AB 76: Surplus land: exempt surplus land: sectional planning area.
- Session Year: 2025-2026
- House: Assembly
- Latest Version Date: 2025-09-12
Current Status:
Failed
(2026-01-22: Consideration of Governor's veto stricken from file.)
Introduced
In Committee
Awaiting First Chamber Vote
Passed First Chamber
In Committee
Awaiting Second Chamber Vote
Passed Second Chamber
Enacted
Existing law prescribes requirements for the disposal of surplus land by a local agency. Existing law defines terms for these purposes, including, among others, surplus land to mean land owned in fee simple by any local agency for which the local agencys governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agencys use. Existing law defines exempt surplus land to mean, among other things, land that is subject to a sectional planning area document, as described, and meets specified requirements, including that the land identified in the adopted sectional planning area document was dedicated prior to January 1, 2019, at least 25% of the units are dedicated to lower income households, as specified, and that the land is developed at an average density of at least 10 units per acre calculated with respect to the entire sectional planning area.
This bill would change those requirements so that at a minimum, 25% of units that are proposed by the sectional planning area document as adopted prior to January 1, 2019, and are not designated for students, faculty, or staff of an academic institution, or 500 units, whichever is greater, must be dedicated to lower income households, as specified, and that the land must be developed at an average density of at least 10 units per acre, in accordance with certain requirements and calculated with respect to the entire sectional planning area and inclusive of housing designated for students, faculty, and staff of an academic institution.
Existing law prescribes requirements for the disposal of surplus land by a local agency. Existing law defines terms for these purposes, including, among others, surplus land to mean land owned in fee simple by any local agency for which the local agencys governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agencys use. Existing law defines exempt surplus land to mean, among other things, land that is subject to a sectional planning area document, as described, and meets specified requirements, including that the land identified in the adopted sectional planning area document was dedicated prior to January 1, 2019, at least 25% of the units are dedicated to lower income households, as specified, and that the land is developed at an average density of at least 10 units per acre calculated with respect to the entire sectional planning area.
This bill would change those requirements so that at a minimum, 25% of units that are proposed by the sectional planning area document as adopted prior to January 1, 2019, and are not designated for students, faculty, or staff of an academic institution institution, or 500 units, whichever is greater, must be dedicated to lower income households, as specified, and that the land must be developed at an average density of at least 10 units per acre, in accordance with certain requirements and calculated with respect to the entire sectional planning area and inclusive of housing designated for students, faculty, and staff of an academic institution. The bill would also include in those requirements that the land identified in the adopted sectional planning area document be developed consistent with the sectional planning area document plan as it existed on January 1, 2019.
Existing law prescribes requirements for the disposal of surplus land by a local agency. Existing law defines terms for these purposes, including, among others, surplus land to mean land owned in fee simple by any local agency for which the local agencys governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agencys use. Existing law defines exempt surplus land to mean, among other things, land that is subject to a sectional planning area document, as described, and meets specified requirements, including that the land identified in the adopted sectional planning area document was dedicated prior to January 1, 2019, at least 25% of the units are dedicated to lower income households, as specified, and that the land is developed at an average density of at least 10 units per acre calculated with respect to the entire sectional planning area.
This bill would change those requirements so that at a minimum, 25% of units that are proposed by the sectional planning area document as adopted prior to January 1, 2019, and are not designated for students, faculty, or staff of an academic institution must be dedicated to lower income households, as specified, and that the land must be developed at an average density of at least 10 units per acre, in accordance with certain requirements and calculated with respect to the entire sectional planning area and inclusive of housing designated for students, faculty, and staff of an academic institution. The bill would also include in those requirements that the land identified in the adopted sectional planning area document be developed consistent with the sectional planning area document plan as it existed on January 1, 2019.
Existing law prescribes requirements for the disposal of surplus land by a local agency. Existing law defines terms for these purposes, including, among others, surplus land to mean land owned in fee simple by any local agency for which the local agencys governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agencys use. Existing law defines exempt surplus land to mean, among other things, land that is subject to a sectional planning area, area document, as described, and meets specified requirements, including that at least 25% of the units are dedicated to lower income households, as specified, and that is developed at an average density of at least 10 units per acre calculated with respect to the entire sectional planning area.
This bill would change those requirements so that at least a minimum, 25% of units that are proposed by the sectional planning area document as adopted prior to January 1, 2019, and are not designated for students, faculty, or staff of an academic institution must be dedicated to lower income households, as specified, and that the land must be developed at an average density of at least 10 units per acre, in accordance with certain requirements and calculated with respect to the entire sectional planning area and inclusive of housing designated for students, faculty, and staff of an academic institution.
Existing law prescribes requirements for the disposal of surplus land by a local agency. Existing law defines terms for these purposes, including, among others, surplus land to mean land owned in fee simple by any local agency for which the local agencys governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agencys use. Existing law defines exempt surplus land to mean, among other things, land that is subject to a sectional planning area, as described, and meets specified requirements, including that at least 25% of the units are dedicated to lower income households, as specified, and that is developed at an average density of at least 10 units per acre calculated with respect to the entire sectional planning area.
This bill would change those requirements so that at least 25% of units that are not designated for students, faculty, or staff of an academic institution must be dedicated to lower income households, as specified, and that the land must be developed at an average density of at least 10 units per acre, in accordance with certain requirements and calculated with respect to the entire sectional planning area and inclusive of housing designated for students, faculty, and staff of an academic institution.
Existing law prescribes requirements for the disposal of surplus land by a local agency. Existing law defines terms for these purposes, including, among others, surplus land to mean land owned in fee simple by any local agency for which the local agencys governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agencys use. Existing law defines exempt surplus land to mean, among other things, land that is subject to a sectional planning area, as described, and meets specified requirements, including that at least 25% of the units are dedicated to lower income households, as specified, and that is developed at an average density of at least 10 units per acre calculated with respect to the entire sectional planning area.
This bill would change those requirements so that at least 25% of units that are not designated for students, faculty, or staff of an academic institution must be dedicated to lower income households, as specified, and that the land must be developed at an average density of at least 10 units per acre, calculated with respect to the entire sectional planning area and inclusive of housing designated for students, faculty, and staff of an academic institution.
As used in this article, the following definitions shall apply:
(a)(1)Local agency means every city, whether organized under general law or by charter, county, city and county, district, including school, sewer, water, utility, and local and regional park districts of any kind or class, joint powers authority, successor agency to a former redevelopment agency, housing authority, or other political subdivision of this state and any instrumentality thereof that is empowered to acquire and hold real property.
(2)The Legislature finds and declares that the term district as used in this article includes all districts within the state, including, but not limited to, all special districts, sewer, water, utility, and local and regional park districts, and any other political subdivision of this state that is a district, and therefore the changes in paragraph (1) made by the act adding this paragraph that specify that the provisions of this article apply to all districts, including school, sewer, water, utility, and local and regional park districts of any kind or class, are declaratory of, and not a change in, existing law.
(b)(1)Surplus land means land owned in fee simple by any local agency for which the local agencys governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agencys use. Land shall be declared either surplus land or exempt surplus land, as supported by written findings, before a local agency may take any action to dispose of it consistent with an agencys policies or procedures. A local agency, on an annual basis, may declare multiple parcels as surplus land or exempt surplus land.
(2)Surplus land includes land held in the Community Redevelopment Property Trust Fund pursuant to Section 34191.4 of the Health and Safety Code and land that has been designated in the long-range property management plan approved by the Department of Finance pursuant to Section 34191.5 of the Health and Safety Code, either for sale or for future development, but does not include any specific disposal of land to an identified entity described in the plan.
(3)Nothing in this article prevents a local agency from obtaining fair market value for the disposition of surplus land consistent with Section 54226.
(4)Notwithstanding paragraph (1), a local agency is not required to make a declaration at a public meeting for land that is exempt surplus land pursuant to subparagraph (A), (B), (E), (K), (L), or (Q) of paragraph (1) of subdivision (f) if the local agency identifies the land in a notice that is published and available for public comment, including notice to the entities identified in subdivision (a) of Section 54222, at least 30 days before the exemption takes effect.
(c)(1)Except as provided in paragraph (2), agencys use shall include, but not be limited to, land that is being used, or is planned to be used pursuant to a written plan adopted by the local agencys governing board, for agency work or operations, including, but not limited to, utility sites, property owned by a port that is used to support logistics uses, watershed property, land being used for conservation purposes, land for demonstration, exhibition, or educational purposes related to greenhouse gas emissions, sites for broadband equipment or wireless facilities, and buffer sites near sensitive governmental uses, including, but not limited to, waste disposal sites, and wastewater treatment plants. Agencys use by a local agency that is a district shall also include land disposed for uses described in subparagraph (B) of paragraph (2).
(2)(A)Agencys use shall not include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development. Property disposed of for the sole purpose of investment or generation of revenue shall not be considered necessary for the agencys use.
(B)In the case of a local agency that is a district, excepting those whose primary mission or purpose is to supply the public with a transportation system, agencys use may include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or be for the sole purpose of investment or generation of revenue if the agencys governing body takes action in a public meeting declaring that the use of the site will do one of the following:
(i)Directly further the express purpose of agency work or operations.
(ii)Be expressly authorized by a statute governing the local agency, provided the district complies with Section 54233.5 if applicable.
(d)(1)Dispose means either of the following:
(A)The sale of the surplus land.
(B)The entering of a lease for surplus land, which is for a term longer than 15 years, inclusive of any extension or renewal options included in the terms of the initial lease, entered into on or after January 1, 2024.
(2)Dispose shall not mean either of the following:
(A)The entering of a lease for surplus land, which is for a term of 15 years or less, inclusive of any extension or renewal options included in the terms of the initial lease.
(B)The entering of a lease for surplus land on which no development or demolition will occur, regardless of the term of the lease.
(e)Open-space purposes means the use of land for public recreation, enjoyment of scenic beauty, or conservation or use of natural resources.
(f)(1)Except as provided in paragraph (2), exempt surplus land means any of the following:
(A)Surplus land that is transferred pursuant to Section 25539.4 or 37364.
(B)Surplus land that is less than one-half acre in area and is not contiguous to land owned by a state or local agency that is used for open-space or low- and moderate-income housing purposes.
(C)Surplus land that a local agency is exchanging for another property necessary for the agencys use. Property may include easements necessary for the agencys use.
(D)Surplus land that a local agency is transferring to another local, state, or federal agency, or to a third-party intermediary for future dedication for the receiving agencys use, or to a federally recognized California Indian tribe. If the surplus land is transferred to a third-party intermediary, the receiving agencys use must be contained in a legally binding agreement at the time of transfer to the third-party intermediary.
(E)Surplus land that is a former street, right-of-way, or easement, and is conveyed to an owner of an adjacent property.
(F)(i)Surplus land that is to be developed for a housing development, which may have ancillary commercial ground floor uses, that restricts 100 percent of the residential units to persons and families of low or moderate income, with at least 75 percent of the residential units restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Section 50052.5 or 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability, and in no event shall the maximum affordable sales price or rent level be higher than 20 percent below the median market rents or sales prices for the neighborhood in which the site is located.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(G)(i)Surplus land that is subject to a local agencys open, competitive solicitation or that is put to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process, for a housing or a mixed-use development that is more than 1 acre and less than 10 acres in area, consisting of either a single parcel, or two or more adjacent or nonadjacent parcels combined, that includes not less than 300 residential units, and that restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(H)(i)Surplus land totaling 10 or more acres, consisting of either a single parcel, or two or more adjacent or nonadjacent parcels combined for disposition to one or more buyers pursuant to a plan or ordinance adopted by the legislative body of the local agency, or a state statute. That surplus land shall be subject to a local agencys open, competitive solicitation process or put out to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process for a housing or mixed-use development.
(ii)The aggregate development shall include the greater of the following:
(I)Not less than 300 residential units.
(II)A number of residential units equal to 10 times the number of acres of the surplus land or 10,000 residential units, whichever is less.
(iii)At least 25 percent of the residential units shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent pursuant to Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(iv)If nonresidential development is included in the development pursuant to this subparagraph, at least 25 percent of the total planned units affordable to lower income households shall be made available for lease or sale and permitted for use and occupancy before or at the same time with every 25 percent of nonresidential development made available for lease or sale and permitted for use and occupancy.
(v)A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph. A local agency shall only dispose of land pursuant to this subparagraph through a disposition and development agreement that includes an indemnification clause that provides that if an action occurs after disposition violates this subparagraph, the person or entity that acquired the property shall be liable for the penalties.
(vi)The requirements of clauses (i) to (v), inclusive, shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(I)A mixed-use development, which may include more than one publicly owned parcel, that meets all of the following conditions:
(i)The development restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(ii)At least 50 percent of the square footage of the new construction associated with the development is designated for residential use.
(iii)The development is not located in an urbanized area, as defined in Section 21094.5 of the Public Resources Code.
(J)(i)Surplus land that is subject to a valid legal restriction that is not imposed by the local agency and that makes housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site. A declaration of exemption pursuant to this subparagraph shall be supported by documentary evidence establishing the valid legal restriction. For the purposes of this section, documentary evidence includes, but is not limited to, a contract, agreement, deed restriction, statute, regulation, or other writing that documents the valid legal restriction.
(ii)Valid legal restrictions include, but are not limited to, all of the following:
(I)Existing constraints under ownership rights or contractual rights or obligations that prevent the use of the property for housing, if the rights or obligations were agreed to prior to September 30, 2019.
(II)Conservation or other easements or encumbrances that prevent housing development.
(III)Existing leases, or other contractual obligations or restrictions, if the terms were agreed to prior to September 30, 2019.
(IV)Restrictions imposed by the source of funding that a local agency used to purchase a property, provided that both of the following requirements are met:
(ia)The restrictions limit the use of those funds to purposes other than housing.
(ib)The proposed disposal of surplus land meets a use consistent with that purpose.
(iii)Valid legal restrictions that would make housing prohibited do not include either of the following:
(I)An existing nonresidential land use designation on the surplus land.
(II)Covenants, restrictions, or other conditions on the property rendered void and unenforceable by any other law, including, but not limited to, Section 714.6 of the Civil Code.
(iv)Feasible methods to mitigate or avoid a valid legal restriction on the site do not include a requirement that the local agency acquire additional property rights or property interests belonging to third parties.
(K)Surplus land that was granted by the state in trust to a local agency or that was acquired by the local agency for trust purposes by purchase or exchange, and for which disposal of the land is authorized or required subject to conditions established by statute.
(L)Land that is subject to either of the following, unless compliance with this article is expressly required:
(i)Section 17515, 81192, 81397, 81399, 81420, or 81422 of the Education Code.
(ii)Part 14 (commencing with Section 53570) of Division 31 of the Health and Safety Code.
(M)Surplus land that is a former military base that was conveyed by the federal government to a local agency, and is subject to Article 8 (commencing with Section 33492.125) of Chapter 4.5 of Part 1 of Division 24 of the Health and Safety Code, provided that all of the following conditions are met:
(i)The former military base has an aggregate area greater than five acres, is expected to include a mix of residential and nonresidential uses, and is expected to include no fewer than 1,400 residential units upon completion of development or redevelopment of the former military base.
(ii)The affordability requirements for residential units shall be governed by a settlement agreement entered into prior to September 1, 2020. Furthermore, at least 25 percent of the initial 1,400 residential units developed shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(iii)Before disposition of the surplus land, the agency adopts written findings that the land is exempt surplus land pursuant to this subparagraph.
(iv)Before disposition of the surplus land, the recipient has negotiated a project labor agreement consistent with the local agencys project stabilization agreement resolution, as adopted on February 2, 2021, and any succeeding ordinance, resolution, or policy, regardless of the length of the agreement between the local agency and the recipient.
(v)The agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development of residential units on the former military base, including the total number of residential units that have been permitted and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph or the settlement agreement.
(N)Real property that is used by a district for an agencys use expressly authorized in subdivision (c).
(O)Land that has been transferred before June 30, 2019, by the state to a local agency pursuant to Section 32667 of the Streets and Highways Code and has a minimum planned residential density of at least 100 dwelling units per acre, and includes 100 or more residential units that are restricted to persons and families of low or moderate income, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability. For purposes of this subparagraph, not more than 20 percent of the affordable units may be restricted to persons and families of moderate income and at least 80 percent of the affordable units must be restricted to lower income households as defined in Section 50079.5 of the Health and Safety Code.
(P)(i)Land that meets the following conditions:
(I)Land that is subject to a sectional planning area document that meets both of the following:
(ia)The sectional planning area was adopted prior to January 1, 2019.
(ib)The sectional planning area document is consistent with county and city general plans applicable to the land.
(II)The land identified in the adopted sectional planning area document was dedicated prior to January 1, 2019.
(III)On January 1, 2019, the parcels on the land met at least one of the following conditions:
(ia)The land was subject to an irrevocable offer of dedication of fee interest requiring the land to be used for a specified purpose.
(ib)The land was acquired through a land exchange subject to a land offer agreement that grants the lands original owner the right to repurchase the land acquired by the local agency pursuant to the agreement if the land will not be developed in a manner consistent with the agreement.
(ic)The land was subject to a grant deed specifying that the property shall be used for educational uses and limiting other types of uses allowed on the property.
(IV)At a minimum, 25 percent of the units that are proposed by the sectional planning area document as adopted prior to January 1, 2019, and are not designated for students, faculty, or staff of an academic institution, or 500 units, whichever is greater, shall be constructed and dedicated to lower income households at an affordable rent or an affordable housing cost and subject to a recorded deed restriction for a period of 55 years for rental units and 45 years for owner-occupied units, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(ia)Lower income household shall have the same meaning as defined in Section 50079.5 of the Health and Safety Code.
(ib)Affordable rent shall have the same meaning as defined in Section 50053 of the Health and Safety Code.
(ic)Affordable housing cost shall have the same meaning as defined in Section 50052.5 of the Health and Safety Code.
(V)(ia)The land is developed at an average density of at least 10 units per acre, calculated with respect to the entire sectional planning area and inclusive of housing designated for students, faculty, and staff of an academic institution.
(ib)For purposes of this subclause, a student housing unit must meet all of the following requirements to be counted toward meeting the density requirement described in sub-subclause (ia):
(Ia)The unit includes a fully functioning kitchen with a refrigerator, stove, sink with hot and cold water, vent, and an area to prepare food.
(Ib)The unit has a ratio of beds to toilets, lavatories, and showers not exceeding five to one.
(Ic)The unit meets or exceeds the requirements described in Section 17920.3 of the Health and Safety Code.
(VI)No more than 25 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 25 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VII)No more than 50 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 50 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VIII)No more than 75 percent of the nonresidential square footage identified in the sectional planning area document shall receive its first certificate of occupancy before at least 75 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(ii)The local agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development, including the total square footage of the residential and nonresidential development, the number of residential units that have been permitted, and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
(iii)The Department of Housing and Community Development may request additional information from the agency regarding land disposed of pursuant to this subparagraph.
(iv)At least 30 days prior to disposing of land declared exempt surplus land, a local agency shall provide the Department of Housing and Community Development a written notification of its declaration and findings in a form prescribed by the Department of Housing and Community Development. Within 30 days of receipt of the written notification and findings, the department shall notify the local agency if the department has determined that the local agency is in violation of this article. A local agency that fails to submit the written notification and findings shall be liable for a civil penalty pursuant to this subparagraph. A local agency shall not be liable for the civil penalty if the Department of Housing and Community Development does not notify the agency that the agency is in violation of this article within 30 days of receiving the written notification and findings. Once the department determines that the declarations and findings comply with subclauses (I) to (IV), inclusive, of clause (i), the local agency may proceed with disposal of land pursuant to this subparagraph. This clause is declaratory of, and not a change in, existing law.
(v)If the local agency disposes of land in violation of this subparagraph, the local agency shall be liable for a civil penalty calculated as follows:
(I)For a first violation, 30 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(II)For a second or subsequent violation, 50 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(III)For purposes of this subparagraph, fair market value shall be determined by an independent appraisal of the land.
(IV)An action to enforce this subparagraph may be brought by any of the following:
(ia)An entity identified in subdivisions (a) to (e), inclusive, of Section 54222.
(ib)A person who would have been eligible to apply for residency in affordable housing had the agency not violated this section.
(ic)A housing organization, as that term is defined in Section 65589.5.
(id)A beneficially interested person or entity.
(ie)The Department of Housing and Community Development.
(V)A penalty assessed pursuant to this subparagraph shall, except as otherwise provided, be deposited into a local housing trust fund. The local agency may elect to instead deposit the penalty moneys into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund. Penalties shall not be paid out of funds already dedicated to affordable housing, including, but not limited to, a Low and Moderate Income Housing Asset Fund, funds dedicated to housing for very low, low-, and moderate-income households, and federal HOME Investment Partnerships Program and Community Development Block Grant Program funds. The local agency shall commit and expend the penalty moneys deposited into the local housing trust fund within five years of deposit for the sole purpose of financing newly constructed housing units that are affordable to extremely low, very low, or low-income households.
(VI)Five years after deposit of the penalty moneys into the local housing trust fund, if the funds have not been expended, the funds shall revert to the state and be deposited in the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund for the sole purpose of financing newly constructed housing units located in the same jurisdiction as the surplus land and that are affordable to extremely low, very low, or low-income households. Expenditure of any penalty moneys deposited into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund pursuant to this subdivision shall be subject to appropriation by the Legislature.
(vi)For purposes of this subparagraph, the following definitions apply:
(I)Sectional planning area means an area composed of identifiable planning units, within which common services and facilities, a strong internal unity, and an integrated pattern of land use, circulation, and townscape planning are readily achievable.
(II)Sectional planning area document means a document or plan that sets forth, at minimum, a site utilization plan of the sectional planning area and development standards for each land use area and designation.
(vii)This subparagraph shall become inoperative on January 1, 2034.
(Q)Land that is owned by a California public-use airport on which residential uses are prohibited pursuant to Federal Aviation Administration Order 5190.6B, Airport Compliance Program, Chapter 20 -- Compatible Land Use and Airspace Protection.
(R)Land that is transferred to a community land trust, and all of the following conditions are met:
(i)The property is being or will be developed or rehabilitated as any of the following:
(I)An owner-occupied single-family dwelling.
(II)An owner-occupied unit in a multifamily dwelling.
(III)A member-occupied unit in a limited equity housing cooperative.
(IV)A rental housing development.
(ii)Improvements on the property are or will be available for use and ownership or for rent by qualified persons, as defined in paragraph (6) of subdivision (c) of Section 214.18 of the Revenue and Taxation Code.
(iii)(I)A deed restriction or other instrument, requiring a contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units or on the affordability of rental units is recorded on or before the lien date following the acquisition of the property by the community land trust.
(II)For the purpose of this clause, the following definitions apply:
(ia)A contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units means a contract described in paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.
(ib)A contract or contracts serving as an enforceable restriction on the affordability of rental units means an enforceable and verifiable agreement with a public agency, a recorded deed restriction, or other legal document described in subparagraph (A) of paragraph (2) of subdivision (g) of Section 214 of the Revenue and Taxation Code.
(iv)A copy of the deed restriction or other instrument shall be provided to the assessor.
(S)(i)For local agencies whose primary mission or purpose is to supply the public with a transportation system, surplus land that is developed for commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or for the sole purpose of investment or generation of revenue, if the agency meets all of the following conditions:
(I)The agency has an adopted land use plan or policy that designates at least 50 percent of the gross acreage covered by the adopted land use plan or policy for residential purposes. The adopted land use plan or policy shall also require the development of at least 300 residential units, or at least 10 residential units per gross acre, averaged across all land covered by the land use plan or policy, whichever is greater.
(II)The agency has an adopted land use plan or policy that requires at least 25 percent of all residential units to be developed on the parcels covered by the adopted land use plan or policy made available to lower income households, as defined in Section 50079 of the Health and Safety Code, at an affordable sales price or rented at an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing and 45 years for ownership housing, unless a local ordinance or the terms of a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability. These terms shall be included in the land use plan or policy and dictate that they will be contained in a covenant or restriction recorded against the surplus land at the time of disposition that shall run with the land and be enforceable against any owner or lessee who violates the covenant or restriction and each successor in interest who continues the violation.
