 11-3-1

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache

NO: Dixon, Ta, Tangipa

ABS, ABST OR NV: Sanchez

UPDATED

VERSION: December 2, 2024

CONSULTANT: Lisa Engel / H. & C.D. / (916) 319-2085 FN: 0000578

Date of Hearing: May 7, 2025

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 11

Author:(Lee) – As Introduced Ver:December 2, 2024

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

SUMMARY:

This bill enacts the Social Housing Act and establishes the California Housing Authority (CHA) for the purpose of developing mixed-income social housing.

Among this bill’s provisions:

1. Creates the CHA as an independent entity within state government to develop social housing, defined as mixed-income rental and ownership housing that is publicly owned and permanently affordable, and provides specified protections for residents who have the right to participate in the operation and management of the units in which they reside.
2. Requires the CHA to prioritize development of specified property, including vacant parcels and parcels near transit, and prescribes a process for the annual determination of required social housing units.
3. Prescribes the powers and duties of the CHA and the duties of the board that would govern the authority, which would be composed of appointed members and members who are elected by residents of social housing developments, as specified.
4. Requires the CHA to use two leasing models in social housing developments, to be referred to as the rental model and the ownership model, and specifies the parameters of each model.
5. Requires the CHA’s activities be conducted according to revenue neutrality and states legislative intent to provide financing for the activities of the CHA through the issuance of general obligation (GO) bonds. This bill also authorizes CHA to issue revenue bonds from time to time to provide sufficient funds for financing social housing developments.

FISCAL EFFECT:

1. Estimated General Fund (GF) costs of an unknown amount, but likely in the tens of millions of dollars annually, to establish and operate a new state entity, the CHA, which would be responsible for the construction, acquisition and maintenance of mixed-income social housing developments. It is unclear how the CHA would interact with other departments with overlapping missions such as the Department of Housing and Community Development (HCD) and the California Housing Finance Agency (CalHFA).
2. Estimated capital costs of an unknown amount, but likely in the low billions of dollars (GF and bond funds) for the construction and development of social housing units. This bill states legislative intent to issue GO bonds to finance the activities of the CHA, but no timeframe or dollar amount is indicated. In addition, the Legislature lacks the ability to issue GO bonds without voter approval and, thus, subsequent legislation would be needed to put a GO bond measure before the voters.

COMMENTS:

1. Purpose. The author seeks to address the state’s lack of affordable housing through the use of the social housing model. According to the author:

Social housing is an important tool to ensure housing is affordable to people of all income levels. Social housing is publicly backed, self-sustaining housing that accommodates a mix of household income ranges. Housing is protected from being sold to a private for-profit entity for the duration of its life, and residents are granted the same protections as tenants in private property, if not more. Many countries throughout the world have successful social housing programs, and in the US, there are social housing developments such as in Montgomery County, Maryland using a similar model. Social Housing is how we provide and realize housing as a human right.

1. Background. There are a variety of definitions of social housing, but generally it is distinguished from privately-owned, for-profit housing provided through market mechanisms. The Organization for Economic Cooperation and Development (OECD) defines social housing as “the stock of residential rental accommodations provided at sub-market prices and allocated according to specific rules rather than according to market mechanisms.”

Under this definition, there are an estimated 480,000 socially-rented (i.e., subsidized) housing units available for rent in California, or about 3.5% of the state’s housing stock. These deed-restricted affordable rental units are generally built using a mix of public and private financing and residency is restricted to low-income households that make no more than 80% of county area median income (AMI). Other versions of social housing specify permanent affordability requirements and ownership by the government or a non-profit entity. Most of California’s deed-restricted affordable housing is not publicly owned and the length of affordability requirements varies, though permanent affordability is not required in most cases.

According to data from the 2019 American Communities Survey, over half of the state’s renter households are considered rent-burdened, which is defined as paying more than 30% of their income towards rent. For low-income renter households, the share of cost-burdened families is 80%. To address the shortage of affordable housing options, HCD’s most recent update of the Statewide Housing Plan calls for the production of over a million units of affordable housing units for lower-income households in the coming years.

This bill creates an independent state entity, the CHA, to develop social housing, defined as mixed-income rental and ownership housing that is publicly owned and permanently affordable, in an effort to close the gap between a jurisdiction’s current level of housing production and its housing needs.

