AB11 - The Social Housing Act.

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 11 Introduced by Assembly Member Lee December 02, 2024 An act to add Title 6.91 (commencing with Section 64900) to the Government Code, relating to housing. LEGISLATIVE COUNSEL'S DIGEST AB 11, as introduced, Lee. The Social Housing Act. 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 which 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, including the requirement that the authority and the board annually prepare and submit a business plan and related information to the Governor and Legislature, as specified. The bill would also require the board to provide for regular audits of the authority’s accounts and records, as specified. 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 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 have the right to 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 creating social housing, referred to as the rental model and the ownership model, and would specify the characteristics of both models. Under the rental model, the authority would extend a one-year lease to individuals who commit to a minimum of one year of residence and would require the authority to set rents, as specified. 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 would provide for the selection of residents by lottery, as specified, provided 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. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. The Legislature finds and declares all of the following: (a) The housing crisis has reached unprecedented and unacceptable proportions in the State of California, where more than two in five households spend greater than 30 percent of their income on housing and more than one in five households spend greater than 50 percent of their income on housing. (b) The United States Department of Housing and Urban Development defines cost-burdened families as those who pay more than 30 percent of their income for housing and may have difficulty affording necessities such as food, clothing, transportation, and medical care. Severe rent burden is defined as paying more than 50 percent of one’s income on rent. (c) Housing burden creates severe financial, physical, and emotional impacts on households. (d) The affordable housing crisis has imposed a significant toll on the California economy, as overpriced rents depress the California gross domestic product by approximately 2 percent and more than 600,000 people leave the state annually in search of lower rent. (e) Current efforts, while laudable, have proven insufficient in resolving the state’s affordable housing crisis, since 97 percent of cities and counties have been unable to meet the regional housing needs assessment targets for very low income, low-income, and moderate-income housing. (f) With such a great failure to meet the housing needs of California residents, the state has a duty to act and help localities fill the gap by financing publicly owned, affordable housing built sustainably, based on the widely successful Vienna and Singapore models and many other successful models of mixed-income rental and ownership housing. (g) It is the intent of the Legislature to establish the California Housing Authority, an independent public entity, to offer the necessary social housing to help eliminate the gaps between housing production and acquisition and regional housing needs assessment targets in all jurisdictions throughout the state. The authority shall be responsible for developing, owning, and maintaining social housing in California. Social housing is 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. (h) It is the intent of the Legislature in enacting this legislation to set an ambitious goal for creating social housing, through both new production and preservation of existing units, and to establish the means for achieving that goal. (i) It is further the intent of the Legislature for the California Housing Authority to ensure that no Californian pays more than 30 percent of their income on housing by the year 2050. SEC. 2. Title 6.91 (commencing with Section 64900) is added to the Government Code, to read: TITLE 6.91. THE SOCIAL HOUSING ACT PART 1. General Provisions CHAPTER 1. Title 64900. This title shall be known, and may be cited, as the Social Housing Act. CHAPTER 2. Definitions 64901. Unless the context demands otherwise, the definitions provided by this chapter shall apply to this title. 64902. “Above moderate income” means income for households that exceeds the moderate-income level, as described in Section 50093 of the Health and Safety Code. 64903. “Area median income” means area median income as published by the Department of Housing and Community Development pursuant to Section 50093 of the Health and Safety Code. 64904. “Authority” or “CHA” means the California Housing Authority, an independent state body established by this title for the purpose of developing social housing for all California residents. 64905. “Board” means the California Housing Authority Board. 64906. “Cost rent” means a system in which the rent of a dwelling is calculated on the cost of providing for and maintaining the dwelling, only allowing for limited or no proceeds. 64907. “Extremely low income” means income that does not exceed the qualifying limits for extremely low income households, as described in Section 50106 of the Health and Safety Code. 64908. “Limited equity arrangement” means an ownership model in which residents are extended a long-term lease of a unit, take out a subsidized leasehold mortgage on the property from the authority, make monthly mortgage payments, and commit to resell at a price determined by a formula designed to balance ongoing affordability and resident wealth generation. 