(III)Land disposed of for residential purposes shall issue a competitive request for proposals subject to the local agencys open, competitive solicitation process or put out to open, competitive bid by the local agency, provided that all entities identified in subdivision (a) of Section 54222 are invited to participate.
(IV)Prior to entering into an agreement to dispose of a parcel for nonresidential development on land designated for the purposes authorized pursuant to this subparagraph in an agencys adopted land use plan or policy, the agency, since January 1, 2020, must have entered into an agreement to dispose of a minimum of 25 percent of the land designated for affordable housing pursuant to subclause (II).
(ii)The agency may exempt at one time all parcels covered by the adopted land use plan or policy pursuant to this subparagraph.
(2)Notwithstanding paragraph (1), a written notice of the availability of surplus land for open-space purposes shall be sent to the entities described in subdivision (b) of Section 54222 before disposing of the surplus land, provided the land does not meet the criteria in subparagraph (H) of paragraph (1), if the land is any of the following:
(A)Within a coastal zone.
(B)Adjacent to a historical unit of the State Parks System.
(C)Listed on, or determined by the State Office of Historic Preservation to be eligible for, the National Register of Historic Places.
(D)Within the Lake Tahoe region as defined in Section 66905.5.
(g)Persons and families of low or moderate income has the same meaning as provided in Section 50093 of the Health and Safety Code.
As used in this article, the following definitions shall apply:
(a)(1)Local agency means every city, whether organized under general law or by charter, county, city and county, district, including school, sewer, water, utility, and local and regional park districts of any kind or class, joint powers authority, successor agency to a former redevelopment agency, housing authority, or other political subdivision of this state and any instrumentality thereof that is empowered to acquire and hold real property.
(2)The Legislature finds and declares that the term district as used in this article includes all districts within the state, including, but not limited to, all special districts, sewer, water, utility, and local and regional park districts, and any other political subdivision of this state that is a district, and therefore the changes in paragraph (1) made by the act adding this paragraph that specify that the provisions of this article apply to all districts, including school, sewer, water, utility, and local and regional park districts of any kind or class, are declaratory of, and not a change in, existing law.
(b)(1)Surplus land means land owned in fee simple by any local agency for which the local agencys governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agencys use. Land shall be declared either surplus land or exempt surplus land, as supported by written findings, before a local agency may take any action to dispose of it consistent with an agencys policies or procedures. A local agency, on an annual basis, may declare multiple parcels as surplus land or exempt surplus land.
(2)Surplus land includes land held in the Community Redevelopment Property Trust Fund pursuant to Section 34191.4 of the Health and Safety Code and land that has been designated in the long-range property management plan approved by the Department of Finance pursuant to Section 34191.5 of the Health and Safety Code, either for sale or for future development, but does not include any specific disposal of land to an identified entity described in the plan.
(3)Nothing in this article prevents a local agency from obtaining fair market value for the disposition of surplus land consistent with Section 54226.
(4)Notwithstanding paragraph (1), a local agency is not required to make a declaration at a public meeting for land that is exempt surplus land pursuant to subparagraph (A), (B), (E), (K), (L), or (Q) of paragraph (1) of subdivision (f) if the local agency identifies the land in a notice that is published and available for public comment, including notice to the entities identified in subdivision (a) of Section 54222, at least 30 days before the exemption takes effect.
(c)(1)Except as provided in paragraph (2), agencys use shall include, but not be limited to, land that is being used, or is planned to be used pursuant to a written plan adopted by the local agencys governing board, for agency work or operations, including, but not limited to, utility sites, property owned by a port that is used to support logistics uses, watershed property, land being used for conservation purposes, land for demonstration, exhibition, or educational purposes related to greenhouse gas emissions, sites for broadband equipment or wireless facilities, and buffer sites near sensitive governmental uses, including, but not limited to, waste disposal sites, and wastewater treatment plants. Agencys use by a local agency that is a district shall also include land disposed for uses described in subparagraph (B) of paragraph (2).
(2)(A)Agencys use shall not include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development. Property disposed of for the sole purpose of investment or generation of revenue shall not be considered necessary for the agencys use.
(B)In the case of a local agency that is a district, excepting those whose primary mission or purpose is to supply the public with a transportation system, agencys use may include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or be for the sole purpose of investment or generation of revenue if the agencys governing body takes action in a public meeting declaring that the use of the site will do one of the following:
(i)Directly further the express purpose of agency work or operations.
(ii)Be expressly authorized by a statute governing the local agency, provided the district complies with Section 54233.5 if applicable.
(d)(1)Dispose means either of the following:
(A)The sale of the surplus land.
(B)The entering of a lease for surplus land, which is for a term longer than 15 years, inclusive of any extension or renewal options included in the terms of the initial lease, entered into on or after January 1, 2024.
(2)Dispose shall not mean either of the following:
(A)The entering of a lease for surplus land, which is for a term of 15 years or less, inclusive of any extension or renewal options included in the terms of the initial lease.
(B)The entering of a lease for surplus land on which no development or demolition will occur, regardless of the term of the lease.
(e)Open-space purposes means the use of land for public recreation, enjoyment of scenic beauty, or conservation or use of natural resources.
(f)(1)Except as provided in paragraph (2), exempt surplus land means any of the following:
(A)Surplus land that is transferred pursuant to Section 25539.4 or 37364.
(B)Surplus land that is less than one-half acre in area and is not contiguous to land owned by a state or local agency that is used for open-space or low- and moderate-income housing purposes.
(C)Surplus land that a local agency is exchanging for another property necessary for the agencys use. Property may include easements necessary for the agencys use.
(D)Surplus land that a local agency is transferring to another local, state, or federal agency, or to a third-party intermediary for future dedication for the receiving agencys use, or to a federally recognized California Indian tribe. If the surplus land is transferred to a third-party intermediary, the receiving agencys use must be contained in a legally binding agreement at the time of transfer to the third-party intermediary.
(E)Surplus land that is a former street, right-of-way, or easement, and is conveyed to an owner of an adjacent property.
(F)(i)Surplus land that is to be developed for a housing development, which may have ancillary commercial ground floor uses, that restricts 100 percent of the residential units to persons and families of low or moderate income, with at least 75 percent of the residential units restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Section 50052.5 or 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability, and in no event shall the maximum affordable sales price or rent level be higher than 20 percent below the median market rents or sales prices for the neighborhood in which the site is located.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(G)(i)Surplus land that is subject to a local agencys open, competitive solicitation or that is put to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process, for a housing or a mixed-use development that is more than 1 acre and less than 10 acres in area, consisting of either a single parcel, or two or more adjacent or nonadjacent parcels combined, that includes not less than 300 residential units, and that restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(H)(i)Surplus land totaling 10 or more acres, consisting of either a single parcel, or two or more adjacent or nonadjacent parcels combined for disposition to one or more buyers pursuant to a plan or ordinance adopted by the legislative body of the local agency, or a state statute. That surplus land shall be subject to a local agencys open, competitive solicitation process or put out to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process for a housing or mixed-use development.
(ii)The aggregate development shall include the greater of the following:
(I)Not less than 300 residential units.
(II)A number of residential units equal to 10 times the number of acres of the surplus land or 10,000 residential units, whichever is less.
(iii)At least 25 percent of the residential units shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent pursuant to Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(iv)If nonresidential development is included in the development pursuant to this subparagraph, at least 25 percent of the total planned units affordable to lower income households shall be made available for lease or sale and permitted for use and occupancy before or at the same time with every 25 percent of nonresidential development made available for lease or sale and permitted for use and occupancy.
(v)A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph. A local agency shall only dispose of land pursuant to this subparagraph through a disposition and development agreement that includes an indemnification clause that provides that if an action occurs after disposition violates this subparagraph, the person or entity that acquired the property shall be liable for the penalties.
(vi)The requirements of clauses (i) to (v), inclusive, shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(I)A mixed-use development, which may include more than one publicly owned parcel, that meets all of the following conditions:
(i)The development restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(ii)At least 50 percent of the square footage of the new construction associated with the development is designated for residential use.
(iii)The development is not located in an urbanized area, as defined in Section 21094.5 of the Public Resources Code.
(J)(i)Surplus land that is subject to a valid legal restriction that is not imposed by the local agency and that makes housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site. A declaration of exemption pursuant to this subparagraph shall be supported by documentary evidence establishing the valid legal restriction. For the purposes of this section, documentary evidence includes, but is not limited to, a contract, agreement, deed restriction, statute, regulation, or other writing that documents the valid legal restriction.
(ii)Valid legal restrictions include, but are not limited to, all of the following:
(I)Existing constraints under ownership rights or contractual rights or obligations that prevent the use of the property for housing, if the rights or obligations were agreed to prior to September 30, 2019.
(II)Conservation or other easements or encumbrances that prevent housing development.
(III)Existing leases, or other contractual obligations or restrictions, if the terms were agreed to prior to September 30, 2019.
(IV)Restrictions imposed by the source of funding that a local agency used to purchase a property, provided that both of the following requirements are met:
(ia)The restrictions limit the use of those funds to purposes other than housing.
(ib)The proposed disposal of surplus land meets a use consistent with that purpose.
(iii)Valid legal restrictions that would make housing prohibited do not include either of the following:
(I)An existing nonresidential land use designation on the surplus land.
(II)Covenants, restrictions, or other conditions on the property rendered void and unenforceable by any other law, including, but not limited to, Section 714.6 of the Civil Code.
(iv)Feasible methods to mitigate or avoid a valid legal restriction on the site do not include a requirement that the local agency acquire additional property rights or property interests belonging to third parties.
(K)Surplus land that was granted by the state in trust to a local agency or that was acquired by the local agency for trust purposes by purchase or exchange, and for which disposal of the land is authorized or required subject to conditions established by statute.
(L)Land that is subject to either of the following, unless compliance with this article is expressly required:
(i)Section 17515, 81192, 81397, 81399, 81420, or 81422 of the Education Code.
(ii)Part 14 (commencing with Section 53570) of Division 31 of the Health and Safety Code.
(M)Surplus land that is a former military base that was conveyed by the federal government to a local agency, and is subject to Article 8 (commencing with Section 33492.125) of Chapter 4.5 of Part 1 of Division 24 of the Health and Safety Code, provided that all of the following conditions are met:
(i)The former military base has an aggregate area greater than five acres, is expected to include a mix of residential and nonresidential uses, and is expected to include no fewer than 1,400 residential units upon completion of development or redevelopment of the former military base.
(ii)The affordability requirements for residential units shall be governed by a settlement agreement entered into prior to September 1, 2020. Furthermore, at least 25 percent of the initial 1,400 residential units developed shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(iii)Before disposition of the surplus land, the agency adopts written findings that the land is exempt surplus land pursuant to this subparagraph.
(iv)Before disposition of the surplus land, the recipient has negotiated a project labor agreement consistent with the local agencys project stabilization agreement resolution, as adopted on February 2, 2021, and any succeeding ordinance, resolution, or policy, regardless of the length of the agreement between the local agency and the recipient.
(v)The agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development of residential units on the former military base, including the total number of residential units that have been permitted and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph or the settlement agreement.
(N)Real property that is used by a district for an agencys use expressly authorized in subdivision (c).
(O)Land that has been transferred before June 30, 2019, by the state to a local agency pursuant to Section 32667 of the Streets and Highways Code and has a minimum planned residential density of at least 100 dwelling units per acre, and includes 100 or more residential units that are restricted to persons and families of low or moderate income, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability. For purposes of this subparagraph, not more than 20 percent of the affordable units may be restricted to persons and families of moderate income and at least 80 percent of the affordable units must be restricted to lower income households as defined in Section 50079.5 of the Health and Safety Code.
(P)(i)Land that meets the following conditions:
(I)Land that is subject to a sectional planning area document that meets both of the following:
(ia)The sectional planning area was adopted prior to January 1, 2019.
(ib)The sectional planning area document is consistent with county and city general plans applicable to the land.
(II)The land identified in the adopted sectional planning area document was dedicated prior to January 1, 2019 and is developed consistent with the sectional planning area document plan as it existed on January 1, 2019.
(III)On January 1, 2019, the parcels on the land met at least one of the following conditions:
(ia)The land was subject to an irrevocable offer of dedication of fee interest requiring the land to be used for a specified purpose.
(ib)The land was acquired through a land exchange subject to a land offer agreement that grants the lands original owner the right to repurchase the land acquired by the local agency pursuant to the agreement if the land will not be developed in a manner consistent with the agreement.
(ic)The land was subject to a grant deed specifying that the property shall be used for educational uses and limiting other types of uses allowed on the property.
(IV)At a minimum, 25 percent of the units that are proposed by the sectional planning area document as adopted prior to January 1, 2019, and are not designated for students, faculty, or staff of an academic institution institution, or 500 units, whichever is greater, shall be constructed and dedicated to lower income households at an affordable rent or an affordable housing cost and subject to a recorded deed restriction for a period of 55 years for rental units and 45 years for owner-occupied units, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(ia)Lower income household shall have the same meaning as defined in Section 50079.5 of the Health and Safety Code.
(ib)Affordable rent shall have the same meaning as defined in Section 50053 of the Health and Safety Code.
(ic)Affordable housing cost shall have the same meaning as defined in Section 50052.5 of the Health and Safety Code.
(V)(ia)The land is developed at an average density of at least 10 units per acre, calculated with respect to the entire sectional planning area and inclusive of housing designated for students, faculty, and staff of an academic institution.
(ib)For purposes of this subclause, a student housing unit must meet all of the following requirements to be counted toward meeting the density requirement described in sub-subclause (ia):
(Ia)The unit includes a fully functioning kitchen with a refrigerator, stove, sink with hot and cold water, vent, and an area to prepare food.
(Ib)The unit has a ratio of beds to toilets, lavatories, and showers not exceeding five to one.
(Ic)The unit meets or exceeds the requirements described in Section 17920.3 of the Health and Safety Code.
(VI)No more than 25 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 25 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VII)No more than 50 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 50 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VIII)No more than 75 percent of the nonresidential square footage identified in the sectional planning area document shall receive its first certificate of occupancy before at least 75 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(ii)The local agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development, including the total square footage of the residential and nonresidential development, the number of residential units that have been permitted, and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
(iii)The Department of Housing and Community Development may request additional information from the agency regarding land disposed of pursuant to this subparagraph.
(iv)At least 30 days prior to disposing of land declared exempt surplus land, a local agency shall provide the Department of Housing and Community Development a written notification of its declaration and findings in a form prescribed by the Department of Housing and Community Development. Within 30 days of receipt of the written notification and findings, the department shall notify the local agency if the department has determined that the local agency is in violation of this article. A local agency that fails to submit the written notification and findings shall be liable for a civil penalty pursuant to this subparagraph. A local agency shall not be liable for the civil penalty if the Department of Housing and Community Development does not notify the agency that the agency is in violation of this article within 30 days of receiving the written notification and findings. Once the department determines that the declarations and findings comply with subclauses (I) to (IV), inclusive, of clause (i), the local agency may proceed with disposal of land pursuant to this subparagraph. This clause is declaratory of, and not a change in, existing law.
(v)If the local agency disposes of land in violation of this subparagraph, the local agency shall be liable for a civil penalty calculated as follows:
(I)For a first violation, 30 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(II)For a second or subsequent violation, 50 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(III)For purposes of this subparagraph, fair market value shall be determined by an independent appraisal of the land.
(IV)An action to enforce this subparagraph may be brought by any of the following:
(ia)An entity identified in subdivisions (a) to (e), inclusive, of Section 54222.
(ib)A person who would have been eligible to apply for residency in affordable housing had the agency not violated this section.
(ic)A housing organization, as that term is defined in Section 65589.5.
(id)A beneficially interested person or entity.
(ie)The Department of Housing and Community Development.
(V)A penalty assessed pursuant to this subparagraph shall, except as otherwise provided, be deposited into a local housing trust fund. The local agency may elect to instead deposit the penalty moneys into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund. Penalties shall not be paid out of funds already dedicated to affordable housing, including, but not limited to, a Low and Moderate Income Housing Asset Fund, funds dedicated to housing for very low, low-, and moderate-income households, and federal HOME Investment Partnerships Program and Community Development Block Grant Program funds. The local agency shall commit and expend the penalty moneys deposited into the local housing trust fund within five years of deposit for the sole purpose of financing newly constructed housing units that are affordable to extremely low, very low, or low-income households.
(VI)Five years after deposit of the penalty moneys into the local housing trust fund, if the funds have not been expended, the funds shall revert to the state and be deposited in the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund for the sole purpose of financing newly constructed housing units located in the same jurisdiction as the surplus land and that are affordable to extremely low, very low, or low-income households. Expenditure of any penalty moneys deposited into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund pursuant to this subdivision shall be subject to appropriation by the Legislature.
(vi)For purposes of this subparagraph, the following definitions apply:
(I)Sectional planning area means an area composed of identifiable planning units, within which common services and facilities, a strong internal unity, and an integrated pattern of land use, circulation, and townscape planning are readily achievable.
(II)Sectional planning area document means a document or plan that sets forth, at minimum, a site utilization plan of the sectional planning area and development standards for each land use area and designation.
(vii)This subparagraph shall become inoperative on January 1, 2034.
(Q)Land that is owned by a California public-use airport on which residential uses are prohibited pursuant to Federal Aviation Administration Order 5190.6B, Airport Compliance Program, Chapter 20 -- Compatible Land Use and Airspace Protection.
(R)Land that is transferred to a community land trust, and all of the following conditions are met:
(i)The property is being or will be developed or rehabilitated as any of the following:
(I)An owner-occupied single-family dwelling.
(II)An owner-occupied unit in a multifamily dwelling.
(III)A member-occupied unit in a limited equity housing cooperative.
(IV)A rental housing development.
(ii)Improvements on the property are or will be available for use and ownership or for rent by qualified persons, as defined in paragraph (6) of subdivision (c) of Section 214.18 of the Revenue and Taxation Code.
(iii)(I)A deed restriction or other instrument, requiring a contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units or on the affordability of rental units is recorded on or before the lien date following the acquisition of the property by the community land trust.
(II)For the purpose of this clause, the following definitions apply:
(ia)A contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units means a contract described in paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.
(ib)A contract or contracts serving as an enforceable restriction on the affordability of rental units means an enforceable and verifiable agreement with a public agency, a recorded deed restriction, or other legal document described in subparagraph (A) of paragraph (2) of subdivision (g) of Section 214 of the Revenue and Taxation Code.
(iv)A copy of the deed restriction or other instrument shall be provided to the assessor.
(S)(i)For local agencies whose primary mission or purpose is to supply the public with a transportation system, surplus land that is developed for commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or for the sole purpose of investment or generation of revenue, if the agency meets all of the following conditions:
(I)The agency has an adopted land use plan or policy that designates at least 50 percent of the gross acreage covered by the adopted land use plan or policy for residential purposes. The adopted land use plan or policy shall also require the development of at least 300 residential units, or at least 10 residential units per gross acre, averaged across all land covered by the land use plan or policy, whichever is greater.
(II)The agency has an adopted land use plan or policy that requires at least 25 percent of all residential units to be developed on the parcels covered by the adopted land use plan or policy made available to lower income households, as defined in Section 50079 of the Health and Safety Code, at an affordable sales price or rented at an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing and 45 years for ownership housing, unless a local ordinance or the terms of a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability. These terms shall be included in the land use plan or policy and dictate that they will be contained in a covenant or restriction recorded against the surplus land at the time of disposition that shall run with the land and be enforceable against any owner or lessee who violates the covenant or restriction and each successor in interest who continues the violation.
(III)Land disposed of for residential purposes shall issue a competitive request for proposals subject to the local agencys open, competitive solicitation process or put out to open, competitive bid by the local agency, provided that all entities identified in subdivision (a) of Section 54222 are invited to participate.
(IV)Prior to entering into an agreement to dispose of a parcel for nonresidential development on land designated for the purposes authorized pursuant to this subparagraph in an agencys adopted land use plan or policy, the agency, since January 1, 2020, must have entered into an agreement to dispose of a minimum of 25 percent of the land designated for affordable housing pursuant to subclause (II).
(ii)The agency may exempt at one time all parcels covered by the adopted land use plan or policy pursuant to this subparagraph.
(2)Notwithstanding paragraph (1), a written notice of the availability of surplus land for open-space purposes shall be sent to the entities described in subdivision (b) of Section 54222 before disposing of the surplus land, provided the land does not meet the criteria in subparagraph (H) of paragraph (1), if the land is any of the following:
(A)Within a coastal zone.
(B)Adjacent to a historical unit of the State Parks System.
(C)Listed on, or determined by the State Office of Historic Preservation to be eligible for, the National Register of Historic Places.
(D)Within the Lake Tahoe region as defined in Section 66905.5.
(g)Persons and families of low or moderate income has the same meaning as provided in Section 50093 of the Health and Safety Code.
As used in this article, the following definitions shall apply:
(a)(1)Local agency means every city, whether organized under general law or by charter, county, city and county, district, including school, sewer, water, utility, and local and regional park districts of any kind or class, joint powers authority, successor agency to a former redevelopment agency, housing authority, or other political subdivision of this state and any instrumentality thereof that is empowered to acquire and hold real property.
(2)The Legislature finds and declares that the term district as used in this article includes all districts within the state, including, but not limited to, all special districts, sewer, water, utility, and local and regional park districts, and any other political subdivision of this state that is a district, and therefore the changes in paragraph (1) made by the act adding this paragraph that specify that the provisions of this article apply to all districts, including school, sewer, water, utility, and local and regional park districts of any kind or class, are declaratory of, and not a change in, existing law.
(b)(1)Surplus land means land owned in fee simple by any local agency for which the local agencys governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agencys use. Land shall be declared either surplus land or exempt surplus land, as supported by written findings, before a local agency may take any action to dispose of it consistent with an agencys policies or procedures. A local agency, on an annual basis, may declare multiple parcels as surplus land or exempt surplus land.
(2)Surplus land includes land held in the Community Redevelopment Property Trust Fund pursuant to Section 34191.4 of the Health and Safety Code and land that has been designated in the long-range property management plan approved by the Department of Finance pursuant to Section 34191.5 of the Health and Safety Code, either for sale or for future development, but does not include any specific disposal of land to an identified entity described in the plan.
(3)Nothing in this article prevents a local agency from obtaining fair market value for the disposition of surplus land consistent with Section 54226.
(4)Notwithstanding paragraph (1), a local agency is not required to make a declaration at a public meeting for land that is exempt surplus land pursuant to subparagraph (A), (B), (E), (K), (L), or (Q) of paragraph (1) of subdivision (f) if the local agency identifies the land in a notice that is published and available for public comment, including notice to the entities identified in subdivision (a) of Section 54222, at least 30 days before the exemption takes effect.
(c)(1)Except as provided in paragraph (2), agencys use shall include, but not be limited to, land that is being used, or is planned to be used pursuant to a written plan adopted by the local agencys governing board, for agency work or operations, including, but not limited to, utility sites, property owned by a port that is used to support logistics uses, watershed property, land being used for conservation purposes, land for demonstration, exhibition, or educational purposes related to greenhouse gas emissions, sites for broadband equipment or wireless facilities, and buffer sites near sensitive governmental uses, including, but not limited to, waste disposal sites, and wastewater treatment plants. Agencys use by a local agency that is a district shall also include land disposed for uses described in subparagraph (B) of paragraph (2).
(2)(A)Agencys use shall not include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development. Property disposed of for the sole purpose of investment or generation of revenue shall not be considered necessary for the agencys use.
(B)In the case of a local agency that is a district, excepting those whose primary mission or purpose is to supply the public with a transportation system, agencys use may include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or be for the sole purpose of investment or generation of revenue if the agencys governing body takes action in a public meeting declaring that the use of the site will do one of the following:
(i)Directly further the express purpose of agency work or operations.
(ii)Be expressly authorized by a statute governing the local agency, provided the district complies with Section 54233.5 if applicable.
(d)(1)Dispose means either of the following:
(A)The sale of the surplus land.
(B)The entering of a lease for surplus land, which is for a term longer than 15 years, inclusive of any extension or renewal options included in the terms of the initial lease, entered into on or after January 1, 2024.
(2)Dispose shall not mean either of the following:
(A)The entering of a lease for surplus land, which is for a term of 15 years or less, inclusive of any extension or renewal options included in the terms of the initial lease.
