CC SR 20230815 D - Legislative Update AB 309
CITY COUNCIL MEETING DATE: 08/15/2023
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA TITLE:
Consideration and possible action to ratify an opposition letter regarding Assembly Bill
(AB) No. 309 (Social Housing Act).
RECOMMENDED COUNCIL ACTION:
(1) Ratify the opposition letter signed and sent to Honorable Anthony J. Portantino
Chair of the Senate Appropriations Committee by Mayor Ferraro on August 1, 2023
opposing AB 309 that would grant the Department of General Services (DGS) the
authority to make land use and zoning decisions on state excess property.
FISCAL IMPACT: None
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Shaunna Hunter, Administrative Analyst
REVIEWED BY: Karina Banales, Deputy City Manager
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. Letter signed by Mayor Ferraro opposing AB 309 (page A-1)
B. Text of AB 309 (as amended July 13, 2023) (page B-1)
C. Analysis by Senate Committee on Governance and Finance (page C-1)
D. Analysis of AB 309 conducted by RPPG (page D-1)
E. Rancho Palos Verdes’ 2023 Legislative Platform (page E-1)
BACKGROUND:
In response to California's housing shortage and the multifaceted challenges that
contribute to insufficient housing production , AB 309 introduces the concept of social
housing and grants the DGS the authority to develop up to three social housing projects
on excess state lands. The primary goal of this legislation is to offer equitable and
affordable housing options to address the ongoing housing crisis.
1
RANCHO PALOS VERDES
AB 309 establishes a comprehensive framework for the definition and attributes of social
housing. This model places strong emphasis on public ownership, the incorporation of
mixed-income housing, and the commitment to long-term affordability. Notably, a core
provision of the bill mandates that both the housing units and the underlying land must be
owned by a public entity, effectively safeguarding against privatization and ensuring the
enduring public nature of the housing projects.
Reports from the Legislative Analyst’s Office identify challenges such as local approval
processes, zoning regulations, and the California Environmental Quality Act, which
collectively hinder efficient housing development. Furthermore, the scarcity of dedicated
funds for affordable housing and an imbalanced housing supply and demand equation
further amplify the crisis.
Local control stands as a cornerstone principle that empowers local governments to tailor
regulations and policies to suit their distinct needs. However, AB 309's proposed
mechanisms, notably the creation of the Social Housing Revolving Loan Fund and the
establishment of the California Housing Authority Board, have the potential to influence
housing development decisions within local jurisdictions with little to no input from cities.
While the bill's intent to augment housing production aligns with broader state goals, its
execution could potentially impact the balance between state intervention and local
autonomy over land use decisions.
The challenge lies in harmonizing the state's imperative to address the housing crisis with
the preservation of local control. AB 309's departure from conventional affordable housing
approaches introduces new dynamics that may influence local governance and decision -
making processes.
DISCUSSION:
On July 26, 2023, Staff received an action alert from Jeff Kiernan, Regional Public Affairs
Manager for Cal Cities’ Los Angeles County Division, calling on member cities to oppose
Senate Bill No. 423 and AB 309 due to their impacts on local land use authority. The City
Council already took a position opposing SB 423 on June 6, 2023.
Pursuant to City Council Policy No. 29, the Council typically takes positions on pending
bills before letters are sent. However, due to time constraints, a letter opposing AB 309
was signed by the Mayor on August 1 and sent to Honorable Anthony J. Portantino Chair
of the Senate Appropriations Committee (Attachment A). Due to the breadth and scope
of AB 309 and the City Council-adopted 2023 Legislative Platform, the City Council is
being asked to formally affirm the opposition letter sent on August 1 by rati fying the letter,
unless modifications to the letter are desired by the Council.
CONCLUSION:
Staff recommends the City Council ratify the letter signed by Mayor Ferraro in opposition
to AB 309.
2
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative actions are available for
the City Council’s consideration.
1. Do not affirm the letter of opposition signed by Mayor Ferraro, and direct Staff to
recall the submitted letter.
2. Identify modifications to the letter and direct Staff to recall the submitted letter and
submit a revised letter.
3. Take other action, as deemed appropriate.
3
City of Rancho Palos Verdes
Barbara Ferraro, Mayor John Cruikshank, Mayor Pro Tem Eric Alegria, Councilmember David L. Bradley, Councilmember Paul Seo, Councilmember
30940 HAWTHORNE BLVD. / RANCHO PALOS VERDES, CA 90275-5391 / (310) 544-5207 / FAX (310) 544-5291 / WWW.RPVCA.GOV
August 1, 2023
The Honorable Anthony J. Portan�no
Chair, Senate Appropria�ons Commitee
1021 O Street, Ste. 7630
Sacramento, CA 95814
RE: AB 309 (Lee) Social Housing Program
(as amended on 07/13/2023)
No�ce of Oppose unless amended
Dear Senator Portan�no,
I am wri�ng on behalf of the City of Rancho Palos Verdes to express our strong opposi�on to Assembly
Bill 309, introduced by Assemblymember Lee. We believe that while AB 309 aims to address important
housing challenges in California, it raises significant concerns that warrant careful considera�on and
amendments.
Rancho Palos Verdes is dedicated to promo�ng housing affordability and addressing homelessness
within our community and across the state. We are ac�vely engaged in robust public input processes and
adhere to state housing laws to develop comprehensive plans and zoning regula�ons for new projects.
Our primary opposi�on to AB 309 revolves around the establishment of the Social Housing Program
within the Department of General Services (DGS) and the provision to grant DGS the authority to make
land use and zoning decisions on state excess property. This approach could poten�ally bypass the state-
mandated planning process and local zoning regula�ons, which have been though�ully developed with
community involvement. This prac�ce would undermine the efforts of ci�es like Rancho Palos Verdes in
cra�ing tailored housing solu�ons that align with the unique needs and character of our community.
While we understand that AB 309 currently limits DGS authority to three housing projects on declared
excess state property suitable for housing, we remain apprehensive about the future expansion of this
program to include all state-owned lands. This expansion could further diminish local control and disrupt
the well-established planning efforts of ci�es throughout the state.
Considering our concerns, we kindly request that AB 309 be amended to address these issues. We
propose a collabora�ve approach between the state and local governments, where DGS works in
coopera�on with ci�es to iden�fy appropriate sites for social housing projects. This approach would
foster greater alignment with local planning efforts and ensure that the needs and preferences of each
community are appropriately considered.
Addi�onally, we con�nue to urge the Governor and lawmakers to allocate annual investments of $3
billion to support ci�es in preven�ng and reducing homelessness, as well as encouraging affordable
A-1
30940 HAWTHORNE BLVD. / RANCHO PALOS VERDES, CA 90275-5391 / (310) 544-5207 / FAX (310) 544-5291 / WWW.RPVCA.GOV
housing development. This ongoing funding commitment is crucial to enable ci�es like ours to
implement community-based solu�ons that cater to the housing needs of residents across all income
levels, thereby fostering a more inclusive and sustainable housing landscape.
For the reasons men�oned above, the City of Rancho Palos Verdes opposes AB 309 in its current form
unless the necessary amendments are made to address our concerns and preserve local planning
authority.
Thank you for taking the �me to consider our posi�on on this mater. We are willing to engage in further
discussions and collaborate to find common ground that advances housing affordability and
homelessness solu�ons in California.
Sincerely,
Barbara Ferraro
Mayor, City of Rancho Palos Verdes
CC: Senator Ben Allen, District 24
Assemblymember Al Muratsuchi, District 66
Rancho Palos Verdes City Council and City Manager
Jeff Kiernan, League of California Ci�es
A-2
AMENDED IN SENATE JULY 13, 2023
AMENDED IN ASSEMBLY MAY 1, 2023
AMENDED IN ASSEMBLY APRIL 3, 2023
california legislature—2023–24 regular session
ASSEMBLY BILL No. 309
Introduced by Assembly Members Lee, Wendy Carrillo, and Kalra
(Coauthors: Assembly Members Bennett, Haney, Jackson, McCarty,
Ting, Ward, and Rendon)
(Coauthors: Senators Allen, Menjivar, and Wiener)
January 26, 2023
An act to add Title 6.91 (commencing with Section 64900) to the
Government Code, relating to housing.
legislative counsel’s digest
AB 309, as amended, Lee. The Social Housing Act.
Existing law establishes the Department of General Services to
provide centralized services, including, but not limited to, planning,
acquisition, construction and maintenance of state buildings and
property. Existing law authorizes the Director of General Services, with
the consent of the state agency concerned, to lease state-owned real
property when the Director of General Services deems that leasing
serves a beneficial public purpose limited to the development of housing.
This bill would enact the Social Housing Act and would create, in
the Department of General Services, the Social Housing Program, the
mission of which would be to ensure that social housing developments
are produced on leased state property to help address the housing crisis,
as specified. The bill would authorize the program to identify and
develop up to 3 social housing projects, as specified, with the intent to
96 B-1
use the results to inform public policy related to developing an
independent public entity to develop statewide social housing. The bill
would require the program to solicit bids to develop social housing
units, and prioritize bids that demonstrate long-term revenue neutrality
or a cost rent model, as those terms are defined. The bill would require
the program to employ 2 different leasing models, the rental model and
the ownership model, as specified, in creating social housing. The bill
would prohibit a city or county from denying a social housing
development authorized under the program. The bill would authorize
a city or county to propose objective design review standards, as
specified, and authorize a city or county to propose modifications to
mitigate any specific, adverse impacts on public health or safety, as
specified.
Existing law establishes the Department of Housing and Community
Development and sets forth its powers and duties. Existing law creates
a housing authority in each county or city, which functions upon the
adoption of a specified resolution by the relevant governing body.
Existing law authorizes these housing authorities, within their
jurisdictions, to construct, reconstruct, improve, alter, or repair all or
part of any housing project. Existing law establishes various programs
that provide housing assistance.
This bill would enact the Social Housing Act and would create the
California Housing Authority, as an independent state body, the mission
of which would be to ensure that social housing developments that are
produced and acquired align with the goals of eliminating the gap
between housing production and regional housing needs assessment
targets and preserving affordable housing. The bill would prescribe a
definition of social housing that would describe, in addition to housing
owned by the authority, housing owned by other entities, as specified,
provided that all social housing developed or authorized by the authority
would be owned by the authority.
This bill would prescribe the composition of the California Housing
Authority Board, which would govern the authority, and would be
composed of appointed members and members who would be elected
by residents of social housing developments, as specified. The bill
would set forth the powers and duties of the authority and the board.
The bill would require the authority to seek to achieve revenue
neutrality, as defined, and would require the authority to seek to
recuperate the cost of development and operations over the life of its
96
— 2 — AB 309 B-2
properties through mechanisms that maximize the number of
Californians who can be housed without experiencing rent burden.
This bill would require the authority to prioritize the development of
specified property, including vacant parcels and parcels near transit,
and would establish a process for the annual determination of required
social housing units. Under the bill, social housing would accommodate
a mix of household income ranges and would provide specified
protections for residents, who would participate in the operation and
management of the units in which they reside.
This bill would require the California Housing Authority to employ
2 leasing models in social housing developments, referred to as the
rental model and the ownership model, and would set forth the
characteristics of both models. Under the ownership model, the authority
would extend a 99-year lease, in the form of a limited equity
arrangement, as defined, to individuals who commit to a minimum
5-year term of residence, and would authorize the authority to act as a
lender for residents. The bill would specify how the units may be sold
and transferred. The bill would establish eligibility requirements for
social housing residents and provide for the selection of residents by
lottery, as specified, providing that people who may have been displaced
from a property as part of its development would be granted a preference
for occupancy. The bill, among other things, would require the authority
to accept a local jurisdiction’s preference for a project parcel if specified
conditions are met.
This bill would establish the Social Housing Revolving Loan Fund
within the State Treasury to provide, upon appropriation by the
Legislature, zero-interest loans for the purposes of constructing housing
to accommodate a mix of household incomes. The bill would declare
the intent of the Legislature to enact subsequent legislation to provide
financing for the activities of the authority through the issuance of
general obligation bonds. The bill would authorize the authority to issue
revenue bonds, as specified. The bill would require the board to provide
for regular audits of the authority’s accounts and records, as specified.
