Goal is to Provide Much-Needed Housing for Teachers and Other LEA Staff

On September 28, 2022, Governor Gavin Newson signed AB 2295 into law, adding Section 65914.7 to the Government Code. This new section considers housing development projects on property owned by a local educational agency (LEA) to be an allowable use of the property, provided certain criteria are met. These housing development projects are aimed at providing much-needed housing for teachers and other employees of the LEA. Government Code Section 65914.7 becomes effective January 1, 2024 and expires January 1, 2033.

Allowable Use Requirements for LEA Housing Developments

To be considered an allowable use of property, an LEA housing development must meet the following criteria:

• The project must include a minimum of 10 units. (Government Code § 65914.7(a)(1))
• A deed restriction is imposed (see specifics below). (Government Code § 65914.7(a)(2))
• 100% of the units are rented to LEA employees, or others, but based on a procedure provided by law. (Government Code § 65914.7(a)(3))
• It is built at the highest density — the greater of what is allowed by the city or county, or the density deemed appropriate to accommodate housing for lower-income households (and is measured based on “development footprint,” as defined). (Government Code § 65914.7(a)(4))
• It is built at the maximum height — the greater of what is allowed by the city or county, or 35 feet. (Government Code § 65914.7(a)(5))
• It is adjacent to property that permits residential use as a principally permitted use. (Government Code § 65914.7(a)(6))
• It is located in an “infill site” (defined below). (Government Code § 65914.7(a)(7))
• The project satisfies local objective zoning standards, objective subdivision standards and objective design review standards that do not preclude development at the permitted density and height. ((Government Code § 65914.7(a)(8))
  • If there are no objective standards for that parcel, the project will be subject to local standards (zoning, parking, design, etc.) of the nearest parcel in a multi-family zone that meets or exceeds the density and height allowed.
• The property is located entirely within any applicable urban limit line or urban growth boundary established by local ordinance. (Government Code § 65914.7(a)(9))
• It complies with all infrastructure-related requirements, including impact fees that are existing or pending at the time the application is submitted. (Government Code § 65914.7(a)(10))

If the project meets these criteria, it will be deemed consistent, compliant and in conformity with local development standards, zoning codes or maps and the general plan.

“Objective Standards” Defined

For purposes of the new law, the terms “objective zoning standards,” “objective subdivision standards,” and “objective design review standards” mean standards that involve no personal or subjective judgment by a public official and are uniformly verifiable by reference to an external and uniform benchmark or criterion available and knowable by both the development applicant or proponent and the public official prior to submittal. These standards may be embodied in alternative objective land use specifications adopted by the city or county, as applicable, and may include, but are not limited to, housing overlay zones, specific plans, inclusionary zoning ordinances, and density bonus ordinances. (Government Code § 65914.7(a)(8)(A))

Deed Restriction Requirements

A minimum 55-year covenant is required to ensure a majority of the units are set at an affordable rent for lower-income or moderate-income households; however, at least 30% must be affordable to lower-income households. All units (100%) must be rented to LEA employees, adjacent LEA employees, public employees in the jurisdiction or general public, according to a procedure:

• First, the LEA must offer the units to the agency’s own employees.
• Second, if there are insufficient numbers of the agency’s own employees applying and occupying, they may be offered to employees of adjacent LEAs.
• Third, if there are insufficient numbers of adjacent LEA employees applying for and occupying the units, the unoccupied units may be offered to public employees who work for an LEA within the jurisdiction of the LEA.
• Fourth, if there are insufficient numbers of public employees within the jurisdiction applying for and occupying the units, the unoccupied units may be offered to general members of the public.

However, when units in the housing development become unoccupied and available for rent, an LEA shall first offer the units to the agency’s employees.
Affordability levels are the same as contained in the Health and Safety Code. (Government Code § 65914.7(a)(8)(A))

“Infill Site” Defined

For purposes of the law, “infill site” means a site in an urban area, as determined by the 2020 United States Census, that meets either of the following criteria:

• (A) The site has not been previously developed for urban uses and both of the following apply:
  • (i) The site is immediately adjacent to parcels that are developed with qualified urban uses, or at least 75% of the perimeter of the site adjoins parcels that are developed with qualified urban uses, and the remaining 25% of the site adjoins parcels that have previously been developed for qualified urban uses.
  • (ii) No parcel within the site has been created within the past 10 years unless the parcel was created as a result of the plan of a redevelopment agency.
• (B) The site has been previously developed for qualified urban uses.
• (C) For purposes of the above, “qualified urban use” has the same meaning as defined in Section 21072 of the Public Resources Code.

Additional Requirements and Limitations

The LEA must have owned the property as of January 1, 2023 and must maintain ownership of the housing development project throughout the 55-year affordability restriction. (Government Code § 65914.7(c) and (f)(9))

In addition, LEAs providing a housing development meeting the criteria of this law are exempt from Surplus Land Act provisions contained in the Government Code and Education Code. (Government Code § 65914.7(e)). In addition, while still subject to limitations imposed by Education Code Sections 17515 and 17527 related to renting or leasing property, the law expressly provides that the property can be jointly used or jointly occupied by the LEA and any other party. One of those limitations is that the property so rented or leased to another entity will be subject to zoning and building requirements. (Government Code § 65914.7(d))

Cities and counties should expect to receive written notices from the Department of Housing and Community Development by January 31, 2023. (Government Code § 65914.7(g))

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