(B)The entering of a lease for surplus land on which no development or demolition will occur, regardless of the term of the lease.
(e)Open-space purposes means the use of land for public recreation, enjoyment of scenic beauty, or conservation or use of natural resources.
(f)(1)Except as provided in paragraph (2), exempt surplus land means any of the following:
(A)Surplus land that is transferred pursuant to Section 25539.4 or 37364.
(B)Surplus land that is less than one-half acre in area and is not contiguous to land owned by a state or local agency that is used for open-space or low- and moderate-income housing purposes.
(C)Surplus land that a local agency is exchanging for another property necessary for the agencys use. Property may include easements necessary for the agencys use.
(D)Surplus land that a local agency is transferring to another local, state, or federal agency, or to a third-party intermediary for future dedication for the receiving agencys use, or to a federally recognized California Indian tribe. If the surplus land is transferred to a third-party intermediary, the receiving agencys use must be contained in a legally binding agreement at the time of transfer to the third-party intermediary.
(E)Surplus land that is a former street, right-of-way, or easement, and is conveyed to an owner of an adjacent property.
(F)(i)Surplus land that is to be developed for a housing development, which may have ancillary commercial ground floor uses, that restricts 100 percent of the residential units to persons and families of low or moderate income, with at least 75 percent of the residential units restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Section 50052.5 or 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability, and in no event shall the maximum affordable sales price or rent level be higher than 20 percent below the median market rents or sales prices for the neighborhood in which the site is located.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(G)(i)Surplus land that is subject to a local agencys open, competitive solicitation or that is put to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process, for a housing or a mixed-use development that is more than one 1 acre and less than 10 acres in area, consisting of either a single parcel, or two or more adjacent or non-adjacent nonadjacent parcels combined, that includes not less than 300 residential units, and that restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(H)(i)Surplus land totaling 10 or more acres, consisting of either a single parcel, or two or more adjacent or non-adjacent nonadjacent parcels combined for disposition to one or more buyers pursuant to a plan or ordinance adopted by the legislative body of the local agency, or a state statute. That surplus land shall be subject to a local agencys open, competitive solicitation process or put out to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process for a housing or mixed-use development.
(ii)The aggregate development shall include the greater of the following:
(I)Not less than 300 residential units.
(II)A number of residential units equal to 10 times the number of acres of the surplus land or 10,000 residential units, whichever is less.
(iii)At least 25 percent of the residential units shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent pursuant to Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(iv)If nonresidential development is included in the development pursuant to this subparagraph, at least 25 percent of the total planned units affordable to lower income households shall be made available for lease or sale and permitted for use and occupancy before or at the same time with every 25 percent of nonresidential development made available for lease or sale and permitted for use and occupancy.
(v)A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph. A local agency shall only dispose of land pursuant to this subparagraph through a disposition and development agreement that includes an indemnification clause that provides that if an action occurs after disposition violates this subparagraph, the person or entity that acquired the property shall be liable for the penalties.
(vi)The requirements of clauses (i) to (v), inclusive, shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(I)A mixed-use development, which may include more than one publicly owned parcel, that meets all of the following conditions:
(i)The development restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(ii)At least 50 percent of the square footage of the new construction associated with the development is designated for residential use.
(iii)The development is not located in an urbanized area, as defined in Section 21094.5 of the Public Resources Code.
(J)(i)Surplus land that is subject to a valid legal restriction that is not imposed by the local agency and that makes housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site. A declaration of exemption pursuant to this subparagraph shall be supported by documentary evidence establishing the valid legal restriction. For the purposes of this section, documentary evidence includes, but is not limited to, a contract, agreement, deed restriction, statute, regulation, or other writing that documents the valid legal restriction.
(ii)Valid legal restrictions include, but are not limited to, all of the following:
(I)Existing constraints under ownership rights or contractual rights or obligations that prevent the use of the property for housing, if the rights or obligations were agreed to prior to September 30, 2019.
(II)Conservation or other easements or encumbrances that prevent housing development.
(III)Existing leases, or other contractual obligations or restrictions, if the terms were agreed to prior to September 30, 2019.
(IV)Restrictions imposed by the source of funding that a local agency used to purchase a property, provided that both of the following requirements are met:
(ia)The restrictions limit the use of those funds to purposes other than housing.
(ib)The proposed disposal of surplus land meets a use consistent with that purpose.
(iii)Valid legal restrictions that would make housing prohibited do not include either of the following:
(I)An existing nonresidential land use designation on the surplus land.
(II)Covenants, restrictions, or other conditions on the property rendered void and unenforceable by any other law, including, but not limited to, Section 714.6 of the Civil Code.
(iv)Feasible methods to mitigate or avoid a valid legal restriction on the site do not include a requirement that the local agency acquire additional property rights or property interests belonging to third parties.
(K)Surplus land that was granted by the state in trust to a local agency or that was acquired by the local agency for trust purposes by purchase or exchange, and for which disposal of the land is authorized or required subject to conditions established by statute.
(L)Land that is subject to either of the following, unless compliance with this article is expressly required:
(i)Section 17515, 81192, 81397, 81399, 81420, or 81422 of the Education Code.
(ii)Part 14 (commencing with Section 53570) of Division 31 of the Health and Safety Code.
(M)Surplus land that is a former military base that was conveyed by the federal government to a local agency, and is subject to Article 8 (commencing with Section 33492.125) of Chapter 4.5 of Part 1 of Division 24 of the Health and Safety Code, provided that all of the following conditions are met:
(i)The former military base has an aggregate area greater than five acres, is expected to include a mix of residential and nonresidential uses, and is expected to include no fewer than 1,400 residential units upon completion of development or redevelopment of the former military base.
(ii)The affordability requirements for residential units shall be governed by a settlement agreement entered into prior to September 1, 2020. Furthermore, at least 25 percent of the initial 1,400 residential units developed shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(iii)Before disposition of the surplus land, the agency adopts written findings that the land is exempt surplus land pursuant to this subparagraph.
(iv)Before disposition of the surplus land, the recipient has negotiated a project labor agreement consistent with the local agencys project stabilization agreement resolution, as adopted on February 2, 2021, and any succeeding ordinance, resolution, or policy, regardless of the length of the agreement between the local agency and the recipient.
(v)The agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development of residential units on the former military base, including the total number of residential units that have been permitted and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph or the settlement agreement.
(N)Real property that is used by a district for an agencys use expressly authorized in subdivision (c).
(O)Land that has been transferred before June 30, 2019, by the state to a local agency pursuant to Section 32667 of the Streets and Highways Code and has a minimum planned residential density of at least 100 dwelling units per acre, and includes 100 or more residential units that are restricted to persons and families of low or moderate income, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability. For purposes of this subparagraph, not more than 20 percent of the affordable units may be restricted to persons and families of moderate income and at least 80 percent of the affordable units must be restricted to lower income households as defined in Section 50079.5 of the Health and Safety Code.
(P)(i)Land that meets the following conditions:
(I)Land that is subject to a sectional planning area document that meets both of the following:
(ia)The sectional planning area was adopted prior to January 1, 2019.
(ib)The sectional planning area document is consistent with county and city general plans applicable to the land.
(II)The land identified in the adopted sectional planning area document was dedicated prior to January 1, 2019. 2019 and is developed consistent with the sectional planning area document plan as it existed on January 1, 2019.
(III)On January 1, 2019, the parcels on the land met at least one of the following conditions:
(ia)The land was subject to an irrevocable offer of dedication of fee interest requiring the land to be used for a specified purpose.
(ib)The land was acquired through a land exchange subject to a land offer agreement that grants the lands original owner the right to repurchase the land acquired by the local agency pursuant to the agreement if the land will not be developed in a manner consistent with the agreement.
(ic)The land was subject to a grant deed specifying that the property shall be used for educational uses and limiting other types of uses allowed on the property.
(IV)At least a minimum, 25 percent of the units are dedicated to lower income households, as defined in Section 50079.5 of the Health and Safety Code, at an affordable rent, as defined by Section 50053 of the Health and Safety Code, or an affordable housing cost, as defined by Section 50052.5 of the Health and Safety Code, that are proposed by the sectional planning area document as adopted prior to January 1, 2019, and are not designated for students, faculty, or staff of an academic institution shall be constructed and dedicated to lower income households at an affordable rent or an affordable housing cost and subject to a recorded deed restriction for a period of 55 years for rental units and 45 years for owner-occupied units, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(ia)Lower income household shall have the same meaning as defined in Section 50079.5 of the Health and Safety Code.
(ib)Affordable rent shall have the same meaning as defined in Section 50053 of the Health and Safety Code.
(ic)Affordable housing cost shall have the same meaning as defined in Section 50052.5 of the Health and Safety Code.
(V)(ia)The land is developed at an average density of at least 10 units per acre, calculated with respect to the entire sectional planning area. area and inclusive of housing designated for students, faculty, and staff of an academic institution.
(ib)For purposes of this subclause, a student housing unit must meet all of the following requirements to be counted toward meeting the density requirement described in sub-subclause (ia):
(Ia)The unit includes a fully functioning kitchen with a refrigerator, stove, sink with hot and cold water, vent, and an area to prepare food.
(Ib)The unit has a ratio of beds to toilets, lavatories, and showers not exceeding five to one.
(Ic)The unit meets or exceeds the requirements described in Section 17920.3 of the Health and Safety Code.
(VI)No more than 25 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 25 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VII)No more than 50 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 50 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VIII)No more than 75 percent of the nonresidential square footage identified in the sectional planning area document shall receive its first certificate of occupancy before at least 75 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(ii)The local agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development, including the total square footage of the residential and nonresidential development, the number of residential units that have been permitted, and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
(iii)The Department of Housing and Community Development may request additional information from the agency regarding land disposed of pursuant to this subparagraph.
(iv)At least 30 days prior to disposing of land declared exempt surplus land, a local agency shall provide the Department of Housing and Community Development a written notification of its declaration and findings in a form prescribed by the Department of Housing and Community Development. Within 30 days of receipt of the written notification and findings, the department shall notify the local agency if the department has determined that the local agency is in violation of this article. A local agency that fails to submit the written notification and findings shall be liable for a civil penalty pursuant to this subparagraph. A local agency shall not be liable for the civil penalty if the Department of Housing and Community Development does not notify the agency that the agency is in violation of this article within 30 days of receiving the written notification and findings. Once the department determines that the declarations and findings comply with subclauses (I) to (IV), inclusive, of clause (i), the local agency may proceed with disposal of land pursuant to this subparagraph. This clause is declaratory of, and not a change in, existing law.
(v)If the local agency disposes of land in violation of this subparagraph, the local agency shall be liable for a civil penalty calculated as follows:
(I)For a first violation, 30 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(II)For a second or subsequent violation, 50 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(III)For purposes of this subparagraph, fair market value shall be determined by an independent appraisal of the land.
(IV)An action to enforce this subparagraph may be brought by any of the following:
(ia)An entity identified in subdivisions (a) to (e), inclusive, of Section 54222.
(ib)A person who would have been eligible to apply for residency in affordable housing had the agency not violated this section.
(ic)A housing organization, as that term is defined in Section 65589.5.
(id)A beneficially interested person or entity.
(ie)The Department of Housing and Community Development.
(V)A penalty assessed pursuant to this subparagraph shall, except as otherwise provided, be deposited into a local housing trust fund. The local agency may elect to instead deposit the penalty moneys into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund. Penalties shall not be paid out of funds already dedicated to affordable housing, including, but not limited to, a Low and Moderate Income Housing Asset Funds, Fund, funds dedicated to housing for very low, low-, and moderate-income households, and federal HOME Investment Partnerships Program and Community Development Block Grant Program funds. The local agency shall commit and expend the penalty moneys deposited into the local housing trust fund within five years of deposit for the sole purpose of financing newly constructed housing units that are affordable to extremely low, very low, or low-income households.
(VI)Five years after deposit of the penalty moneys into the local housing trust fund, if the funds have not been expended, the funds shall revert to the state and be deposited in the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund for the sole purpose of financing newly constructed housing units located in the same jurisdiction as the surplus land and that are affordable to extremely low, very low, or low-income households. Expenditure of any penalty moneys deposited into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund pursuant to this subdivision shall be subject to appropriation by the Legislature.
(vi)For purposes of this subparagraph, the following definitions apply:
(I)Sectional planning area means an area composed of identifiable planning units, within which common services and facilities, a strong internal unity, and an integrated pattern of land use, circulation, and townscape planning are readily achievable.
(II)Sectional planning area document means a document or plan that sets forth, at minimum, a site utilization plan of the sectional planning area and development standards for each land use area and designation.
(vii)This subparagraph shall become inoperative on January 1, 2034.
(Q)Land that is owned by a California public-use airport on which residential uses are prohibited pursuant to Federal Aviation Administration Order 5190.6B, Airport Compliance Program, Chapter 20 -- Compatible Land Use and Airspace Protection.
(R)Land that is transferred to a community land trust, and all of the following conditions are met:
(i)The property is being or will be developed or rehabilitated as any of the following:
(I)An owner-occupied single-family dwelling.
(II)An owner-occupied unit in a multifamily dwelling.
(III)A member-occupied unit in a limited equity housing cooperative.
(IV)A rental housing development.
(ii)Improvements on the property are or will be available for use and ownership or for rent by qualified persons, as defined in paragraph (6) of subdivision (c) of Section 214.18 of the Revenue and Taxation Code.
(iii)(I)A deed restriction or other instrument, requiring a contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units or on the affordability of rental units is recorded on or before the lien date following the acquisition of the property by the community land trust.
(II)For the purpose of this clause, the following definitions apply:
(ia)A contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units means a contract described in paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.
(ib)A contract or contracts serving as an enforceable restriction on the affordability of rental units means an enforceable and verifiable agreement with a public agency, a recorded deed restriction, or other legal document described in subparagraph (A) of paragraph (2) of subdivision (g) of Section 214 of the Revenue and Taxation Code.
(iv)A copy of the deed restriction or other instrument shall be provided to the assessor.
(S)(i)For local agencies whose primary mission or purpose is to supply the public with a transportation system, surplus land that is developed for commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or for the sole purpose of investment or generation of revenue, if the agency meets all of the following conditions:
(I)The agency has an adopted land use plan or policy that designates at least 50 percent of the gross acreage covered by the adopted land use plan or policy for residential purposes. The adopted land use plan or policy shall also require the development of at least 300 residential units, or at least 10 residential units per gross acre, averaged across all land covered by the land use plan or policy, whichever is greater.
(II)The agency has an adopted land use plan or policy that requires at least 25 percent of all residential units to be developed on the parcels covered by the adopted land use plan or policy made available to lower income households, as defined in Section 50079 of the Health and Safety Code, at an affordable sales price or rented at an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing and 45 years for ownership housing, unless a local ordinance or the terms of a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability. These terms shall be included in the land use plan or policy and dictate that they will be contained in a covenant or restriction recorded against the surplus land at the time of disposition that shall run with the land and be enforceable against any owner or lessee who violates the covenant or restriction and each successor in interest who continues the violation.
(III)Land disposed of for residential purposes shall issue a competitive request for proposals subject to the local agencys open, competitive solicitation process or put out to open, competitive bid by the local agency, provided that all entities identified in subdivision (a) of Section 54222 are invited to participate.
(IV)Prior to entering into an agreement to dispose of a parcel for nonresidential development on land designated for the purposes authorized pursuant to this subparagraph in an agencys adopted land use plan or policy, the agency, since January 1, 2020, must have entered into an agreement to dispose of a minimum of 25 percent of the land designated for affordable housing pursuant to subclause (II).
(ii)The agency may exempt at one time all parcels covered by the adopted land use plan or policy pursuant to this subparagraph.
(2)Notwithstanding paragraph (1), a written notice of the availability of surplus land for open-space purposes shall be sent to the entities described in subdivision (b) of Section 54222 before disposing of the surplus land, provided the land does not meet the criteria in subparagraph (H) of paragraph (1), if the land is any of the following:
(A)Within a coastal zone.
(B)Adjacent to a historical unit of the State Parks System.
(C)Listed on, or determined by the State Office of Historic Preservation to be eligible for, the National Register of Historic Places.
(D)Within the Lake Tahoe region as defined in Section 66905.5.
(g)Persons and families of low or moderate income has the same meaning as provided in Section 50093 of the Health and Safety Code.
All matter omitted in this version of the bill appears in the bill as amended in the Assembly, April 21, 2025. (JR11)As used in this article, the following definitions shall apply:
(a)(1)Local agency means every city, whether organized under general law or by charter, county, city and county, district, including school, sewer, water, utility, and local and regional park districts of any kind or class, joint powers authority, successor agency to a former redevelopment agency, housing authority, or other political subdivision of this state and any instrumentality thereof that is empowered to acquire and hold real property.
(2)The Legislature finds and declares that the term district as used in this article includes all districts within the state, including, but not limited to, all special districts, sewer, water, utility, and local and regional park districts, and any other political subdivision of this state that is a district, and therefore the changes in paragraph (1) made by the act adding this paragraph that specify that the provisions of this article apply to all districts, including school, sewer, water, utility, and local and regional park districts of any kind or class, are declaratory of, and not a change in, existing law.
(b)(1)Surplus land means land owned in fee simple by any local agency for which the local agencys governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agencys use. Land shall be declared either surplus land or exempt surplus land, as supported by written findings, before a local agency may take any action to dispose of it consistent with an agencys policies or procedures. A local agency, on an annual basis, may declare multiple parcels as surplus land or exempt surplus land.
(2)Surplus land includes land held in the Community Redevelopment Property Trust Fund pursuant to Section 34191.4 of the Health and Safety Code and land that has been designated in the long-range property management plan approved by the Department of Finance pursuant to Section 34191.5 of the Health and Safety Code, either for sale or for future development, but does not include any specific disposal of land to an identified entity described in the plan.
(3)Nothing in this article prevents a local agency from obtaining fair market value for the disposition of surplus land consistent with Section 54226.
(4)Notwithstanding paragraph (1), a local agency is not required to make a declaration at a public meeting for land that is exempt surplus land pursuant to subparagraph (A), (B), (E), (K), (L), or (Q) of paragraph (1) of subdivision (f) if the local agency identifies the land in a notice that is published and available for public comment, including notice to the entities identified in subdivision (a) of Section 54222, at least 30 days before the exemption takes effect.
(c)(1)Except as provided in paragraph (2), agencys use shall include, but not be limited to, land that is being used, or is planned to be used pursuant to a written plan adopted by the local agencys governing board, for agency work or operations, including, but not limited to, utility sites, property owned by a port that is used to support logistics uses, watershed property, land being used for conservation purposes, land for demonstration, exhibition, or educational purposes related to greenhouse gas emissions, sites for broadband equipment or wireless facilities, and buffer sites near sensitive governmental uses, including, but not limited to, waste disposal sites, and wastewater treatment plants. Agencys use by a local agency that is a district shall also include land disposed for uses described in subparagraph (B) of paragraph (2).
(2)(A)Agencys use shall not include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development. Property disposed of for the sole purpose of investment or generation of revenue shall not be considered necessary for the agencys use.
(B)In the case of a local agency that is a district, excepting those whose primary mission or purpose is to supply the public with a transportation system, agencys use may include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or be for the sole purpose of investment or generation of revenue if the agencys governing body takes action in a public meeting declaring that the use of the site will do one of the following:
(i)Directly further the express purpose of agency work or operations.
(ii)Be expressly authorized by a statute governing the local agency, provided the district complies with Section 54233.5 if applicable.
(d)(1)Dispose means either of the following:
(A)The sale of the surplus land.
(B)The entering of a lease for surplus land, which is for a term longer than 15 years, inclusive of any extension or renewal options included in the terms of the initial lease, entered into on or after January 1, 2024.
(2)Dispose shall not mean either of the following:
(A)The entering of a lease for surplus land, which is for a term of 15 years or less, inclusive of any extension or renewal options included in the terms of the initial lease.
(B)The entering of a lease for surplus land on which no development or demolition will occur, regardless of the term of the lease.
(e)Open-space purposes means the use of land for public recreation, enjoyment of scenic beauty, or conservation or use of natural resources.
(f)(1)Except as provided in paragraph (2), exempt surplus land means any of the following:
(A)Surplus land that is transferred pursuant to Section 25539.4 or 37364.
(B)Surplus land that is less than one-half acre in area and is not contiguous to land owned by a state or local agency that is used for open-space or low- and moderate-income housing purposes.
(C)Surplus land that a local agency is exchanging for another property necessary for the agencys use. Property may include easements necessary for the agencys use.
(D)Surplus land that a local agency is transferring to another local, state, or federal agency, or to a third-party intermediary for future dedication for the receiving agencys use, or to a federally recognized California Indian tribe. If the surplus land is transferred to a third-party intermediary, the receiving agencys use must be contained in a legally binding agreement at the time of transfer to the third-party intermediary.
(E)Surplus land that is a former street, right-of-way, or easement, and is conveyed to an owner of an adjacent property.
(F)(i)Surplus land that is to be developed for a housing development, which may have ancillary commercial ground floor uses, that restricts 100 percent of the residential units to persons and families of low or moderate income, with at least 75 percent of the residential units restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Section 50052.5 or 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability, and in no event shall the maximum affordable sales price or rent level be higher than 20 percent below the median market rents or sales prices for the neighborhood in which the site is located.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(G)(i)Surplus land that is subject to a local agencys open, competitive solicitation or that is put to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process, for a housing or a mixed-use development that is more than 1 acre and less than 10 acres in area, consisting of either a single parcel, or two or more adjacent or nonadjacent parcels combined, that includes not less than 300 residential units, and that restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(H)(i)Surplus land totaling 10 or more acres, consisting of either a single parcel, or two or more adjacent or nonadjacent parcels combined for disposition to one or more buyers pursuant to a plan or ordinance adopted by the legislative body of the local agency, or a state statute. That surplus land shall be subject to a local agencys open, competitive solicitation process or put out to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process for a housing or mixed-use development.
(ii)The aggregate development shall include the greater of the following:
(I)Not less than 300 residential units.
(II)A number of residential units equal to 10 times the number of acres of the surplus land or 10,000 residential units, whichever is less.
(iii)At least 25 percent of the residential units shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent pursuant to Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(iv)If nonresidential development is included in the development pursuant to this subparagraph, at least 25 percent of the total planned units affordable to lower income households shall be made available for lease or sale and permitted for use and occupancy before or at the same time with every 25 percent of nonresidential development made available for lease or sale and permitted for use and occupancy.
(v)A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph. A local agency shall only dispose of land pursuant to this subparagraph through a disposition and development agreement that includes an indemnification clause that provides that if an action occurs after disposition violates this subparagraph, the person or entity that acquired the property shall be liable for the penalties.
(vi)The requirements of clauses (i) to (v), inclusive, shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(I)A mixed-use development, which may include more than one publicly owned parcel, that meets all of the following conditions:
(i)The development restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(ii)At least 50 percent of the square footage of the new construction associated with the development is designated for residential use.
(iii)The development is not located in an urbanized area, as defined in Section 21094.5 of the Public Resources Code.
(J)(i)Surplus land that is subject to a valid legal restriction that is not imposed by the local agency and that makes housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site. A declaration of exemption pursuant to this subparagraph shall be supported by documentary evidence establishing the valid legal restriction. For the purposes of this section, documentary evidence includes, but is not limited to, a contract, agreement, deed restriction, statute, regulation, or other writing that documents the valid legal restriction.
(ii)Valid legal restrictions include, but are not limited to, all of the following:
(I)Existing constraints under ownership rights or contractual rights or obligations that prevent the use of the property for housing, if the rights or obligations were agreed to prior to September 30, 2019.
(II)Conservation or other easements or encumbrances that prevent housing development.
(III)Existing leases, or other contractual obligations or restrictions, if the terms were agreed to prior to September 30, 2019.
(IV)Restrictions imposed by the source of funding that a local agency used to purchase a property, provided that both of the following requirements are met:
(ia)The restrictions limit the use of those funds to purposes other than housing.
(ib)The proposed disposal of surplus land meets a use consistent with that purpose.