The bill would also require the authority to prepare and submit specified
reporting information regarding its business plan and progress to the
Legislature on an annual basis.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
96
AB 309 — 3 — B-3
The people of the State of California do enact as follows:
line 1 SECTION 1. The Legislature finds and declares all of the
line 2 following:
line 3 (a) The housing crisis has reached unprecedented and
line 4 unacceptable proportions in the State of California, where more
line 5 than two in five households spend greater than 30 percent of their
line 6 income on housing and more than one in five households spend
line 7 greater than 50 percent of their income on housing.
line 8 (b) The United States Department of Housing and Urban
line 9 Development defines cost-burdened families as those who pay
line 10 more than 30 percent of their income for housing and may have
line 11 difficulty affording necessities such as food, clothing,
line 12 transportation, and medical care. Severe rent burden is defined as
line 13 paying more than 50 percent of one’s income on rent.
line 14 (c) Housing burden creates severe financial, physical, and
line 15 emotional impacts on households.
line 16 (d) The affordable housing crisis has imposed a significant toll
line 17 on the California economy, as overpriced rents depress the
line 18 California gross domestic product by approximately 2 percent and
line 19 more than 600,000 people leave the state annually in search of
line 20 lower rent.
line 21 (e) Current efforts, while laudable, have proven insufficient in
line 22 resolving the state’s affordable housing crisis, since 97 percent of
line 23 cities and counties have been unable to meet the regional housing
line 24 needs assessment targets for very low income, low-income, and
line 25 moderate-income housing.
line 26 (f) With such a great failure to meet the housing needs of
line 27 California residents, the state has a duty to act and help localities
line 28 fill the gap, localities by financing publicly owned, affordable
line 29 housing built sustainably, based on the widely successful Vienna
line 30 and Singapore models and many other successful models of
line 31 mixed-income rental and ownership housing.
line 32 (g) It is the intent of the Legislature to establish the California
line 33 Housing Authority, an independent public entity, Social Housing
line 34 Program to offer the necessary social housing to help eliminate
line 35 the gaps between increase housing production and acquisition and
line 36 regional housing needs assessment targets in all jurisdictions
line 37 throughout the state. state, which will inform the future
line 38 establishment of an independent public entity to develop, own, and
96
— 4 — AB 309 B-4
line 1 maintain social housing in California. The authority shall be
line 2 responsible for developing, owning, and maintaining Legislature
line 3 intends the program to be the first step in creating social housing
line 4 in California. Social housing is publicly owned, mixed-income
line 5 housing, removed from market forces and speculation, and built
line 6 with the express aim of housing people equitably and affordably.
line 7 Under public control and oversight, social housing is sustainable
line 8 and remains affordable in perpetuity.
line 9 (h) It is the intent of the Legislature in enacting this title to set
line 10 an ambitious goal for creating social housing, through both new
line 11 production and preservation of existing units, and to establish the
line 12 means for achieving that goal.
line 13 (i) It is further the intent of the Legislature for the California
line 14 Housing Authority Social Housing Program to ensure that no
line 15 Californian pays more than 30 percent of their income on housing
line 16 by the year 2050.
line 17 SEC. 2. Title 6.91 (commencing with Section 64900) is added
line 18 to the Government Code, to read:
line 19
line 20 TITLE 6.91. THE SOCIAL HOUSING ACT
line 21
line 22 PART 1. GENERAL PROVISIONS
line 23
line 24 Chapter 1. Title
line 25
line 26 64900. This title shall be known, and may be cited, as the Social
line 27 Housing Act.
line 28
line 29 Chapter 2. Definitions
line 30
line 31 64901. Unless the context demands otherwise, the definitions
line 32 provided by this chapter shall apply to this title.
line 33 64902. “California Housing Authority,” “CHA,” or “authority”
line 34 means the independent state entity created under this title for the
line 35 purpose of developing social housing for all California residents.
line 36 64903. “Social housing” means housing with the following
line 37 characteristics:
line 38 (a) (1) The housing units are owned by a government entity
line 39 such as the California Housing Authority, a public entity, or a local
line 40 housing authority.
96
AB 309 — 5 — B-5
line 1 (2) For the purposes of this act, all social housing developed or
line 2 authorized by the authority shall be owned by the authority.
line 3 (b) If a housing unit is in a social housing development, the
line 4 development contains housing units that accommodate a mix of
line 5 household income ranges, including extremely low income, very
line 6 low income, low income, moderate income, and above moderate
line 7 income.
line 8 (c) Residents of housing units are afforded, at a minimum, all
line 9 protections granted to tenants with tenancies in private property
line 10 under Section 1946.2 of the Civil Code, including protection
line 11 against termination without just cause or for any discriminatory,
line 12 retaliatory, or other arbitrary reason, and shall be afforded due
line 13 process prior to being subject to eviction procedures, in addition
line 14 to other protections provided by this title.
line 15 (d) The housing units shall be protected for the duration of their
line 16 useful life from being sold or transferred to a private for-profit
line 17 entity to prevent the privatization of social housing.
line 18 (e) Residents of the housing units have the right to participate
line 19 directly and meaningfully in decisionmaking affecting the operation
line 20 and management of their housing units.
line 21 64906. “Revenue neutrality” means a system in which all
line 22 monetary expenditures that result from the development and
line 23 operation of social housing owned by the authority are returned
line 24 to the authority through rents, payments on leasehold mortgages,
line 25 or other subsidies, to further the maintenance and development of
line 26 more social housing units.
line 27 64907. “Rent and mortgage cross-subsidization” means a
line 28 system in which the below-cost rents and leasehold mortgages of
line 29 certain units are balanced by above-cost payments on other units
line 30 within the same multiunit property so as to ensure the property’s
line 31 overall revenue meets development and operational costs.
line 32 64908. “Cost rent” means a system in which the rent of a
line 33 dwelling is calculated on the cost of providing for and maintaining
line 34 the dwelling, only allowing for limited or no proceeds.
line 35 64909. “Limited equity arrangement” means an ownership
line 36 model in which residents are extended a long-term lease of a unit,
line 37 take out a subsidized leasehold mortgage on the property from the
line 38 authority, make monthly mortgage payments, and commit to resell
line 39 at a price determined by a formula designed to balance ongoing
line 40 affordability and resident wealth generation.
96
— 6 — AB 309 B-6
line 1 64910. “Regional housing needs assessment” or “RHNA”
line 2 means a representation of housing needs for all income levels in
line 3 a jurisdiction pursuant to Article 10.6 (commencing with Section
line 4 65580) of Chapter 3 of Division 1 of Title 7.
line 5 64911. “Area median income” means the median family income
line 6 in a metropolitan or nonmetropolitan area, as determined by the
line 7 Department of Housing and Community Development.
line 8 64912. “Extremely low income” means income that does not
line 9 exceed the qualifying limits for extremely low income families,
line 10 as described in Section 50106 of the Health and Safety Code.
line 11 64913. “Very low income” means income that does not exceed
line 12 the qualifying limits for very low income families, as described
line 13 in Section 50105 of the Health and Safety Code.
line 14 64914. “Low income” means income for households that does
line 15 not exceed the qualifying limits for lower income families, as
line 16 described in Section 50079.5 of the Health and Safety Code.
line 17 64915. “Moderate income” means income for households of
line 18 low or moderate income whose income exceeds the income limit
line 19 for lower income households, as described in Section 50093 of
line 20 the Health and Safety Code.
line 21 64916. “Above moderate income” means income for
line 22 households that exceeds the moderate-income level, as described
line 23 in Section 50093 of the Health and Safety Code.
line 24 64917. “Underutilized parcel” means a parcel of property upon
line 25 which is built a structure that contains fewer units than the
line 26 maximum number of units permissible under local zoning
line 27 regulations.
line 28 64918. “Multifamily property” means a collection of units
line 29 featuring extremely low income, very low income, low-income,
line 30 moderate-income, and above-moderate income units. A multifamily
line 31 property may be a single building, multiple buildings on the same
line 32 or adjacent parcels, or multiple buildings across several blocks
line 33 within a single jurisdiction, or as may be defined by the authority.
line 34 64919. “Board” means the California Housing Authority Board.
96
AB 309 — 7 — B-7
line 1 PART 2. CALIFORNIA HOUSING AUTHORITY
line 2
line 3 Chapter 1. Creation, Powers, and Duties
line 4
line 5 Article 1. Creation
line 6
line 7 64920. (a) The California Housing Authority is hereby created.
line 8 The authority shall be governed by the California Housing
line 9 Authority Board.
line 10 (b) The core mission of the authority shall be to ensure that
line 11 social housing developments that are produced and acquired align
line 12 with the goals of eliminating the gap between housing production
line 13 and regional housing needs assessment targets, and preserving
line 14 affordable housing.
line 15
line 16 Article 2. Powers
line 17
line 18 64921. The authority shall have the following general powers:
line 19 (a) Sue and be sued.
line 20 (b) Have a seal and alter the same at its pleasure.
line 21 (c) Make and execute contracts and all other instruments
line 22 necessary or convenient for the exercise of its powers and functions
line 23 to perform its mission.
line 24 (d) Make rules with respect to its projects, operations, properties,
line 25 and facilities.
line 26 (e) Through its executive officer, appoint officers, agents, and
line 27 employees; prescribe their duties and qualifications; set their
line 28 employment descriptions and salaries subject to civil service rules;
line 29 provide for participation in health care and retirement benefits
line 30 available to similar state employees; and delegate to one or more
line 31 of its agents or employees the powers and duties it deems proper.
line 32 (f) Acquire, reacquire, or contract to acquire or reacquire by
line 33 grant or purchase real, personal, or mixed property or any interest
line 34 therein and own, hold, clear, improve, rehabilitate, sell, assign,
line 35 exchange, transfer, convey, lease, or otherwise dispose of or
line 36 encumber the same.
line 37 (g) Acquire or dispose of real, personal, or mixed property.
line 38 (h) In partnership with qualified persons, acquire, reacquire,
line 39 construct, reconstruct, rehabilitate, improve, alter, or repair or
line 40 provide for the construction, reconstruction, improvement,
96
— 8 — AB 309 B-8
line 1 alteration, or repair of any project; own, hold, sell, assign, transfer,
line 2 convey, exchange, lease, or otherwise dispose of or encumber any
line 3 project.
line 4 (i) Enter into development partnerships with municipalities,
line 5 joint powers of authority, and other public and private entities and
line 6 agencies in order to further its social housing development goals.
line 7 (j) Arrange or contract for the planning, replanning, opening,
line 8 grading, or closing of streets, roads, roadways, alleys, or other
line 9 places, or for the furnishing of facilities or for the acquisition of
line 10 property or property rights, or for the furnishing of property or
line 11 services in connection with a project.
line 12 (k) Grant options to purchase any project or to renew any lease
line 13 entered into by it in connection with any of its projects, on terms
line 14 and conditions as it deems advisable.
line 15 (l) Prepare or cause to be prepared project plans, specifications,
line 16 designs, and estimates of costs for the construction, reconstruction,
line 17 rehabilitation, improvement, alteration, or repair of any project,
line 18 and from time to time modify the plans, specifications, designs,
line 19 or estimates.
line 20 (m) Provide advisory, consultative, training, and educational
line 21 services, technical assistance, and advice to any person, partnership,
line 22 or corporation, either public or private, to carry out its mission,
line 23 and engage the services of consultants on a contractual basis for
line 24 rendering professional and technical assistance and advice.
line 25 (n) Contract for and accept funding in any form from any public
line 26 or private agency or from any other source.
line 27 (o) Employ technical experts and officers, agents, and
line 28 employees, permanent or temporary, as required, including
line 29 architects and experts in housing finance.
line 30 (p) Call upon the Attorney General for legal services as it may
line 31 require.
