Public land for public good A Brief Overview of California’s Surplus Land Act Melissa A. Morris, Law Foundation of Silicon Valley, March 24, 2016

History of the Surplus Land Act First enacted in 1973 Amended most recently in 2014 by AB 2135, the “Ting Bill” (changes effective January 1, 2015)

Why Surplus Land Matters You can’t build housing without land. High land costs, complicated financing, and other factors make it incredibly difficult for affordable projects to compete with market- rate developers for developable parcels. Using surplus public lands for affordable housing is critical to increasing the supply of homes for low- and moderate-income households.

Who is subject to the Surplus Land Act? “Local agencies” Cities (including charter cities) Counties Cities/Counties (i.e., San Francisco) Any District Empowered to Acquire and Hold Real Property (including school districts and transit districts)

What is Surplus Land? “Any land owned by any local agency that is determined to be no longer necessary for the agency’s use, except property being held by the agency for purposes of exchange.” Surplus Land Act applies to sale or lease of property. Very narrow exception for “exempt surplus land” transferred pursuant to Gov. Code § 25539.4 (for affordable housing) < 5000 sq. ft. < min. lot size for residential building or < 5000 sq. ft., whichever is less No record access + < 10,000 sq. ft. + not contiguous to land owned by state/local agency that is being used for park, recreation, open space, or affordable housing + not in an enterprise zone* BUT there are more exceptions to the exceptions (e.g., land in the Coastal Zone)!

Requirements of the Surplus Land Act Process Requirements Notification Negotiation Inclusionary Requirement (if land is sold to be developed for other purposes, e.g., market-rate residential)

Notification Before disposal of the property, the local agency must send a written offer to sell or lease to: Local public entity in whose land the jurisdiction is located. “Housing sponsors” who have made a written request for an offer. (E.g., affordable housing developers). Parks/recreation departments of city and county where land is located. Regional park authority in whose jurisdiction the land is located. State Resources Agency/Natural Resources Agency. School district in whose jurisdiction the land is located, for school facilities or use. Additional requirements for land located in enterprise zones* and infill opportunity zones.

Negotiation Give interested entities 60 days to respond. Enter into good faith negotiations for the sale or lease for at least 90 days. Priority for affordable housing (≥25% LI). If multiple affordable housing offers, preference for more units + deeper affordability. If land is being used as park/recreation or is designated in the General Plan for park/recreation, then priority for park/recreation.

Affordability Requirements ≥ 25% LI (affordable to households at 80% of AMI) 55-year deed restriction Equity share (for for-sale)

Inclusionary Requirement If land is not sold or leased to one of the preferred entities for affordable housing, open space, or school purposes, and if ≥10 residential units developed on the site, then ≥ 15% must be affordable to LI. 55-year deed restriction. Equity share for for-sale.