In 2023, the Governor signed SB 555 (Wahab), Chapter 402, Statutes of 2023, which requires HCD, no later than December 31, 2026, to develop, adopt, and submit to the Legislature a Social Housing Study for achieving the social housing unit goals included in the bill. The study must include a comprehensive analysis of the opportunities, resources, obstacles, and recommendations for the creation of affordable and social housing at scale, to assist in meeting the need identified in the statewide projections for below market rate housing affordable to households with extremely low, very low, low, and moderate incomes in the sixth RHNA cycle.

1. Arguments in Support. Various organizations are in support of this bill because they believe allowing state government to develop and own mixed-income housing will help address the shortage of affordable homes for all income levels.
2. Arguments in Opposition. The League of California Cities is opposed unless amended because it believes the CHA could build housing on any land the CHA owns, undermining the local planning process.
3. Related Legislation. AB 736 (Wicks), of this legislative session, places a $10 billion bond on the June 2026 ballot to fund affordable and supportive housing. AB 736 is pending in this committee.
4. Prior Legislation. AB 2881 (Lee), of the 2023- 2024 Legislative Session, and AB 2053 (Lee), of the 2021-22 Legislative Session, were both substantially similar to this bill. AB 2881 was held on this committee’s suspense file, and AB 2053 failed passage in the Senate Governance and Finance Committee.

This bill is also substantially similar to the introduced version of AB 309 (Lee), also of the 2023-24 Legislative Session. AB 309 was substantially amended in the Senate to instead create the Social Housing Program within the Department of General Services (DGS) to identify and develop up to three social housing projects on state-owned surplus land deemed suitable for housing. AB 309 was vetoed by the Governor over concerns the bill infringed on state sovereignty over state-owned real property and imposed significant cost pressures that are best considered in the annual budget process.

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

Date of Hearing: April 24, 2025

ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT

Matt Haney, Chair

ABPCA Bill Id:AB 11 (

Author:Lee) – As Introduced Ver:December 2, 2024

SUBJECT: The Social Housing Act

SUMMARY: Establishes the California Housing Authority (CHA) for the purposes of developing mixed-income social housing. Specifically, this bill:

1. Creates the CHA as an independent state entity with the mission of producing and acquiring social housing for all California residents, eliminating the gap between housing production and regional housing needs assessment targets, and preserving affordable housing.
2. Defines “social housing” to mean housing with the following characteristics:
   1. Units are owned by a public entity such as the CHA, a public entity, or a housing authority;
   2. All social housing developed by the authority must be owned by the authority;
   3. If a housing unit is in a social housing development, the development contains housing units that accommodate a specified mix of household income ranges;
   4. Units that are owned and managed by a mission-driven not-for-profit private entity must be permanently restricted by deed to be affordable;
   5. Residents of CHA units are given, at a minimum, all protections granted to tenants in private property, as specified, but may be evicted for breaking community standards and for non-payment of rent lasting more than one month;
   6. The housing units must be protected for the duration of their useful life from being sold or transferred to a private for-profit entity to prevent the privatization of social housing; and
   7. Residents of the housing units have the right to participate directly and meaningfully in decision making affecting the operation and management of their housing units.
3. Defines the following terms:
   1. “Revenue neutrality” means a system in which all monetary expenditures that result from the development and operation of CHA units are returned through rents, payments on leasehold mortgages, or other specified subsidies;
   2. “Rent and mortgage cross-subsidization” means a system in which the below-cost rents and leasehold mortgages of certain units are balanced by above-cost payments on others within the same multiunit property;
   3. “Cost rent” means a system in which the rent of a dwelling is calculated on the cost of providing for and maintain the dwelling, only allowing for limited or no proceeds;
   4. “Limited equity arrangement” means an ownership model in which residents are extended a long-term lease, take out a subsidized leasehold mortgage from the CHA, make monthly mortgage payments, and commit to resell at a price designed to balance ongoing affordability and resident wealth generation;
   5. “Regional housing needs assessment” or “RHNA” means a representation of housing needs for all income levels as specified;
   6. “Underutilized parcel” means a parcel of property which contains fewer units than the maximum number of units permissible under local zoning regulations;
   7. “Multifamily property” means a revenue-neutral collection of units featuring units dedicated to a range of affordability levels from extremely low-income to above-moderate income. It may be a single building, multiple buildings on the same or adjacent parcels, or multiple buildings across several blocks within a single jurisdiction, or may be defined by the CHA; and
   8. “Board” means the CHA Board.
4. Specifies income definitions for the following categories, consistent with existing law: extremely low-income, very low-income, low-income, moderate-income, and above moderate-income.
5. Provides that CHA has various powers, including the ability to:
   1. Sue and be sued;
   2. Have a seal and alter the seal at its pleasure;
   3. Make and execute contracts and other instruments;
   4. Make rules with respect to its projects, operations, properties, and facilities;
   5. Through its executive officer, appoint specified personnel and set various policies;
   6. Acquire, by grant or purchase, property or any interest therein and own, hold, clear, improve, rehabilitate, sell, assign, exchange, lease, or otherwise dispose of or encumber it;
   7. Enter into development partnerships with municipalities, joint powers of authority, and other public and private entities in order to further its social housing development goals;
   8. Arrange for the planning, opening, grading, or closing of roads or other places, for the furnishing of facilities, or for the furnishing of property or services in connection with a project;
   9. Prepare project plans for any project, and from time to time modify those plans;
   10. Provide advisory, consultative, training, and educational services, technical assistance, and related work as specified;
   11. Accept funding in any form from any source; and
   12. Call upon the Attorney General for legal services as it may require.
6. Requires the CHA to submit an annual business plan to the Governor and the Legislature which must be made available for public comment at least 60 days before publication.
7. Specifies that the CHA board will consist of nine members who will elect a chair and make decisions by majority vote. The board membership will be as follows:
   1. An expert in housing development and finance;
   2. An expert in housing construction;
   3. An expert in property maintenance;
   4. An appointee of the Speaker of the Assembly;
   5. An appointee of the Senate Committee on Rules;
   6. An appointee of the Governor; and
   7. Three representatives of CHA residents, to be appointed initially by specified entities. Following the occupancy of CHA units, resident representatives are to be elected annually according to specified procedures.
8. Tasks the CHA board with the following duties:
   1. Establish a strategy to eliminate the gap between housing production and acquisition and RHNA targets, set objective and performance targets to this goal, and monitor CHA’s success in achieving the targets;
   2. The ability to hire, fire, and monitor performance of an executive officer;
   3. Approving the annual budget prepared by the executive officer;
   4. Integrating risk management into the authority’s strategic planning process and notify the Governor and the Legislature of specified risks facing CHA;
   5. Adopting and amend regulations, including on resident board elections; and
   6. Holding biannual meetings with resident governance councils.
9. Provides that each CHA-owned multifamily social housing development must form a governance council with specified powers and responsibilities.
10. Requires that the CHA seek to achieve revenue neutrality over the long term and must seek to recuperate the cost of development and operations over the life of its properties through rent cross-subsidization or cost rent.
11. States that the CHA must prioritize development on vacant parcels, certain underutilized parcels without deed-restricted or rent-controlled units, surplus public properties, and parcels near transit.
12. Specifies that if the development requires rehabilitation or demolition of covenanted affordable units, the new development must include a greater number of affordable units.
13. Requires that each multi-unit property must include a variety of mixed income units.
14. Provides that if the development of a property requires the removal of residents, the CHA must cover certain relocation costs and provide displaced residents with the right to live in the new CHA property for their previous rent for one year, or the CHA rent, whichever is lower.
15. Specifies that the CHA will make an annual determination of the required amount of social housing units to be produced as follows:
    1. Annual RHNA targets will be calculated as the total RHNA cycle targets for each jurisdiction divided by the length of the RHNA cycle;
    2. On or before January 1, 2028, and each year thereafter, the CHA will determine the gap between the previous year’s RHNA and actual housing construction; and
    3. Within a given year, the CHA may construct at least the number of units to meet the gap between the previous year’s construction of units and the RHNA targets.
16. Specifies that, in creating housing, the authority shall employ two different leasing models, the rental model and the ownership model, as specified.
17. Provides that, under the CHA rental model, one-year leases will be used, barring extraordinary circumstances.
18. Puts forth the following requirements for CHA ownership units:
    1. The CHA will extend a 99-year limited equity arrangement lease to individuals who commit to five years of residence. After five years, residents can sell the unit, though the CHA will have first right of refusal to purchase. If the CHA does not purchase then it may be sold to an eligible buyer subject to requirements established by the CHA which give the seller a reasonable return on investment;
    2. Upon the death of the owner, the unit may be transferred to the deceased’s heir by device or as any other real property may pass. If a transferee is not eligible to be a resident, the transferee shall sell the unit to the authority;
    3. The CHA must strive to ensure that residents pay no more than 30% of income for housing and rent adjustments will be applied annually in a way that does not discourage increased earnings. If resident income changes, the property manager will rent to an appropriate income household;
    4. Residents will pay a 15% down payment with the purchase price set to be affordable for the purchasing household; and
    5. Properties will be sold at the price for which the owner purchased the property, plus documented capital improvements, and adjusted for inflation.
19. Puts forth the following requirements for CHA residency and occupancy and specifies penalties for failure to abide by them:
    1. Unless an above-moderate income unit, it must be resident’s sole residence;
    2. Applicant must be living or working in California at the time of their application subject to specified rules;
    3. Allows an applicant with a prior criminal record to reside in CHA units unless there is evidence of a clear and manifest danger to the development or its residents;
    4. Allows the CHA or the applicable governance council to allow subleasing of units;
    5. Permits a resident to terminate their residency due to specified reasons including job relocation, change in household structure, and serious illness; and
    6. Specifies that, with the exception of those displaced during construction, resident selection is by a lottery stratified by income category.
20. Provides that the CHA can conduct ground-up construction and rehabilitation of existing structures and may dedicate space to commercial use with leases to qualifying entities.
21. Specifies that, when appropriate, the state shall gift public lands to the CHA, though the CHA can also purchase land from other entities.
22. States that the CHA must accept a local government’s preference on project location if certain conditions, including cost and community amenity access, are met. Also directs the CHA to seek input from the jurisdiction’s governing body related to specific site development, height, number of units, and development timeline.
23. Specifies that CHA activities much be conducted with a goal of revenue neutrality, establishes the Social Housing Revolving Loan Fund within the State Treasury to provide zero-interest loans for mixed-income housing, and further states that it is the intent of the Legislature to enact legislation to provide financing for the activities of the authority through the issuance of general obligations bonds.

