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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-19</ns0:ActionDate>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Ta</ns0:AuthorText>
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<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Ta</ns0:Name>
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<ns0:Title> An act to amend Section 50675.1.3 of the Health and Safety Code, relating to housing. </ns0:Title>
<ns0:RelatingClause>housing</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Multifamily Housing Program: Homekey: adaptive reuse.</ns0:Subject>
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<html:p>Existing law establishes the Multifamily Housing Program, administered by the Department of Housing and Community Development, to provide financial assistance in the form of deferred payment loans to pay for the eligible costs of development of specified types of housing projects. Existing law requires that specified funds appropriated to provide housing for individuals and families who are experiencing homelessness or who are at risk of homelessness and who are inherently impacted by or at increased risk for medical diseases or conditions due to the COVID-19 pandemic or other communicable diseases be disbursed in accordance with the Multifamily Housing Program for specified uses, including acquisition or rehabilitation of motels, hotels, hostels, or other sites, as provided. This disbursement program is referred to as Homekey.</html:p>
<html:p>This bill would
additionally allow Homekey funds awarded on or after January 1, 2027, to be used for adaptive reuse, as defined. The bill would also require that adaptive reuse projects be treated as a distinct eligible project category and not be subject to per unit cost caps.</html:p>
<html:p>Existing law, upon appropriation, requires Homekey awards to be expended within 8 months of the date of the award, as provided.</html:p>
<html:p>This bill would require, for Homekey awards made on or after July 1, 2026, that construction completion, capital expenditure, and completion of occupancy occur within 24 months of the date of the award for specified projects, and within 14 or 15 months for all other projects, as provided.</html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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Section 50675.1.3 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
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<ns0:Num>50675.1.3.</ns0:Num>
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<html:p>
(a)
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Notwithstanding any other law, including subdivision (b) of Section 50675.1, funds appropriated to provide housing for individuals and families who are experiencing homelessness or who are at risk of homelessness, as defined by this section, and who are inherently impacted by or at increased risk for medical diseases or conditions due to the COVID-19 pandemic or other communicable diseases, shall be disbursed in accordance with the Multifamily Housing Program, including as grants to cities, counties, cities and counties, and all other state, regional, and local public entities, including councils of government, metropolitan planning organizations, and regional transportation planning agencies designated in Section 29532.1 of the Government Code, as necessary, for the following uses:
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<html:p>
(1)
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Acquisition or rehabilitation, or acquisition and rehabilitation, of motels, hotels, hostels, or other sites and assets, including apartments or homes, adult residential facilities, residential care facilities for the elderly, manufactured housing, commercial properties, and other buildings with existing uses that could be converted to permanent or interim housing.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Master leasing of properties for noncongregant housing.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Conversion of units from nonresidential to residential.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
New construction of dwelling units.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
The purchase of affordability covenants and restrictions for units.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
Relocation costs for
individuals who are being displaced as a result of rehabilitation of existing units.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
Capitalized operating subsidies for units purchased, converted, or altered with funds provided by this section.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
For funds awarded on or after January 1, 2027, adaptive reuse.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
Where possible, the funds described in subdivision (a) shall be allocated by the department in a manner that takes into consideration all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Need geographically across the state.
