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<ns0:Id>20250SB__100398AMD</ns0:Id>
<ns0:VersionNum>98</ns0:VersionNum>
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<ns0:Action>
<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-09</ns0:ActionDate>
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<ns0:Action>
<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
<ns0:ActionDate>2026-03-19</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Grayson</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Grayson</ns0:Name>
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<ns0:Title> An act to amend Section 65589.9 of, and to add Article 5 (commencing with Section 53398.89) to Chapter 2.99 of Part 1 of Division 2 of Title 5 of, the Government Code, relating to land use. </ns0:Title>
<ns0:RelatingClause>land use</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Prohousing enhanced infrastructure financing districts.</ns0:Subject>
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<ns0:DigestText>
<html:p>The Planning and Zoning law requires each planning agency to prepare and the legislative body of each county and city to adopt a comprehensive, long-term general plan for the physical development of the county or city that includes specified elements, including a housing element. The law requires the Department of Housing and Community Development to designate jurisdictions as prohousing, as specified. The law requires that jurisdictions that have adopted a housing element that has been found by the department to be in substantial compliance with specified requirements and that have been designated as prohousing based on their adoption of prohousing local policies, as defined, be awarded additional points or preference in the scoring of program applications for certain programs.</html:p>
<html:p>Existing law authorizes the legislative body of a city or county to designate a proposed enhanced infrastructure financing district to finance public capital facilities or other specified projects of communitywide significance that provide significant benefits to the district or the surrounding community, including, among other things, the acquisition, construction, or rehabilitation of housing for persons of very low, low, and moderate income for rent or purchase, as specified. Existing law authorizes an infrastructure financing plan to contain a provision for the division of taxes levied upon taxable property in the area included within the district, and authorizes the public financing authority of the district to issue bonds, as provided.</html:p>
<html:p>This bill would authorize a city or county that is designated as prohousing to establish a prohousing enhanced infrastructure financing district if certain requirements are met, as
specified. The bill would prescribe requirements applicable to those districts, and would authorize those district to engage in specified activities in addition to those authorized for an enhanced infrastructure financing district, as described above. The bill would expand the definition of “prohousing local policies” for purposes of the above-described provisions to include the establishment of one of these districts, and would require that the jurisdiction that established, and projects located within, a district receive enhanced points or preference than the baseline provided to other prohousing jurisdictions.</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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Article 5 (commencing with Section 53398.89) is added to Chapter 2.99 of Part 1 of Division 2 of Title 5 of the
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, to read:
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<ns0:Num>5.</ns0:Num>
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<ns0:LawHeadingText>Prohousing Enhanced Infrastructure Financing Act</ns0:LawHeadingText>
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<ns0:Num>53398.89.</ns0:Num>
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<html:p>This article shall be known as the Prohousing Enhanced Infrastructure Financing Act.</html:p>
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<ns0:Num>53398.90.</ns0:Num>
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<ns0:Content>
<html:p>The Legislature finds and declares all of the following:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
California is facing a housing crisis that necessitates additional tools to help local jurisdictions establish new funding streams to address overall housing needs, with a particular focus on supporting affordable housing, associated infrastructure, and community revitalization in infill areas.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The creation of a prohousing enhanced infrastructure financing district will authorize prohousing jurisdictions that take significant measures to accelerate housing production and affordability to capitalize on revenues from enhanced infrastructure financing districts. This will spur private investment and provide additional dollars to
support development and revitalization of areas that include housing for all income levels with equitable access to opportunities, including, but not limited to, transportation mobility, goods, services, and economic opportunities.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
The benefits of a prohousing enhanced infrastructure financing district include the ability to fund more housing units, as well as needed infrastructure improvements to meet the current and future capacity demands and affirmatively further fair housing, as required by Section 8899.50.
</html:p>
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<ns0:LawSection id="id_2674FC96-E974-450B-A3E3-F0CAE11C4104">
<ns0:Num>53398.91.</ns0:Num>
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<ns0:Content>
<html:p>For purposes of this article:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
“Lower income households” has the same meaning as defined in Section 50079.5.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
“Persons and families of low or moderate income” has the same meaning as defined in Section 50093 of the Health and Safety Code.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
“Prohousing enhanced infrastructure financing district” means an enhanced infrastructure financing district that meets the requirements of Section 53398.92.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
“Prohousing jurisdiction” means a city or county that has been designated as prohousing pursuant to Section 65589.9.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
“Very low income households” has the same meaning as defined in Section 50105 of the Health and Safety Code.