EXISTING LAW:

1. Specifies that a housing authority may engage in a number of activities in order to provide housing to low income individuals, including:
   1. Preparing, carrying out, acquiring, leasing and operating housing projects and developments for persons of low income;
   2. Providing for the construction, reconstruction, improvement, alteration, or repair of all or part of any housing project;
   3. Providing leased housing to persons of low income; and
   4. Offering counseling, referral, and advisory services to persons and families of low or moderate income in connection with the purchase, rental, occupancy, maintenance, or repair of housing. (Health and Safety Code Section 34312)
2. Requires each city and county to prepare, adopt, and administer a general plan for their jurisdiction, which must include a housing element, to shape the future growth of its community. (Government Code (GOV) Sections 65300 - 65404)
3. Specifies that each community’s fair share of housing be determined through the RHNA process, which involves three main stages: (a) the Department of Finance and Department of Housing and Community Development (HCD) develop regional housing needs estimates at specified income levels; (b) councils of government (COGs) use these estimates to allocate housing within each region (HCD is to make the determinations where a COG does not exist); and (c) cities and counties plan for accommodating these allocations in their housing elements. (GOV 65580 - 65589.11)
4. Establishes HCD oversight of the housing element process, including the following:
   1. Local governments must submit a draft of their housing element to HCD for review;
   2. HCD must review the draft housing element and determine whether it substantially complies with housing element law, in addition to making other findings;
   3. Local governments must incorporate HCD feedback into their housing element; and
   4. HCD must review any action or failure to act by local governments that it deems to be inconsistent with an adopted housing element. HCD must notify any local government, and at its discretion the office of the Attorney General, if it finds that the jurisdiction has violated state law. (GOV 65585)
5. Requires each city and county to submit an Annual Progress Report (APR) to the Governor’s Office of Planning and Research (OPR) and HCD by April 1 of each year, including the following:
   1. The report must evaluate the general plan’s implementation, including the implementation of their housing element, and provide specified quantitative outcomes, such as number of applications for housing projects received and housing units approved;
   2. Authorizes a court to issue a judgement to compel compliance should a city or county fail to submit their APR within 60 days of the statutory deadline; and
   3. Requires HCD to post all city and county APRs on their website within a reasonable time after receipt. (GOV 65400)
6. Requires HCD no later than December 31, 2026, to complete a California Social Housing Study. The study shall consist of a comprehensive analysis of the opportunities, resources, obstacles, and recommendations for the creation of affordable and social housing at scale, to assist in meeting the need identified in the statewide projections for below market rate housing affordable to households with extremely low, very low, low, and moderate incomes in the sixth Regional Housing Needs Assessment cycle. (HSC 50613)

FISCAL EFFECT: Unknown.