</html:p>
<html:p>
(2)
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The demonstrated ability of the applicant to fund ongoing operating reserves.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The creation of new permanent housing options.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
The potential for state, federal, or local funding for capitalized operating reserves to make additional housing units financially viable through this program.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
Not less than 8 percent of the funds described in subdivision (a) shall be available for projects serving homeless youth, or youth at risk of homelessness, as defined in Part 578.3 of Title 24 of the Code of Federal Regulations.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
Any conflict between the other requirements of the Multifamily Housing Program created by this chapter and this section shall be resolved in favor of this section, as may be set forth in the guidelines authorized by this section.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
The Department
of Housing and Community Development may adopt guidelines for the expenditure of the funds appropriated to the department, and for the administration of this program. The guidelines shall not be subject to the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
Up to 5 percent of the funds received from the Coronavirus State Fiscal Recovery Fund established by the federal American Rescue Plan Act of 2021 (ARPA) (Public Law 117-2) and appropriated for purposes of this section may be expended for the costs to administer the program, to the extent authorized by federal law.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
Up to 5 percent of any General Fund moneys appropriated for purposes of this section may be expended for the costs to administer this program.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
The department’s annual
report to the Legislature submitted under Section 50408 shall include, but not be limited to, all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The amount of funds expended for the uses described in this section.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The location of any properties for which the funds are used.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The number of usable housing units produced, or planned to be produced, using the funds.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
The number of individuals housed, or likely to be housed, using the funds.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
The number of units, and the location of those units, for which operating subsidies have been, or are planned to be, capitalized using the funds.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
An explanation of how funding decisions were made for
acquisition, conversion, or rehabilitation projects, or for capitalized operating subsidies, including what metrics were considered in making those decisions.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
Any lessons learned from the use of the funds.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
Proposed changes to the program to address lessons learned.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Any project that uses funds received for any of the purposes specified in subdivision (a) shall be deemed consistent and in conformity with any applicable local plan, standard, or requirement, and any applicable coastal plan, local or otherwise, and allowed as a permitted use, within the zone in which the structure is located, and shall not be subject to a conditional use permit, discretionary permit, or any other discretionary reviews or approvals.
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<html:p>
(j)
<html:span class="EnSpace"/>
A report to be submitted
pursuant to subdivision (h) shall be submitted in compliance with Section 9795 of the Government Code.
</html:p>
<html:p>
(k)
<html:span class="EnSpace"/>
Upon an appropriation by the Legislature for the purposes described in this section, the department shall administer funding according to the timeline set forth below, subject to any modifications allowing for additional time set forth by the guidelines:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The department may accept funding applications and issue awards on a continuous, over-the-counter basis until the funding has been exhausted or as otherwise required by law.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Each award made before July 1, 2026, shall be expended on the uses authorized at subdivision (a), and in accordance with all relevant representations and descriptions in the application, within eight months of the date of the award. Applicants may ask the department for an extension of this timeframe on the grounds and according to the procedures set forth in the guidelines. The director shall have reasonable discretion to approve or deny such an extension upon conducting a full and good faith review of the applicant’s extension request.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
For each award made on or after July 1, 2026, the following shall apply:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Construction completion for eligible uses authorized at subdivision (a), and in accordance with all relevant representations and descriptions in the application, shall occur within 24 months of the date of the award for all new construction, gap financing, and adaptive reuse projects, and within 14 months for all other projects. Applicants may ask the department for an extension of this timeframe on the grounds and according to the procedures set forth in the guidelines. The director shall have reasonable discretion to approve or deny such an extension upon conducting a full and good faith review of the applicant’s extension request.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Capital expenditure and completion of occupancy for eligible uses authorized at subdivision (a), and in accordance with all relevant representations and descriptions in the application, shall occur within 24 months of the date of the award for
all new construction, gap financing, and adaptive reuse projects, and within 15 months for all other projects. Applicants may ask the department for an extension of this timeframe on the grounds and according to the procedures set forth in the guidelines. The director shall have reasonable discretion to approve or deny such an extension upon conducting a full and good faith review of the applicant’s extension request.
</html:p>
<html:p>
(
<html:i>l</html:i>
)
<html:span class="EnSpace"/>
For purposes of this section, the following definitions shall apply:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Adaptive reuse” means retrofitting and repurposing of existing buildings that create new residential rental units, and expressly excludes any project that involves rehabilitation of any construction affecting existing residential units. Adaptive reuse may include retrofitting and repurposing of existing hotels or motels if the hotel or motel is not currently a place of residence for the occupants, and/or sites that received a Project Homekey allocation.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Individuals and families who are experiencing homelessness or who are at risk of
homelessness” means persons and families that meet the qualifying definitions under Part 578.3 of Title 24 of the Code of Federal Regulations.
</html:p>
<html:p>
(m)
<html:span class="EnSpace"/>
For the purposes of this section, adaptive reuse projects shall be treated as a distinct eligible project category and shall not be subject to per unit cost caps.
</html:p>
<html:p>
(n)
<html:span class="EnSpace"/>
To advance the objectives specified in Section 50675.1.1 or this section, the department may expand the population served beyond the population specified in
subdivision (l) as specified by the guidelines authorized by this section.
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