(iii)Valid legal restrictions that would make housing prohibited do not include either of the following:
(I)An existing nonresidential land use designation on the surplus land.
(II)Covenants, restrictions, or other conditions on the property rendered void and unenforceable by any other law, including, but not limited to, Section 714.6 of the Civil Code.
(iv)Feasible methods to mitigate or avoid a valid legal restriction on the site do not include a requirement that the local agency acquire additional property rights or property interests belonging to third parties.
(K)Surplus land that was granted by the state in trust to a local agency or that was acquired by the local agency for trust purposes by purchase or exchange, and for which disposal of the land is authorized or required subject to conditions established by statute.
(L)Land that is subject to either of the following, unless compliance with this article is expressly required:
(i)Section 17388, 17515, 17536, 81192, 81397, 81399, 81420, or 81422 of the Education Code.
(ii)Part 14 (commencing with Section 53570) of Division 31 of the Health and Safety Code.
(M)Surplus land that is a former military base that was conveyed by the federal government to a local agency, and is subject to Article 8 (commencing with Section 33492.125) of Chapter 4.5 of Part 1 of Division 24 of the Health and Safety Code, provided that all of the following conditions are met:
(i)The former military base has an aggregate area greater than five acres, is expected to include a mix of residential and nonresidential uses, and is expected to include no fewer than 1,400 residential units upon completion of development or redevelopment of the former military base.
(ii)The affordability requirements for residential units shall be governed by a settlement agreement entered into prior to September 1, 2020. Furthermore, at least 25 percent of the initial 1,400 residential units developed shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(iii)Before disposition of the surplus land, the agency adopts written findings that the land is exempt surplus land pursuant to this subparagraph.
(iv)Before disposition of the surplus land, the recipient has negotiated a project labor agreement consistent with the local agencys project stabilization agreement resolution, as adopted on February 2, 2021, and any succeeding ordinance, resolution, or policy, regardless of the length of the agreement between the local agency and the recipient.
(v)The agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development of residential units on the former military base, including the total number of residential units that have been permitted and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph or the settlement agreement.
(N)Real property that is used by a district for an agencys use expressly authorized in subdivision (c).
(O)Land that has been transferred before June 30, 2019, by the state to a local agency pursuant to Section 32667 of the Streets and Highways Code and has a minimum planned residential density of at least 100 dwelling units per acre, and includes 100 or more residential units that are restricted to persons and families of low or moderate income, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability. For purposes of this subparagraph, not more than 20 percent of the affordable units may be restricted to persons and families of moderate income and at least 80 percent of the affordable units must be restricted to lower income households as defined in Section 50079.5 of the Health and Safety Code.
(P)(i)Land that meets the following conditions:
(I)Land that is subject to a sectional planning area document that meets both of the following:
(ia)The sectional planning area was adopted prior to January 1, 2019.
(ib)The sectional planning area document is consistent with county and city general plans applicable to the land.
(II)The land identified in the adopted sectional planning area document was dedicated prior to January 1, 2019.
(III)On January 1, 2019, the parcels on the land met at least one of the following conditions:
(ia)The land was subject to an irrevocable offer of dedication of fee interest requiring the land to be used for a specified purpose.
(ib)The land was acquired through a land exchange subject to a land offer agreement that grants the lands original owner the right to repurchase the land acquired by the local agency pursuant to the agreement if the land will not be developed in a manner consistent with the agreement.
(ic)The land was subject to a grant deed specifying that the property shall be used for educational uses and limiting other types of uses allowed on the property.
(IV)At least a minimum, 25 percent of the units that are proposed by the sectional planning area document as adopted prior to January 1, 2019, and are not designated for students, faculty, or staff of an academic institution are shall be constructed and dedicated to lower income households, as defined in Section 50079.5 of the Health and Safety Code, households at an affordable rent, as defined by Section 50053 of the Health and Safety Code, rent or an affordable housing cost, as defined by Section 50052.5 of the Health and Safety Code, cost and subject to a recorded deed restriction for a period of 55 years for rental units and 45 years for owner-occupied units, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(ia)Lower income household shall have the same meaning as Section 50079.5 of the Health and Safety Code.
(ib)Affordable rent shall have the same meaning as defined in Section 50053 of the Health and Safety Code.
(ic)Affordable housing cost shall have the same meaning as defined in Section 50052.5 of the Health and Safety Code.
(V)(ia)The land is developed at an average density of at least 10 units per acre, calculated with respect to the entire sectional planning area and inclusive of housing designated for students, faculty, and staff of an academic institution.
(ib)For purposes of this subclause, a student housing unit must meet all of the following requirements to be counted toward meeting the density requirement described in sub-subclause (ia):
(Ia)The unit includes a fully functioning kitchen with a refrigerator, stove, sink with hot and cold water, vent, and an area to prepare food.
(Ib)The unit has a ratio of beds to toilets, lavatories, and showers not exceeding five to one.
(Ic)The unit meets or exceeds the requirements described in Section 17920.3 of the Health and Safety Code.
(VI)No more than 25 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 25 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VII)No more than 50 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 50 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VIII)No more than 75 percent of the nonresidential square footage identified in the sectional planning area document shall receive its first certificate of occupancy before at least 75 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(ii)The local agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development, including the total square footage of the residential and nonresidential development, the number of residential units that have been permitted, and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
(iii)The Department of Housing and Community Development may request additional information from the agency regarding land disposed of pursuant to this subparagraph.
(iv)At least 30 days prior to disposing of land declared exempt surplus land, a local agency shall provide the Department of Housing and Community Development a written notification of its declaration and findings in a form prescribed by the Department of Housing and Community Development. Within 30 days of receipt of the written notification and findings, the department shall notify the local agency if the department has determined that the local agency is in violation of this article. A local agency that fails to submit the written notification and findings shall be liable for a civil penalty pursuant to this subparagraph. A local agency shall not be liable for the civil penalty if the Department of Housing and Community Development does not notify the agency that the agency is in violation of this article within 30 days of receiving the written notification and findings. Once the department determines that the declarations and findings comply with subclauses (I) to (IV), inclusive, of clause (i), the local agency may proceed with disposal of land pursuant to this subparagraph. This clause is declaratory of, and not a change in, existing law.
(v)If the local agency disposes of land in violation of this subparagraph, the local agency shall be liable for a civil penalty calculated as follows:
(I)For a first violation, 30 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(II)For a second or subsequent violation, 50 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(III)For purposes of this subparagraph, fair market value shall be determined by an independent appraisal of the land.
(IV)An action to enforce this subparagraph may be brought by any of the following:
(ia)An entity identified in subdivisions (a) to (e), inclusive, of Section 54222.
(ib)A person who would have been eligible to apply for residency in affordable housing had the agency not violated this section.
(ic)A housing organization, as that term is defined in Section 65589.5.
(id)A beneficially interested person or entity.
(ie)The Department of Housing and Community Development.
(V)A penalty assessed pursuant to this subparagraph shall, except as otherwise provided, be deposited into a local housing trust fund. The local agency may elect to instead deposit the penalty moneys into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund. Penalties shall not be paid out of funds already dedicated to affordable housing, including, but not limited to, a Low and Moderate Income Housing Asset Fund, funds dedicated to housing for very low, low-, and moderate-income households, and federal HOME Investment Partnerships Program and Community Development Block Grant Program funds. The local agency shall commit and expend the penalty moneys deposited into the local housing trust fund within five years of deposit for the sole purpose of financing newly constructed housing units that are affordable to extremely low, very low, or low-income households.
(VI)Five years after deposit of the penalty moneys into the local housing trust fund, if the funds have not been expended, the funds shall revert to the state and be deposited in the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund for the sole purpose of financing newly constructed housing units located in the same jurisdiction as the surplus land and that are affordable to extremely low, very low, or low-income households. Expenditure of any penalty moneys deposited into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund pursuant to this subdivision shall be subject to appropriation by the Legislature.
(vi)For purposes of this subparagraph, the following definitions apply:
(I)Sectional planning area means an area composed of identifiable planning units, within which common services and facilities, a strong internal unity, and an integrated pattern of land use, circulation, and townscape planning are readily achievable.
(II)Sectional planning area document means a document or plan that sets forth, at minimum, a site utilization plan of the sectional planning area and development standards for each land use area and designation.
(vii)This subparagraph shall become inoperative on January 1, 2034.
(Q)Land that is owned by a California public-use airport on which residential uses are prohibited pursuant to Federal Aviation Administration Order 5190.6B, Airport Compliance Program, Chapter 20 -- Compatible Land Use and Airspace Protection.
(R)Land that is transferred to a community land trust, and all of the following conditions are met:
(i)The property is being or will be developed or rehabilitated as any of the following:
(I)An owner-occupied single-family dwelling.
(II)An owner-occupied unit in a multifamily dwelling.
(III)A member-occupied unit in a limited equity housing cooperative.
(IV)A rental housing development.
(ii)Improvements on the property are or will be available for use and ownership or for rent by qualified persons, as defined in paragraph (6) of subdivision (c) of Section 214.18 of the Revenue and Taxation Code.
(iii)(I)A deed restriction or other instrument, requiring a contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units or on the affordability of rental units is recorded on or before the lien date following the acquisition of the property by the community land trust.
(II)For the purpose of this clause, the following definitions apply:
(ia)A contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units means a contract described in paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.
(ib)A contract or contracts serving as an enforceable restriction on the affordability of rental units means an enforceable and verifiable agreement with a public agency, a recorded deed restriction, or other legal document described in subparagraph (A) of paragraph (2) of subdivision (g) of Section 214 of the Revenue and Taxation Code.
(iv)A copy of the deed restriction or other instrument shall be provided to the assessor.
(S)(i)For local agencies whose primary mission or purpose is to supply the public with a transportation system, surplus land that is developed for commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or for the sole purpose of investment or generation of revenue, if the agency meets all of the following conditions:
(I)The agency has an adopted land use plan or policy that designates at least 50 percent of the gross acreage covered by the adopted land use plan or policy for residential purposes. The adopted land use plan or policy shall also require the development of at least 300 residential units, or at least 10 residential units per gross acre, averaged across all land covered by the land use plan or policy, whichever is greater.
(II)The agency has an adopted land use plan or policy that requires at least 25 percent of all residential units to be developed on the parcels covered by the adopted land use plan or policy made available to lower income households, as defined in Section 50079 of the Health and Safety Code, at an affordable sales price or rented at an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing and 45 years for ownership housing, unless a local ordinance or the terms of a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability. These terms shall be included in the land use plan or policy and dictate that they will be contained in a covenant or restriction recorded against the surplus land at the time of disposition that shall run with the land and be enforceable against any owner or lessee who violates the covenant or restriction and each successor in interest who continues the violation.
(III)Land disposed of for residential purposes shall issue a competitive request for proposals subject to the local agencys open, competitive solicitation process or put out to open, competitive bid by the local agency, provided that all entities identified in subdivision (a) of Section 54222 are invited to participate.
(IV)Prior to entering into an agreement to dispose of a parcel for nonresidential development on land designated for the purposes authorized pursuant to this subparagraph in an agencys adopted land use plan or policy, the agency, since January 1, 2020, must have entered into an agreement to dispose of a minimum of 25 percent of the land designated for affordable housing pursuant to subclause (II).
(ii)The agency may exempt at one time all parcels covered by the adopted land use plan or policy pursuant to this subparagraph.
(2)Notwithstanding paragraph (1), a written notice of the availability of surplus land for open-space purposes shall be sent to the entities described in subdivision (b) of Section 54222 before disposing of the surplus land, provided the land does not meet the criteria in subparagraph (H) of paragraph (1), if the land is any of the following:
(A)Within a coastal zone.
(B)Adjacent to a historical unit of the State Parks System.
(C)Listed on, or determined by the State Office of Historic Preservation to be eligible for, the National Register of Historic Places.
(D)Within the Lake Tahoe region as defined in Section 66905.5.
(g)Persons and families of low or moderate income has the same meaning as provided in Section 50093 of the Health and Safety Code.
As used in this article, the following definitions shall apply:
(a)(1)Local agency means every city, whether organized under general law or by charter, county, city and county, district, including school, sewer, water, utility, and local and regional park districts of any kind or class, joint powers authority, successor agency to a former redevelopment agency, housing authority, or other political subdivision of this state and any instrumentality thereof that is empowered to acquire and hold real property.
(2)The Legislature finds and declares that the term district as used in this article includes all districts within the state, including, but not limited to, all special districts, sewer, water, utility, and local and regional park districts, and any other political subdivision of this state that is a district, and therefore the changes in paragraph (1) made by the act adding this paragraph that specify that the provisions of this article apply to all districts, including school, sewer, water, utility, and local and regional park districts of any kind or class, are declaratory of, and not a change in, existing law.
(b)(1)Surplus land means land owned in fee simple by any local agency for which the local agencys governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agencys use. Land shall be declared either surplus land or exempt surplus land, as supported by written findings, before a local agency may take any action to dispose of it consistent with an agencys policies or procedures. A local agency, on an annual basis, may declare multiple parcels as surplus land or exempt surplus land.
(2)Surplus land includes land held in the Community Redevelopment Property Trust Fund pursuant to Section 34191.4 of the Health and Safety Code and land that has been designated in the long-range property management plan approved by the Department of Finance pursuant to Section 34191.5 of the Health and Safety Code, either for sale or for future development, but does not include any specific disposal of land to an identified entity described in the plan.
(3)Nothing in this article prevents a local agency from obtaining fair market value for the disposition of surplus land consistent with Section 54226.
(4)Notwithstanding paragraph (1), a local agency is not required to make a declaration at a public meeting for land that is exempt surplus land pursuant to subparagraph (A), (B), (E), (K), (L), or (Q) of paragraph (1) of subdivision (f) if the local agency identifies the land in a notice that is published and available for public comment, including notice to the entities identified in subdivision (a) of Section 54222, at least 30 days before the exemption takes effect.
(c)(1)Except as provided in paragraph (2), agencys use shall include, but not be limited to, land that is being used, or is planned to be used pursuant to a written plan adopted by the local agencys governing board, for agency work or operations, including, but not limited to, utility sites, property owned by a port that is used to support logistics uses, watershed property, land being used for conservation purposes, land for demonstration, exhibition, or educational purposes related to greenhouse gas emissions, sites for broadband equipment or wireless facilities, and buffer sites near sensitive governmental uses, including, but not limited to, waste disposal sites, and wastewater treatment plants. Agencys use by a local agency that is a district shall also include land disposed for uses described in subparagraph (B) of paragraph (2).
(2)(A)Agencys use shall not include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development. Property disposed of for the sole purpose of investment or generation of revenue shall not be considered necessary for the agencys use.
(B)In the case of a local agency that is a district, excepting those whose primary mission or purpose is to supply the public with a transportation system, agencys use may include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or be for the sole purpose of investment or generation of revenue if the agencys governing body takes action in a public meeting declaring that the use of the site will do one of the following:
(i)Directly further the express purpose of agency work or operations.
(ii)Be expressly authorized by a statute governing the local agency, provided the district complies with Section 54233.5 if applicable.
(d)(1)Dispose means either of the following:
(A)The sale of the surplus land.
(B)The entering of a lease for surplus land, which is for a term longer than 15 years, inclusive of any extension or renewal options included in the terms of the initial lease, entered into on or after January 1, 2024.
(2)Dispose shall not mean either of the following:
(A)The entering of a lease for surplus land, which is for a term of 15 years or less, inclusive of any extension or renewal options included in the terms of the initial lease.
(B)The entering of a lease for surplus land on which no development or demolition will occur, regardless of the term of the lease.
(e)Open-space purposes means the use of land for public recreation, enjoyment of scenic beauty, or conservation or use of natural resources.
(f)(1)Except as provided in paragraph (2), exempt surplus land means any of the following:
(A)Surplus land that is transferred pursuant to Section 25539.4 or 37364.
(B)Surplus land that is less than one-half acre in area and is not contiguous to land owned by a state or local agency that is used for open-space or low- and moderate-income housing purposes.
(C)Surplus land that a local agency is exchanging for another property necessary for the agencys use. Property may include easements necessary for the agencys use.
(D)Surplus land that a local agency is transferring to another local, state, or federal agency, or to a third-party intermediary for future dedication for the receiving agencys use, or to a federally recognized California Indian tribe. If the surplus land is transferred to a third-party intermediary, the receiving agencys use must be contained in a legally binding agreement at the time of transfer to the third-party intermediary.
(E)Surplus land that is a former street, right-of-way, or easement, and is conveyed to an owner of an adjacent property.
(F)(i)Surplus land that is to be developed for a housing development, which may have ancillary commercial ground floor uses, that restricts 100 percent of the residential units to persons and families of low or moderate income, with at least 75 percent of the residential units restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Section 50052.5 or 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability, and in no event shall the maximum affordable sales price or rent level be higher than 20 percent below the median market rents or sales prices for the neighborhood in which the site is located.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(G)(i)Surplus land that is subject to a local agencys open, competitive solicitation or that is put to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process, for a housing or a mixed-use development that is more than one 1 acre and less than 10 acres in area, consisting of either a single parcel, or two or more adjacent or non-adjacent nonadjacent parcels combined, that includes not less than 300 residential units, and that restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(H)(i)Surplus land totaling 10 or more acres, consisting of either a single parcel, or two or more adjacent or non-adjacent nonadjacent parcels combined for disposition to one or more buyers pursuant to a plan or ordinance adopted by the legislative body of the local agency, or a state statute. That surplus land shall be subject to a local agencys open, competitive solicitation process or put out to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process for a housing or mixed-use development.
(ii)The aggregate development shall include the greater of the following:
(I)Not less than 300 residential units.
(II)A number of residential units equal to 10 times the number of acres of the surplus land or 10,000 residential units, whichever is less.
(iii)At least 25 percent of the residential units shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent pursuant to Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(iv)If nonresidential development is included in the development pursuant to this subparagraph, at least 25 percent of the total planned units affordable to lower income households shall be made available for lease or sale and permitted for use and occupancy before or at the same time with every 25 percent of nonresidential development made available for lease or sale and permitted for use and occupancy.
(v)A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph. A local agency shall only dispose of land pursuant to this subparagraph through a disposition and development agreement that includes an indemnification clause that provides that if an action occurs after disposition violates this subparagraph, the person or entity that acquired the property shall be liable for the penalties.
(vi)The requirements of clauses (i) to (v), inclusive, shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(I)A mixed-use development, which may include more than one publicly owned parcel, that meets all of the following conditions:
(i)The development restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(ii)At least 50 percent of the square footage of the new construction associated with the development is designated for residential use.
(iii)The development is not located in an urbanized area, as defined in Section 21094.5 of the Public Resources Code.
(J)(i)Surplus land that is subject to a valid legal restriction that is not imposed by the local agency and that makes housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site. A declaration of exemption pursuant to this subparagraph shall be supported by documentary evidence establishing the valid legal restriction. For the purposes of this section, documentary evidence includes, but is not limited to, a contract, agreement, deed restriction, statute, regulation, or other writing that documents the valid legal restriction.
(ii)Valid legal restrictions include, but are not limited to, all of the following:
(I)Existing constraints under ownership rights or contractual rights or obligations that prevent the use of the property for housing, if the rights or obligations were agreed to prior to September 30, 2019.
(II)Conservation or other easements or encumbrances that prevent housing development.
(III)Existing leases, or other contractual obligations or restrictions, if the terms were agreed to prior to September 30, 2019.
(IV)Restrictions imposed by the source of funding that a local agency used to purchase a property, provided that both of the following requirements are met:
(ia)The restrictions limit the use of those funds to purposes other than housing.
(ib)The proposed disposal of surplus land meets a use consistent with that purpose.
(iii)Valid legal restrictions that would make housing prohibited do not include either of the following:
(I)An existing nonresidential land use designation on the surplus land.
(II)Covenants, restrictions, or other conditions on the property rendered void and unenforceable by any other law, including, but not limited to, Section 714.6 of the Civil Code.
(iv)Feasible methods to mitigate or avoid a valid legal restriction on the site do not include a requirement that the local agency acquire additional property rights or property interests belonging to third parties.
(K)Surplus land that was granted by the state in trust to a local agency or that was acquired by the local agency for trust purposes by purchase or exchange, and for which disposal of the land is authorized or required subject to conditions established by statute.
(L)Land that is subject to either of the following, unless compliance with this article is expressly required:
(i)Section 17388, 17515, 17536, 81192, 81397, 81399, 81420, or 81422 of the Education Code.
(ii)Part 14 (commencing with Section 53570) of Division 31 of the Health and Safety Code.
(M)Surplus land that is a former military base that was conveyed by the federal government to a local agency, and is subject to Article 8 (commencing with Section 33492.125) of Chapter 4.5 of Part 1 of Division 24 of the Health and Safety Code, provided that all of the following conditions are met:
(i)The former military base has an aggregate area greater than five acres, is expected to include a mix of residential and nonresidential uses, and is expected to include no fewer than 1,400 residential units upon completion of development or redevelopment of the former military base.
(ii)The affordability requirements for residential units shall be governed by a settlement agreement entered into prior to September 1, 2020. Furthermore, at least 25 percent of the initial 1,400 residential units developed shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(iii)Before disposition of the surplus land, the agency adopts written findings that the land is exempt surplus land pursuant to this subparagraph.
(iv)Before disposition of the surplus land, the recipient has negotiated a project labor agreement consistent with the local agencys project stabilization agreement resolution, as adopted on February 2, 2021, and any succeeding ordinance, resolution, or policy, regardless of the length of the agreement between the local agency and the recipient.
(v)The agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development of residential units on the former military base, including the total number of residential units that have been permitted and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph or the settlement agreement.
(N)Real property that is used by a district for an agencys use expressly authorized in subdivision (c).
(O)Land that has been transferred before June 30, 2019, by the state to a local agency pursuant to Section 32667 of the Streets and Highways Code and has a minimum planned residential density of at least 100 dwelling units per acre, and includes 100 or more residential units that are restricted to persons and families of low or moderate income, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability. For purposes of this subparagraph, not more than 20 percent of the affordable units may be restricted to persons and families of moderate income and at least 80 percent of the affordable units must be restricted to lower income households as defined in Section 50079.5 of the Health and Safety Code.
(P)(i)Land that meets the following conditions:
(I)Land that is subject to a sectional planning area document that meets both of the following:
(ia)The sectional planning area was adopted prior to January 1, 2019.
(ib)The sectional planning area document is consistent with county and city general plans applicable to the land.
(II)The land identified in the adopted sectional planning area document was dedicated prior to January 1, 2019.
(III)On January 1, 2019, the parcels on the land met at least one of the following conditions:
(ia)The land was subject to an irrevocable offer of dedication of fee interest requiring the land to be used for a specified purpose.
(ib)The land was acquired through a land exchange subject to a land offer agreement that grants the lands original owner the right to repurchase the land acquired by the local agency pursuant to the agreement if the land will not be developed in a manner consistent with the agreement.
(ic)The land was subject to a grant deed specifying that the property shall be used for educational uses and limiting other types of uses allowed on the property.
(IV)At least 25 percent of the units that are not designated for students, faculty, or staff of an academic institution are dedicated to lower income households, as defined in Section 50079.5 of the Health and Safety Code, at an affordable rent, as defined by Section 50053 of the Health and Safety Code, or an affordable housing cost, as defined by Section 50052.5 of the Health and Safety Code, and subject to a recorded deed restriction for a period of 55 years for rental units and 45 years for owner-occupied units, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(V)(ia)The land is developed at an average density of at least 10 units per acre, calculated with respect to the entire sectional planning area and inclusive of housing designated for students, faculty, and staff of an academic institution.
(ib)For purposes of this subclause, a student housing unit must meet all of the following requirements to be counted toward meeting the density requirement described in sub-subclause (ia):
(Ia)The unit includes a fully functioning kitchen with a refrigerator, stove, sink with hot and cold water, vent, and an area to prepare food.
(Ib)The unit has a ratio of beds to toilets, lavatories, and showers not exceeding five to one.
(Ic)The unit meets or exceeds the requirements described in Section 17920.3 of the Health and Safety Code.