COMMENTS:

Author’s Statement: According to the author, Housing is too expensive for millions of Californians. More than two in five households are considered rent burdened and spend over 30% of their income on housing, and more than one in five households spend over 50% of their income on housing. Over 97% of cities and counties haven’t produced enough affordable housing, and existing strategies to address the lack of affordable housing have not been nearly enough to meet demand. Affordable housing relies on government subsidies, and there is significantly more demand for them than supply.

Social housing is an important tool to ensure housing is affordable to people of all income levels. Social housing is publicly backed, self-sustaining housing that accommodates a mix of household income ranges. Housing is protected from being sold to a private for-profit entity for the duration of its life, and residents are granted the same protections as tenants in private property, if not more. Many countries throughout the world have successful social housing programs, and in the US, there are social housing developments such as in Montgomery County, Maryland using a similar model. Social Housing is how we provide and realize housing as a human right.

Background on Social Housing: There is no widely shared consensus on how to define social housing. However, all definitions of social housing distinguish it in various ways from privately-owned, for-profit housing provided through market mechanisms. The Assembly Select Committee on Social Housing held an informational hearing on October 20, 2021 and Rob Weiner from the California Coalition for Rural Housing shared the Organization for Economic Cooperation and Development (OECD) definition of social housing as “the stock of residential rental accommodations provided at sub-market prices and allocated according to specific rules rather than according to market mechanisms.”^[1]

Under this definition, there are an estimated 480,000 subsidized housing units available for rent in California, or about 3.5% of the state’s housing stock. These deed-restricted affordable rental units are generally built using a mix of public and private financing and residency is restricted to low-income households that make no more than 80% of county area median income (AMI). Other versions of social housing specify permanent affordability requirements and ownership by the government or a non-profit entity. Most of California’s deed-restricted affordable housing is not publicly owned and the length of affordability requirements varies, though permanent affordability is not required in most cases.

Another variation of social housing involves making accommodations available to all individuals regardless of their household income. In particular, Vienna, Austria is often held up as an example of a large city with widespread mixed-income social housing—an estimated 40% of the city’s housing stock is social housing. In the Viennese model higher income households pay market rate rents which then subsidize the below market rents for lower-income households. This mechanism is referred to as “cross-subsidization” and it is the same logic that underlies California’s density bonus law, a policy that allows residential developers to receive added density and other concessions and incentives from a local government in exchange for building a certain percentage of affordable units.

Planning for Housing and the RHNA Process: As noted above, with the exception of deed-restricted affordable housing, California generally relies on the private sector to build most housing accommodations. However, cities and counties are required to plan for a certain amount of housing development across various income categories. This happens through “general plans” for land use that each city and county’s legislative body adopts. Every general plan must include a “housing element” that details existing housing conditions within the jurisdiction, the need for new housing at various household income levels, and the strategy that the jurisdiction will use to address that need. The need for new housing is determined through the RHNA process, which involves three main stages:

• The Department of Finance and HCD develop regional housing needs estimates at four income levels: very low-income, low-income, moderate-income, and above moderate-income (for the seventh cycle, two additional income categories for acutely low-income and extremely low-income will be added);
• COGs use these estimates to allocate housing needs within each region to cities and counties. HCD makes the determinations where a COG does not exist; and
• Cities and counties plan for accommodating these allocations in their housing elements.

Local governments must adopt a new housing element every eight years (though some rural jurisdictions must do so every five). These adopted housing elements must be approved by HCD, which must find them in “substantial compliance” with the law. Every eight years a new RHNA cycle begins and the process restarts. Currently the state is in the 6^th RHNA cycle and housing element updates in this cycle also need to include information on steps the local government is taking to affirmatively further fair housing objectives.

Each year, the local government’s planning agency must submit an APR to HCD and OPR that documents implementation of its housing element and progress towards meetings its RHNA target. The APR must include information about all proposed and approved development projects, a list of rezoned sites to accommodate housing for each income level, and information on density bonus applications and approvals, among other provisions. The APRs provide statewide and local data across California’s 539 cities and counties which allow for tracking the amount, type, location, and affordability of new housing development. In addition to providing completed residential construction data in the jurisdiction, APRs also include data on the number residential developments which are still in the initial permitting and entitlement phases.

