Existing law establishes the Department of Housing and Community Development (department) and, pursuant to the Governor’s Reorganization Plan No. 1 of 2025, which became effective on July 5, 2025, transfers the department to the California Housing and Homelessness Agency, effective July 1, 2026, for purposes of carrying out state housing policies and programs. Existing law, commonly referred to as the Surplus Land Act, prescribes requirements for the disposal of surplus land by a local agency, as defined, and requires, except as provided, a local agency disposing of surplus land to comply with certain notice requirements before disposing of the land or participating in negotiations to dispose of the land with a prospective transferee. As part of these procedures, existing law requires that the local agency send a notice of availability to housing sponsors, as defined, that have notified the department of their interest in surplus land, as specified.

This bill would require the department to establish and administer the Surplus Public Land Housing Pilot Program (program). The bill would set forth the purposes of the program, including to increase the supply of affordable housing. The bill would require the department to ensure that at least one housing pilot project on surplus public land is completed by January 1, 2030, and to identify and prioritize surplus public land suitable for housing pilot project development, as specified. The bill would define a “housing pilot project” as housing developed pursuant to the bill’s provisions that is owned by a local public entity, provides housing affordable to a mix of household income levels, and preserves long-term affordability. The bill would authorize the department to use surplus public land in collaboration with a local public entity, as described, and to develop housing, as specified, directly or in partnership with a local public entity, a nonprofit housing developer, or a mission-driven private entity. The bill would require the housing pilot project developed pursuant to the bill’s provisions to be, among other things, a use by right and ministerially approved if it meets local objective planning and zoning standards. The bill would require the construction of a housing pilot project to be subject to specified prevailing wage requirements, as specified, and to use a skilled and trained workforce, as described. The bill would require housing pilot project units to be eligible to be counted by a jurisdiction toward its share of the regional housing needs assessment, as specified. The bill would require the department, beginning January 1, 2031, and annually thereafter, until January 1, 2035, to submit a report to the Legislature, as described. The bill, upon appropriation by the Legislature, would authorize the department to utilize legislative appropriations, existing housing funds that may be used for a housing pilot project, local contributions, federal funds, and bond financing to implement the program.

Existing law, the California Environmental Quality Act (CEQA), requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of, an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment, or to adopt a negative declaration if it determines that the project would not have that effect, as provided. CEQA does not apply to the approval of ministerial projects.

This bill would specify that the Surplus Public Land Housing Pilot Program created pursuant to its provisions does not alter the application of CEQA, but would further allow a housing pilot project that qualifies for existing statutory or categorical exemptions to rely upon those exemptions.