line 32
line 33 Article 3. Duties
line 34
line 35 64922. (a) The authority shall implement and advise on the
line 36 social housing program, as prescribed by Chapter 3 (commencing
line 37 with Section 64933), and is hereby granted all powers necessary
line 38 for this purpose.
line 39 (b) The authority may contract with property managers to
line 40 manage its properties according to the following requirements:
96
AB 309 — 9 — B-9
line 1 (1) Property managers shall abide by standards of responsiveness
line 2 to resident needs prescribed by the authority.
line 3 (2) Property managers shall abide by rules regarding resident
line 4 rights and protections or be subject to termination of employment.
line 5 64923. (a) The authority shall prepare, publish, adopt, and
line 6 submit to the Governor and the Legislature an annual business
line 7 plan. At least 60 days prior to the publication of the plan, the
line 8 authority shall publish a draft business plan for public review and
line 9 comment. The draft plan shall also be submitted to the Governor
line 10 and the Legislature.
line 11 (b) The business plan shall include, but need not be limited to,
line 12 all of the following elements:
line 13 (1) A description of the type of projects the authority is
line 14 producing or acquiring and the proposed timeline, estimated costs,
line 15 and funding sources.
line 16 (2) A projection of the expected residents, income levels, and
line 17 other demographic data.
line 18 (3) An estimate and description of the anticipated funds the
line 19 authority intends to leverage to fund the construction and operation
line 20 activities, and the authority’s level of confidence for obtaining
line 21 each type of funding.
line 22 (4) Any written agreements with public or private entities, such
line 23 as technical assistance agreements.
line 24 (c) On or before December 31 of each year, the authority shall
line 25 provide and submit to the Legislature an analysis on the effect of
line 26 its developments on gentrification. The report of the analysis shall
line 27 be subject to public comment and shall be considered by the board
line 28 for future decisionmaking.
line 29 (d) On or before December 31 of each year, the authority shall
line 30 provide an annual update to the Legislature on its progress, which
line 31 shall include relevant resident statistics once social housing
line 32 developments owned by the authority are occupied.
line 33 (e) The reports and annual updates that this section requires the
line 34 authority to provide to the Legislature shall be submitted in
line 35 compliance with Section 9795.
96
— 10 — AB 309 B-10
line 1 Chapter 2. California Housing Authority Governance
line 2
line 3 Article 1. Formation and Structure of Governing Board
line 4
line 5 64924. (a) The board shall be composed of the following:
line 6 (1) An expert in housing development and finance.
line 7 (2) An expert in housing construction.
line 8 (3) An expert in property maintenance.
line 9 (4) An appointee of the Speaker of the Assembly.
line 10 (5) An appointee of the Senate Committee on Rules.
line 11 (6) An appointee of the Governor.
line 12 (7) Three representatives of the residents, to be appointed
line 13 initially as described in subdivision (c).
line 14 (b) All appointees shall serve at the pleasure of their respective
line 15 appointing authorities. The Governor shall appoint the experts in
line 16 housing development and finance, housing construction, and
line 17 property management, whose appointments shall be subject to
line 18 confirmation by Senate approval by majority vote.
line 19 (c) Prior to the occupancy of the first social housing unit
line 20 developments owned by the authority, the resident representatives
line 21 shall be appointed by the Speaker of the Assembly, the Senate
line 22 Committee on Rules, and the Governor, respectively. The Speaker
line 23 of the Assembly, the Senate Committee on Rules, and the Governor
line 24 shall consult with advocates for tenants’ rights in the course of
line 25 making their respective selections.
line 26 (d) Following the occupancy of the first social housing unit
line 27 developments owned by the authority, resident representatives
line 28 shall be elected according to the following procedure:
line 29 (1) Any resident may nominate another resident to sit on the
line 30 board, who shall be elected by a vote of all social housing residents
line 31 who reside in units owned by the authority.
line 32 (2) Each resident may vote for up to three nominees to sit on
line 33 the board. The three nominees who receive the most votes shall
line 34 have the right to sit on the board for terms of one year.
line 35 (3) Resident elections for board seats shall take place annually
line 36 and the elections shall be coordinated by the board and its executive
line 37 officer.
line 38 64925. All board decisions shall be approved by majority vote.
line 39 64926. The board shall select a board chair, who may hold
line 40 special powers as determined by members of the board.
96
AB 309 — 11 — B-11
line 1 64927. The board is a state body for purposes of the
line 2 Bagley-Keene Open Meeting Act (Article 9 (commencing with
line 3 Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2).
line 4
line 5 Article 2. Board Powers and Duties
line 6
line 7 64928. The duties of the board include, but are not limited to,
line 8 the following:
line 9 (a) Establish a strategy to achieve the core goal of elimination
line 10 of the gap between housing production and acquisition and regional
line 11 housing needs assessment targets.
line 12 (b) Set objectives and performance targets designed to achieve
line 13 the strategy required by subdivision (a).
line 14 (c) Monitor and assess the degree of the authority’s success in
line 15 achieving its objectives and performance targets.
line 16 (d) Exercise exclusive hiring and firing power over an executive
line 17 officer.
line 18 (e) Establish and monitor performance measures for the
line 19 executive officer and an associated succession plan.
line 20 (f) Approve the annual budget prepared by the executive officer.
line 21 (g) Foster a culture and set of values consistent with the
line 22 short-term, medium-term, and long-term goals of the authority.
line 23 (h) Integrate risk management into the authority’s strategic
line 24 planning process.
line 25 (i) Notify the Governor and the Legislature of unanticipated
line 26 and sizable risks facing CHA in meeting its objectives.
line 27 (j) Adopt and amend regulations, which shall include election
line 28 procedures for resident board positions.
line 29 (k) Following an initial trial period, create and make public an
line 30 annual business plan as described in Section 64923.
line 31 (l) Hold biannual meetings with resident governance councils.
line 32 64929. The executive officer of the board shall have the
line 33 following powers and duties:
line 34 (a) Manage the day-to-day operations of the authority in
line 35 accordance with the strategy, delegations, business plans, and
line 36 policies of the board and this title.
line 37 (b) Employ and manage staff, including establishing, promoting,
line 38 and maintaining a positive organizational culture that effectively
line 39 aligns with the values and employment principles of the authority.
line 40 (c) Transform the strategic plans of the board into action.
96
— 12 — AB 309 B-12
line 1 (d) Ensure the effectiveness of the authority’s operational
line 2 systems, including financial management, human resource
line 3 management, information systems management, risk management,
line 4 communications, marketing, fund raising, asset management, and
line 5 reporting.
line 6 (e) Ensure the board is kept informed of changes to gubernatorial
line 7 directives, relevant legislation and changes in law, and other critical
line 8 information relating to the board’s functions and powers.
line 9 (f) Ensure compliance with applicable law and governmental
line 10 policies.
line 11 (g) Maintain effective communication and cooperation with
line 12 external stakeholders in collaboration with the chair of the board.
line 13 (h) Provide advice and information to the board on any material
line 14 issues concerning strategy, finance, reporting obligations, or other
line 15 important matters that arise.
line 16 (i) Prepare the annual business plan, including organizational
line 17 performance targets, for board approval.
line 18 (j) Interact with and, where appropriate, report to the Governor
line 19 and the Legislature.
line 20 (k) Additional responsibilities as determined by the board.
line 21
line 22 Article 3. Resident Governance Councils
line 23
line 24 64930. Each multifamily social housing development owned
line 25 by the authority shall form a governance council, which shall
line 26 include residents in both rental and ownership model properties.
line 27 The governance council shall be made up of no more than 10
line 28 percent of the overall population of the multifamily development.
line 29 The authority shall establish appropriate size limitations for
line 30 governance councils based on the size of the developments that
line 31 they represent.
line 32 64931. An authority multifamily social housing development
line 33 governance council shall have the following powers and
line 34 responsibilities:
line 35 (a) Host regular meetings to gather feedback and perspective
line 36 of residents.
line 37 (b) Provide the resident perspective to property management.
line 38 (c) Represent the interests of the development in biannual
line 39 meetings with the board.
96
AB 309 — 13 — B-13
line 1 (d) Determine how to spend the development’s allotted annual
line 2 budget for common room amenities and social events.
line 3 (e) Participate in the approval of renovation projects.
line 4 (f) Other responsibilities as determined by the board.
line 5 64932. A multifamily social housing development governance
line 6 council and the board may consult with outside parties with
line 7 appropriate experience for the purpose of establishing managerial
line 8 policies and practices that align with the requirements of affordable
line 9 housing and the need to provide suitable tenant protections.
line 10
line 11 Chapter 3. Social Housing Program
line 12
line 13 Article 1. Program Design
line 14
line 15 64933. (a) In all its operations, the authority shall seek to
line 16 achieve revenue neutrality over the long term. The authority shall
line 17 seek to recuperate the cost of development and operations over
line 18 the life of its properties through the mechanisms that maximize
line 19 the number of Californians who can be housed without
line 20 experiencing rent burden, such as rent cross-subsidization or cost
line 21 rent.
line 22 (b) (1) The authority shall develop regional target percentages
line 23 for extremely low income, very low income, and low-income
line 24 housing that seek to maximize low-income housing within the
line 25 constraints of long-term revenue neutrality and maintaining
line 26 sufficient operational, maintenance, and capital reserves. The
line 27 methodology for low-income housing maximization in each
line 28 development region shall be explained at a board meeting and shall
line 29 be subject to public comment.
line 30 (2) Priority consideration for the use of the authority’s proceeds
line 31 shall be given to the building and acquiring of social housing units,
line 32 and subsidies for extremely low income, very low income, and
line 33 low-income residents in affordable units.
line 34 (c) The authority shall prioritize development of property with
line 35 the following characteristics:
line 36 (1) Vacant parcels.
line 37 (2) Underutilized parcels or redevelopment of underutilized
line 38 parcels without affordability covenants or rent-controlled units.
line 39 (3) Surplus public properties.
line 40 (4) Parcels near transit.
96
— 14 — AB 309 B-14
line 1 (d) (1) If the development of a property requires the
line 2 rehabilitation or demolition of covenanted affordable units, the
line 3 new development shall include a greater number of affordable
line 4 units by income group than the previous property.
line 5 (2) Each multiunit property shall include a variety of
line 6 mixed-income units according to area median income levels.
line 7 (e) If the development of a property requires the removal of
line 8 residents from the property, the authority shall cover the temporary
line 9 relocation costs of these residents, including, but not limited to,
line 10 the following:
line 11 (1) Costs of searching for a new residence.
line 12 (2) Moving costs.
line 13 (3) Any differences between the resident’s previous rent at the
line 14 property and their rent during the authority development period.
line 15 (f) Residents who are displaced during the authority’s
line 16 development of the property shall have the right to live in the new
line 17 social housing property for their previous rent for the period of
line 18 one year, or the authority’s established rent for the resident’s
line 19 income level, whichever is lower.
line 20 (g) If a displaced resident chooses not to occupy the new social
line 21 housing development, the authority is not obligated to pay the
line 22 difference between new and old rents, as described in subdivision
line 23 (e), after the displaced resident could otherwise have begun
line 24 occupying the property.
line 25 64934. The authority shall make an annual determination of
line 26 the required amount of social housing units to be produced in the
line 27 following manner:
line 28 (a) Annual regional housing needs assessment targets shall be
line 29 calculated as the total RHNA cycle targets for each jurisdiction
line 30 divided by the length of the RHNA cycle. The authority shall
line 31 update its calculations each year based on housing construction
line 32 data submitted by jurisdictions to the Department of Housing and
line 33 Community Development.
line 34 (b) On or before January 1, 2027, and each year thereafter, the
line 35 authority shall determine the gap between the previous year’s
line 36 regional housing needs assessment targets for very low income,
line 37 low-income, moderate-income, and above moderate-income
line 38 housing, as determined by the Department of Housing and
line 39 Community Development and local councils of government, and
96
AB 309 — 15 — B-15
line 1 actual housing construction, as determined by official local
line 2 statistics.