(VI)No more than 25 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 25 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VII)No more than 50 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 50 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VIII)No more than 75 percent of the nonresidential square footage identified in the sectional planning area document shall receive its first certificate of occupancy before at least 75 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(ii)The local agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development, including the total square footage of the residential and nonresidential development, the number of residential units that have been permitted, and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
(iii)The Department of Housing and Community Development may request additional information from the agency regarding land disposed of pursuant to this subparagraph.
(iv)At least 30 days prior to disposing of land declared exempt surplus land, a local agency shall provide the Department of Housing and Community Development a written notification of its declaration and findings in a form prescribed by the Department of Housing and Community Development. Within 30 days of receipt of the written notification and findings, the department shall notify the local agency if the department has determined that the local agency is in violation of this article. A local agency that fails to submit the written notification and findings shall be liable for a civil penalty pursuant to this subparagraph. A local agency shall not be liable for the civil penalty if the Department of Housing and Community Development does not notify the agency that the agency is in violation of this article within 30 days of receiving the written notification and findings. Once the department determines that the declarations and findings comply with subclauses (I) to (IV), inclusive, of clause (i), the local agency may proceed with disposal of land pursuant to this subparagraph. This clause is declaratory of, and not a change in, existing law.
(v)If the local agency disposes of land in violation of this subparagraph, the local agency shall be liable for a civil penalty calculated as follows:
(I)For a first violation, 30 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(II)For a second or subsequent violation, 50 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(III)For purposes of this subparagraph, fair market value shall be determined by an independent appraisal of the land.
(IV)An action to enforce this subparagraph may be brought by any of the following:
(ia)An entity identified in subdivisions (a) to (e), inclusive, of Section 54222.
(ib)A person who would have been eligible to apply for residency in affordable housing had the agency not violated this section.
(ic)A housing organization, as that term is defined in Section 65589.5.
(id)A beneficially interested person or entity.
(ie)The Department of Housing and Community Development.
(V)A penalty assessed pursuant to this subparagraph shall, except as otherwise provided, be deposited into a local housing trust fund. The local agency may elect to instead deposit the penalty moneys into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund. Penalties shall not be paid out of funds already dedicated to affordable housing, including, but not limited to, a Low and Moderate Income Housing Asset Funds, Fund, funds dedicated to housing for very low, low-, and moderate-income households, and federal HOME Investment Partnerships Program and Community Development Block Grant Program funds. The local agency shall commit and expend the penalty moneys deposited into the local housing trust fund within five years of deposit for the sole purpose of financing newly constructed housing units that are affordable to extremely low, very low, or low-income households.
(VI)Five years after deposit of the penalty moneys into the local housing trust fund, if the funds have not been expended, the funds shall revert to the state and be deposited in the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund for the sole purpose of financing newly constructed housing units located in the same jurisdiction as the surplus land and that are affordable to extremely low, very low, or low-income households. Expenditure of any penalty moneys deposited into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund pursuant to this subdivision shall be subject to appropriation by the Legislature.
(vi)For purposes of this subparagraph, the following definitions apply:
(I)Sectional planning area means an area composed of identifiable planning units, within which common services and facilities, a strong internal unity, and an integrated pattern of land use, circulation, and townscape planning are readily achievable.
(II)Sectional planning area document means a document or plan that sets forth, at minimum, a site utilization plan of the sectional planning area and development standards for each land use area and designation.
(vii)This subparagraph shall become inoperative on January 1, 2034.
(Q)Land that is owned by a California public-use airport on which residential uses are prohibited pursuant to Federal Aviation Administration Order 5190.6B, Airport Compliance Program, Chapter 20 -- Compatible Land Use and Airspace Protection.
(R)Land that is transferred to a community land trust, and all of the following conditions are met:
(i)The property is being or will be developed or rehabilitated as any of the following:
(I)An owner-occupied single-family dwelling.
(II)An owner-occupied unit in a multifamily dwelling.
(III)A member-occupied unit in a limited equity housing cooperative.
(IV)A rental housing development.
(ii)Improvements on the property are or will be available for use and ownership or for rent by qualified persons, as defined in paragraph (6) of subdivision (c) of Section 214.18 of the Revenue and Taxation Code.
(iii)(I)A deed restriction or other instrument, requiring a contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units or on the affordability of rental units is recorded on or before the lien date following the acquisition of the property by the community land trust.
(II)For the purpose of this clause, the following definitions apply:
(ia)A contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units means a contract described in paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.
(ib)A contract or contracts serving as an enforceable restriction on the affordability of rental units means an enforceable and verifiable agreement with a public agency, a recorded deed restriction, or other legal document described in subparagraph (A) of paragraph (2) of subdivision (g) of Section 214 of the Revenue and Taxation Code.
(iv)A copy of the deed restriction or other instrument shall be provided to the assessor.
(S)(i)For local agencies whose primary mission or purpose is to supply the public with a transportation system, surplus land that is developed for commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or for the sole purpose of investment or generation of revenue, if the agency meets all of the following conditions:
(I)The agency has an adopted land use plan or policy that designates at least 50 percent of the gross acreage covered by the adopted land use plan or policy for residential purposes. The adopted land use plan or policy shall also require the development of at least 300 residential units, or at least 10 residential units per gross acre, averaged across all land covered by the land use plan or policy, whichever is greater.
(II)The agency has an adopted land use plan or policy that requires at least 25 percent of all residential units to be developed on the parcels covered by the adopted land use plan or policy made available to lower income households, as defined in Section 50079 of the Health and Safety Code, at an affordable sales price or rented at an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing and 45 years for ownership housing, unless a local ordinance or the terms of a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability. These terms shall be included in the land use plan or policy and dictate that they will be contained in a covenant or restriction recorded against the surplus land at the time of disposition that shall run with the land and be enforceable against any owner or lessee who violates the covenant or restriction and each successor in interest who continues the violation.
(III)Land disposed of for residential purposes shall issue a competitive request for proposals subject to the local agencys open, competitive solicitation process or put out to open, competitive bid by the local agency, provided that all entities identified in subdivision (a) of Section 54222 are invited to participate.
(IV)Prior to entering into an agreement to dispose of a parcel for nonresidential development on land designated for the purposes authorized pursuant to this subparagraph in an agencys adopted land use plan or policy, the agency, since January 1, 2020, must have entered into an agreement to dispose of a minimum of 25 percent of the land designated for affordable housing pursuant to subclause (II).
(ii)The agency may exempt at one time all parcels covered by the adopted land use plan or policy pursuant to this subparagraph.
(2)Notwithstanding paragraph (1), a written notice of the availability of surplus land for open-space purposes shall be sent to the entities described in subdivision (b) of Section 54222 before disposing of the surplus land, provided the land does not meet the criteria in subparagraph (H) of paragraph (1), if the land is any of the following:
(A)Within a coastal zone.
(B)Adjacent to a historical unit of the State Parks System.
(C)Listed on, or determined by the State Office of Historic Preservation to be eligible for, the National Register of Historic Places.
(D)Within the Lake Tahoe region as defined in Section 66905.5.
(g)Persons and families of low or moderate income has the same meaning as provided in Section 50093 of the Health and Safety Code.
As used in this article, the following definitions shall apply:
(a)(1)Local agency means every city, whether organized under general law or by charter, county, city and county, district, including school, sewer, water, utility, and local and regional park districts of any kind or class, joint powers authority, successor agency to a former redevelopment agency, housing authority, or other political subdivision of this state and any instrumentality thereof that is empowered to acquire and hold real property.
(2)The Legislature finds and declares that the term district as used in this article includes all districts within the state, including, but not limited to, all special districts, sewer, water, utility, and local and regional park districts, and any other political subdivision of this state that is a district, and therefore the changes in paragraph (1) made by the act adding this paragraph that specify that the provisions of this article apply to all districts, including school, sewer, water, utility, and local and regional park districts of any kind or class, are declaratory of, and not a change in, existing law.
(b)(1)Surplus land means land owned in fee simple by any local agency for which the local agencys governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agencys use. Land shall be declared either surplus land or exempt surplus land, as supported by written findings, before a local agency may take any action to dispose of it consistent with an agencys policies or procedures. A local agency, on an annual basis, may declare multiple parcels as surplus land or exempt surplus land.
(2)Surplus land includes land held in the Community Redevelopment Property Trust Fund pursuant to Section 34191.4 of the Health and Safety Code and land that has been designated in the long-range property management plan approved by the Department of Finance pursuant to Section 34191.5 of the Health and Safety Code, either for sale or for future development, but does not include any specific disposal of land to an identified entity described in the plan.
(3)Nothing in this article prevents a local agency from obtaining fair market value for the disposition of surplus land consistent with Section 54226.
(4)Notwithstanding paragraph (1), a local agency is not required to make a declaration at a public meeting for land that is exempt surplus land pursuant to subparagraph (A), (B), (E), (K), (L), or (Q) of paragraph (1) of subdivision (f) if the local agency identifies the land in a notice that is published and available for public comment, including notice to the entities identified in subdivision (a) of Section 54222, at least 30 days before the exemption takes effect.
(c)(1)Except as provided in paragraph (2), agencys use shall include, but not be limited to, land that is being used, or is planned to be used pursuant to a written plan adopted by the local agencys governing board, for agency work or operations, including, but not limited to, utility sites, property owned by a port that is used to support logistics uses, watershed property, land being used for conservation purposes, land for demonstration, exhibition, or educational purposes related to greenhouse gas emissions, sites for broadband equipment or wireless facilities, and buffer sites near sensitive governmental uses, including, but not limited to, waste disposal sites, and wastewater treatment plants. Agencys use by a local agency that is a district shall also include land disposed for uses described in subparagraph (B) of paragraph (2).
(2)(A)Agencys use shall not include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development. Property disposed of for the sole purpose of investment or generation of revenue shall not be considered necessary for the agencys use.
(B)In the case of a local agency that is a district, excepting those whose primary mission or purpose is to supply the public with a transportation system, agencys use may include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or be for the sole purpose of investment or generation of revenue if the agencys governing body takes action in a public meeting declaring that the use of the site will do one of the following:
(i)Directly further the express purpose of agency work or operations.
(ii)Be expressly authorized by a statute governing the local agency, provided the district complies with Section 54233.5 if applicable.
(d)(1)Dispose means either of the following:
(A)The sale of the surplus land.
(B)The entering of a lease for surplus land, which is for a term longer than 15 years, inclusive of any extension or renewal options included in the terms of the initial lease, entered into on or after January 1, 2024.
(2)Dispose shall not mean either of the following:
(A)The entering of a lease for surplus land, which is for a term of 15 years or less, inclusive of any extension or renewal options included in the terms of the initial lease.
(B)The entering of a lease for surplus land on which no development or demolition will occur, regardless of the term of the lease.
(e)Open-space purposes means the use of land for public recreation, enjoyment of scenic beauty, or conservation or use of natural resources.
(f)(1)Except as provided in paragraph (2), exempt surplus land means any of the following:
(A)Surplus land that is transferred pursuant to Section 25539.4 or 37364.
(B)Surplus land that is less than one-half acre in area and is not contiguous to land owned by a state or local agency that is used for open-space or low- and moderate-income housing purposes.
(C)Surplus land that a local agency is exchanging for another property necessary for the agencys use. Property may include easements necessary for the agencys use.
(D)Surplus land that a local agency is transferring to another local, state, or federal agency, or to a third-party intermediary for future dedication for the receiving agencys use, or to a federally recognized California Indian tribe. If the surplus land is transferred to a third-party intermediary, the receiving agencys use must be contained in a legally binding agreement at the time of transfer to the third-party intermediary.
(E)Surplus land that is a former street, right-of-way, or easement, and is conveyed to an owner of an adjacent property.
(F)(i)Surplus land that is to be developed for a housing development, which may have ancillary commercial ground floor uses, that restricts 100 percent of the residential units to persons and families of low or moderate income, with at least 75 percent of the residential units restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Section 50052.5 or 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability, and in no event shall the maximum affordable sales price or rent level be higher than 20 percent below the median market rents or sales prices for the neighborhood in which the site is located.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(G)(i)Surplus land that is subject to a local agencys open, competitive solicitation or that is put to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process, for a housing or a mixed-use development that is more than one acre and less than 10 acres in area, consisting of either a single parcel, or two or more adjacent or non-adjacent parcels combined, that includes not less than 300 residential units, and that restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(ii)The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(H)(i)Surplus land totaling 10 or more acres, consisting of either a single parcel, or two or more adjacent or non-adjacent parcels combined for disposition to one or more buyers pursuant to a plan or ordinance adopted by the legislative body of the local agency, or a state statute. That surplus land shall be subject to a local agencys open, competitive solicitation process or put out to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process for a housing or mixed-use development.
(ii)The aggregate development shall include the greater of the following:
(I)Not less than 300 residential units.
(II)A number of residential units equal to 10 times the number of acres of the surplus land or 10,000 residential units, whichever is less.
(iii)At least 25 percent of the residential units shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent pursuant to Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(iv)If nonresidential development is included in the development pursuant to this subparagraph, at least 25 percent of the total planned units affordable to lower income households shall be made available for lease or sale and permitted for use and occupancy before or at the same time with every 25 percent of nonresidential development made available for lease or sale and permitted for use and occupancy.
(v)A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph. A local agency shall only dispose of land pursuant to this subparagraph through a disposition and development agreement that includes an indemnification clause that provides that if an action occurs after disposition violates this subparagraph, the person or entity that acquired the property shall be liable for the penalties.
(vi)The requirements of clauses (i) to (v), inclusive, shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation.
(I)A mixed-use development, which may include more than one publicly owned parcel, that meets all of the following conditions:
(i)The development restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(ii)At least 50 percent of the square footage of the new construction associated with the development is designated for residential use.
(iii)The development is not located in an urbanized area, as defined in Section 21094.5 of the Public Resources Code.
(J)(i)Surplus land that is subject to a valid legal restriction that is not imposed by the local agency and that makes housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site. A declaration of exemption pursuant to this subparagraph shall be supported by documentary evidence establishing the valid legal restriction. For the purposes of this section, documentary evidence includes, but is not limited to, a contract, agreement, deed restriction, statute, regulation, or other writing that documents the valid legal restriction.
(ii)Valid legal restrictions include, but are not limited to, all of the following:
(I)Existing constraints under ownership rights or contractual rights or obligations that prevent the use of the property for housing, if the rights or obligations were agreed to prior to September 30, 2019.
(II)Conservation or other easements or encumbrances that prevent housing development.
(III)Existing leases, or other contractual obligations or restrictions, if the terms were agreed to prior to September 30, 2019.
(IV)Restrictions imposed by the source of funding that a local agency used to purchase a property, provided that both of the following requirements are met:
(ia)The restrictions limit the use of those funds to purposes other than housing.
(ib)The proposed disposal of surplus land meets a use consistent with that purpose.
(iii)Valid legal restrictions that would make housing prohibited do not include either of the following:
(I)An existing nonresidential land use designation on the surplus land.
(II)Covenants, restrictions, or other conditions on the property rendered void and unenforceable by any other law, including, but not limited to, Section 714.6 of the Civil Code.
(iv)Feasible methods to mitigate or avoid a valid legal restriction on the site do not include a requirement that the local agency acquire additional property rights or property interests belonging to third parties.
(K)Surplus land that was granted by the state in trust to a local agency or that was acquired by the local agency for trust purposes by purchase or exchange, and for which disposal of the land is authorized or required subject to conditions established by statute.
(L)Land that is subject to either of the following, unless compliance with this article is expressly required:
(i)Section 17388, 17515, 17536, 81192, 81397, 81399, 81420, or 81422 of the Education Code.
(ii)Part 14 (commencing with Section 53570) of Division 31 of the Health and Safety Code.
(M)Surplus land that is a former military base that was conveyed by the federal government to a local agency, and is subject to Article 8 (commencing with Section 33492.125) of Chapter 4.5 of Part 1 of Division 24 of the Health and Safety Code, provided that all of the following conditions are met:
(i)The former military base has an aggregate area greater than five acres, is expected to include a mix of residential and nonresidential uses, and is expected to include no fewer than 1,400 residential units upon completion of development or redevelopment of the former military base.
(ii)The affordability requirements for residential units shall be governed by a settlement agreement entered into prior to September 1, 2020. Furthermore, at least 25 percent of the initial 1,400 residential units developed shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(iii)Before disposition of the surplus land, the agency adopts written findings that the land is exempt surplus land pursuant to this subparagraph.
(iv)Before disposition of the surplus land, the recipient has negotiated a project labor agreement consistent with the local agencys project stabilization agreement resolution, as adopted on February 2, 2021, and any succeeding ordinance, resolution, or policy, regardless of the length of the agreement between the local agency and the recipient.
(v)The agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development of residential units on the former military base, including the total number of residential units that have been permitted and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph or the settlement agreement.
(N)Real property that is used by a district for an agencys use expressly authorized in subdivision (c).
(O)Land that has been transferred before June 30, 2019, by the state to a local agency pursuant to Section 32667 of the Streets and Highways Code and has a minimum planned residential density of at least 100 dwelling units per acre, and includes 100 or more residential units that are restricted to persons and families of low or moderate income, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability. For purposes of this subparagraph, not more than 20 percent of the affordable units may be restricted to persons and families of moderate income and at least 80 percent of the affordable units must be restricted to lower income households as defined in Section 50079.5 of the Health and Safety Code.
(P)(i)Land that meets the following conditions:
(I)Land that is subject to a sectional planning area document that meets both of the following:
(ia)The sectional planning area was adopted prior to January 1, 2019.
(ib)The sectional planning area document is consistent with county and city general plans applicable to the land.
(II)The land identified in the adopted sectional planning area document was dedicated prior to January 1, 2019.
(III)On January 1, 2019, the parcels on the land met at least one of the following conditions:
(ia)The land was subject to an irrevocable offer of dedication of fee interest requiring the land to be used for a specified purpose.
(ib)The land was acquired through a land exchange subject to a land offer agreement that grants the lands original owner the right to repurchase the land acquired by the local agency pursuant to the agreement if the land will not be developed in a manner consistent with the agreement.
(ic)The land was subject to a grant deed specifying that the property shall be used for educational uses and limiting other types of uses allowed on the property.
(IV)At least 25 percent of the units that are not designated for students, faculty, or staff of an academic institution are dedicated to lower income households, as defined in Section 50079.5 of the Health and Safety Code, at an affordable rent, as defined by Section 50053 of the Health and Safety Code, or an affordable housing cost, as defined by Section 50052.5 of the Health and Safety Code, and subject to a recorded deed restriction for a period of 55 years for rental units and 45 years for owner-occupied units, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(V)The land is developed at an average density of at least 10 units per acre, calculated with respect to the entire sectional planning area. area and inclusive of housing designated for students, faculty, and staff of an academic institution.
(VI)No more than 25 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 25 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VII)No more than 50 percent of the nonresidential square footage identified in the sectional planning area document receives its first certificate of occupancy before at least 50 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(VIII)No more than 75 percent of the nonresidential square footage identified in the sectional planning area document shall receive its first certificate of occupancy before at least 75 percent of the residential square footage identified in the sectional planning area document has received its first certificate of occupancy.
(ii)The local agency includes in the annual report required by paragraph (2) of subdivision (a) of Section 65400 the status of development, including the total square footage of the residential and nonresidential development, the number of residential units that have been permitted, and what percentage of those residential units are restricted for persons and families of low or moderate income, or lower income households, as defined in Section 50079.5 of the Health and Safety Code.
(iii)The Department of Housing and Community Development may request additional information from the agency regarding land disposed of pursuant to this subparagraph.
(iv)At least 30 days prior to disposing of land declared exempt surplus land, a local agency shall provide the Department of Housing and Community Development a written notification of its declaration and findings in a form prescribed by the Department of Housing and Community Development. Within 30 days of receipt of the written notification and findings, the department shall notify the local agency if the department has determined that the local agency is in violation of this article. A local agency that fails to submit the written notification and findings shall be liable for a civil penalty pursuant to this subparagraph. A local agency shall not be liable for the civil penalty if the Department of Housing and Community Development does not notify the agency that the agency is in violation of this article within 30 days of receiving the written notification and findings. Once the department determines that the declarations and findings comply with subclauses (I) to (IV), inclusive, of clause (i), the local agency may proceed with disposal of land pursuant to this subparagraph. This clause is declaratory of, and not a change in, existing law.
(v)If the local agency disposes of land in violation of this subparagraph, the local agency shall be liable for a civil penalty calculated as follows:
(I)For a first violation, 30 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(II)For a second or subsequent violation, 50 percent of the greater of the final sale price or the fair market value of the land at the time of disposition.
(III)For purposes of this subparagraph, fair market value shall be determined by an independent appraisal of the land.
(IV)An action to enforce this subparagraph may be brought by any of the following:
(ia)An entity identified in subdivisions (a) to (e), inclusive, of Section 54222.
(ib)A person who would have been eligible to apply for residency in affordable housing had the agency not violated this section.
(ic)A housing organization, as that term is defined in Section 65589.5.
(id)A beneficially interested person or entity.
(ie)The Department of Housing and Community Development.
(V)A penalty assessed pursuant to this subparagraph shall, except as otherwise provided, be deposited into a local housing trust fund. The local agency may elect to instead deposit the penalty moneys into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund. Penalties shall not be paid out of funds already dedicated to affordable housing, including, but not limited to, Low and Moderate Income Housing Asset Funds, funds dedicated to housing for very low, low-, and moderate-income households, and federal HOME Investment Partnerships Program and Community Development Block Grant Program funds. The local agency shall commit and expend the penalty moneys deposited into the local housing trust fund within five years of deposit for the sole purpose of financing newly constructed housing units that are affordable to extremely low, very low, or low-income households.
(VI)Five years after deposit of the penalty moneys into the local housing trust fund, if the funds have not been expended, the funds shall revert to the state and be deposited in the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund for the sole purpose of financing newly constructed housing units located in the same jurisdiction as the surplus land and that are affordable to extremely low, very low, or low-income households. Expenditure of any penalty moneys deposited into the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund pursuant to this subdivision shall be subject to appropriation by the Legislature.
(vi)For purposes of this subparagraph, the following definitions apply:
(I)Sectional planning area means an area composed of identifiable planning units, within which common services and facilities, a strong internal unity, and an integrated pattern of land use, circulation, and townscape planning are readily achievable.
(II)Sectional planning area document means a document or plan that sets forth, at minimum, a site utilization plan of the sectional planning area and development standards for each land use area and designation.
(vii)This subparagraph shall become inoperative on January 1, 2034.
(Q)Land that is owned by a California public-use airport on which residential uses are prohibited pursuant to Federal Aviation Administration Order 5190.6B, Airport Compliance Program, Chapter 20 -- Compatible Land Use and Airspace Protection.
(R)Land that is transferred to a community land trust, and all of the following conditions are met:
(i)The property is being or will be developed or rehabilitated as any of the following:
(I)An owner-occupied single-family dwelling.
(II)An owner-occupied unit in a multifamily dwelling.
(III)A member-occupied unit in a limited equity housing cooperative.
(IV)A rental housing development.
(ii)Improvements on the property are or will be available for use and ownership or for rent by qualified persons, as defined in paragraph (6) of subdivision (c) of Section 214.18 of the Revenue and Taxation Code.
(iii)(I)A deed restriction or other instrument, requiring a contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units or on the affordability of rental units is recorded on or before the lien date following the acquisition of the property by the community land trust.
(II)For the purpose of this clause, the following definitions apply:
(ia)A contract or contracts serving as an enforceable restriction on the sale or resale value of owner-occupied units means a contract described in paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.
(ib)A contract or contracts serving as an enforceable restriction on the affordability of rental units means an enforceable and verifiable agreement with a public agency, a recorded deed restriction, or other legal document described in subparagraph (A) of paragraph (2) of subdivision (g) of Section 214 of the Revenue and Taxation Code.
(iv)A copy of the deed restriction or other instrument shall be provided to the assessor.
(S)(i)For local agencies whose primary mission or purpose is to supply the public with a transportation system, surplus land that is developed for commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or for the sole purpose of investment or generation of revenue, if the agency meets all of the following conditions:
(I)The agency has an adopted land use plan or policy that designates at least 50 percent of the gross acreage covered by the adopted land use plan or policy for residential purposes. The adopted land use plan or policy shall also require the development of at least 300 residential units, or at least 10 residential units per gross acre, averaged across all land covered by the land use plan or policy, whichever is greater.
