Surplus Land Act Requirements Expand for Local Agencies

Agencies will have expanded roles under the Surplus Land Act, and will have to satisfy new housing element requirements under Assembly Bill 1486, signed by Gov. Gavin Newsom on Wednesday. The legislation will impact existing practices, add new reporting requirements and subject agencies to penalties for noncompliance. The legislation is intended to address California’s shortage of affordable housing. AB 1486 takes effect Jan. 1, with penalty provisions going into effect Jan. 1, 2021.

The new law expands the number of agencies subject to Surplus Land Act requirements. The definition of “local agency” was revised to include not only every city, county, city and county, and district, including school districts, but also specifically covers sewer, water, utility, and local and regional park districts, among others.

Revisions to existing law will include, but are not limited to:

Requiring legislative bodies to take formal action in a regular public meeting to declare land surplus. That declaration must be supported by written findings.
Prohibiting the negotiations between a disposing agency and interested entities from including deal terms that would reduce or disallow residential use of the site.
Requiring a disposing agency to send a notice of availability to housing sponsors that have notified the Department of Housing and Community Development of their interest. HCD is also required to maintain a listing of all notices of availability throughout the State on its website.
Requiring a disposing agency, prior to agreeing to the terms for the disposition of surplus land, to provide specified information about its disposition process to HCD. HCD then has 30 days to review the information and submit written findings to the disposing agency if HCD determines the proposed land disposal will violate requirements of this new law. Violations would be subject to monetary penalties or enforcement action. HCD is required to implement these provisions beginning Jan. 1, 2021.
Adding a requirement that the planning agency of a city or county include a listing of specified sites owned by the city or county that have been sold, leased or otherwise disposed of in the prior year. The list must include the entity to whom each site was transferred and the intended use for the site.

In light of AB 1486’s expanded requirements under the Surplus Land Act, as well as changes related to general plan housing elements, local agencies should carefully evaluate their existing policies and procedures relating to the disposal of surplus land, particularly as it relates to affordable housing, to ensure compliance with the new requirements.

With California’s housing shortage reaching crisis levels, the state Legislature and Gov. Gavin Newsom approved a slew of new bills this session aimed at helping the situation. Using a mix of carrots and sticks, these laws will change how cities and counties address housing shortages in their own communities. Watch for more Legal Alerts analyzing the new laws and how they impact your agency.

Also in BB&K’s Housing Series:

If you have any questions about AB 1486 and how it may impact your agency, please contact the authors of this Legal Alert listed to the right or your BB&K attorney.

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