Planning vs. Building Affordable Housing: While the RHNA process requires local governments to plan to address housing need in their jurisdiction, it does not mean housing will actually get built. A number of factors affect housing development and, in order to build affordable units for low-income and very low-income households, government subsidies are generally needed to make the project economically viable. According to the California Housing Partnership Corporation, while California has more than doubled its production of deed-restricted affordable units in the prior three years, in 2021 the available public funding for affordable housing provided just 16% of the units that would be needed to meet the state’s targets for low-income homes.^[2]

The lack of affordable housing disproportionately impacts California’s most economically-vulnerable households. According to data from the 2019 American Communities Survey, over half of the state’s renter households are considered rent-burdened, which is defined as paying more than 30% of their income towards rent. For low-income renter households in the state the share of cost-burdened families is even higher at 80%. To address the shortage of affordable housing options, HCD’s most recent update of the Statewide Housing Plan call for the production of over a million units of affordable housing units for lower income households in the coming years.^[3]

Creation of the California Housing Authority (CHA): This bill proposes to establish the CHA as a new, independent entity within the state government to develop social housing, which is defined as mixed-income rental and ownership housing that is publicly owned and permanently affordable. The CHA’s mission would be to close the gap between a jurisdiction’s current level of housing production and their RHNA amount while maintaining revenue neutrality. The CHA would be governed by a nine-member board consisting of: three resident representatives living in CHA accommodations, a housing development and finance expert, a housing construction expert, a property maintenance expert, an appointee of the Speaker of the Assembly, an appointee of the Senate Committee on Rules, and an appointee of the Governor. Decisions would be made by majority vote of the board and the board would also have the authority to appoint a board chair and an executive officer.

Development of CHA Housing: This bill specifies that the CHA could build residential housing to make up the different between a jurisdiction’s RHNA and the actual amount of housing built. These calculations would be made annually using each local government’s APR data beginning on January 1, 2029. Development would be prioritized on vacant parcels, surplus public properties, and parcels near transit, though the bill does not indicate a particular distance from transit or the frequency of transit service that would be required for a parcel to be considered “near transit.” Additionally, underutilized parcels (i.e., those containing fewer than the maximum number of allowable units per the jurisdiction’s zoning) would be prioritized for CHA developments so long as they do not contain rent controlled units or deed-restricted affordable housing.

This bill requires the CHA to seek input from the local government about certain aspects of a proposed development, including the number of units and the timeline for completing the project. When the CHA has multiple potential sites for development in a jurisdiction it would need to defer to the local government on their preferred site if property acquisition costs and amenities are generally similar and if the site would allow the local government to meet its RHNA targets. If a CHA development would lead to the displacement of existing residents, those households would be eligible for relocation assistance and would have the first right of refusal to live in a CHA housing unit.

CHA housing developments are required to be mixed-income housing developments, though the specific mix is not spelled out in the bill and there is no intent language indicating minimum proportions of affordable units nor the depth of affordability. The CHA also has the ability to develop mixed-use buildings with commercial space.

Policies Governing Residency in CHA-Built Housing: In CHA-built developments, individuals could either rent or purchase a unit through an ownership model and the CHA unit would need to be the person’s sole residence unless they fall into the above-moderate income category. In the ownership model, CHA provides the resident a 99-year lease and they would need to commit to a minimum of five years of residency in the CHA building. The ownership model requires a down payment of 15% of the purchase price. When a resident in the ownership model wishes to sell their unit, the CHA would have first right of refusal to purchase the unit. If the CHA declines to repurchase the unit then it can be resold to a qualified buyer in a manner that allows the resident to have a reasonable return on investment. The bill states that ownership units would be sold for the original purchase price plus documented capital improvements and an adjustment for inflation.

Renters in CHA units would be required to commit to a year of residency, though exceptions would be allowed in some cases such as illness or employment changes. Renters living in CHA-owned properties are provided tenant protections including protection against termination of tenancy without just cause. Additionally, the bill specifies that each multifamily social housing development produced by the CHA will have a resident governance council elected by residents of the housing complex. Governance councils will host regular meetings, interact with property management, handle budgeting for development, and represent the community at biannual meetings with the CHA board. Though the bill specifies that the governance council is to be made up of no more than 10% of the overall population for development, it is unclear if this is per unit or per resident. In a 20-unit building with only one individual per unit, there would be only two members on the council, which would pose an issue for any decisions that the two members disagree on.

