Highlights

California Gov. Gavin Newsom announced during his campaign that one of the ways in which he intended to deliver on his ambitious housing goals was to make state and local surplus properties more available for affordable housing. Several steps have been taken to implement this strategy with further momentum anticipated.

• The Department of Housing and Community Development has released an interactive map identifying approximately 100 state-owned sites for potential affordable housing developments and will begin issuing request for proposals (RFPs) at the end of this month.
• Notable legislation, AB 1486, makes significant amendments to the Surplus Lands Act process to address past circumvention of the law and to achieve more affordable housing on surplus properties, if signed by the governor.
• Several adopted bills would result in additional efforts to create surplus property databases, if signed by the governor.

Release of State Surplus Property Maps

The Department of Housing and Community Development (HCD) has released an interactive map identifying approximately 100 state-owned sites for potential affordable housing developments. The release of the maps follows Gov. Newsom's Executive Order N-06-19, which ordered the Department of General Services (DGS) to generate a comprehensive map of excess state real estate parcels where development of affordable housing a) is feasible and b) will help address regional underproduction of housing. Consistent with the Executive Order, the DGS, in consultation with the HCD, will issue requests for proposals (RFPs) on individual parcels and accept proposals from developers of affordable housing interested in entering into low-cost, long-term ground leases of parcels on the priority map. The agencies are expected to begin releasing RFPs by Sept. 30, 2019. A Frequently Asked Questions (FAQ) sheet has also been released. Mayors of Chico, Fresno, Oakland, Sacramento, San Diego and San Francisco have partnered with state agencies to work on expediting development of housing on state-owned properties in those areas.

Bills passed this year further increase the surplus property momentum.

Surplus Lands Act Process Amendments – AB 1486 (Assembly Member Phil Ting)

This bill, passed on Sept. 12, 2019, and awaiting the governor's signature, significantly expands the Surplus Lands Act (Act) requirements for local agencies in an effort to achieve more affordable housing on surplus properties. Existing law requires agencies, when disposing of surplus land, to first offer it for sale or lease for the purpose of developing affordable housing. The bill analysis states that local agencies have attempted to circumvent the Act process in the past. Notable amendments include the following:

• clarifies the public agencies to which the Act applies and revises the definition of surplus lands
• expands the list of Act exemptions (primarily focused on certain affordable housing projects)
• requires a local agency disposing of surplus land to notify interested affordable housing developers of the anticipated disposition and requires HCD to maintain notices of availability on its website
• imposes limitations on terms between a disposing agency and interested entities when negotiating a disposition contract (primarily in relation to provisions that would limit affordable, residential uses)
• requires local agencies to make an inventory of surplus lands and report to HCD
• requires a local agency to provide information about its disposition process to HCD and requires HCD to submit, within 30 days, written findings of any process violations that have occurred
• provides that a local agency that violates the Act is liable for up 30 percent to 50 percent of the final sale price

Surplus Property Database

There are a number of bills that have been passed that would impose additional requirements to create databases of surplus properties. These include SB 6 (Sens. Jim Beall/Mike McGuire), AB 1255 (Assembly Member Robert Rivas) and AB 1483 (Assembly Member Tim Grayson). If signed by the governor, these bills would further facilitate the surplus lands efforts.