Jurisdictions can acquire land for a variety of public purposes. Over time circumstances can change, and sometimes property is no longer needed for its intended or other public purpose and, therefore, can be determined to be surplus.
In 2019, State laws governing surplus lands were revised with an emphasis on the disposition of surplus properties for affordable housing. Jurisdictions are now required to update and annually report their inventory of publicly owned land that exceeds foreseeable needs. Further, a jurisdiction must offer the property for affordable housing and other public purposes such as parks, open space, and schools, and follow required processes before putting it on the market. A city or county may sell, lease, exchange, quitclaim, convey, or otherwise dispose of public property for less than fair market value if it is used for housing and/or mixed-use projects that meet specified affordability criteria. Examples of surplus property that can be used for affordable housing purposes can include:
- An older public facility that may have been replaced with a new facility at another location (e.g., an old fire station or corporation yard).
- A remnant portion of a property that has been developed for a public purpose.
- Former Redevelopment Agency land that does not have any specific disposal of land identified in its Long-Range Property Management Plan.
Opportunities. The Surplus Land Law could be used to increase land available for affordable housing, but jurisdictions should keep in mind the following considerations. State law provides that a jurisdiction must give priority to sponsors of housing projects that meet the minimum level of affordability, with the exception of land that is being used or will be used for park and recreation purposes. Jurisdictions should be aware that they can be liable for penalties if the disposition of surplus land is found to be in violation of the Surplus Land Law. The law also requires every jurisdiction to have a central inventory of surplus and excess land and must report this inventory to HCD in the housing element annual progress report.
In addition to complying with legal requirements, jurisdictions can offer to sell or lease surplus public land for less than fair market value. This can be a form of local financial assistance that could be leveraged to obtain other grant funds for affordable housing projects. Additionally, a local jurisdiction may approve land use, zoning, or entitlement decisions in connection with the disposition of surplus land so long as the jurisdiction does not preclude or reduce the residential development potential. As such, a jurisdiction could grant land use and zoning entitlements that would effectively increase the number of residential units allowed on the property to ensure that future development provides a certain number of affordable units. Jurisdictions, however, should recognize that the buyer (an affordable housing builder) could also request a State density bonus to provide additional units. A density bonus would also entitle the project to additional incentives and zoning concessions (see the discussion of density bonuses in the Zoning Code Revisions section of this report).
Relevant State Law
Surplus Land, Government Code Sections 54220 – 54234, includes the following 2019-2020 legislative session bills:
- Surplus land, Assembly Bill No. 1486 (AB 1486) (2019).
- Surplus public land: inventory, Assembly Bill No. 1255 (AB-1255) (2019).
County Property for Affordable Housing – Less than Fair Market Value, Government Code Section 25539.4.
City Property for Affordable Housing – Less than Fair Market Value, Government Code Section 37364.
Department of Housing and Community Development, Surplus Land Act Guidelines.
Department of Housing and Community Development, Public Lands for Affordable Housing Development Website.
Department of Housing and Community Development. Map of Notices Received by Senate and Assembly District.
City of Oakland. 1911 Telegraph Avenue Parcel.