Financing Start-Up Costs and Revenue Neutrality: This bill states that the CHA would operate according to principles of revenue neutrality, though it does not specify the time period over which revenue neutrality would be achieved. Presumably a significant amount of start-up capital would be needed to create the CHA and it would have ongoing expenses including the costs of developing and managing mixed-income housing, mortgage servicing, staff time, facilities, legal services, and IT. AB 11 also includes language stating that it is the intent of the Legislature to fund the CHA’s activities through the issuance of general obligations bonds, though no specific timeline or dollar amount for bond issuance is included in the bill text. However, because the Legislature lacks the ability to issue general obligation bonds without voter approval, another bill would need to pass with a two-thirds vote of both houses of the Legislature to put the question of CHA general obligation bond issuance before the voters. The author has introduced a social housing bond that would accompany this bill – AB 590 (Lee). The bill also includes language giving the CHA the ability to issue revenue bonds that would ostensibly be secured with the rental income generated from CHA-provided housing, but such bonds could only be issued after a reliable stream of rental income is being generated from CHA-owned properties.

Policy Considerations: Without further specificity on initial start-up costs and the timeframe for achieving revenue neutrality it is challenging – if not impossible – to predict the amount of housing the CHA could be reasonably expected to produce. It is also unclear how long it would take for the first units of CHA housing to be built given that the state has not historically undertaken direct construction of rental or ownership housing. The state also generally does not directly manage rental or ownership housing outside of some limited exceptions, such as student housing for California State University campuses and employee housing for a small number of state parks employees.

Moreover, since the goal of the bill is to close the gap between a jurisdiction’s RHNA goals and the actual production of housing, presumably a CHA development would not be able to include units from a particular income category (e.g., above moderate) if the jurisdiction has already exceeded their RHNA targets for that category. This may provide an incentive for jurisdictions to quickly approve above moderate income housing to make CHA developments less economically feasible. One way to avoid such an outcome would be to drop the bill’s revenue neutrality goal and instead focus the CHA’s mission on producing affordable units for low-income households in a more cost-effective manner than the existing affordable housing development process.

CHA and Social Housing in the Context of Other Efforts to Address the Housing Crisis: On the one hand it could be argued that this bill runs counter to the Legislature’s recent efforts to streamline and consolidate affordable housing development. For example, AB 434 (Daly), Chapter 192, Statutes of 2020, required HCD to align several rental housing programs administered by HCD with the Multifamily Housing Program (MHP), to allow HCD to issue a single application and scoring system for making coordinated awards under seven different programs. As a result of AB 434 (Daly), HCD released the guidelines for the first MHP “super Notice of Funding Availability (NOFA)” to allow developers to apply for seven different affordable rental programs at one time, and granted the first super-NOFA awards in spring 2023.

On the other hand, the CHA would generally not be aiming to duplicate the funding, oversight, policy, or technical assistance work of other state housing entities. Instead it seeks to do something the state has never attempted to do: build large amounts of permanently affordable mixed-income rental and ownership housing to close the gap between actual housing production and the estimated need for additional housing in a community. This may prove to be a tall order for a state which has a decidedly mixed record with delivering ambitious new programs and infrastructure in recent decades.

Yet, at the same time it is clear that the state’s existing approach to housing has left affordable housing out of reach for far too many. As noted above, the current system for producing deed-restricted affordable housing for low-income Californians is not adequately funded. And many of the affordable housing funding sources that the state currently draws on are one-time funds from voter-approved bonds that will be depleted in the coming years. This bill proposes creating a new entity to take on housing development and ongoing management of properties it builds. There may be cost savings and potential efficiencies in state-sponsored housing development through the CHA, but it could also end up costing more to establish a new entity that would be taking on work state governments have not typically engaged in.

SB 555: Stable Housing Act of 2023: In 2023, the Governor signed SB 555 (Wahab), Chapter 402, which requires HCD, no later than December 31, 2026, to develop, adopt, and submit to the Legislature a Social Housing Study for achieving the social housing unit goals included in the bill. The study must include a comprehensive analysis of the opportunities, resources, obstacles, and recommendations for the creation of affordable and social housing at scale, to assist in meeting the need identified in the statewide projections for below market rate housing affordable to households with extremely low, very low, low, and moderate incomes in the sixth RHNA cycle.