</html:p>
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<ns0:LawSection id="id_9B97BF4D-F8C5-4AD9-9439-E2F6ADB14008">
<ns0:Num>53398.92.</ns0:Num>
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<ns0:Content>
<html:p>At any time before or after the adoption of an infrastructure financing plan, a city or county may establish a prohousing enhanced infrastructure financing district by resolution if all of the following requirements are met:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
The city or county is a prohousing jurisdiction.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The infrastructure financing plan requires either of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
At least 20 percent of any new housing units constructed or rehabilitated in the prohousing enhanced infrastructure financing district will be affordable to persons and families of low or moderate income and at least 6 percent of new units will be affordable to very low income
households.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
At least 30 percent of the total project area will be affordable to lower income households within 20 years of establishment of the prohousing enhanced infrastructure financing district.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
The city or county finds by resolution that it is in compliance with Section 8899.50.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
The infrastructure financing plan requires a review to ensure compliance with the requirements of this section every 10 years.
</html:p>
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<ns0:LawSection id="id_045D6AE6-30FF-480F-9157-087AFCEEC3FE">
<ns0:Num>53398.93.</ns0:Num>
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<ns0:Content>
<html:p>All of the following apply to a prohousing enhanced infrastructure financing district:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
The boundaries of a prohousing enhanced infrastructure financing district may be any of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Coterminous with the city or county that established the prohousing enhanced infrastructure financing district.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
An area smaller than the boundaries of the city or county that established the prohousing enhanced infrastructure financing district.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
An area beyond the boundaries of the city or county that established the prohousing enhanced infrastructure financing
district.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The prohousing enhanced infrastructure financing district shall require, by recorded covenants or restrictions, that affordable housing units financed pursuant to this article remain available at the applicable required affordable housing costs for the longest feasible time, but not less than 55 years for rental units and 45 years for owner-occupied units.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
This chapter applies to a prohousing enhanced infrastructure financing district except for all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Paragraph (1) of subdivision (b) of Section 53398.52 to the extent that paragraph authorizes revenues collected and allocated to be used for highway or highway interchange improvements.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Section 53398.54.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Paragraph (3) of subdivision (b) of Section 53398.66.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Subparagraph (E) of paragraph (1) of subdivision (c) of Section 53398.66.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Paragraph (2) of subdivision (c) of Section 53398.66.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
Subdivision (e) of Section 53398.66.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
Subdivision (g) of Section 53398.66.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
Subdivision (i) of Section 53398.66.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
In addition to activities authorized pursuant to this chapter, a prohousing enhanced infrastructure financing district may do any of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Activities intended to promote equitable quality of life in terms of housing,
neighborhood improvements, and community development, including, but not limited to, infrastructure, housing conservation, housing rehabilitation, sidewalk improvements, safe routes to school, recreational trails, community programs and displacement strategies.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
In addition to replacement requirements described in Section 53398.56, nondeed restricted housing in tandem with displacement strategies.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Infrastructure investments that support climate-friendly housing development, including, but not limited to, improvements necessary to facilitate higher density residential development in infill and transit-served areas.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Transportation and mobility improvements, including, but not limited to, transit access improvements, pedestrian and bicycle infrastructure, first- and last-mile connectivity, and other
investments that reduce vehicle miles traveled.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Climate resilience and sustainability improvements, including, but not limited to, green infrastructure, urban greening, stormwater capture, heat mitigation, and energy infrastructure that supports electrification and sustainable community development.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
Public realm and neighborhood infrastructure improvements that support housing development, including, but not limited to, utilities, water and wastewater systems, broadband infrastructure, parks and open space, and community facilities necessary to support new housing growth.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
Site preparation and enabling infrastructure, including, but not limited to, remediation, demolition, and other improvements necessary to unlock housing production in infill or underutilized
areas.
</html:p>
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</ns0:LawSection>
<ns0:LawSection id="id_29179226-243D-420D-9641-51C3813FF479">
<ns0:Num>53398.94.</ns0:Num>
<ns0:LawSectionVersion id="id_4C784884-F975-435B-B901-A6F1687FCFB3">
<ns0:Content>
<html:p>The public financing authority shall include both of the following in the annual report required by subdivision (j) of Section 53398.66.</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
The compliance review described in subdivision (d) of Section 53398.92 in the years when that review is conducted.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The progress in complying with affordable housing obligations.