line 3 (c) The authority shall split the very low income RHNA
line 4 allocation into extremely low income and very low income
line 5 allocations based on the latest available census or official survey
line 6 data for the relevant jurisdiction.
line 7 (d) Within a given year, the authority is authorized at least to
line 8 construct the required number of units to meet the gap between
line 9 the previous year’s extremely low income, very low income,
line 10 low-income, moderate-income, and above moderate-income
line 11 housing unit construction and regional housing needs assessment
line 12 targets.
line 13 64935. (a) In creating social housing, the authority shall
line 14 employ two different leasing models, the rental model and the
line 15 ownership model, consistent with the requirements of this title.
line 16 (b) In the rental model, the authority shall extend a one-year
line 17 lease for a social housing unit to eligible individuals who commit
line 18 to a minimum of one year of residence, barring extraordinary
line 19 circumstances.
line 20 (c) The rents or the rates on a leasehold mortgage in a
line 21 multifamily property shall be set according to the following
line 22 requirements:
line 23 (1) The authority shall strive to ensure that residents do not pay
line 24 more than 30 percent of their income for housing.
line 25 (2) Any rental adjustments applied shall be applied in a manner
line 26 that does not discourage the residents’ pursuit of higher income.
line 27 (3) Subject to the directive of paragraph (2), if a resident’s
line 28 income changes, upon the next vacancy, the property manager
line 29 shall rent to an appropriate income group to abide by revenue
line 30 neutrality and meet other requirements.
line 31 (4) For cost rentals, the authority will determine a reasonable
line 32 proceeds cap on rental units. Priority consideration for the use of
line 33 the authority’s proceeds shall be given to the building and acquiring
line 34 of social housing units, and subsidies for extremely low income,
line 35 very low income, and low-income residents in affordable units.
line 36 (d) In the ownership model, the authority shall extend a 99-year
line 37 lease to individuals who commit to a minimum of five years of
line 38 residence in the social housing unit. This lease shall be in the form
line 39 of a limited equity arrangement.
96
— 16 — AB 309 B-16
line 1 (e) Under the ownership model, upon the death of the owner of
line 2 the social housing unit, the unit may be transferred to the
line 3 deceased’s heir by devise or as any other real property may pass.
line 4 If a transferee is not eligible to be a resident, the transferee shall
line 5 sell the unit to the authority.
line 6 (f) Under the ownership model, the following conditions shall
line 7 apply:
line 8 (1) The estate’s land and common areas will be owned by the
line 9 authority.
line 10 (2) The authority may operate as a lender for residents.
line 11 (3) Buyers shall pay at least a 15-percent down payment.
line 12 (4) Housing units may only be sold after meeting the following
line 13 conditions:
line 14 (A) A minimum of five years of owner-occupancy.
line 15 (B) The authority shall have the right of first refusal to buy back
line 16 a property.
line 17 (C) If the authority does not exercise its right to purchase the
line 18 unit, the unit may be sold by the owner to an eligible buyer subject
line 19 to requirements established by the authority.
line 20 (5) Properties shall be sold at a price that allows the owner to
line 21 have a reasonable return on investment, which may include
line 22 documented capital improvements and adjustments for inflation.
line 23 (g) Residents may be evicted for either of the following reasons:
line 24 (1) Failure to meet social housing community standards, as
line 25 determined by the authority or governance council.
line 26 (2) Failure to pay rent for more than two months.
line 27 (h) Residents shall enjoy the following protections:
line 28 (1) Property managers shall provide a 24-hour notice before
line 29 entering the resident’s unit.
line 30 (2) Termination for nonpayment of rent requires a 14-day notice
line 31 prior to eviction.
line 32 (3) Residents may recover abandoned properties within 60 days
line 33 of receiving an eviction notice.
line 34 64936. Applicants to be residents and continuing residents
line 35 shall meet the following eligibility requirements, as may be
line 36 applicable to them:
line 37 (a) Except in the case of above moderate-income units, social
line 38 housing units shall be the resident’s sole residence.
line 39 (b) A potential resident shall prove that they have been living
line 40 or working in California at the time of their application. The
96
AB 309 — 17 — B-17
line 1 authority shall promulgate rules and criteria to determine the
line 2 necessary residency or work qualifications solely for eligibility
line 3 purposes, and these shall include sufficient qualifying criteria that
line 4 do not discriminate against applicants based on their belonging to
line 5 any protected class.
line 6 (c) Upon approval by the authority, or the applicable governance
line 7 council if authorized by the authority, residents whose units are
line 8 part of the ownership model may rent their units. The authority
line 9 shall prescribe the conditions pursuant to which a governance
line 10 council may regulate renting.
line 11 (d) Residents under the rental model shall commit to one year
line 12 of residence in the rental unit, after which a month-to-month
line 13 tenancy may take effect. Residents under the ownership model
line 14 shall commit to at least five years of primary residence in their
line 15 unit.
line 16 (e) Under certain circumstances, a resident shall be allowed to
line 17 interrupt residence requirements without penalty, including:
line 18 (1) Job relocation.
line 19 (2) Change in the household structure.
line 20 (3) Serious physical or mental illness.
line 21 (4) A mutually agreed-upon unit swap with another social
line 22 housing resident within the same property pursuant to authority
line 23 requirements.
line 24 (5) Other circumstances authorized by the authority or the
line 25 governance council, to the extent authorized by the authority.
line 26 (f) If a resident interrupting their tenancy or leasehold mortgage
line 27 does not satisfy the requirements for an exception, the resident
line 28 may be subject to one of the following penalties:
line 29 (1) Obligation to pay rent or make payments on a leasehold
line 30 mortgage until a new resident is located.
line 31 (2) In the case of a resident leasing under the ownership model,
line 32 forfeiture of proceeds from resale of the property.
line 33 (3) Ineligibility to reside in authority units for a period of five
line 34 years, or as determined by the authority.
line 35 (g) Except in cases that evidence a clear and manifest danger
line 36 to the development or its residents, as may be determined by the
line 37 authority, a prior criminal record shall not in any way preclude a
line 38 person from residing in social housing.
line 39 64937. (a) Subject to the requirements of subdivision (b), the
line 40 authority shall use a lottery to select social housing residents from
96
— 18 — AB 309 B-18
line 1 all qualifying applicants. The lottery shall be structured by income
line 2 categories and shall provide separate selection results for each
line 3 category.
line 4 (b) If residents of a property who were displaced during the
line 5 authority’s development of the property as social housing have
line 6 elected to lease a unit in the social housing, they shall be
line 7 accommodated prior to offering units to others pursuant to
line 8 subdivision (a).
line 9
line 10 Article 2. Production of Housing
line 11
line 12 64938. (a) The authority is authorized to contract with qualified
line 13 entities, in accordance with the authority’s plan to meet its goals,
line 14 to conduct ground-up construction and rehabilitation of existing
line 15 structures.
line 16 (b) The authority is authorized to dedicate building space to
line 17 commercial use and may lease the space to qualifying entities,
line 18 pursuant to requirements established by the authority.
line 19 (c) When appropriate, the state shall gift public lands to the
line 20 authority for social housing development purposes.
line 21 (d) In the absence of suitable state-owned parcels, the authority
line 22 is authorized to purchase municipal, county, other local jurisdiction,
line 23 and private lands.
line 24 64939. (a) The authority shall accept a local jurisdiction’s
line 25 preference for a project parcel if all of the following conditions
line 26 are met:
line 27 (1) The parcel allows the authority to meet the jurisdiction’s
line 28 regional housing needs assessments goals.
line 29 (2) The parcel does not exceed the cost of all suitable alternative
line 30 sites by more than 2 percent.
line 31 (3) The parcel offers comparable community amenities to all
line 32 suitable alternatives.
line 33 (b) The authority shall seek input from the local jurisdiction’s
line 34 city council, board of supervisors, or planning agency, as
line 35 applicable, on the following dimensions of an authority
line 36 development:
line 37 (1) Specific site of development.
line 38 (2) Number of stories.
line 39 (3) Number of units.
line 40 (4) Development timeline.
96
AB 309 — 19 — B-19
line 1 Article 3. Acquisition
line 2
line 3 64941. The authority may acquire, reacquire, or contract to
line 4 acquire or reacquire by grant or purchase real, personal, or mixed
line 5 property or any interest therein and own, hold, clear, improve,
line 6 rehabilitate, sell, assign, exchange, transfer, or otherwise dispose
line 7 of or encumber the same.
line 8 64942. The authority shall prioritize acquiring or reacquiring
line 9 property with the following characteristics:
line 10 (a) Parcels with affordability covenants or rent control units in
line 11 danger of losing affordability status, in order to preserve affordable
line 12 housing stock.
line 13 (b) Parcels at risk of becoming unaffordable or at the end of
line 14 their affordability covenants.
line 15 (c) Underutilized parcels or redevelopment of underutilized
line 16 parcels with affordability covenants or rent-controlled units.
line 17 (d) Surplus public properties.
line 18 (e) Parcels near transit.
line 19
line 20 Chapter 4. Funding
line 21
line 22 64943. The activities of the authority shall be conducted with
line 23 a goal to cover its costs over the long term in accordance with the
line 24 principle of revenue neutrality.
line 25 64944. The Social Housing Revolving Loan Fund is hereby
line 26 established within the State Treasury to be used, upon appropriation
line 27 by the Legislature, to provide zero-interest loans for the purpose
line 28 of constructing housing to accommodate a mix of household
line 29 incomes.
line 30 64945. (a) It is the intent of the Legislature to enact subsequent
line 31 legislation to provide financing for the activities of the authority
line 32 through the issuance of general obligation bonds.
line 33 (b) The authority may, from time to time, issue revenue bonds
line 34 in the principal amount that the agency determines necessary to
line 35 provide sufficient funds for financing social housing developments,
line 36 the payment of interest on these bonds, the establishment of
line 37 reserves to secure the bonds, and the payment of other expenditures
line 38 of the agency incident to, and necessary or convenient to, issuance
line 39 of the bonds.
96
— 20 — AB 309 B-20
line 1 (c) The board shall provide for regular audits of the authority’s
line 2 accounts and records and shall maintain accounting records and
line 3 shall report accounting transactions in accordance with generally
line 4 accepted accounting principles adopted by the Governmental
line 5 Accounting Standards Board of the Financial Accounting
line 6 Foundation for both public reporting purposes and for reporting
line 7 of activities to the Controller.
line 8 64946. The authority may, upon appropriation by the
line 9 Legislature, utilize funds from other legislation, cities and counties,
line 10 or other sources, in order to build more low-, very low, and
line 11 extremely low income housing.
line 12 SEC. 2. Title 6.91 (commencing with Section 64900) is added
line 13 to the Government Code, to read:
line 14
line 15 TITLE 6.91. THE SOCIAL HOUSING ACT
line 16
line 17 PART 1. GENERAL PROVISIONS
line 18
line 19 Chapter 1. Title
line 20
line 21 64900. This title shall be known, and may be cited, as the Social
line 22 Housing Act.
line 23
line 24 Chapter 2. Definitions
line 25
line 26 64901. Unless the context demands otherwise, the definitions
line 27 provided by this chapter shall apply to this title.
line 28 64902. “Cost rent” means a system in which the rent of a
line 29 dwelling is calculated on the cost of providing for and maintaining
line 30 the dwelling, only allowing for limited or no proceeds.
line 31 64903. “Revenue neutrality” means a system in which all
line 32 monetary expenditures that result from the development and
line 33 operation of social housing owned are returned through rents,
line 34 payments on leasehold mortgages, or other subsidies, to further
line 35 the maintenance and development of more social housing units.
line 36 64904. “Social housing” means housing with the following
line 37 characteristics:
line 38 (a) (1) The housing units or the land on which housing units
line 39 are built is owned by a government entity.