(II)The agency has an adopted land use plan or policy that requires at least 25 percent of all residential units to be developed on the parcels covered by the adopted land use plan or policy made available to lower income households, as defined in Section 50079 of the Health and Safety Code, at an affordable sales price or rented at an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing and 45 years for ownership housing, unless a local ordinance or the terms of a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability. These terms shall be included in the land use plan or policy and dictate that they will be contained in a covenant or restriction recorded against the surplus land at the time of disposition that shall run with the land and be enforceable against any owner or lessee who violates the covenant or restriction and each successor in interest who continues the violation.
(III)Land disposed of for residential purposes shall issue a competitive request for proposals subject to the local agencys open, competitive solicitation process or put out to open, competitive bid by the local agency, provided that all entities identified in subdivision (a) of Section 54222 are invited to participate.
(IV)Prior to entering into an agreement to dispose of a parcel for nonresidential development on land designated for the purposes authorized pursuant to this subparagraph in an agencys adopted land use plan or policy, the agency, since January 1, 2020, must have entered into an agreement to dispose of a minimum of 25 percent of the land designated for affordable housing pursuant to subclause (II).
(ii)The agency may exempt at one time all parcels covered by the adopted land use plan or policy pursuant to this subparagraph.
(2)Notwithstanding paragraph (1), a written notice of the availability of surplus land for open-space purposes shall be sent to the entities described in subdivision (b) of Section 54222 before disposing of the surplus land, provided the land does not meet the criteria in subparagraph (H) of paragraph (1), if the land is any of the following:
(A)Within a coastal zone.
(B)Adjacent to a historical unit of the State Parks System.
(C)Listed on, or determined by the State Office of Historic Preservation to be eligible for, the National Register of Historic Places.
(D)Within the Lake Tahoe region as defined in Section 66905.5.
(g)Persons and families of low or moderate income has the same meaning as provided in Section 50093 of the Health and Safety Code.
|
Date
|
Status
|
|---|---|
| Jan 22, 2026 | Consideration of Governor's veto stricken from file. |
| Oct 13, 2025 | Consideration of Governor's veto pending. |
| Oct 13, 2025 | Vetoed by Governor. |
| Sep 22, 2025 | Enrolled and presented to the Governor at 3 p.m. |
| Sep 10, 2025 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 78. Noes 0. Page 3211.). |
| Sep 9, 2025 | In Assembly. Concurrence in Senate amendments pending. |
| Sep 9, 2025 | Read third time. Passed. Ordered to the Assembly. (Ayes 40. Noes 0. Page 2658.). |
| Jul 17, 2025 | Read second time and amended. Ordered to third reading. |
| Jul 16, 2025 | From committee: Amend, and do pass as amended. (Ayes 7. Noes 0.) (July 16). |
| Jul 9, 2025 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on L. GOV. |
| May 21, 2025 | Referred to Com. on L. GOV. |
| May 8, 2025 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 8, 2025 | Read third time. Passed. Ordered to the Senate. (Ayes 66. Noes 0. Page 1483.) |
| May 1, 2025 | Read second time. Ordered to third reading. |
| Apr 30, 2025 | From committee: Do pass. (Ayes 10. Noes 1.) (April 30). |
| Apr 22, 2025 | Re-referred to Com. on H. & C.D. |
| Apr 21, 2025 | Read second time and amended. |
| Apr 10, 2025 | From committee: Amend, and do pass as amended and re-refer to Com. on H. & C.D. (Ayes 8. Noes 1.) (April 9). |
| Apr 1, 2025 | Re-referred to Com. on L. GOV. |
| Mar 28, 2025 | From committee chair, with author's amendments: Amend, and re-refer to Com. on L. GOV. Read second time and amended. |
| Feb 3, 2025 | Referred to Coms. on L. GOV. and H. & C.D. |
| Jan 6, 2025 | Read first time. |
| Dec 17, 2024 | From printer. May be heard in committee January 16. |
| Dec 16, 2024 | Introduced. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 10, 2025 | AB 76 Alvarez Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Sep 9, 2025 | Assembly 3rd Reading AB76 Alvarez By Padilla | Senate Floor |
Passed |
|
| Jul 16, 2025 | Do pass as amended | Senate Standing Committee on Local Government |
Passed |
|
| May 8, 2025 | AB 76 Alvarez Assembly Third Reading | Assembly Floor |
Passed |
|
| Apr 30, 2025 | Do pass. | Assembly Standing Committee on Housing and Community Development |
Passed |
|
| Apr 9, 2025 | Do pass as amended and be re-referred to the Committee on [Housing and Community Development] | Assembly Standing Committee on Local Government |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| California Association For Local Economic Development | ** Support | |
| CDP Rural Caucus | ** Support | |
| CFT- a Union of Educators & Classified Professionals, Aft, Afl-cio | ** Support | |
| City Of Chula Vista | ** Support |
GOVERNOR'S VETO
GV Bill Id:AB 76
Author:(Alvarez)
As Enrolled Ver:September 12, 2025
2/3 vote
SUMMARY
Modifies the affordability and density requirements of the Surplus Land Act (SLA) exemption that applies to land subject to a sectional planning document adopted prior to January 1, 2019.
Senate Amendments
Clarify that at a minimum 500 units of housing be affordable to lower income households.
Make technical and conforming changes.
Governor's Veto Message
This bill reduces the affordable housing requirements for the University Innovation District (UID) in Chula Vista to qualify as exempt surplus land under the Surplus Land Act (SLA). Current law requires that at least 25 percent of all units be affordable to lower-income households. This measure instead excludes student, faculty, and university employee housing from those calculations - lowering the number of affordable homes required.
I support the vision of a University Innovation District in Chula Vista, as reflected in my signing of AB 662, which establishes a task force studying a mixed-use educational facility. But this effort should not come at the expense of the SLA's affordability framework, which since 2022 has been responsible for unlocking more than 34,000 homes - including 21,500 affordable units. Nor should it conflict with legislative efforts to expand affordable workforce housing by excluding faculty and staff units from affordability requirements.
With the AB 662 task force work set to begin, it is premature to alter this exemption before the task force completes its evaluation. Any subsequent proposal must ensure affordability requirements are maintained and the underlying use is consistent with the SLA's purpose of delivering broad public benefit.
COMMENTS
Background. The City of Chula Vista acquired parcels over several decades in order to facilitate the development of a university campus. The history of the land acquisition dating back to 1990 and continuing through 2014 is detailed in the city's UI-SPA. The parcels were acquired through a variety of agreements that placed various legal restrictions on the type of developments allowed on the land. City staff consulted with HCD and sought an SLA exemption from HCD for these parcels that are critical to the UI-SPA. Chula Vista staff prepared a memo for the Chula Vista City Council detailing the status of the parcels and the legal restrictions applicable to each parcel.
The City of Chula Vista and HCD. Each parcel identified by the city is subject to some form of legal restriction that controls for the type of development allowed on the parcel. The SLA allows for exemptions for parcels owned by local agencies that are subject to legal restrictions that are not imposed by the local agency (e.g. not imposed by the local agency's zoning code). Legal restrictions, such as deeds and covenants that are not imposed by the local agency that owns the land are not uncommon. However, the SLA only allows exemptions for legal restrictions that would make housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site.
The City of Chula Vista maintains that the restrictions on the property prohibit housing on the parcels, other than such housing necessary to fulfill the public purpose for university or educational uses, and that the disposal of the parcels should not be subject to the SLA. In analyzing the restrictions, HCD generally found that while the restrictions may limit the type of development allowed on the property to specific purposes (e.g. university development) the restrictions either do not "make housing prohibited," or they allow for some form of housing development (e.g. university housing). With the exception of a parcel subject to a superior court order, HCD further found that the city was a party to the original agreements and, therefore, could not claim that the restrictions were not imposed by the city.
HCD informed the City of Chula Vista that it must follow the standard SLA protocols when disposing of the property. Additionally, HCD noted for several of the properties that "the city may include a reasonable condition or restriction in the notice of availability (NOA) of the Property i.e., the City may include in the NOA that, because the Property was acquired for university purposes, the City envisions a development project on the Property that includes both housing and university uses."
AB 129 (Committee on Budget), Chapter 40, Statutes of 2023 created an SLA exemption for land subject to a sectional planning area adopted prior to January 1, 2019 if that sectional planning area is consistent with county and city general plans. To qualify for an exemption, the land must be dedicated for the local agency's use before January 1, 2019.
According to the Author
"Chula Vista's university effort is positioned to benefit the region greatly. A university presence in the South County would be a key player within the regional economy, producing graduates who occupy regional jobs, employing thousands of local workers, and contributing to the regional and state economies. A South County university presence would also provide more equitable access to higher education. Bachelor's degree holders have greater earning power and can earn about $32,000 more annually than those with a high school diploma. The City will develop approximately 4,000 residential units as part of the mixed-use UID project. The change in AB 76 is needed to build a much-needed four-year university in South County and provide the housing necessary for the university's students, faculty, and staff."
Arguments in Support
The City of Chula Vista writes in support, "Since the adoption of the Otay Ranch General Development Plan in 1993, the City of Chula Vista has pursued a vision of locating a university within eastern Chula Vista. This vision is also reflected in the Otay Ranch General Development Plan and Sectional Planning Area Plan for a new UID. Under the adopted planning documents that govern the development of the site, the UID will accommodate up to 20,000 students with an innovation district capable of building approximately 10 million square feet of mixed-use development, inclusive of 4 million square feet of academic space, 2 million square feet of commercial space for business innovation uses, and 3.6 million square feet of housing.
"The City has committed to allocating 25 percent of the entitled housing units as affordable. While this commitment has not changed, restrictions on 'affordable housing', as defined by the U.S. Department of Housing and Urban Development (HUD), does not allow for student and faculty housing to be designated as affordable. Proper planning for student housing is critical in developing a new university. Therefore, AB 76 seeks to clarify the affordability requirement by excluding housing designated for students, faculty, and university employees from the affordable housing ratio, reaffirming the City's intent to develop the UID in a manner consistent with the existing land use entitlements for the project."
Arguments in Opposition
None on file.
FISCAL COMMENTS
None.
VOTES
ASM LOCAL GOVERNMENT: 8-1-1
YES: Carrillo, Pacheco, Ramos, Ransom, Blanca Rubio, Stefani, Ward, Wilson
NO: Ta
ABS, ABST OR NV: Hoover
ASM HOUSING AND COMMUNITY DEVELOPMENT: 10-1-1
YES: Haney, Patterson, Ávila Farías, Caloza, Garcia, Kalra, Lee, Quirk-Silva, Wicks, Wilson
NO: Ta
ABS, ABST OR NV: Tangipa
ASSEMBLY FLOOR: 66-0-13
YES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Bonta, Bryan, Calderon, Caloza, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Fong, Gabriel, Garcia, Gipson, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Jackson, Kalra, Krell, Lackey, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Valencia, Ward, Wicks, Wilson, Zbur, Rivas
ABS, ABST OR NV: Arambula, Boerner, Carrillo, Castillo, Flora, Gallagher, Jeff Gonzalez, Irwin, Macedo, Celeste Rodriguez, Sanchez, Tangipa, Wallis
SENATE FLOOR: 40-0-0
YES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Grove, Hurtado, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Reyes, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener
ASSEMBLY FLOOR: 78-0-2
YES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Johnson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas
ABS, ABST OR NV: Sanchez, Tangipa
UPDATED
VERSION: September 12, 2025
CONSULTANT: Linda Rios / L. GOV. / (916) 319-3958 FN: 0002200
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 76
Author:(Alvarez)
As Amended Ver:July 17, 2025
Majority vote
SUMMARY
Modifies the affordability and density requirements of the Surplus Land Act (SLA) exemption that applies to land subject to a sectional planning document adopted prior to January 1, 2019.
Senate Amendments
Clarify that at a minimum 500 units of housing be affordable to lower income households.
Make technical and conforming changes.
COMMENTS
Background. The City of Chula Vista acquired parcels over several decades in order to facilitate the development of a university campus. The history of the land acquisition dating back to 1990 and continuing through 2014 is detailed in the city′s UI-SPA. The parcels were acquired through a variety of agreements that placed various legal restrictions on the type of developments allowed on the land. City staff consulted with HCD and sought an SLA exemption from HCD for these parcels that are critical to the UI-SPA. Chula Vista staff prepared a memo for the Chula Vista City Council detailing the status of the parcels and the legal restrictions applicable to each parcel.
The City of Chula Vista and HCD. Each parcel identified by the city is subject to some form of legal restriction that controls for the type of development allowed on the parcel. The SLA allows for exemptions for parcels owned by local agencies that are subject to legal restrictions that are not imposed by the local agency (e.g. not imposed by the local agency′s zoning code). Legal restrictions, such as deeds and covenants that are not imposed by the local agency that owns the land are not uncommon. However, the SLA only allows exemptions for legal restrictions that would make housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site.
The City of Chula Vista maintains that the restrictions on the property prohibit housing on the parcels, other than such housing necessary to fulfill the public purpose for university or educational uses, and that the disposal of the parcels should not be subject to the SLA. In analyzing the restrictions, HCD generally found that while the restrictions may limit the type of development allowed on the property to specific purposes (e.g. university development) the restrictions either do not ″make housing prohibited,″ or they allow for some form of housing development (e.g. university housing). With the exception of a parcel subject to a superior court order, HCD further found that the city was a party to the original agreements and, therefore, could not claim that the restrictions were not imposed by the city.
HCD informed the City of Chula Vista that it must follow the standard SLA protocols when disposing of the property. Additionally, HCD noted for several of the properties that ″the city may include a reasonable condition or restriction in the notice of availability (NOA) of the Property i.e., the City may include in the NOA that, because the Property was acquired for university purposes, the City envisions a development project on the Property that includes both housing and university uses.″
AB 129 (Committee on Budget, Chapter 40, Statutes of 2023) created an SLA exemption for land subject to a sectional planning area adopted prior to January 1, 2019 if that sectional planning area is consistent with county and city general plans. To qualify for an exemption, the land must be dedicated for the local agency′s use before January 1, 2019.
According to the Author
″Chula Vista′s university effort is positioned to benefit the region greatly. A university presence in the South County would be a key player within the regional economy, producing graduates who occupy regional jobs, employing thousands of local workers, and contributing to the regional and state economies. A South County university presence would also provide more equitable access to higher education. Bachelor′s degree holders have greater earning power and can earn about $32,000 more annually than those with a high school diploma. The City will develop approximately 4,000 residential units as part of the mixed-use UID project. The change in AB 76 is needed to build a much-needed four-year university in South County and provide the housing necessary for the university′s students, faculty, and staff.″
Arguments in Support
The City of Chula Vista writes in support, ″Since the adoption of the Otay Ranch General Development Plan in 1993, the City of Chula Vista has pursued a vision of locating a university within eastern Chula Vista. This vision is also reflected in the Otay Ranch General Development Plan and Sectional Planning Area Plan for a new UID. Under the adopted planning documents that govern the development of the site, the UID will accommodate up to 20,000 students with an innovation district capable of building approximately 10 million square feet of mixed-use development, inclusive of four million square feet of academic space, two million square feet of commercial space for business innovation uses, and 3.6 million square feet of housing.
″The City has committed to allocating 25% of the entitled housing units as affordable. While this commitment has not changed, restrictions on ′affordable housing′, as defined by the U.S. Department of Housing and Urban Development (HUD), does not allow for student and faculty housing to be designated as affordable. Proper planning for student housing is critical in developing a new university. Therefore, AB 76 seeks to clarify the affordability requirement by excluding housing designated for students, faculty, and university employees from the affordable housing ratio, reaffirming the City′s intent to develop the UID in a manner consistent with the existing land use entitlements for the project.″
Arguments in Opposition
None on file.
FISCAL COMMENTS
None.
VOTES:
ASM LOCAL GOVERNMENT: 8-1-1
YES: Carrillo, Pacheco, Ramos, Ransom, Blanca Rubio, Stefani, Ward, Wilson
NO: Ta
ABS, ABST OR NV: Hoover
ASM HOUSING AND COMMUNITY DEVELOPMENT: 10-1-1
YES: Haney, Patterson, Ávila Farías, Caloza, Garcia, Kalra, Lee, Quirk-Silva, Wicks, Wilson
NO: Ta
ABS, ABST OR NV: Tangipa
ASSEMBLY FLOOR: 66-0-13
YES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Bonta, Bryan, Calderon, Caloza, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Fong, Gabriel, Garcia, Gipson, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Jackson, Kalra, Krell, Lackey, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Valencia, Ward, Wicks, Wilson, Zbur, Rivas
ABS, ABST OR NV: Arambula, Boerner, Carrillo, Castillo, Flora, Gallagher, Jeff Gonzalez, Irwin, Macedo, Celeste Rodriguez, Sanchez, Tangipa, Wallis
UPDATED
VERSION: July 17, 2025
CONSULTANT: Linda Rios / L. GOV. / (916) 319-3958 FN: 0001951
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 76 |
THIRD READING
Bill No: AB 76
Author: Alvarez (D)
Amended: 7/17/25 in Senate
Vote: 21
SENATE LOCAL GOVERNMENT COMMITTEE: 7-0, 7/16/25
AYES: Durazo, Choi, Arreguín, Cabaldon, Laird, Seyarto, Wiener
ASSEMBLY FLOOR: 66-0, 5/8/25 - See last page for vote
SUBJECT: Surplus land: exempt surplus land: sectional planning area
SOURCE: City of Chula Vista
DIGEST:
This bill modifies the affordability and density requirements of the Surplus Land Act (SLA) exemption that applies to land subject to a sectional planning document adopted prior to January 1, 2019.
ANALYSIS:
Existing law:
- Establishes procedures for the disposal of publicly-owned land that is surplus to the needs of local agencies, under SLA.
- Requires local officials that want to dispose of public property to declare that the land is no longer needed for the agency’s use in a public meeting and declare the land either “surplus land” or “exempt surplus land.”
- Provides that “agency’s use” includes land that is being used, or is planned to be used pursuant to a written plan adopted by the local agency or will be disposed of to support agency work or operations, and excludes land for agency’s use from the SLA.
- Requires local agencies to follow the procedures laid out in the SLA before surplus land can be sold, including:
- Send a written notice of availability to various public agencies and nonprofit groups, referred to as “housing sponsors,” notifying them that land is available for specified purposes.
- Negotiate in good faith for 90 days with housing sponsors that respond.
- Allows the local agency to dispose of the property on the private market if agreement is not reached with a housing sponsor.
- Requires that, if a property sold as surplus is not sold to a housing sponsor, but housing is developed on it later, 15% of the units must be sold or rented at an affordable cost to lower income households.
- Requires local agencies to notify the Department of Housing and Community Development (HCD) prior to agreeing to terms for the disposition of surplus land.
- Imposes penalties of 30% of the disposition value of the land for a first violation and 50% of the disposition value for any subsequent violation for selling land in violation of the SLA.
- Designates certain types of land as “exempt surplus land” and provides that the entirety of the SLA does not apply to exempt surplus land.
- Provides an exemption from the SLA to land that is subject to a sectional planning area that was adopted prior to January 1, 2019, and that is consistent with the local general plan designation, with certain restrictions, including:
- At least 25% of housing units in the sectional planning area be dedicated to lower income households at an affordable rent or cost subject to a deed restriction of 55 years for rental units and 45 years for owner-occupied units, unless otherwise specified; and
- That the land must also be developed at an average density of at least 10 units per acre, calculated with respect to the entire sectional planning area.
This bill modifies the SLA exemption that applies to land subject to a sectional planning document adopted prior to January 1, 2019, to:
- Exclude housing units designated for students, faculty, or staff of an academic institution from the minimum 25% of housing units proposed in the sectional planning area that must be affordable to lower income households;
- Require that 25% of the remaining units, or 500 units, whichever is greater, be affordable to lower income households; and
- Allow student housing units that include specified kitchen and bathroom facilities, and are not determined to be substandard buildings, to count towards the 10 units per acre minimum density requirement for the sectional planning area.
Background
Chula Vista is a charter city, and San Diego County’s second largest city, with just over 275,000 residents. The City has long hoped to attract a university. On October 28, 1993, the Chula Vista City Council and the San Diego County Board of Supervisors adopted the Otay Ranch General Development Plan/Subregional Plan (GDP/SRP) to implement this vision. Chula Vista and San Diego County jointly adopt and amend the GDP/SRP, which functions as a general plan level document for both the county and the city. Land use planning within the area must be consistent with the GDP/SRP. To help ensure consistency with the GDP/SRP, the City requires the preparation and adoption of “Sectional Planning Area” plans, and the County of San Diego requires “Specific Plans.”
In 2018, the City of Chula Vista created a University Innovation District: Sectional Planning Area (UI-SPA), by adopting a sectional planning area document to guide a portion of the implementation of the GDP/SRP. Chula Vista’s UI-SPA functions as a discretionary land use plan and therefore must be consistent with the GDP/SRP as adopted by the two local agencies.
From 1990 to 2014, Chula Vista acquired parcels to implement the UI-SPA. Many of these parcels included legal restrictions on the type of developments allowed on the parcel. Some required the land be used for “future university purposes.” Others gave the previous owner repurchase rights if the City decided to use it for “non-university development,” including non-university related housing.
The SLA considers land subject to valid legal restrictions that prohibit housing, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site, to be exempt from the Act. Chula Vista asked HCD to concur it would consider the parcels with these legal constrictions to be exempt from the SLA. Late 2022, HCD issued letters to Chula Vista stating that none of the parcels qualified for an SLA exemption.
HCD reviewed the agreements and found that many of the restrictions limited the types of developments on these parcels, but did not explicitly prohibit housing. Additionally, since the City was party to the agreements, HCD considered the restrictions to be imposed by the city, and therefore not subject to the exemption for valid legal restrictions. As such, HCD informed the City of Chula Vista it must follow the standard SLA protocols when disposing of the parcels in its sectional planning area.
AB 129 (Committee on Budget, Chapter 40, Statutes of 2023) created an SLA exemption for land subject to a sectional planning area adopted prior to January 1, 2019 if that sectional planning area is consistent with county and city general plans. To qualify for an exemption, the land must be dedicated for the local agency’s use before January 1, 2019.
Comments
Purpose of this bill. According to the author, “Chula Vista’s university effort is positioned to benefit the region greatly. A university presence in the South County would be a key player within the regional economy, producing graduates who occupy regional jobs, employing thousands of local workers, and contributing to the regional and state economies. A South County university presence would also provide more equitable access to higher education. Bachelor’s degree holders have greater earning power and can earn about $32,000 more annually than those with a high school diploma. The City will develop approximately 4,000 residential units as part of the mixed-use UID project. The change in AB 76 is needed to build a much-needed four-year university in South County and provide the housing necessary for the university’s students, faculty, and staff.”
Housing uber alles. Until 2020, the SLA was largely toothless. AB 1486 (Ting, Chapter 664, Statutes of 2019) rewrote the SLA to include many of the provisions in the SLA today. The 2019 amendments to the SLA were intended to increase the supply of housing affordable to lower-income Californians by giving affordable housing developers the first right of refusal on surplus local properties and by imposing affordability requirements on surplus land that later had market-rate housing built on it. The changes also strictly limited the cases where local governments could dispose of land to support commercial purposes, on the theory that if given the option, local governments would preferentially offer land to most other developers, instead of affordable housing. AB 129 granted an additional exception to the SLA for Chula Vista’s university project, but to ensure Chula Vista follows the SLA’s primary purpose to increase the supply of housing affordable to lower-income residents, AB 129 required 25% of the housing to be affordable. However, the measure did not specify whether that meant 25% of all housing units, including those for students, faculty, and staff, or 25% of the market rate units. According to Chula Vista, requiring 25% of all housing in the sectional planning area to be affordable means that they would have to build roughly 960 affordable housing units. Making half of 2,000 units affordable would make it more difficult for the project to pencil out since the return on investment for the developer would be much lower. If the 25% requirement applies only to the 2,000 market rate units, the City would only have to build 500 affordable units, which the City believes would still allow the development to pencil out. Does AB 76 ensure that sufficient housing in the Chula Vista university project is affordable to lower income households?