Arguments in Support: According to the California School Employees Association, “California is in the midst of a protracted housing shortage, in 2018 we ranked 49th among the United States in housing per resident. Fifty-five percent of renters are rent burdened, meaning that they spend more than thirty percent of their income on rent. There is a significant shortage of housing that is available to low income Californians, per the California Housing Partnership there are only 480,000 subsidized housing units in California, or about ten percent of the total need. AB 11 would help to create more social housing in California. Social housing is publicly backed mixed-income housing that has already shown its effectiveness in the parts of the United States and beyond. Creating more housing with an eye towards social-economic diversity and affordability can help to alleviate California’s housing shortage as well as build a more a more equitable housing environment.”

Arguments in Opposition: According to the League of Cities, “AB 11 would disregard this state mandated planning process and force cities to allow housing developments in nearly all areas of a city. This seriously questions the rationale for the regional housing needs allocation (RHNA) process. If the California Housing Authority can build housing on any parcel they own or acquire, why should cities go through the multiyear planning process to identify sites suitable for new housing units for those plans to be ignored and housing built on sites never considered for new housing. Additionally, as a state entity, the California Housing Authority would have full control over the properties they own and would not be required to abide by local zoning, design standards, density requirements, height limitations, parking requirements, or other development standards.”

Related Legislation:

AB 2281 (Lee) (2024): Would have enacted the Social Housing Act and establishes the California Housing Authority (CHA) for the purposes of developing mixed-income social housing. This bill was held in Assembly Appropriations Committee.

AB 2053 (Lee) (2022) would have establishes the CHA for the purposes of developing mixed-income social housing. This bill failed passage in the Senate Governance and Finance Committee.

AB 309 (Lee) (2023) would have created the Social Housing Program (Program) within the Department of General Services (DGS) to identify and develop up to three social housing projects on state-owned surplus land deemed suitable for housing, as specified. This bill was vetoed by the Governor.

Veto message:

I am returning Assembly Bill 309 without my signature.

This bill would create the Social Housing Program in the Department of General
Services (DGS). The program would identify and produce three social housing projects on excess state-owned property through development or acquisition.

This bill infringes on state sovereignty over state-owned real property by establishing a new process for local government review of state projects authorized under the bill and could potentially cost the state several hundred million dollars in capital expenditures.

State-owned sites identified as suitable for housing development already are being developed as affordable housing through the State Excess Sites program. This program, instituted through Executive Order (EO) N-06-19 and further codified through AB 2233 (Quirk-Silva, Chapter 438, Statutes of 2022) and SB 561 (Dodd, Chapter 446, Statutes of 2022), has already awarded state land for 17 residential or mixed-use projects with significant affordable housing components.

While I appreciate the author's commitment to build more affordable housing in the state, this bill creates new additional cost pressures and must be considered in the annual budget in the context of all state funding priorities.

In partnership with the Legislature, we enacted a budget that closed a shortfall of more than $30 billion through balanced solutions that avoided deep program cuts and protected education, health care, climate, public safety, and social service programs that are relied on by millions of Californians. This year, however, the Legislature sent me bills outside of this budget process that, if all enacted, would add nearly $19 billion of unaccounted costs in the budget, of which $11 billion would be ongoing.

With our state facing continuing economic risk and revenue uncertainty, it is important to remain disciplined when considering bills with significant fiscal implications, such as this measure.

For these reasons, I cannot sign this bill.

REGISTERED SUPPORT / OPPOSITION:

Support

AIDS Healthcare Foundation
California School Employees Association
CFT- a Union of Educators & Classified Professionals, AFT, AFL-CIO

City of Alameda
Culver City Democratic Club
Davis College Democrats
Democrats of Rossmoor
East Bay for Everyone
Fremont for Everyone

Indivisible CA: StateStrong
Peace and Freedom Party of California

Redlands YIMBY

Santa Monica Democratic Club

Opposition

California Civil Liberties Advocacy
Camarillo; City of
City of Thousand Oaks

South Bay Cities Council of Governments
Southern California Rental Housing Association

Oppose Unless Amended

Fieldstead and Company, INC.
League of California Cities

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

1. https://www.assembly.ca.gov/media/assembly-select-committee-social-housing-20211020/video ↑

2. https://1p08d91kd0c03rlxhmhtydpr-wpengine.netdna-ssl.com/wp-content/uploads/2022/03/California-Affordable-Housing-Needs-Report-2022.pdf ↑

3. https://statewide-housing-plan-cahcd.hub.arcgis.com/ ↑