96
AB 309 — 21 — B-21
line 1 (2) For the purposes of this title, all social housing developed
line 2 or authorized by the public entity shall be owned by the public
line 3 entity.
line 4 (b) If a housing unit is in a social housing development, the
line 5 development contains housing units that accommodate a mix of
line 6 household income ranges that may include extremely low income,
line 7 very low income, low income, moderate income, and above
line 8 moderate income.
line 9 (c) Residents of housing units are afforded, at a minimum, all
line 10 protections granted to tenants with tenancies in private property
line 11 under Section 1946.2 of the Civil Code, including protection
line 12 against termination without just cause or for any discriminatory,
line 13 retaliatory, or other arbitrary reason, and shall be afforded due
line 14 process prior to being subject to eviction procedures, in addition
line 15 to other protections provided by this title.
line 16 (d) The housing units or the land on which housing units are
line 17 built that are owned by a government entity shall be protected for
line 18 the duration of their useful life from being sold or transferred to
line 19 a private entity to prevent the privatization of social housing.
line 20 (e) Residents of the housing units have the right to participate
line 21 directly and meaningfully in decisionmaking affecting the operation
line 22 and management of their housing units.
line 23
line 24 PART 2. SOCIAL HOUSING PROGRAM
line 25
line 26 Chapter 1. Definitions
line 27
line 28 64910. Unless the context demands otherwise, the definitions
line 29 provided by this chapter shall apply to this part.
line 30 64911. “Social Housing Program” or “program” means the
line 31 program under the Department of General Services that facilitates
line 32 the creation of social housing pursuant this part.
line 33 64912. “Cost rent” means a system in which the rent of a
line 34 dwelling is calculated on the cost of providing for and maintaining
line 35 the dwelling, only allowing for limited or no proceeds.
line 36 64913. “Revenue neutrality” means a system in which all
line 37 monetary expenditures that result from the development and
line 38 operation of social housing owned by program are returned to the
line 39 program through rents, payments on leasehold mortgages, or other
96
— 22 — AB 309 B-22
line 1 subsidies, to further the maintenance and development of more
line 2 social housing units.
line 3 64914. Notwithstanding Section 64904, “social housing” means
line 4 housing with the following characteristics:
line 5 (a) (1) The housing units are on state property leased pursuant
line 6 to Section 14671.2.
line 7 (2) For the purposes of this part, all social housing developed
line 8 or authorized by the program shall be owned by the Department
line 9 of General Services and managed by a private entity.
line 10 (b) The development contains housing units that accommodate
line 11 a mix of household income ranges.
line 12 (c) Residents of housing units are afforded, at a minimum, all
line 13 protections granted to tenants with tenancies in private property
line 14 under Section 1946.2 of the Civil Code, including protection
line 15 against termination without just cause or for any discriminatory,
line 16 retaliatory, or other arbitrary reason, and shall be afforded due
line 17 process prior to being subject to eviction procedures.
line 18 (d) The land on which the housing units are built shall be
line 19 protected for the duration of their useful life from being sold or
line 20 transferred to a private for-profit entity to prevent the privatization
line 21 of social housing.
line 22 (e) Residents of the housing units have the right to participate
line 23 directly and meaningfully in decisionmaking affecting the operation
line 24 and management of their housing units.
line 25
line 26 Chapter 2. Creation
line 27
line 28 64915. (a) The Social Housing Program is hereby created in
line 29 the Department of General Services.
line 30 (b) The core mission of the program shall be to ensure that
line 31 social housing developments are produced on leased state property
line 32 pursuant to Section 14671.2, to help address the housing crisis.
line 33 (c) The program is authorized to identify and develop up to
line 34 three social housing projects on land declared excess by a state
line 35 department and deemed suitable for housing pursuant to Executive
line 36 Order No. N-06-19, with the intent to use the results to inform
line 37 public policy related to developing an independent public entity
line 38 to manage and develop statewide social housing.
96
AB 309 — 23 — B-23
line 1 Chapter 3. Program Design
line 2
line 3 64916. (a) In all of its operations, the program shall comply
line 4 with subdivisions (a) to (e), inclusive, of Section 14671.2.
line 5 (b) Priority consideration for the use of the program’s proceeds
line 6 shall be given to the creation, development, and subsidization of
line 7 social housing units.
line 8 (c) The program will act as a land bank for state properties in
line 9 which to develop social housing, by maintaining ownership of the
line 10 land through ground leases.
line 11 64917. (a) The program shall solicit bids to develop social
line 12 housing units, and prioritize bids that demonstrate long-term
line 13 revenue neutrality or a cost rent model.
line 14 (b) In creating social housing, the program shall employ two
line 15 different leasing models, the rental model and the ownership model.
line 16 (1) (A) In the rental model, the program shall extend a lease
line 17 for a social housing unit to eligible individuals.
line 18 (B) The program shall strive to ensure that residents do not pay
line 19 more than 30 percent of their income for housing.
line 20 (2) In the ownership model, the housing units may only be sold
line 21 after meeting the following conditions:
line 22 (A) A minimum of five years of owner-occupancy.
line 23 (B) The program shall have the right of first refusal to buy back
line 24 a property.
line 25 (C) If the program does not exercise its right to purchase the
line 26 unit, the unit may be sold by the owner to an eligible buyer subject
line 27 to requirements established by the program.
line 28 (D) Properties shall be sold at a price that allows the owner to
line 29 have a reasonable return on investment, which may include
line 30 documented capital improvements and adjustments for inflation.
line 31 (E) Upon the death of the owner of the social housing unit, the
line 32 unit may be transferred to the deceased’s heir by devise or as any
line 33 other real property may pass. The heir shall be subject to the
line 34 requirements of this paragraph.
line 35 64918. (a) (1) A city or county shall not deny a social housing
line 36 development authorized under the program.
line 37 (2) The Department of General Services shall notify a city, or
line 38 county if the development occurs in an unincorporated area, of a
line 39 social housing development occurring within its jurisdiction.
96
— 24 — AB 309 B-24
line 1 (b) (1) The Department of General Services shall send a city,
line 2 or county if the development occurs in an unincorporated area,
line 3 any conceptual plans for a social housing development occurring
line 4 within its jurisdiction.
line 5 (2) (A) Within 90 days of receiving the conceptual plans, the
line 6 city or county may propose objective design review standards, as
line 7 defined in paragraph (7) of subdivision (a) of Section 66300, for
line 8 a social housing development authorized under this chapter, which
line 9 the Department of General Services shall accept.
line 10 (B) The proposed objective design review standards shall not
line 11 differ from the city or county’s existing objective design review
line 12 standards for comparable developments in effect one year before
line 13 the date the Department of General Services notifies a city or
line 14 county as required by this subdivision.
line 15 (C) The Department of General Services may, but is not required
line 16 to, accept design review standard proposals made by a city or
line 17 county 90 days after a city or county receives the conceptual plans.
line 18 (3) Notwithstanding paragraph (2), any design review standards
line 19 proposed by a city or county on a social housing development shall
line 20 not include floor area ratios, height limitations, or density
line 21 requirements.
line 22 (c) (1) The Department of General Services shall send
line 23 completed plans to the city, or county if the development occurs
line 24 in an unincorporated area, of a social housing development
line 25 occurring within its jurisdiction.
line 26 (2) If the city or county makes written findings based on
line 27 substantial evidence in the record that the social housing
line 28 development might have a specific, adverse impact on public health
line 29 or safety, the city or county shall notify the Department of General
line 30 Services of those impacts within 90 days of receiving the completed
line 31 plans.
line 32 (3) The city or county may propose modifications to the social
line 33 housing development to mitigate those specific, adverse impacts,
line 34 which the Department of General Services shall accept if received
line 35 within the 90-day period described in paragraph (2). The
line 36 Department of General Services may, but is not required to, accept
line 37 modifications made 90 days after a city or county receives the
line 38 completed plans.
line 39 (4) For the purposes of this subdivision, “specific, adverse
line 40 impact” means a significant, quantifiable, direct, and unavoidable
96
AB 309 — 25 — B-25
line 1 impact, based on objective, identified, and written public health
line 2 or safety standards, policies, or conditions as they existed on the
line 3 date the Department of General Services sent its completed plans.
O
96
— 26 — AB 309 B-26
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Anna M. Caballero, Chair
2023 - 2024 Regular
Bill No: AB 309 Hearing Date: 7/12/23
Author: Lee Tax Levy: No
Version: 5/1/23 Fiscal: Yes
Consultant: Grinnell
THE SOCIAL HOUSING ACT
Enacts the Social Housing Act, which creates the California Housing Authority for the purpose
of developing social housing for all California residents, under the direction of the California
Housing Authority Board.
Background
California’s Housing Crisis. California faces a severe housing shortage. A variety of factors
have contributed to the lack of housing production. Recent reports by the Legislative Analyst’s
Office and others point to local approval processes as a major factor. They argue local
governments control most of the decisions about where, when, and how to build new housing,
and those governments are quick to respond to vocal community members who may not want
new neighbors. The building industry also points to the California Environmental Quality Act as
an impediment, and housing advocates note a lack of a dedicated source of funds for affordable
housing.
A major cause of the housing crisis is the mismatch between the supply and demand for housing.
The Statewide Housing Plan adopted by the Department of Housing and Community
Development in 2022 found California needs approximately 2.5 million units of housing,
including one million units affordable to lower income households, to address this mismatch
over the next eight years. That would require production of over 300,000 units a year, including
over 120,000 units a year of housing affordable to lower income households. However,
production in the past decade has lagged at under 100,000 units per year – including less than
10,000 units of affordable housing per year.
Social Housing. The Assembly Select Committee on Social Housing held an informational
hearing on October 20, 2021, where Rob Weiner from the California Coalition for Rural Housing
shared the Organization for Economic Cooperation and Development (OECD) definition of
social housing as: “the stock of residential rental accommodations provided at sub-market prices
and allocated according to specific rules rather than according to market mechanisms.”
According to the Senate Housing Committee, another variation of social housing involves
making accommodations available to all individuals regardless of their household income. In
particular, Vienna, Austria is often held up as an example of a large city with widespread mixed-
income social housing and an estimated 40% of the city’s housing stock is social housing. In the
Viennese model, higher income households pay market rate rents which then subsidize the below
market rents for lower-income households, referred to as “cross-subsidization.”
C-1
AB 309 (Lee) 5/1/23 Page 2 of 10
Planning and zoning. The Planning and Zoning Law requires every county and city to adopt a
general plan that sets out planned uses for all of the area covered by the plan. A general plan
must include specified mandatory “elements,” including a housing element that establishes the
locations and densities of housing, among other requirements. Cities’ and counties’ major land
use decisions—including most zoning ordinances and other aspects of development permitting—
must be consistent with their general plans.
State law also imposes numerous requirements on the housing element of a general plan. A local
government’s housing element must allow for enough housing to be produced to meet the
jurisdiction’s regional housing need allocation (RHNA) for several income bands: very low, low,
moderate, and above moderate households. The Department of Housing and Community
Development (HCD) reviews and certifies housing elements as compliant with state law and also
reviews their zoning ordinances for consistency with the approved housing element.
While the RHNA process requires local governments to plan to address housing needs in their
jurisdictions, it does not mean housing will actually get built. California, along with the rest of
the country, generally relies on the private sector to develop its affordable housing stock. A
number of factors affect housing development and government subsidies are generally needed
for housing projects with affordable units for low-income and very low-income households to be
economically viable.
General obligation bonds. When public agencies issue bonds, they essentially borrow money
from investors, who provide cash in exchange for the agencies’ commitment to repay the
principal amount of the bond plus interest in the future. Bonds are usually either revenue bonds,
which repay investors out of revenue generated from the project the agency buys with bond
proceeds or from a specific dedicated revenue source, or general obligation (GO) bonds, which
the public agency pays out of general revenues and are guaranteed by its full faith and credit.
Section One of Article XVI of the California Constitution and the state’s General Obligation
Bond Law guide the issuance of the state’s GO debt. The Constitution allows the Legislature to
place general obligation bonds on the ballot for specific purposes with a two-thirds vote of the
Assembly and Senate. Voters also can place bonds on the ballot by initiative, as they have for
parks, water projects, high-speed rail, and stem cell research, among others. Either way, general
obligation bonds must be ratified by majority vote of the state’s electorate. Unlike local general
obligation bonds, approval by the state’s electorate does not automatically trigger an increased
tax to repay the bond. The Constitution commits the state to repay investors from general
revenues above all other claims, except payments to public education.