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
SUPPORT: (Verified 7/24/25)
City of Chula Vista (Source)
Cdp Rural Caucus
Cft- a Union of Educators & Classified Professionals, Aft, Afl-cio
OPPOSITION: (Verified 7/24/25)
None received
ASSEMBLY FLOOR: 66-0, 5/8/25
AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Bonta, Bryan, Calderon, Caloza, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Fong, Gabriel, Garcia, Gipson, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Jackson, Kalra, Krell, Lackey, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Valencia, Ward, Wicks, Wilson, Zbur, Rivas
NO VOTE RECORDED: Arambula, Boerner, Carrillo, Castillo, Flora, Gallagher, Jeff Gonzalez, Irwin, Macedo, Celeste Rodriguez, Sanchez, Tangipa, Wallis
Prepared by: Jonathan Peterson / L. GOV. / (916) 651-4119
8/14/25 16:22:47
**** END ****
SENATE COMMITTEE ON LOCAL GOVERNMENT
Senator María Elena Durazo, Chair
2025 - 2026 Regular
Bill No: | AB 76 | Hearing Date: | 7/16/25 |
Author: | Alvarez | Fiscal: | No |
Version: | 7/9/25 | Consultant: | Peterson |
Surplus land: exempt surplus land: sectional planning area
Modifies the affordability and density requirements of the Surplus Land Act exemption that applies to land subject to a sectional planning document adopted prior to January 1, 2019.
Background
Surplus Land Act. Public agencies are major landlords in some communities, owning significant pieces of real estate. When properties become surplus to an agency’s needs, public officials want to sell the land to recoup their investments. The Surplus Land Act (SLA) spells out the steps local agencies must follow when they want to dispose of land. It requires local governments to give a “first right of refusal” to other governments and nonprofit housing developers, and to negotiate in good faith with them to try to come to agreement. This means that local agencies must open their properties up to affordable housing developers first, even if they have a different purpose in mind for the property.
Surplus land vs. agency’s use. Before local officials can dispose of property, they must declare that the land is no longer needed for the agency’s use in a public meeting and declare the land either “surplus land” or “exempt surplus land.” Land that is being used for an agency’s use is not subject to the SLA. “Agency’s use” includes land that is being used, or is planned to be used pursuant to a written plan adopted by the local agency or will be disposed of to support agency work or operations.
As a general rule, agency’s use cannot include commercial or industrial uses or activities, and land disposed of for the purpose of investment or generating revenue cannot be considered necessary for the agency’s use. As a result, cities and counties are limited in their ability to dispose of properties for economic development or revenue generation purposes. However, most special districts are not subject to those restrictions on agency’s use as long as they can demonstrate that use of the site will do one of the following:
- Directly further the express purpose of agency work or operations.
- Be expressly authorized by a statute governing the local agency.
Transit districts can only dispose of property for commercial or revenue generation purposes if they meet specific requirements for developing affordable housing across their portfolio of properties, and have made a certain amount of progress towards building that housing.
The SLA designates certain types of land as “exempt surplus land.” Statute provides that the entirety of the SLA does not apply to disposals of exempt surplus land. All other surplus land must follow the procedures laid out in the SLA before a local agency can sell it.
SLA process. Before agencies can enter into negotiations to dispose of surplus land, they must send a written notice of availability to various public agencies and nonprofit groups, referred to as “housing sponsors,” notifying them that land is available for the following purposes:
- Low- and moderate-income housing;
- Park and recreation, and open space;
- School facilities; or
- Infill opportunity zones or transit village plans.
Housing sponsors can notify the Department of Housing and Community Development (HCD) if they are interested in acquiring surplus land to develop affordable housing. HCD maintains a list of notices of availability on its website.
If another agency or housing sponsor wants to buy or lease the surplus land for one of these purposes, it must tell the disposing agency within 60 days, and if multiple entities want to purchase the land, the housing sponsor that proposes to provide the greatest level of affordable housing gets priority. The agency and the housing sponsor then have an additional 90 days to negotiate a mutually satisfactory price and terms in good faith. If they cannot agree, the agency that owns the surplus land can sell the land on the private market. If surplus land is not sold to an affordable housing developer, but housing is developed on it later, 15 percent of the units must be sold or rented at an affordable cost to lower income households.
The SLA says that nothing in its provisions:
- Limits the power of any local agency to sell or lease surplus land at fair market value or less than fair market value;
- Prevents a local agency from obtaining fair market value;
- Limits a local agency’s authority or discretion to approve land use, zoning, or other entitlement decisions in connection with surplus land; or
- Requires a local agency to dispose of land just because it is surplus.
Local agencies that dispose of surplus land in violation of the SLA face penalties totaling 30 percent of the sales price, or fair market value of the sale or lease, of land disposed of in violation of the SLA for a first violation, and 50 percent for subsequent violations. These penalty revenues must be deposited in a local housing trust fund. The enforcement process in the SLA requires that:
- Prior to agreeing to terms for the disposition of surplus land, a local agency must provide HCD a description of the notices of availability sent, and negotiations conducted with any responding entities, as specified.
- HCD must submit written findings to the local agency within 30 days of receipt of the description of the disposal if the proposed disposal of the land will violate SLA.
- A local agency has at least 60 days to respond to the findings before HCD may take further action. The local agency must consider findings made by HCD and then either correct any issues found by HCD or respond in writing why the disposal complied with the SLA.
- If the local agency does not respond or does not address the issues, HCD must notify the local government and may notify the Attorney General that the disposal violates the SLA.
- A local agency cannot be held liable for the penalties under the SLA if HCD does not notify the agency that the agency is in violation within 30 days of receiving the description.
Recent SLA revisions. Two bills chaptered in 2023, SB 747 (Caballero) and AB 480 (Ting), made significant changes to the SLA. Collectively, the bills attempted to strike a balance between ensuring comprehensive coverage of dispositions, while enacting exemptions and other changes that would streamline the process for local governments. Specifically, SB 747 and AB 480:
- Define “dispose” in the law to include leases of longer than 15 years that are entered into on or after January 1, 2024, but exclude leases of shorter than 15 years and leases where no development or demolition will occur;
- Apply penalties to leases that violate the SLA, but provide that penalties don’t apply to non-substantive violations of the SLA;
- Add numerous categories of exempt surplus land, such as properties of smaller than one-half acre, specified mixed-use developments and developments on larger sites that include affordability requirements, airport land, and others;
- Authorize disposal of certain categories of exempt surplus land without a public hearing, as long as specified notice is provided;
- Establish additional types of activities that explicitly qualify as “agency’s use”; and
- Extend provisions that allow projects with an exclusive negotiating agreement in place to follow a previous version of the SLA.
City of Chula Vista. Chula Vista is a charter city, and San Diego County’s second largest city, with just over 275,000 residents. The City has long hoped to attract a university. On October 28, 1993, the Chula Vista City Council and the San Diego County Board of Supervisors adopted the Otay Ranch General Development Plan/Subregional Plan (GDP/SRP) to implement this vision. Chula Vista and San Diego County jointly adopt and amend the GDP/SRP, which functions as a general plan level document for both the county and the city. Land use planning within the area must be consistent with the GDP/SRP. To help ensure consistency with the GDP/SRP, the City requires the preparation and adoption of “Sectional Planning Area” plans, and the County of San Diego requires “Specific Plans.”
In 2018, the City of Chula Vista created a University Innovation District: Sectional Planning Area (UI-SPA), by adopting a sectional planning area document to guide a portion of the implementation of the GDP/SRP. Chula Vista’s UI-SPA functions as a discretionary land use plan and therefore must be consistent with the GDP/SRP as adopted by the two local agencies.
From 1990 to 2014, Chula Vista acquired parcels to implement the UI-SPA. Many of these parcels included legal restrictions on the type of developments allowed on the parcel. Some required the land be used for “future university purposes.” Others gave the previous owner repurchase rights if the City decided to use it for “non-university development,” including non-university related housing.
The SLA considers land subject to valid legal restrictions that prohibit housing, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site, to be exempt from the Act. Chula Vista asked HCD to concur it would consider the parcels with these legal constrictions to be exempt from the SLA. Late 2022, HCD issued letters to Chula Vista stating that none of the parcels qualified for an SLA exemption.
HCD reviewed the agreements and found that many of the restrictions limited the types of developments on these parcels, but did not explicitly prohibit housing. Additionally, since the City was party to the agreements, HCD considered the restrictions to be imposed by the city, and therefore not subject to the exemption for valid legal restrictions. As such, HCD informed the City of Chula Vista it must follow the standard SLA protocols when disposing of the parcels in its sectional planning area.
AB 129 (Committee on Budget, 2023) created an SLA exemption for land subject to a sectional planning area adopted prior to January 1, 2019 if that sectional planning area is consistent with county and city general plans. To qualify for an exemption, the land must be dedicated for the local agency’s use before January 1, 2019. It also must have met at least one of the following conditions by January 1, 2019:
- The land was subject to an irrevocable offer of dedication of fee interest requiring the land to be used for a specified purpose;
- The land was acquired through a land exchange subject to a land offer agreement that grants the land’s original owner the right to repurchase the land acquired by the local agency pursuant to the agreement if the land will not be developed in a manner consistent with the agreement; or
- The land was subject to a grant deed specifying that the property shall be used for educational uses and limiting other types of uses allowed on the property.
AB 129 also required all of the following:
- At least 25% of housing units in the sectional planning area be dedicated to lower income households at an affordable rent or cost subject to a deed restriction of 55 years for rental units and 45 years for owner-occupied units, unless otherwise specified;
- That the land must also be developed at an average density of at least 10 units per acre, calculated with respect to the entire sectional planning area; and
- That nonresidential square footage in the sectional planning area must not be developed faster than the residential square footage; and
- That the local agency include in its housing annual progress report the status of the development, including information like how many affordable housings units it has permitted; and
- At least 30 days before disposing of land as “exempt surplus land, the local agency must provide HCD with a written notification. Within 30 days of receipt, HCD must notify the local agency if it is in violation of the SLA. Local agencies that do not comply with these requirements are subject to specified civil penalties.
AB 129’s provisions sunset on January 1, 2034.
Now that the City of Chula Vista has sought to implement AB 129, it has identified challenges it will face when it comes to the affordability requirement. Current law requires that 25% of the housing constructed across the entire sectional planning area (totaling 384 acres), at a minimum density of 10 units per acre, be affordable to lower income households. This calculation would yield a minimum of 960 units of affordable housing. The sectional planning area identifies housing for students, staff, and faculty housing, and, separately, market-rate housing. The section planning area proposes to include 2 million square feet of market-rate housing, which equates to a proposed 2,000 units. Applying the 25% affordable housing requirement to just the proposed 2,000 market rate units would yield a minimum of 500 units of affordable housing. Chula Vista does not believe that it could develop the area if 960 units of the market rate units have to affordable.
To address these concerns, the City of Chula Vista wants to change the affordability requirement to exempt housing for students, faculty, and staff from the calculation of the number of required affordable housing units.
Proposed Law
Assembly Bill 76 modifies the SLA exemption that applies to land subject to a sectional planning document adopted prior to January 1, 2019, to:
- Exclude housing units designated for students, faculty, or staff of an academic institution from the minimum 25% of housing units proposed in the sectional planning area that must be affordable to lower income households; and
- Allow student housing units that include specified kitchen and bathroom facilities, and are not determined to be substandard buildings, to count towards the 10 units per acre minimum density requirement for the sectional planning area.
Comments
1. Purpose of the bill. According to the author, “Chula Vista’s university effort is positioned to benefit the region greatly. A university presence in the South County would be a key player within the regional economy, producing graduates who occupy regional jobs, employing thousands of local workers, and contributing to the regional and state economies. A South County university presence would also provide more equitable access to higher education. Bachelor’s degree holders have greater earning power and can earn about $32,000 more annually than those with a high school diploma. The City will develop approximately 4,000 residential units as part of the mixed-use UID project. The change in AB 76 is needed to build a much-needed four-year university in South County and provide the housing necessary for the university’s students, faculty, and staff.”
2. Housing uber alles. Until 2020, the SLA was largely toothless. AB 1486 (Ting, 2019) rewrote the SLA to include many of the provisions in the SLA today. The 2019 amendments to the SLA were intended to increase the supply of housing affordable to lower-income Californians by giving affordable housing developers the first right of refusal on surplus local properties and by imposing affordability requirements on surplus land that later had market-rate housing built on it. The changes also strictly limited the cases where local governments could dispose of land to support commercial purposes, on the theory that if given the option, local governments would preferentially offer land to most other developers, instead of affordable housing. AB 129 granted an additional exception to the SLA for Chula Vista’s university project, but to ensure Chula Vista follows the SLA’s primary purpose to increase the supply of housing affordable to lower-income residents, AB 129 required 25% of the housing to be affordable. However, the measure did not specify whether that meant 25% of all housing units, including those for students, faculty, and staff, or 25% of the market rate units. According to Chula Vista, requiring 25% of all housing in the sectional planning area to be affordable means that they would have to build roughly 960 affordable housing units. Making half of 2,000 units affordable would make it more difficult for the project to pencil out since the return on investment for the developer would be much lower. If the 25% requirement applies only to the 2,000 market rate units, the City would only have to build 500 affordable units, which the City believes would still allow the development to pencil out. However, under AB 76, if Chula Vista ends up developing only student, faculty, and staff housing, the City would not have to build any affordable housing units for the broader community, running counter to the purpose of the SLA. The Committee may wish to consider amending the bill to ensure that the City develops a minimum number of affordable housing units.
Assembly Actions
Assembly Local Government Committee: 8-1
Assembly Housing and Community Development Committee: 10-1
Assembly Floor: 66-0
Support and Opposition
(7/11/25)
Support: City of Chula Vista (Sponsor)
Cdp Rural Caucus
Cft- a Union of Educators & Classified Professionals, Aft, Afl-cio
Opposition: None Submitted
-- END --
ASSEMBLY THIRD READING
ATR Bill Id:AB 76
Author:(Alvarez)
As Amended Ver:April 21, 2025
Majority vote
SUMMARY
Specifies, for purposes of meeting the requirements a category of exempt surplus land, that student, staff, and faculty housing can be counted toward minimum density requirements and excludes student, staff, and faculty housing from the total number of units used for calculating the minimum number of affordable housing units to be constructed.
Major Provisions
- Requires, for a Surplus Land Act (SLA) exemption that applies to land subject to a sectional planning document adopted prior to January 1, 2019, that a minimum of 25% of housing units proposed by the sectional planning document that are not designated for students, faculty, or staff of an academic institution, must be constructed and dedicated to lower-income households, as specified.
- Provides, for purposes of the SLA exemption that applies to land subject to a sectional planning document prior to January 1, 2019, that a "student housing unit" must meet all of the following to count towards the minimum density requirement:
- The unit includes a fully functioning kitchen with a refrigerator, stove, sink with hot and cold water, vent, and an area to prepare food;
- The unit has a ratio of beds to toilets, lavatories, and showers not exceeding five to one; and
- The unit is not a substandard building, as specified.
- Makes other technical and conforming changes.
COMMENTS
- Background. Over the course of a few decades, the City of Chula Vista acquired land with the intent of attracting a university and established a specific plan for the development of a university, residential units, commercial uses, and open space purposes. In total, the City of Chula Vista acquired 384 acres of land for development. However, land that is owned by a public agency is subject to the SLA. The SLA requires local agencies to first offer surplus land that they plan to dispose, which means to either sell or lease, to affordable housing, schools and open space uses. In order to facilitate development and ease navigating the conditions of sale for agency, a category of exempt surplus land was created for lands subject to a sectional planning document that was approved prior to January 1, 2019 and the parcels had dedications, agreements, or grant deeds limiting the use of the land to specified purposes.
- Surplus Land Act. Public agencies are major landlords in some communities, owning significant pieces of real estate. When properties become surplus to an agency's needs, public officials want to dispose, which means to sell or lease for 15 years or longer, the land to recoup their investments. The SLA spells out the steps local agencies must follow when they want to dispose of land. It requires local governments to give a "first right of refusal" to other public agencies, nonprofit housing developers, schools, and parks and recreation departments. After notifying these groups that the land is available, the disposing agency must negotiate in good faith with these interested parties to try to come to agreement for 90 days before the local agency can dispose of the surplus land.
- Land Acquisitions and Restrictions. The City of Chula Vista acquired parcels over several decades in order to facilitate the development of a university campus. The history of the land acquisition dating back to 1990 and continuing through 2014 is detailed in the city's UI-SPA. The parcels were acquired through a variety of agreements that placed various legal restrictions on the type of developments allowed on the land. City staff consulted with the Department of Housing and Community Development (HCD) and sought an SLA exemption from HCD for these parcels that are critical to the UI-SPA. Chula Vista staff prepared a memo for the Chula Vista City Council detailing the status of the parcels and the legal restrictions applicable to each parcel.
- The City of Chula Vista and HCD. The City of Chula Vista maintained that the restrictions on the property prohibit housing on the parcels, other than such housing necessary to fulfill the public purpose for university or educational uses, and that the disposal of the parcels should not be subject to the SLA. In analyzing the restrictions, HCD generally found that while the restrictions may limit the type of development allowed on the property to specific purposes (e.g. university development) the restrictions either do not "make housing prohibited," or they allow for some form of housing development (e.g. university housing). With the exception of a parcel subject to a superior court order, HCD further found that the city was a party to the original agreements and, therefore, could not claim that the restrictions were not imposed by the city.
HCD informed the City of Chula Vista that it must follow the standard SLA protocols when disposing of the property. Additionally, HCD noted for several of the properties that "the city may include a reasonable condition or restriction in the notice of availability (NOA) of the Property i.e., the City may include in the NOA that, because the Property was acquired for university purposes, the City envisions a development project on the Property that includes both housing and university uses."
In order to address the problem above, AB 837 (Alvarez) of 2023 which created the exemption for Chula Vista's sectional planning area with specified conditions. The bill ultimately stopped in Senate Local Government Committee. However, substantially similar policy was established via a budget trailer bill, AB 129 (Committee on Budget), Chapter 40, Statutes of 2023.
According to the Author
According to the author, "Chula Vista's university effort is positioned to benefit the region greatly. A university presence in the South County would be a key player within the regional economy, producing graduates who occupy regional jobs, employing thousands of local workers, and contributing to the regional and state economies. A South County university presence would also provide more equitable access to higher education. Bachelor's degree holders have greater earning power and can earn about $32,000 more annually than those with a high school diploma. The City will develop approximately 4,000 residential units as part of the mixed-use University-Innovation District (UID) project. The change in AB 76 is needed to build a much-needed four-year university in South County and provide the housing necessary for the university's students, faculty, and staff."
Arguments in Support
The City of Chula Vista writes in support, "Since the adoption of the Otay Ranch General Development Plan in 1993, the City of Chula Vista has pursued a vision of locating a university within eastern Chula Vista. This vision is also reflected in the Otay Ranch General Development Plan and Sectional Planning Area Plan for a new UID. Under the adopted planning documents that govern the development of the site, the UID will accommodate up to 20,000 students with an innovation district capable of building approximately 10 million square feet of mixed-use development, inclusive of four million square feet of academic space, two million square feet of commercial space for business innovation uses, and 3.6 million square feet of housing.
"The City has committed to allocating 25% of the entitled housing units as affordable. While this commitment has not changed, restrictions on 'affordable housing', as defined by the U.S. Department of Housing and Urban Development (HUD), does not allow for student and faculty housing to be designated as affordable. Proper planning for student housing is critical in developing a new university. Therefore, AB 76 seeks to clarify the affordability requirement by excluding housing designated for students, faculty, and university employees from the affordable housing ratio, reaffirming the City's intent to develop the UID in a manner consistent with the existing land use entitlements for the project."
Arguments in Opposition
None on file.
FISCAL COMMENTS
None.
VOTES
ASM LOCAL GOVERNMENT: 8-1-1
YES: Carrillo, Pacheco, Ramos, Ransom, Blanca Rubio, Stefani, Ward, Wilson
NO: Ta
ABS, ABST OR NV: Hoover
ASM HOUSING AND COMMUNITY DEVELOPMENT: 10-1-1
YES: Haney, Patterson, Ávila Farías, Caloza, Garcia, Kalra, Lee, Quirk-Silva, Wicks, Wilson
NO: Ta
ABS, ABST OR NV: Tangipa
UPDATED
VERSION: April 21, 2025
CONSULTANT: Linda Rios / L. GOV. / (916) 319-3958 FN: 0000318
Date of Hearing: April 30, 2025
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Matt Haney, Chair
ABPCA Bill Id:AB 76 (
Author:Alvarez) – As Amended Ver:April 21, 2025
SUBJECT: Surplus land: exempt surplus land: sectional planning area
SUMMARY: Allows for purposes of meeting the requirements of the Surplus Lands Act (SLA), that student, staff, and faculty housing can be counted toward minimum density requirements. Excludes student, staff, and faculty housing from the total number of units used for calculating the minimum number of affordable housing units that must be constructed. Specifically, this bill:
- Requires, for a SLA exemption that applies to land subject to a sectional planning document adopted prior to January 1, 2019, that a minimum of 25% of housing units proposed by the sectional planning area that are not designated for students, faculty, or staff of an academic institution, must be constructed and dedicated to lower-income households, as specified.
- Provides, for purposes of the SLA exemption that applies to land subject to a sectional planning document prior to January 1, 2019, that a “student housing unit” must meet all of the following to count towards the minimum density requirement:
- The unit includes a fully functioning kitchen with a refrigerator, stove, sink with hot and cold water, vent, and an area to prepare food;
- The unit has a ratio of beds to toilets, lavatories, and showers not exceeding five to one; and
- The unit is not a substandard building, as specified.
- Makes other technical and conforming changes.
EXISTING LAW:
- Establishes the SLA, which requires local agencies to prioritize affordable housing when disposing of publicly owned land by establishing certain processes that they must follow. (Government Code (GOV) 54221)
- Provides an exemption from the SLA to land that is subject to a sectional planning area that was adopted prior to January 1, 2019, and that is consistent with the local general plan designation, with certain restrictions. (GOV 54221)
FISCAL EFFECT: None.
COMMENTS:
Author’s Statement. According to the author, “Chula Vista’s university effort is positioned to benefit the region greatly. A university presence in the South County would be a key player within the regional economy, producing graduates who occupy regional jobs, employing thousands of local workers, and contributing to the regional and state economies. A South County university presence would also provide more equitable access to higher education. Bachelor’s degree holders have greater earning power and can earn about $32,000 more annually than those with a high school diploma. The City will develop approximately 4,000 residential units as part of the mixed-use UID project. The change in AB 76 is needed to build a much-needed four-year university in South County and provide the housing necessary for the university’s students, faculty, and staff.”
The Surplus Land Act. Public agencies are major landlords in some communities, owning significant pieces of real estate. When properties become surplus to an agency’s needs, public officials may wish to dispose of that property, meaning selling or leasing it for fifteen years or longer, to recoup their investments. The SLA spells out clear steps that local agencies must follow when they want to dispose of land. It requires local governments to give a “first right of refusal” to other public agencies, nonprofit housing developers, schools, and parks and recreation departments. After notifying these groups that the land is available, the disposing agency must negotiate in good faith with these interested parties to try to come to agreement for 90 days before the local agency can dispose of the surplus land.
Before agencies can enter into negotiations to dispose of surplus land, they must send a written notice of availability (NOA) to various public agencies and nonprofit affordable housing developers, commonly referred to as “housing sponsors,” notifying them that land is available for the following purposes:
- Low- and moderate-income housing;
- Park and recreation, and open space;
- School facilities; or
- Infill opportunity zones or transit village plans.
Housing sponsors can notify the Department of Housing and Community Development (HCD) if they are interested in acquiring surplus land to develop affordable housing. HCD maintains a list of notices of availability on its website.
If another agency or housing sponsor wants to buy or lease the surplus land for one of these purposes, it must tell the disposing agency within 60 days, and if multiple entities want to purchase the land, the housing sponsor that proposes to provide the greatest level of affordable housing gets priority. The agency and the housing sponsor then have an additional 90 days to negotiate a mutually satisfactory price and terms in good faith. If they cannot agree, the agency that owns the surplus land can sell the land on the private market. If surplus land is not sold to an affordable housing developer, but housing is developed on it later, 15%of the units must be sold or rented at an affordable cost to lower income households.