64909. “Low income” means income for households that does not exceed the qualifying limits for lower income households, as described in Section 50079.5 of the Health and Safety Code. 64910. “Moderate income” means income for households of low or moderate income whose income exceeds the income limit for lower income households, as described in Section 50093 of the Health and Safety Code. 64911. “Multifamily property” means a collection of units featuring extremely low income, very low income, low-income, moderate-income, and above moderate-income units. A multifamily property may be a single building, multiple buildings on the same or adjacent parcels, or multiple buildings across several blocks within a single jurisdiction, or as may be defined by the authority. 64912. “Regional housing needs assessment” or “RHNA” means a representation of housing needs for all income levels in a jurisdiction pursuant to Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7. 64913. “Rent and mortgage cross-subsidization” means a system in which the below-cost rents and leasehold mortgages of certain units are balanced by above-cost payments on other units within the same multiunit property so as to ensure the property’s overall revenue meets development and operational costs. 64914. “Revenue neutrality” means a system in which all monetary expenditures that result from the development and operation of social housing owned by the authority are returned to the authority through rents, payments on leasehold mortgages, or other subsidies, to further the maintenance and development of more social housing units. 64915. “Social housing” means housing with the following characteristics: (a) (1) The housing units are owned by a government entity such as the California Housing Authority, a public entity, or a local housing authority. (2) For the purposes of this title, all social housing developed or authorized by the authority shall be owned by the authority. (b) If a housing unit is in a social housing development, the 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. (c) Residents of housing units are afforded, at a minimum, all protections granted to tenants with tenancies in private property under Section 1946.2 of the Civil Code, including protection against termination without just cause or for any discriminatory, retaliatory, or other arbitrary reason, and shall be afforded due process prior to being subject to eviction procedures, in addition to other protections provided by this title. (d) The housing units shall be protected for the duration of their useful life from being sold or transferred to a private for-profit entity to prevent the privatization of social housing. (e) Residents of the housing units have the right to participate directly and meaningfully in decisionmaking affecting the operation and management of their housing units. 64916. “Very low income” means income that does not exceed the qualifying limits for very low income households, as described in Section 50105 of the Health and Safety Code. 64917. “Underutilized parcel” means a parcel of property upon which is built a structure that contains fewer units than the maximum number of units permissible under local zoning regulations. PART 2. California Housing Authority CHAPTER 1. Creation, Powers, and Duties Article 1. Creation 64920. (a) The California Housing Authority is hereby created. The authority shall be governed by the California Housing Authority Board. (b) The core mission of the authority shall 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. Article 2. Powers 64921. The authority shall have the following general powers: (a) Sue and be sued. (b) Have a seal and alter the same at its pleasure. (c) Enter into contracts and execute other instruments necessary or convenient for the exercise of its powers to perform its mission. (d) Make rules with respect to its projects, operations, properties, and facilities. (e) Through its executive officer, appoint officers, agents, and employees; prescribe their duties and qualifications; set their employment descriptions and salaries subject to civil service rules; provide for participation in health care and retirement benefits available to similar state employees; and delegate to one or more of its agents or employees the powers and duties it deems proper. (f) Acquire, by grant or purchase, property or any interest therein and own, hold, clear, improve, rehabilitate, sell, assign, exchange, lease, or otherwise dispose of or encumber the same. (g) Enter into development partnerships with municipalities, joint powers of authority, and other public and private entities in order to further its social housing development goals. (h) Arrange for the planning, opening, grading, or closing of roads or other places, for the furnishing of facilities, or for the furnishing of property or services in connection with a project. (i) Prepare project plans for any project, and from time to time modify those plans. (j) Provide advisory, consultative, training, and educational services, technical assistance, and advice to any person, partnership, or corporation, either public or private, to carry out its mission, and to contract with consultants provision of professional and technical assistance and advice. (k) Accept funding in any form from any source. (l) Call upon the Attorney General for legal services as it may require. Article 3. Duties 64922. (a) The authority [Text truncated for display. Full text available on Congress.gov.]