</html:p>
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<ns0:LawSection id="id_7E652069-80E6-45F5-9F0E-E57DE3956C78">
<ns0:Num>53398.95.</ns0:Num>
<ns0:LawSectionVersion id="id_E25A745A-1A39-4715-B5D8-F152FD8D20BE">
<ns0:Content>
<html:p>A city our county shall not terminate a prohousing enhanced infrastructure financing district if the district has not complied with its affordable housing obligations.</html:p>
</ns0:Content>
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</ns0:LawSection>
<ns0:LawSection id="id_323D7C07-A97E-4489-AAC3-F336D368EA15">
<ns0:Num>53398.96.</ns0:Num>
<ns0:LawSectionVersion id="id_04900AEA-5778-4EBF-9E78-049325320D53">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
A city our county that has established a prohousing enhanced infrastructure financing district that has its prohousing designation under Section 65589.9 revoked shall make a diligent effort to remedy that status within 120 days of revocation.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
If a city or county that has established a prohousing enhanced infrastructure financing district fails to remedy a revocation of its prohousing designation under Section 65589.9 by 120 days after revocation, the prohousing enhanced infrastructure financing district shall not engage in any activity described in subdivision (d) of Section 53398.93 until the city or county is designated as prohousing under Section 65589.9.
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<ns0:BillSection id="id_150A0B2B-6575-4D1C-BEC1-7AE8998BBC5C">
<ns0:Num>SEC. 2.</ns0:Num>
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Section 65589.9 of the
<ns0:DocName>Government Code</ns0:DocName>
is amended to read:
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<ns0:Num>65589.9.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
It is the intent of the Legislature to create incentives for jurisdictions that are compliant with housing element requirements and have enacted prohousing local policies. It is the intent of the Legislature that these incentives be in the form of additional points or other preference in the scoring of competitive housing and infrastructure programs. It is the intent of the Legislature that, in adopting regulations related to prohousing local policy criteria, the department shall create criteria that consider the needs of rural, suburban, and urban jurisdictions and how those criteria may differ in those areas.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
For award
cycles commenced after July 1, 2021, jurisdictions that have adopted a housing element that has been found by the department to be in substantial compliance with the requirements of this article pursuant to Section 65585, and that have been designated prohousing pursuant to subdivision (c) based upon their adoption of prohousing local policies, shall be awarded additional points or preference in the scoring of program applications for the following programs:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The Affordable Housing and Sustainable Communities Program established by Part 1 (commencing with Section 75200) of Division 44 of the Public Resources Code.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The Transformative Climate Communities Program established by Part 4 (commencing with Section 75240) of Division 44 of the Public Resources Code.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The qualifying infill area portion of the Infill Incentive Grant Program of 2007 established by Section 53545.13 of the Health and Safety Code.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
The qualifying infill area and catalytic qualifying infill area portions of the Infill Infrastructure Grant Program of 2019 established by Section 53559 of the Health and Safety Code.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
Additional bonus points may be awarded to other state programs when already allowable under state law.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Both of the following shall receive
enhanced points or preference beyond the baseline provided pursuant to paragraph (1):
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
A jurisdiction that has established a prohousing enhanced infrastructure financing district pursuant to Article 5 (commencing with Section 53398.89) of Chapter 2.99 of Part 1 of Division 2 of Title 5.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
An eligible project located within a prohousing enhanced infrastructure financing district described in Article 5 (commencing with Section 53398.89) of Chapter 2.99 of Part 1 of Division 2 of Title 5.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Funding awarded to a jurisdiction that has established a prohousing enhanced infrastructure financing district pursuant to Article 5 (commencing with Section 53398.89) of Chapter 2.99 of Part 1 of Division 2 of Title 5, or to an eligible project located within one of those districts may be used for infrastructure components
that directly support, strengthen, or accelerate implementation of the district, including house-enabling infrastructure, but only to the extent consistent with the requirements of the program pursuant to which funding was awarded.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The department shall designate jurisdictions as prohousing pursuant to the permanent regulations adopted pursuant to subdivision (d) and report these designations to the Office of Land Use and Climate Innovation, and any other applicable agency or department, annually and upon request.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Beginning with the seventh housing element cycle, the department shall, upon request by a small rural jurisdiction, to the extent feasible, evaluate materials from the small rural jurisdiction’s housing element submission, pursuant to Section 65585, for evidence of prohousing local
policies in order to minimize the need for jurisdictions to submit supplementary documentation.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The department shall only conduct the evaluation described in subparagraph (A) for small rural jurisdictions that have a compliant housing element.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
The department shall not require small rural jurisdictions to renew their prohousing designations for at least four years.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
This paragraph shall not be construed to limit the authority of the department to revoke a jurisdiction’s prohousing designation.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Any additional points or preferences awarded for a prohousing local policy described in subparagraphs (L) to (N), inclusive, of paragraph (3) of subdivision (f) shall not exceed the minimum value of points or preferences