The SLA says that nothing in its provisions:
- Limits the power of any local agency to sell or lease surplus land at fair market value or less than fair market value;
- Prevents a local agency from obtaining fair market value;
- Limits a local agency’s authority or discretion to approve land use, zoning, or other entitlement decisions in connection with surplus land; or
- Requires a local agency to dispose of land just because it is surplus.
Local agencies that dispose of surplus land in violation of the SLA face penalties totaling 30% of the sales price or the appraised fair market value at the time of disposition for the first violation, and 50% for subsequent violations. These penalty revenues must be deposited in a local housing trust fund. The enforcement process in the SLA requires that: Prior to agreeing to terms for the disposition of surplus land, a local agency must provide HCD a description of the notices of availability sent, and negotiations conducted with any responding entities, as specified. HCD must submit written findings to the local agency within 30 days of receipt of the description of the disposal if the proposed disposal of the land will violate SLA.
A local agency has at least 60 days to respond to the findings before HCD may take further action. The local agency must consider findings made by HCD and then either correct any issues found by HCD or respond in writing explaining why the disposal complied with the SLA. If the local agency does not respond or does not address the issues, HCD must notify the local government and may notify the Attorney General that the disposal violates the SLA. A local agency cannot be held liable for the penalties under the SLA if HCD does not notify the agency that the agency is in violation within 30 days of receiving the description.
The City of Chula Vista’s University Development Plans. According to the City of Chula Vista’s adopted UI-SPA, “For more than 20 years the City of Chula Vista has maintained a vision to locate university and innovation land uses in the Otay Ranch. On October 28, 1993, the Chula Vista City Council and the San Diego County Board of Supervisors adopted the Otay Ranch General Development Plan/Subregional Plan (GDP/SRP) as a means of implementing the City of Chula Vista General Plan. The GDP/SRP resulted from the culmination of years of planning and provides clear direction and policies regarding the type and intensity of uses that will occur within the roughly 23,000‑acre Otay Ranch.”
The University Innovation Sectional Planning Area (UI-SPA) guides implementation of a portion of the GDP/SRP within Chula Vista. Land use planning in Otay Ranch is a cooperative effort between Chula Vista and San Diego County, with both agencies jointly adopting and amending the GDP/SRP, which functions as a general plan-level document for the area. Subsequent, more detailed planning processes are required before land can be subdivided: Chula Vista uses Sectional Planning Area (SPA) plans, while San Diego County requires Specific Plans. These processes serve similar purposes. Chula Vista’s UI-SPA operates as a discretionary land use plan and must remain consistent with the jointly adopted GDP/SRP.
Over several decades, the City of Chula Vista acquired parcels intended to facilitate development of a university campus. The city’s UI-SPA details this acquisition history, which spans from 1990 to 2014, and identifies legal restrictions tied to these parcels through various agreements. These restrictions limit the types of development permitted on the land. In anticipation of disposing of these parcels, Chula Vista staff consulted with the California Department of Housing and Community Development (HCD) and requested an SLA exemption for the properties critical to the UI-SPA. The city also prepared a memorandum for its City Council summarizing the status and legal restrictions applicable to each parcel.
The City of Chula Vista, HCD, and the Resulting SLA Exemption. Each parcel identified by the city is subject to some form of legal restriction controlling development uses. Under the SLA, exemptions are permitted for properties owned by local agencies where legal restrictions imposed by outside entities (e.g., deeds, covenants) prohibit housing, unless those restrictions can be feasibly mitigated. Restrictions that originate from the local agency’s own actions, however, do not qualify for an exemption.
Chula Vista asserted that the restrictions on its parcels prohibited housing, except for housing directly associated with university purposes, and argued that the parcels should be exempt from the SLA. However, HCD’s analysis generally found otherwise. While the restrictions may limit the types of allowable uses (e.g., to university-related development), they do not fully prohibit housing, and in many cases, allow for university-affiliated housing (e.g., student or faculty housing). Further, with the exception of a parcel subject to a superior court order, HCD found that Chula Vista was a party to the original agreements, meaning the restrictions were imposed by the city itself—and thus not eligible for an SLA exemption.
As a result, HCD informed Chula Vista that the city must follow standard SLA procedures when disposing of the properties. Nonetheless, HCD acknowledged that Chula Vista could include reasonable conditions in the NOA, specifying that, due to the land’s university-oriented purpose, the city envisions a development that includes both housing and university uses.
Legislative Resolution and Affordable Housing Requirements: In order to address the problem above, AB 837 (Alvarez) of 2023 proposed an SLA exemption for Chula Vista’s UI-SPA, though the bill stalled in the Senate Local Government Committee. A substantially similar policy was later adopted through the budget trailer bill AB 129 (Committee on Budget), Chapter 40, Statutes of 2023, granting an SLA exemption with specific conditions.
Among the numerous conditions of the exemption granted in the budget trailer bill, current law requires that the land be developed at a minimum density of 10 units per acre across the entire sectional planning area (totaling 384 acres) and that 25% of those units be dedicated to lower income households. This calculation would yield a minimum of 960 units of affordable housing.
(384 acres*10 units per acre) *.25= 960 affordable housing units
The UI-SPA identifies housing for students, staff, and faculty housing and separately market rate housing units, which is interpreted to be units open to the community. According to the UI-SPA, the planning area will include 2 million square feet of market rate housing, which equates to a proposed 2,000 units. Applying the 25% affordable housing dedication requirement to just the proposed 2,000 market rate units would yield a minimum of 500 units of affordable housing.
This bill amends the existing exemption in the SLA for the City of Chula Vista’s University Innovation District: Sectional Planning Area Plan (UI-SPA) by:
- Excluding housing designated for students, faculty, or staff of an academic institution from the total number of units used for calculating the minimum number of affordable units to be constructed;
- Allowing student, staff, and faculty housing to count toward the minimum density requirements of the exemption;
- Clarifying that a minimum of 25% of the units that are not designated for students, faculty, or staff shall be constructed and designated to lower-income households; and
- Establishes minimum requirements for student housing that will be counted toward the minimum density specified in the exemption.
Arguments in Support. The City of Chula Vista writes in support, “Since the adoption of the Otay Ranch General Development Plan in 1993, the City of Chula Vista has pursued a vision of locating a university within eastern Chula Vista. This vision is also reflected in the Otay Ranch General Development Plan and Sectional Planning Area Plan for a new UID. Under the adopted planning documents that govern the development of the site, the UID will accommodate up to 20,000 students with an innovation district capable of building approximately 10 million square feet of mixed-use development, inclusive of 4 million square feet of academic space, 2 million square feet of commercial space for business innovation uses, and 3.6 million square feet of housing.
The City has committed to allocating 25 percent of the entitled housing units as affordable. While this commitment has not changed, restrictions on ‘affordable housing’, as defined by the U.S. Department of Housing and Urban Development (HUD), does not allow for student and faculty housing to be designated as affordable. Proper planning for student housing is critical in developing a new university. Therefore, AB 76 seeks to clarify the affordability requirement by excluding housing designated for students, faculty, and university employees from the affordable housing ratio, reaffirming the City’s intent to develop the UID in a manner consistent with the existing land use entitlements for the project.”
Arguments in Opposition. None on file.
Related Legislation.
AB 837 (Alvarez) of 2023 would have exempted the disposition of land subject to an existing section planning area document that meets specified conditions related to affordable housing from the Surplus Land Act, thereby providing Chula Vista with the requested SLA exemption. The bill was held in the Senate Local Government Committee.
AB 129 (Committee on Budget), Chapter 40, Statutes of 2023 established a substantially similar policy to that which was proposed in AB 837 (Alvarez) of 2023.
Double Referral. This bill was also referred to the Assembly Committee on Local Government, and passed on a vote of 8-1 April 9, 2025.
REGISTERED SUPPORT / OPPOSITION:
Support
City of Chula Vista (Sponsor)
California Association for Local Economic Development (CALED)
CFT- a Union of Educators & Classified Professionals, AFT, AFL-CIO
Opposition
None on file.
Analysis Prepared by: Dori Ganetsos / H. & C.D. / (916) 319-2085
Date of Hearing: April 9, 2025
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Juan Carrillo, Chair
ABPCA Bill Id:AB 76 (
Author:Alvarez) – As Introduced Ver:December 16, 2024
SUBJECT: Surplus land: exempt surplus land: sectional planning area
SUMMARY: Specifies, for purposes of meeting the requirements a category of exempt surplus land, that student, staff, and faculty housing can be counted toward minimum density requirements and excludes student, staff, and faculty housing from the total number of units used for calculating the minimum number of affordable housing units to be constructed. Specifically, this bill:
- Requires, for the purposes of an exemption of the Surplus Land Act (SLA) that applies to land subject to a sectional planning document adopted prior to January 1, 2019, that 25% of housing units not designated for students, faculty, or staff of an academic institution be dedicated to lower income households, as specified, .
- Provides, for purposes of the SLA exemption that applies to land subject to a sectional planning document prior to January 1, 2019, that a “student housing unit” must meet all of the following to count towards the minimum density requirement:
- The unit includes a fully functioning kitchen with a refrigerator, stove, sink with hot and cold water, vent, and an area to prepare food.
- The unit has a ratio of beds to toilets, lavatories, and showers not exceeding five to one.
- The unit is not a substandard building, as specified.
- Makes other technical and conforming changes.
FISCAL EFFECT: None.
COMMENTS:
- Background. Over the course of a few decades, the City of Chula Vista acquired land with the intent of attracting a university and established a specific plan for the development of a university, residential units, commercial uses, and open space purposes. In total, the City of Chula Vista acquired 384 acres of land for development. However, land that is owned by a public agency is subject to the SLA. The SLA requires local agencies to first offer surplus land that they plan to dispose, which means to either sell or lease, to affordable housing, schools and open space uses. In order to facilitate development and ease navigating the conditions of sale for agency, a category of exempt surplus land was created for lands subject to a sectional planning document that was approved prior to January 1, 2019 and the parcels had dedications, agreements, or grant deeds limiting the use of the land to specified purposes.
- Bill Summary. Among the numerous conditions of the exemption, current law requires that the land be developed at a minimum density of 10 units per acre across the entire sectional planning area and that 25% of those units be dedicated to lower income households.
This bill amends the existing exemption in the SLA for the City of Chula Vista’s University Innovation District: Sectional Planning Area Plan (UI-SPA) by:- Excluding housing designated for students, faculty, or staff of an academic institution from the total number of units used for the calculating the minimum number of affordable units to be constructed.
- Allowing student, staff, and faculty housing to count toward the minimum density requirements of the exemption.
- Establishes minimum requirements for student housing that will be counted toward the minimum density.
This bill is sponsored by the City of Chula Vista.
- Author’s Statement. According to the author, “Chula Vista’s university effort is positioned to benefit the region greatly. A university presence in the South County would be a key player within the regional economy, producing graduates who occupy regional jobs, employing thousands of local workers, and contributing to the regional and state economies. A South County university presence would also provide more equitable access to higher education. Bachelor’s degree holders have greater earning power and can earn about $32,000 more annually than those with a high school diploma. The City will develop approximately 4,000 residential units as part of the mixed-use UID project. The change in AB 76 is needed to build a much-needed four-year university in South County and provide the housing necessary for the university’s students, faculty, and staff.”
- Surplus Land Act. Public agencies are major landlords in some communities, owning significant pieces of real estate. When properties become surplus to an agency’s needs, public officials want to dispose, which means to sell or lease for fifteen years or longer, the land to recoup their investments. The SLA spells out the steps local agencies must follow when they want to dispose of land. It requires local governments to give a “first right of refusal” to other public agencies, nonprofit housing developers, schools, and parks and recreation departments. After notifying these groups that the land is available, the disposing agency must negotiate in good faith with these interested parties to try to come to agreement for 90 days before the local agency can dispose of the surplus land.
- Agency’s Use. Generally, before local officials can dispose of property, they must declare that the land is no longer needed for the agency’s use in a public meeting and declare the land either “surplus land” or “exempt surplus land.” AB 480 (Ting), Chapter 788, Statutes of 2023, allowed certain types of exempt surplus land to be declared ministerially, in-lieu of a public hearing. The local agency must publish a notice and allow for public comment for a minimum of 30 days. Land that is being used for an agency’s work or operations is not surplus and therefore is not disposed. Pursuant to GOV § 54221 (c), “agency’s use” includes land that is being used, or is planned to be used pursuant to a written plan adopted by the local agency.
As a general rule, “agency’s use” cannot include commercial or industrial uses or activities, and land disposed of for the purpose of investment or generating revenue cannot be considered necessary for the agency’s use. As a result, cities and counties are limited in their ability to dispose of properties for economic development or revenue generation purposes. However, most special districts are not subject to those restrictions on agency’s use as long as they can demonstrate that use of the site will do one of the following: - Directly further the express purpose of agency work or operations.
- Be expressly authorized by a statute governing the local agency.
The SLA designates certain types of land as “exempt surplus land.” Statute provides that the entirety of the SLA does not apply to disposals of exempt surplus land. However, some exemptions have requirements for eligibility. If the disposal is not consistent with the exemption claimed, the disposition may be illegal. All other surplus land must follow the procedures laid out in the SLA before a local agency can dispose of it.
- Process of the SLA. Before agencies can enter into negotiations to dispose of surplus land, they must send a written notice of availability to various public agencies and nonprofit affordable housing developers, commonly referred to as “housing sponsors,” notifying them that land is available for the following purposes:
- Low- and moderate-income housing;
- Park and recreation, and open space;
- School facilities; or
- Infill opportunity zones or transit village plans.
Housing sponsors can notify the Department of Housing and Community Development (HCD) if they are interested in acquiring surplus land to develop affordable housing. HCD maintains a list of notices of availability on its website.
If another agency or housing sponsor wants to buy or lease the surplus land for one of these purposes, it must tell the disposing agency within 60 days, and if multiple entities want to purchase the land, the housing sponsor that proposes to provide the greatest level of affordable housing gets priority. The agency and the housing sponsor then have an additional 90 days to negotiate a mutually satisfactory price and terms in good faith. If they cannot agree, the agency that owns the surplus land can sell the land on the private market. If surplus land is not sold to an affordable housing developer, but housing is developed on it later, 15 percent of the units must be sold or rented at an affordable cost to lower income households.
The SLA says that nothing in its provisions:
- Limits the power of any local agency to sell or lease surplus land at fair market value or less than fair market value;
- Prevents a local agency from obtaining fair market value;
- Limits a local agency’s authority or discretion to approve land use, zoning, or other entitlement decisions in connection with surplus land; or
- Requires a local agency to dispose of land just because it is surplus.
Local agencies that dispose of surplus land in violation of the SLA face penalties totaling 30 percent of the sales price or the appraised fair market value at the time of disposition for the first violation, and 50 percent for subsequent violations. These penalty revenues must be deposited in a local housing trust fund. The enforcement process in the SLA requires that: Prior to agreeing to terms for the disposition of surplus land, a local agency must provide HCD a description of the notices of availability sent, and negotiations conducted with any responding entities, as specified.HCD must submit written findings to the local agency within 30 days of receipt of the description of the disposal if the proposed disposal of the land will violate SLA.
A local agency has at least 60 days to respond to the findings before HCD may take further action. The local agency must consider findings made by HCD and then either correct any issues found by HCD or respond in writing explaining why the disposal complied with the SLA. If the local agency does not respond or does not address the issues, HCD must notify the local government and may notify the Attorney General that the disposal violates the SLA. A local agency cannot be held liable for the penalties under the SLA if HCD does not notify the agency that the agency is in violation within 30 days of receiving the description.
- SLA Reform. In 2023, AB 480 (Ting), Chapter 788 and SB 747 (Caballero), Chapter 786 made significant changes to the SLA. Together the bills attempted to strike a balance between ensuring comprehensive coverage of dispositions, while enacting exemptions and other changes that would streamline the process for local governments. Specifically, AB 480 and SB 747:
- Defined “dispose” to include leases of longer than 15 years that are entered into on or after January 1, 2024, but excluded leases of terms shorter than15 years and leases where no development or demolition will occur;
- Applied penalties to leases that violate the SLA, but provided that penalties don’t apply to non-substantive violations of the SLA;
- Added numerous categories of exempt surplus land, such as properties smaller than one-half acre, specified mixed-use developments and developments on larger sites that include affordability requirements, airport land, and others;
- Authorized disposal of certain categories of exempt surplus land without a public hearing, as long as specified notice is provided;
- Established additional types of activities that explicitly qualify as “agency’s use”; and
- Extended provisions that allow projects with an exclusive negotiating agreement in place to follow a previous version of the SLA.
- The City of Chula Vista’s University Development Plans. According to the City of Chula Vista’s adopted UI-SPA, “For more than 20 years the City of Chula Vista has maintained a vision to locate university and innovation land uses in the Otay Ranch. On October 28, 1993, the Chula Vista City Council and the San Diego County Board of Supervisors adopted the Otay Ranch General Development Plan/Subregional Plan (GDP/SRP) as a means of implementing the City of Chula Vista General Plan. The GDP/SRP resulted from the culmination of years of planning and provides clear direction and policies regarding the type and intensity of uses that will occur within the roughly 23,000‑acre Otay Ranch.”
The UI-SPA guides the implementation of a portion of the GDP/SRP. Planning for the Otay Ranch is a cooperative effort between the City of Chula Vista and the County of San Diego. Chula Vista and San Diego County jointly adopt and amend the GDP/SRP, which functions as a general plan level document for both the county and the city. Land use planning within the area must be consistent with the GDP/SRP. Within both the City of Chula Vista and the County of San Diego, the Otay Ranch GDP/SRP is implemented through additional, more detailed planning processes prior to the subdivision of land. The City of Chula Vista requires the preparation and adoption of “Sectional Planning Area” plans. The County of San Diego requires “Specific Plans.” The requirements of each process are substantially similar. Chula Vista’s UI-SPA functions as a discretionary land use plan and therefore must be consistent with the GDP/SRP as adopted by the two local agencies.
- Land Acquisitions and Restrictions. The City of Chula Vista acquired parcels over several decades in order to facilitate the development of a university campus. The history of the land acquisition dating back to 1990 and continuing through 2014 is detailed in the city’s UI-SPA. The parcels were acquired through a variety of agreements that placed various legal restrictions on the type of developments allowed on the land. City staff consulted with HCD and sought an SLA exemption from HCD for these parcels that are critical to the UI-SPA. Chula Vista staff prepared a memo for the Chula Vista City Council detailing the status of the parcels and the legal restrictions applicable to each parcel.
- The City of Chula Vista and HCD. Each parcel identified by the city is subject to some form of legal restriction that controls for the type of development allowed on the parcel. The SLA allows for exemptions for parcels owned by local agencies that are subject to legal restrictions that are not imposed by the local agency (e.g. not imposed by the local agency’s zoning code). Legal restrictions, such as deeds and covenants that are not imposed by the local agency that owns the land are not uncommon. However, the SLA only allows exemptions for legal restrictions that would make housing prohibited, unless there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site.
The City of Chula Vista maintains that the restrictions on the property prohibit housing on the parcels, other than such housing necessary to fulfill the public purpose for university or educational uses, and that the disposal of the parcels should not be subject to the SLA. In analyzing the restrictions, HCD generally found that while the restrictions may limit the type of development allowed on the property to specific purposes (e.g. university development) the restrictions either do not “make housing prohibited,” or they allow for some form of housing development (e.g. university housing). With the exception of a parcel subject to a superior court order, HCD further found that the city was a party to the original agreements and, therefore, could not claim that the restrictions were not imposed by the city.
HCD informed the City of Chula Vista that it must follow the standard SLA protocols when disposing of the property. Additionally, HCD noted for several of the properties that “the city may include a reasonable condition or restriction in the notice of availability (NOA) of the Property i.e., the City may include in the NOA that, because the Property was acquired for university purposes, the City envisions a development project on the Property that includes both housing and university uses.”
- A Beautiful Sight. In order to address the problem above, AB 837 (Alvarez) of 2023 which created the exemption for Chula Vista’s sectional planning area with specified conditions. The bill ultimately stopped in Senate Local Government Committee. However, substantially similar policy was established via a budget trailer bill, AB 129 (Committee on Budget), Chapter 40, Statutes of 2023.
- Policy Considerations. Current law requires that 25% of the housing constructed across the entire sectional planning area (totaling 384 acres), at a minimum density of 10 units per acre, to be affordable to lower income households. This calculation would yield a minimum of 960 units of affordable housing.
(384 acres*10 units per acre) *.25= 960 affordable housing units
The UI-SPA identifies housing for students, staff, and faculty housing and separately market rate housing units, which is interpreted to be units open to the community. According to the UI-SPA, the planning area will include 2 million square feet of market rate housing, which equates to a proposed 2,000 units. Applying the 25% affordable housing dedication requirement to just the proposed 2,000 market rate units would yield a minimum of 500 units of affordable housing.
While unlikely, this bill, as currently written, could allow for a scenario in which the sectional planning document is amended and all of the housing units are designated for students, staff, and faculty housing and none are open to the community. In this scenario, 25% of zero housing units available to the community would equal to zero units of affordable housing. The Committee may wish to consider if it is prudent to clarify that a minimum number of affordable housing units must be constructed as a condition of this exemption.
- Committee Amendments. To address the policy consideration above, the Committee may wish to consider the amendment below:
(IV) At least a minimum, 25 percent of the units that are proposed by the sectional planning document as adopted prior to January 1, 2019 and are not designated for students, faculty, or staff of an academic institution shall be constructed and dedicated to lower income households, as defined in Section 50079.5 of the Health and Safety Code, at an affordable rent, as defined by Section 50053 of the Health and Safety Code, or an affordable housing cost, as defined by Section 50052.5 of the Health and Safety Code, and subject to a recorded deed restriction for a period of 55 years for rental units and 45 years for owner-occupied units, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability.
(ia) “Lower income household” shall have the same meaning as Section 50079.5 of the Health and Safety Code.
(ib) “Affordable rent” shall have the same meaning as defined in Section 50053 of the Health and Safety Code.
(ic) “Affordable housing cost” shall have the same meaning as defined in Section 55052.5 of the Health and Safety Code.
- Related Legislation. SB 79 (Wiener) includes public transit operations in the definition of “agency’s use” and allows a public transit operator to use the land for commercial or industrial activities as defined. This bill is in Senate Housing Committee.
- Previous Legislation. AB 837 (Alvarez) of 2023 would have exempted the disposition of land subject to an existing section planning area document that meets specified conditions related to affordable housing from the Surplus Land Act.
- Arguments in Support. The City of Chula Vista writes in support, “Since the adoption of the Otay Ranch General Development Plan in 1993, the City of Chula Vista has pursued a vision of locating a university within eastern Chula Vista. This vision is also reflected in the Otay Ranch General Development Plan and Sectional Planning Area Plan for a new UID. Under the adopted planning documents that govern the development of the site, the UID will accommodate up to 20,000 students with an innovation district capable of building approximately 10 million square feet of mixed-use development, inclusive of 4 million square feet of academic space, 2 million square feet of commercial space for business innovation uses, and 3.6 million square feet of housing.
“The City has committed to allocating 25 percent of the entitled housing units as affordable. While this commitment has not changed, restrictions on ‘affordable housing’, as defined by the U.S. Department of Housing and Urban Development (HUD), does not allow for student and faculty housing to be designated as affordable. Proper planning for student housing is critical in developing a new university. Therefore, AB 76 seeks to clarify the affordability requirement by excluding housing designated for students, faculty, and university employees from the affordable housing ratio, reaffirming the City’s intent to develop the UID in a manner consistent with the existing land use entitlements for the project.”
- Arguments in Opposition. None on file.
- Double-Referral. This bill is double-referred to the Assembly Housing and Community Development Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
City of Chula Vista (Sponsor)
California Association for Local Economic Development
Opposition
None on file.
Analysis Prepared by: Linda Rios / L. GOV. / (916) 319-3958
Discussed in Hearing
1MIN
Assembly Floor
1MIN
Senate Floor
8MIN
Senate Standing Committee on Local Government
2MIN
Assembly Floor
7MIN
Assembly Standing Committee on Housing and Community Development
9MIN
Assembly Standing Committee on Local Government
Bill Author
Bill Co-Author(s):