The author wants to create a new state agency to construct and manage social housing.
Proposed Law
Assembly Bill 309 enacts the Social Housing Act, which creates the California Housing
Authority as an independent entity in state government for the purpose of developing social
housing for all California residents, under the direction of the California Housing Authority
Board.
C-2
AB 309 (Lee) 5/1/23 Page 3 of 10
The measure defines “social housing”: as:
Housing units owned by the California Housing Authority, a public entity, a local
housing authority, or a mission-driven not-for-profit private entity.
Where the social housing development contains housing units that accommodate a mix of
household income ranges, including extremely low income, very low income, low
income, moderate income, and above moderate income.
Residents of housing units are afforded, at a minimum, all protections granted to tenants
with tenancies in private property, including protection against termination without just
cause or for any discriminatory, retaliatory, or other arbitrary reason, and are afforded
due process prior to being subject to eviction procedures, among others.
The units are protected for the duration of their useful life from being sold or transferred
to a private for-profit entity or a public-private partnership.
Where residents of the housing units have the right to participate directly and
meaningfully in decision-making affecting the operation and management of their
housing units.
California Housing Authority. AB 309 creates the California Housing Authority (Authority)
with the core mission to produce and acquire social housing developments to eliminate the gap
between housing production and RHNA targets, and to preserve affordable housing. The bill
charges the Authority to implement and operate the social housing program, and grants it all
necessary powers to do so, including contracting with property managers to manage its
properties so long as they meet standards on responsiveness to resident needs prescribed by the
authority, and rules regarding resident rights and protections, or be subject to termination of
employment.
The bill requires the Authority to prepare, publish, adopt, and submit to the Governor and the
Legislature an annual business plan, as well as a draft business plan at least 60 days prior to the
publication of the plan for public review and comment, which must also be submitted to the
Governor and the Legislature. The measure requires the business plan to include:
A description of the type of projects the Authority is producing or acquiring and the
proposed timeline, estimated costs, and funding sources.
A projection of the expected residents, income levels, and other demographic data.
An estimate and description of the anticipated funds the Authority intends to leverage to
fund the construction and operation activities, and the Authority’s level of confidence for
obtaining each type of funding.
Any written agreements with public or private entities, such as technical assistance
agreements.
The bill also directs the Authority to submit to the Legislature an analysis on the effect of its
developments on gentrification on or before December 31 each year. The analysis must be
subject to public comment and considered by the California Housing Authority Board for future
decision-making. The Authority must also provide an annual update to the Legislature on or
before December 31 of each year its progress, which must include relevant resident statistics
once social housing developments owned by the Authority are occupied.
C-3
AB 309 (Lee) 5/1/23 Page 4 of 10
California Housing Authority Board. AB 309 forms the California Housing Authority Board,
comprised of:
Four Governor appointees, including experts in housing development and finance,
housing construction, property maintenance, as well as an appointee without specific
qualifications.
An appointee of the Speaker of the Assembly.
An appointee of the Senate Committee on Rules.
Three representatives of the residents. Before the Authority owns housing, these
representatives are appointed by the Speaker of the Assembly, the Senate Committee on
Rules, and the Governor, after each consults with advocates for tenants’ rights in the
course of making their respective selections. After the Authority owns housing, the
representatives are elected by vote of all social housing residents who reside in units
owned by the Authority.
All appointees serve at the pleasure of their appointing authority. The Board is subject to the
Bagley-Keene Open Public Meetings Act.
AB 309 establishes the Board’s duties to:
Establish a strategy to achieve the core goal of eliminating the gap between housing
production and acquisition and regional housing needs assessment targets;
Set objectives and performance targets designed to achieve its strategies;
Monitor and assess the degree of the Authority’s success in achieving its objectives and
performance targets;
Exercise exclusive hiring and firing power over an executive officer;
Establish and monitor performance measures for the executive officer and an associated
succession plan;
Approve the annual budget prepared by the executive officer;
Foster a culture and set of values consistent with the short-term, medium-term, and long-
term goals of the Authority;
Integrate risk management into the authority’s strategic planning process;
Notify the Governor and the Legislature of unanticipated and sizable risks facing the
Authority in meeting its objectives;
Adopt and amend regulations, which must include election procedures for resident board
positions;
Following an initial trial period, create and make public an annual business plan;
Hold biannual meetings with resident governance councils.
The measure sets the Authority’s executive director’s powers and duties to:
Manage the day-to-day operations of the authority in accordance with the strategy,
delegations, business plans, and policies of the board and the bill.
Employ and manage staff, including establishing, promoting, and maintaining a positive
organizational culture that effectively aligns with the values and employment principles
of the Authority.
Transform the strategic plans of the Board into action.
C-4
AB 309 (Lee) 5/1/23 Page 5 of 10
Ensure the effectiveness of the Authority’s operational systems, including financial
management, human resource management, information systems management, risk
management, communications, marketing, fund raising, asset management, and reporting.
Ensure the Board is kept informed of changes to gubernatorial directives, relevant
legislation and changes in law, and other critical information relating to the Board’s
functions and powers.
Ensure compliance with applicable law and governmental policies.
Maintain effective communication and cooperation with external stakeholders in
collaboration with the chair of the Board.
Provide advice and information to the Board on any material issues concerning strategy,
finance, reporting obligations, or other important matters that arise.
Prepare the annual business plan, including organizational performance targets, for Board
approval.
Interact with and, where appropriate, report to the Governor and the Legislature.
Additional responsibilities as determined by the Board.
Resident Governance Councils. AB 309 requires each multifamily social housing development
owned by the Authority to form a governance council, capped at 10% of the overall population
of the multifamily development. The bill sets as the powers and responsibilities for each
governance council:
Host regular meetings to gather feedback and perspective of residents.
Provide the resident perspective to property management.
Represent the interests of the development in biannual meetings with the Board.
Determine how to spend the development’s allotted annual budget for common room
amenities and social events.
Participate in the approval of renovation projects.
Other responsibilities as determined by the Board.
Social Housing Program. AB 309 states the Authority seeks to achieve revenue neutrality over
the long term, and specifically to recuperate the cost of development and operations over the life
of its properties through mechanisms that maximize the number of Californians who can be
housed without experiencing rent burden, such as rent cross-subsidization or cost rent. The
Authority must develop regional target percentages for extremely low income, very low income,
and low income housing that seek to maximize low income housing within the constraints of
long-term revenue neutrality and maintaining sufficient operational, maintenance, and capital
reserves. The bill requires the methodology for low income housing maximization in each
development region to be explained at a Board meeting and subject to public comment.
The bill directs the Authority to prioritize development of property with the following
characteristics:
Vacant parcels.
Underutilized parcels or redevelopment of underutilized parcels without affordability
covenants or rent-controlled units.
Surplus public properties.
Parcels near transit.
C-5
AB 309 (Lee) 5/1/23 Page 6 of 10
If the development of a property requires the rehabilitation or demolition of covenanted
affordable units, the bill requires the new development to include a greater number of affordable
units by income group than the previous property. If the development of a property requires the
removal of residents from the property, the authority must cover the temporary relocation costs
of these residents, as defined. Any displaced former resident may have the right to live in the
new social housing property for their previous rent for the period of one year, or the Authority’s
established rent for the resident’s income level, whichever is lower.
The Authority must make an annual determination of the required amount of social housing units
by determining the gap between the previous year’s RHNA targets for each income range, as
determined by HCD, and housing construction data submitted by jurisdictions to HCD, updated
annually. The Authority makes the determination annually using each local government’s data
beginning on January 1, 2027. The Authority then splits the very low income RHNA allocation
into extremely low income and very low income allocations based on the latest available census
or official survey data for the relevant jurisdiction.
The bill then authorizes the Authority to construct at least the required number of units to meet
the gap between the previous year’s very low income, low-income, moderate-income, and above
moderate-income housing unit construction. The Authority may conduct ground-up construction
and rehabilitation of existing structures.
The bill allows the Authority to use two different leasing models, the rental model and the
ownership model, as specified, and sets policies for housing developments as well as eligibility
and residence requirements for potential tenants. The Authority must use a lottery to select
residents to be offered social housing, structured by income categories, with separate selection
results for each category. However, any residents who were displaced due to the construction of
the Authority’s social housing are offered social housing without needing to enter the lottery.
The Authority can dedicate building space to commercial use and lease the space to qualifying
small businesses and nonprofit corporations, pursuant to requirements it establishes. The bill
directs the state to gift public lands to the Authority for social housing development purposes
when appropriate; however, in the absence of suitable state-owned parcels, the Authority can
purchase municipal, county, other local jurisdiction, and private lands, according to the following
priorities:
Parcels with affordability covenants or rent control units in danger of losing affordability
status, in order to preserve affordable housing stock.
Parcels at risk of becoming unaffordable or at the end of their affordability covenants.
Underutilized parcels or redevelopment of underutilized parcels with affordability
covenants or rent-controlled units.
Surplus public properties.
Parcels near transit.
However, the Authority must accept a local jurisdiction’s preference for a project parcel when:
The parcel allows the authority to meet the jurisdiction’s regional housing needs
assessments goals,
The parcel does not exceed the cost of all suitable alternative sites by more than 2%, and
The parcel offers comparable community amenities to all suitable alternatives.
C-6
AB 309 (Lee) 5/1/23 Page 7 of 10
The bill requires the Authority to seek input from the local jurisdiction’s city council, board of
supervisors, or planning agency, regarding any development’s:
Specific site.
Number of stories.
Number of units.
Development timeline.
Financing. AB 309 creates the Social Housing Revolving Loan Fund within the State Treasury
to be used, upon appropriation by the Legislature, to provide zero-interest loans for the purpose
of constructing housing to accommodate a mix of household incomes. The measure allows the
Authority to issue revenue bonds in any principal amount the agency determines necessary to
provide sufficient funds for financing social housing developments, the payment of interest on
these bonds, the establishment of reserves to secure the bonds, and costs to issue the bonds. The
measure also requires the Authority to provide for regular audits of its accounts and records,
maintain accounting records and report accounting transactions in accordance with generally
accepted accounting principles
The measure defines several terms, and makes legislative findings and declarations supporting its
purpose, including to provide financing for the activities of the authority through the issuance of
general obligations bonds.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill. According to the author, “Housing is too expensive for millions of
Californians. More than two in five households are considered rent burdened and spend over
30% of their income on housing, and more than one in five households spend over 50% of their
income on housing. Over 97% of cities and counties haven’t produced enough affordable
housing, and existing strategies to address the lack of affordable housing have not been nearly
enough to meet demand. Social housing is an important tool to ensure housing is affordable to
people of all income levels. Social housing is publicly backed, self-sustaining housing that
accommodates a mix of household income ranges. Housing is protected from being sold to a
private for-profit entity for the duration of its life, and residents are granted the same protections
as tenants in private property, if not more. Many countries throughout the world have successful
social housing programs, and in the US, there are social housing developments such as in
Montgomery County, Maryland using a similar model. Social Housing is how we provide and
realize housing as a human right.”
2. Feasible? State law establishes HCD, the California Housing Finance Agency, as well as the
California Tax Credit Allocation Committee in the Office of the State Treasurer, and charges
each with specific powers and responsibilities to implement the state’s housing policies and
programs. AB 309 creates a new state agency outside the control of the Governor and the
Legislature to acquire property, construct housing, and manage multi-unit housing properties in
any jurisdiction of the state that falls short of its RHNA goals. During a time when the state is
struggling to hire qualified individuals for currently budgeted positions, the bill would create a
C-7
AB 309 (Lee) 5/1/23 Page 8 of 10
new authority to perform several complex tasks not currently performed at a similar scale in any
state agency. In additional to administrative, legal, accounting, and other standard state agency
tasks, the Authority would need to employ professionals with expertise on real estate acquisition,
complex construction project management, and housing management and maintenance at state
employee salary levels generally below private sector compensation for similar skills.