awarded for a prohousing local policy that directly relates to the planning, approval, or construction of housing.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
By July 1, 2021, the department, in collaboration with stakeholders, shall adopt emergency regulations to implement this section.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Notwithstanding Section 11346.1, the emergency regulations adopted pursuant to this subdivision shall remain in effect until the date that permanent regulations to implement this section become effective.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
On or before January 1, 2021, and annually thereafter, the department shall publish on its internet website the list of programs included under subdivision (b).
</html:p>
<html:p>
(f)
<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” shall have the same meaning as in Section 53559.1 of the Health and Safety Code.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Compliant housing element” means an adopted housing element that has been found to be in substantial compliance with the requirements of this article by the department pursuant to Section 65585.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
“Prohousing local policies” means policies that facilitate the planning, approval, or construction of housing, or policies that keep people housed. These policies may include, but are not limited to, the following:
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(A)
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Local financial incentives for housing, including, but not limited to, establishing a local housing trust fund.
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(B)
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Reduced parking requirements for sites that are zoned for
residential development.
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(C)
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Adoption of zoning allowing for use by right for residential and mixed-use development.
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(D)
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Zoning more sites for residential development or zoning sites at higher densities than is required to accommodate the minimum existing regional housing need allocation for the current housing element cycle.
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(E)
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Adoption of accessory dwelling unit ordinances or other mechanisms that reduce barriers for property owners to create accessory dwelling units beyond the requirements outlined in Article 2 (commencing with Section 66314) of Chapter 13, as determined by the department.
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(F)
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Reduction of permit processing time.
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(G)
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Creation of objective development standards.
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(H)
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Reduction of development impact fees.
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(I)
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Establishment of a Workforce Housing Opportunity Zone, as defined in Section 65620, or a housing sustainability district, as defined in Section 66200.
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(J)
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Preservation of affordable housing units through the extension of existing project-based rental assistance covenants to avoid the displacement of affected tenants and a reduction in available affordable housing units.
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(K)
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Facilitation of the conversion or redevelopment of commercial properties into housing, including the adoption of adaptive reuse ordinances or other mechanisms that reduce barriers for these conversions.
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(L)
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A safe parking program that provides safe parking locations and options
for individuals and families living in their vehicles and that does all of the following:
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<html:p>
(i)
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Provides a bathroom facility and onsite security.
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(ii)
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Establishes an application or enrollment process for the program that may include a background check requirement.
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(iii)
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Establishes rules and regulations for the program.
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<html:p>
(M)
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A safe camping program that provides safe camping locations and options for individuals and families experiencing unsheltered homelessness.
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(N)
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Adoption of ordinances, processes, or other mechanisms that expedite, or remove barriers to, the approval of any of the following:
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(i)
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Low-barrier navigation centers
beyond the requirements in Article 12 (commencing with Section 65660).
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(ii)
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Emergency shelters beyond the requirements in Section 65583.
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(iii)
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Supportive housing beyond the requirements in Article 11 (commencing with Section 65650).
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(O)
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Establishment of a prohousing enhanced infrastructure financing district pursuant to Article 5 (commencing with Section 53398.89) of Chapter 2.99 of Part 1 of Division 2 of Title 5.
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(4)
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“Small rural jurisdiction” means either of the following:
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(A)
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A city with a population of fewer than 25,000 persons.
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(B)
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A county with a population of fewer than 200,000 persons.
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