Additionally, the measure contains neither an appropriation nor a revenue source to meet either
start-up costs or its ongoing property acquisition and housing construction program. While the
measure grants the Authority significant powers to acquire property and construct housing to
meet the state’s dire affordable housing crisis, the Committee may wish to consider whether the
bill can be feasibly implemented at a time when existing state agencies are struggling to hire
people with the necessary skills to do this work.
3. Governance. The California Constitution allows cities and counties to “make and enforce
within its limits, all local, police, sanitary and other ordinances and regulations not in conflict
with general laws.” It is from this fundamental power (commonly called the police power) that
cities and counties derive their authority to regulate behavior to preserve the health, safety, and
welfare of the public—including land use authority. However, as a state entity, any project
undertaken by AB 309’s authority would not be subject to local land use restrictions unless the
measure explicitly stated otherwise. While the Authority can only build in jurisdictions that fall
short of meeting its RHNA goals, and must accept local preferences in some cases, given the
scale of the social housing projects contemplated by the bill, the Committee may wish to
consider whether local agencies should have approval authority over any design standards,
density requirements, height limitations, parking requirements, or other development standard of
the bill’s social housing projects.
4. Finance. As mentioned above, AB 309 contains neither an appropriation nor a revenue
source to meet its start-up costs or ongoing operations. While the measure allows the Authority
to issue revenue bonds at amounts sufficient to pay for its social housing program, it’s unlikely
investors will purchase bonds at reasonable interest rates until the Authority can generate
sufficient net revenues to make payments of bond principal and interest.
5. Potential property tax revenue loss? Section One of Article XIII of the California
Constitution provides that all property is taxable and shall be assessed at the same percentage of
fair market value, unless explicitly exempted by the Constitution or federal law. Property owned
by a state or local government is generally exempt from taxation. Should AB 309’s Authority
acquire property currently on the tax rolls, it will become exempt, which would reduce property
tax revenues for local agencies. However, these revenues may be offset to the extent that
occupants of Authority-owned property are subject to possessory interest taxes, which apply to a
private leasehold or other private possessory interest on publicly-owned property. While the
State Board of Equalization has opined that low-income tenants in government-owned housing
should not be considered to have a taxable possessory interests, social housing residents of
higher incomes will likely be subject to possessory interest taxes.
6. Step by step. AB 309 establishes a new, independent state agency with significant powers to
own land as well as construct and manage housing. The Committee may wish to consider
amending the measure to implement the bill’s goals as a pilot program, including, among others:
Specifying that while social housing developments are owned by the state, they must be
managed by non-state entities subject to the measure’s current tenant protections.
Placing the program under an existing state agency. C-8
AB 309 (Lee) 5/1/23 Page 9 of 10
Capping the number of social housing developments.
Detailing any ability for local agencies to impose design review standards or measures to
mitigate specific, adverse, health and safety impacts.
7. Eminent domain? Opponents of AB 309 are concerned that the bill’s Authority could use the
power of eminent domain to take private property to use for social housing projects. While the
measure does not expressly grant this power to the Authority, it does grant it all necessary
powers to implement and operate the social housing program.
8. Related legislation. AB 309 is almost identical AB 2053 (Lee), which failed passage in the
Committee last year. Additionally, the Legislature has considered two other measures related to
AB 309:
SB 555 (Wahab), which enacts the Stable Affordable Housing Act of 2023 (Act) for the
purposes of planning for the development of social housing through a mix of acquisition
and new production. The Assembly Housing and Community Development Committee
approved the measure, and it is currently pending in the Assembly Appropriations
Committee.
SB 584 (Limon), which creates a 15% state short-term rental (STR) occupancy tax to be
collected, as specified, and allocates the funds for the construction, acquisition and
rehabilitation of labor force housing and renter protection programs. The measure is
pending in the Assembly Housing and Community Development Committee.
9. Incoming! The Senate Rules Committee ordered a double-referral of SB 1032. The Senate
Housing Committee approved the bill by a vote of 9 to 2 on June 20th. The Senate Governance
and Finance Committee will consider the bill as the committee of second reference
Assembly Actions
Assemble Housing and Community Development Committee: 5-2
Assembly Appropriations Committee: 11-4
Assembly Floor: 55-16
Support and Opposition (7/7/23)
Support: East Bay for Everyone (Sponsor)
James Coleman - South San Francisco City Councilmember
Sean Elo-Rivera - City of San Diego Councilmember
Zach Hilton - City of Gilroy Council Member
Afscme
California Apartment Association
California Labor Federation, Afl-cio
California School Employees Association
California Yimby
Common Ground California
Culver City Democratic Club
Davis College Democrats
Greenbelt Alliance
C-9
AB 309 (Lee) 5/1/23 Page 10 of 10
Indivisible CA Statestrong
Santa Cruz County
Santa Monica Democratic Club
Opposition: Affordable Housing Network of Santa Clara County
Alliance of Californians for Community Empowerment (ACCE) Action
California Assessors' Association
California Association of Realtors
City of Norwalk
City of Thousand Oaks
Fieldstead and Company, INC.
Housing Contractors of California
League of California Cities
National Association of Social Workers, California Chapter
Public Advocates
Sacred Heart Community Service
San Francisco Tenants Union
Sf Council of Community Housing Organizations
Sonoma Valley Housing Group
-- END --
C-10
AB 309 (Lee, Carrillo, Kalra)
Social Housing Act
As Amended, July 13, 2023
Summary: Authorizes the Department of General Services (DGS) to develop up to three social
housing projects, as defined, on excess state lands. Allows an affected city/county to propose
objective design review standards (except for floor area ratios, height or density), and to make
findings identifying potential specific adverse impacts of the proposed project, which DGS has
discretion to accept.
In brief, this bill:
1) Authorizes the Department of General Services (DGS), to identify and develop up to
three social housing projects on land declared excess by a state department and suitable
for housing pursuant to Governor Newsom’s Executive Order #06-19, with the intent to
use the results to inform public policy related to developing an independent public
entity to manage and develop statewide social housing.
2) Describes “social housing” in legislative intent language as: publicly owned, mixed-
income housing, removed from market forces and speculation, and built with the
express aim of housing people equitably and affordably. Under public control and
oversight, social housing is sustainable and remains affordable in perpetuity.
3) Requires social housing and the underlying land to be owned by a public entity, and
provide housing for a range of income levels between extremely low income to above
moderate income). Residents are provided the right to participate in the decisions
affecting the management and operation of the property and protected from evictions
without due process for a just cause.
4) Requires all housing under the program to be both:
i. Located on state property leased pursuant to Section 14671.2i of the
Government Code, and
ii. Owned ii by the Department of General Services and managed by a private
entity. In another section of the bill, however, it stipulates that the state
shall act as a land bank for social housing and maintain ownership of the land
via ground leases.iii Prohibits the land upon which the housing is situated
from being sold or transferred to a for-profit entity to prevent the
privatization of social housing.
5) Authorizes DGS to solicit bids to develop social housing units and prioritize bids which
demonstrate either a long-term “revenue neutrality” or “cost rent” model:
a. “Revenue neutrality” is described as a system which requires all monetary
expenditures that result from the development and operation of the social
housing are returned through rents, payments on leasehold mortgages, or other
subsidies to further the maintenance and development of more social housing
units.
b. “Cost rent” is defined as a system which the rent is calculated based on the cost
of providing and maintaining the dwelling, and only allowing for limited or no
proceeds.
D-1
6) Requires DGS to employ two different leasing models, a “rental model” and an
“ownership model.”
a. Under the rental model, a unit is leased to eligible households at a rent that
“strives” not to exceed 30 percent of household income.
b. Under the ownership model, a unit may be sold to a tenant after five years of
occupancy. The program shall retain a right of first refusal to repurchase a unit,
but if it does not exercise that right, the unit may be sold to another eligible
household at a price that allows an owner to receive a reasonable return on
invest that reflects documented capital improvements and adjustments for
inflation. Upon death, a unit may pass to an owner’s heir.
7) Provided for limited local reviews, as follows:
a. Requires DGS to notify and send conceptual plans to a city or county when a
social housing development is proposed within its jurisdiction.
b. Authorizes a city or county to propose “objective design review standards,”
which shall not differ from objective design review standards used by the local
agency iv, within 90 days of receipt of conceptual plans. Prohibits such standards
from including floor area ratios, height limitations or density requirements.
Provides that DGS “may, but is not required to” accept local design review
standards.
c. Requires DGS to send completed plans to a city or county when a social housing
development is proposed within its jurisdiction. If a city/county makes findings
that the proposed development “might” have a specific, adverse impact on
public health and safety, it shall send those findings to DGS within 90 days. The
city/county may propose modifications to the plans to mitigate potential impacts
to public health and safety, which DGS may, but is not required to, accept.
Comments:
1) Differences Between “Social Housing” and existing Affordable Housing Programs. There
are several key differences between social housing and what is currently considered
“affordable housing” in California. Differences include:
a. Prohibits for-profit private sector involvement in the ownership or management
of the housing. This limitation stands at odds with existing California affordable
housing programs such as Density Bonus Law, which incentivizes developers to
add affordable units to “market rate” properties, or the California Housing Tax
Credit Program which allows both non-profit and for-profit developers to
participate.
b. Requires units to be permanently affordable for the useful life of the structure.
This is different than most current state and federal programs which require an
affordability covenant which expires in either 45 years (ownership) or 55 years
(rental).
c. Targets a mix of incomes. This is somewhat different than existing state
affordable housing programs which tend to more heavily focus on low and
extremely low income housing.
d. Resident participation in operation and management of properties. While
D-2
resident engagement and input is welcomed by many for-profit and non-profit
affordable housing managers, this appears to be requiring more of a Co-Op style
management model.
2) As Amended, Pilot Project Not Fully Fleshed Out: Several aspects of this pilot proposal
do not appear to be fully fleshed out. This is important to note because the Author has
stated his intent to try and advance the bill to the Governor for consideration this year
versus taking time over the fall to engage with all stakeholders to achieve a more
balanced policy. Prior to the July 13 amendments, this bill proposed establishing a new
state agency that would own and operate social housing developments. The measure
was incredibly detailed with specific parameters that this measure is currently lacking.
All of that language has been stricken, and the bill now proposes that the Department of
General Services identify and develop up to three social housing projects on state. Policy
areas that need more detail include:
a. Lack of Criteria for Program: As currently drafted, there is no stated
criteria/parameters that provides direction as to which jurisdictions would be
subject to the measure. Will the program be used in an urban setting? Rural?
Coastal? Inland? Are these ground up developments? Vacant office building
conversions? Given there are no limits on density or height, will factors such as
increased pupils-to-school-district capacity, population size of a jurisdiction, EMS
response times, or other environmental factors be considered? At present, the
bill requires DGS to assess land that is currently owned by the State and solicit
bids for management—that’s it. Traditionally, pilot programs in any major policy
area (housing, transportation, climate etc.) has a specific set of applicability
criteria. This is critical to assess the overall efficacy of the program as well as
statewide scalability.
b. DGS the Proper Agency? Under the social housing model, the housing is required
to be owned by a public agency. It is unclear whether the Department of
General Services has the expertise and capacity to own and operate such
housing. It seems like such responsibility should be placed with the Department
of Housing and Community Development, which has housing expertise, and
currently owns and operates a number of migrant farmworker housing facilities.
c. Residents Rights Versus Public Agency Liability? Under this proposal, residents
are required to have the right to participate “directly and meaningfully” in the
operation and management of their units. The prior version of this bill detailed
this authority specifically, and required residents to be appointed to a
“governance council” with various powers. With a state agency bearing ultimate
responsibility and liability for the management and operation of the property,
the role of residents in the management of the property should be spelled out.
d. Rental V. Ownership Model. The earlier version of the bill provided more detail
describing the rental model, ownership model, eviction protections etc. These
details are critical elements and should be reinserted for a better understanding
of this proposed pilot program.
e. Local consultation. There is currently no mechanism in place for a local
jurisdiction to know that state land within its boundaries has been “selected” as
D-3
part of this pilot program until after a bid for development/management has
been awarded by DGS. This bill does require DGS to send copies of conceptual
and completed plans to the applicable city/county. The city/county may then:
i. Propose objective design review standards, but cannot address floor area
ratios, density, or height.
ii. Adopt findings identifying specific adverse impacts on public health or
safety.
However, after receiving such local input, DGS may choose to ignore it. If this is
the case, it may be better suited to require DGS to adopt its own findings
demonstrating why reasonable local design review and public health and safety
issues are being overridden.
f. Social housing projects are publicly funded. Thus, it is unclear where the funding
for these three pilot projects would come from. Neither AB 1657 (Wicks), a
proposed $10 billion affordable housing bond, nor ACA 1 (Aguiar Curry), a
proposal to lower local voter thresholds from two-thirds to 55 percent for
infrastructure and affordable housing, mention social housing.
3) Potential Challenges of the Social Housing Concept: The advocates of the social housing
model face several challenges with securing widespread adoption of this model. The
current range of affordable housing tools and ownership models using (tax credits,
density bonus, housing bonds, in lieu fees, etc.) are supported by a broad range of for-
profit, non-profit, and affordable housing stakeholders. While social housing may be
considered another option, it is unclear at this time if the existing stakeholders will
embrace this as a replacement.
i This section of existing law authorizes the Director of General Services to lease for any period of time any real
property “or interest in real property” that belongs to the state for affordable housing development. At least 20
percent of the units must be occupied by lower income households, of which 10 percent shall be designated for
very low income households. The Director may also approve commercial uses of the property if deemed to benefit
the affordable housing. All such leases must be approved by the State Public Works Board.
ii The requirement that the housing be “owned” by the Department of General Services is somewhat at odds with
the authority in Section 14671.2 which authorizes DGS to “lease” property for affordable housing. Under this
“social housing” structure, would the state retain legal liability associated with ownership of the property?
iii The proposed ownership structure appears to require the state to issue ground leases for the development of
social housing, but to also maintain ownership of the housing units.
iv Local objective design review standards must be the same as those used by the local agency within the past year.
D-4
E-1
I
I
I
RESOLUTION NO. 2022-71
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF RANCHO PALOS VERDES, CALIFORNIA,
ADOPTING THE CITY'S 2023 LEGISLATIVE
PLATFORM
WHEREAS, the City Council has an interest in weighing in on state, fede·ral, and
regional legislative issues that impact the City and its residents; and
WHEREAS, the Council annually takes action on numerous legislative proposals
brought forward throughout the year; and
WHEREAS, the City of Rancho Palos Verdes is committed to maintaining and
enhancing a high quality of life and safety for all residents; and
WHEREAS, on August 4, 2020, the City of Rancho Palos Verdes adopted
Resolution No. 2020-46, expressing opposition to proposed planning and zoning
legislation that usurps local control and imposes unfunded mandates, and expressing
support for actions to further strengthen local democracy, authority and control; and
WHEREAS, on July 6, 2021, the City of Rancho Palos Verdes adopted Resolution
No. 2021-31, adopting the. City's Housing and Local Land Use Legislative Platform; and
WHEREAS, on November 2, 2021, the City of Rancho Palos Verdes adopted
Resolution No. 2021-057, adopting the City's 2022 Legislative Platform; and
WHEREAS, the City Council continues to take an active advocacy role on a variety
of topics, including housing and local land use legislative policie.s, proposed by the State
Legislature.
NOW, THEREFORE, the City Council of the City of Rancho Palos Verdes does
hereby resolve as follows:
Section 1: The foregoing recitals are true and correct and are incorporated herein
by reference.
Section 2: The City Council hereby adopts and approves the City's 2023
Legislative Platform attached (Attachment A) and incorporated herein by this reference
as the official legislative policy of the City of Rancho Palos Verdes.
Section 3: The 2023 Legislative Platform will be used to guide legislative advocacy
including position letters on proposed legislation.
E-2
Section 4: The City Clerk shall certify to the passage, approval, and adoption of I
this resolution, and shall cause this resolution and its certification to be entered in the
Book of Resolutions of the City Council of the City.
PASSED, APPROVED AND ADOPTED THE 20TH DAY OF DECEMBER 2022.
ATTEST:
State of California )
County of Los Angeles ) ss
City of Rancho Palos Verdes )
I, Teresa Takaoka, City Clerk of the City of Rancho Palos Verdes, hereby certify that the
above Resolution No. 2022-71 was duly and regularly passed and adopted by the said
City Council at a regular meeting thereof held on December 20, 2022.
Resolution No. 2022-71
Page 2 of 2
I
I
E-3
I
I
I
Resolution No. 2022-71
Attachment A
2023 Legislative Platform
CITY OF RANCHO PALOS VERDES
2023 LEGISLATIVE PLATFORM
DATE ADOPTED: Resolution No. 2022-71 on December 20, 2022.
PURPOSE
The City of Rancho Palos Verdes' 2023 Legislative Platform (Platform) outlines the policy
positions of the City Council on current issues which directly or indirectly impact the City.
This Platform serves as a guideline to actively pursue pending legislation, with City
Council approval.
The City looks forward to working with regional, state, and federal partners to best serve
residents. The statements outlined in the Platform represent the City's general position
on legislative and regulatory issues of interest and concern.
PRIORITY CITY PROJECTS
Through the City's Capital Improvement Plan (CIP), major projects are planned for a
period of five years. The list below includes important projects of regional significance
listed within the CIP that do not have sufficient funding. The City is supportive of
legislation, policies, programs, or administrative actions that would assist in funding these
projects.
A. Portuguese Bend Landslide Remediation Project
Total Cost: $33 million
Status: Environmental analysis and documentation
Funds Committed: $2.3 million
The Portuguese Bend Landslide Complex (PBLC) is the largest active landslide in
the continental United States, encompassing two of the City's roughly 14 square
miles, directly impacting Palos Verdes Drive South, a major arterial street providing
transportation for the wider region, including neighboring cities of Palos Verdes
Estates and the City .of Los Angeles (San Pedro). Continued land movement poses
a catastrophic environmental threat to the California coastline due to an above-
ground sewer trunk line located adjacent to the Pacific Ocean at severe risk of
rupture. The project seeks to protect life, public health, safety, and the environment
through mitigation of land movement in the PBLC area.
1. HOUSING AND LOCAL LAND USE
A. Oppose legislation that usurps local control and erodes the City's authority to
control its own affairs.
Resolution No 2022-71
Attachment A
Page 1 of 4
E-4
Resolution No. 2022-71
Attachment A
2023 Legislative Platform
B. Support actions which further strengthen local democracy, authority, and control.
C. Support policies or programs that allow city and state collaboration on housing
production, alongside sustainable transportation, broadband deployment, and
other key infrastructure areas to support our communities. Support state grants,
legislation, or programs which encourage sustainable and affordable housing
development. Support policies or grants which encourage the development of
regional housing trusts.
D. Oppose legislation that penalizes a city or local government if the units identified
in the Regional Housing Needs Allocation (RHNA) are not constructed. Oppose
legislation that proposes to convert RHNA from a planning process to a production
standard.
E. Support legislation that preserves local authority to manage public rights-of-way
including the appearance and aesthetics of equipment placed within them.
F. Support legislation that preserves local authority to zone and plan for the
deployment of telecommunications infrastructure in public rights-of-way.
G. Oppose legislation that diminishes the authority of local jurisdictions to process
permits and enforce building codes or mandates the manner of enforcement.
H. Oppose legislation that seeks to limit or eliminate municipal authority to regulate
street or sidewalk vendors.
I. Support legislation and administrative actions that protect the ability for a local
jurisdiction to preserve open space in and around a local government's jurisdiction.
o Potential Coalition Partners: League of California Cities (Cal Cities), South Bay
Cities Council of Governments (SBCCOG), California Contract Cities Association
(CCCA), Southern California Association of Governments (SCAG), Palos Verdes
Peninsula Cities (PV Cities), Our Neighborhood Voices Initiative
2. PUBLIC SAFETY
A. Support legislation that enhances emergency preparedness, resiliency, and public
safety.
B. Support legislation that strengthens and enforces legal protections for all
individuals who are victims of crimes.
Resolution No 2022-71
Attachment A
Page 2 of 4
I
I
I
E-5
I
I
I
Resolution No. 2022-71
Attachment A
2023 Legislative Platform
C. Support measures that provide funding to local agencies for training, effective
disaster preparedness, sheriff's station infrastructure, fire department
infrastructure, and emergency planning.
D. Support legislation, regulations, or administrative actions ensuring all cities,
including contract cities, have equal access to public safety funding.
E. Support legislation which maintains law enforcement's ability to utilize automatic
license plate reading (ALPR) cameras as an investigatory tool.
F. Support legislation that provides tools to deter catalytic converter theft.
G. Support legislation that provides tools to deter organized and serial retail theft.
H. Support legislation to accelerate the development and implementation of
enhanced electrical utility infrastructure, including untlergrounding of utility
equipment that ensures reliable utility service and public safety and prevents the
use of public safety power shutoffs.
I. Support legislation that protects insurance coverage for properties within and
adjacent to very high fire zones and geologic hazard abatement districts.
o Potential Coalition Partners: Cal Cities, SBCCOG, CCCA, Los Angeles County
Sheriff's Department (LASO), PV Cities
3. COMMUNITY SERVICES
A. Support legislation and local, state, and federal programs that employ evidence-
based best practice strategies to reduce the number of people experiencing
homelessness by preventing homelessness for those at risk; promoting mental
health and substance abuse services; providing emergency and transitional
housing; expanding permanent affordable housing; and promoting self-
empowerment through counseling, job training, and other supportive services.
B. Support legislation and local, state, and federal programs which seek to provide
mental health services, including youth and young adult programs, community
resource centers, and education in accessing mental health care.
o Potential Coalition Partners: Cal Cities, SBCCOG, CCCA, Los Angeles Homeless
Services Authority, PV Cities, Palos Verdes Peninsula Unified School District
4. ENVIRONMENTAL QUALITY
Resolution No 2022-71
Attachment A
Page 3 of 4
E-6
Resolution No. 2022-71
Attachment A
2023 Legislative Platform
A. Support legislation, regulations, or administrative actions to remediate the harmful
effects of dichloro-diphenyl-trichloroethane (DDT) and other chemicals in coastal
waters, especially near Santa Catalina Island and the Palos Verdes Peninsula.
B. Support legislation that provides rebate programs, tax credits, and other financial
incentives that encourage property owners to invest in water efficient systems and
landscaping and energy efficiency and renewable energy systems.
o Potential Coalition Partners: Cal Cities, SBCCOG, PV Cities, coastal cities
5. GOVERNMENT TRANSPARENCY AND EFFECTIVENESS
A. Support legislation that grants full cost reimbursement to local agencies by the
state and federal government for all mandated programs.
B. Support legislation that ensures the retention of existing local revenue sources,
including the City's share of property taxes, sales and use taxes, transient
occupancy taxes, etc. Support legislation that will enhance revenue for cities.
C. Support legislation modernizing the methods by which a local agency may comply
with the Brown Act. Support legislation that allows for the continued use of
teleconferencing platforms to continue holding hybrid public meetings outside of a
declared state of emergency. Hybrid meetings increase access to public meetings
and encourage greater transparency.
D. Support legislation which allows for regional considerations within Los Angeles
County, particularly at the council of governments (COG) level, in relationship to
public health, homelessness, and sustainability, among other areas of regional
importance.
E. Oppose legislation that would prohibit or limit local governments' ability to contract
out for the provision of services.
o Potential Coalition Partners: Cal Cities, SBCCOG, CCCA, PV Cities
Resolution No. 2022-71
Attachment A
Page 4 of 4
I
I
I