AB1895 - Surplus Land Act: exemptions: land unsuitable for housing.

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 1895 Introduced by Assembly Member Hadwick February 12, 2026 An act to amend Section 54221 of the Government Code, relating to local government. LEGISLATIVE COUNSEL'S DIGEST AB 1895, as introduced, Hadwick. Surplus Land Act: exemptions: land unsuitable for housing. Existing law requires land to be declared either surplus land or exempt surplus land, as supported by written findings, before a local agency may take any action to dispose of it consistent with an agency’s policies or procedures. Existing law establishes procedures for the disposal of surplus land, including requiring certain information to be provided to the Department of Housing and Community Development. These procedures do not apply to the disposal of exempt surplus land. Existing law establishes various categories of exempt surplus land, including surplus land that is a former street, right-of-way, or easement, and is conveyed to an owner of an adjacent property. This bill would broaden the definition of exempt surplus land to include land that is unsuitable for housing development due to the presence of one or more specified characteristics, including land with slope instability that increases risk of mudslides, landslides, subsidence, liquefaction, and other seismic hazards. 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) Application of the Surplus Land Act (Article 8 (commencing with Section 54220) of Chapter 5 of Part 1 of Division 2 of Title 5 of the Government Code) to certain rural parcels that lack feasible housing potential creates unnecessary costs and delays without advancing the act’s purpose. (b) It is the intent of the Legislature to create a narrow, objective exemption for rural parcels that cannot reasonably support housing development in order to preserve the act’s purpose while enabling sensible public use dispositions of land clearly unsuited for housing. SEC. 2. Section 54221 of the Government Code is amended to read: 54221. As used in this article, the following definitions shall apply: (a) (1) “Local agency” means every city, whether organized under general law or by charter, county, city and county, district, including school, sewer, water, utility, and local and regional park districts of any kind or class, joint powers authority, successor agency to a former redevelopment agency, housing authority, or other political subdivision of this state and any instrumentality thereof that is empowered to acquire and hold real property. (2) The Legislature finds and declares that the term “district” as used in this article includes all districts within the state, including, but not limited to, all special districts, sewer, water, utility, and local and regional park districts, and any other political subdivision of this state that is a district, and therefore the changes in paragraph (1) made by the act adding this paragraph that specify that the provisions of this article apply to all districts, including school, sewer, water, utility, and local and regional park districts of any kind or class, are declaratory of, and not a change in, existing law. (b) (1) “Surplus land” means land owned in fee simple by any local agency for which the local agency’s governing body takes formal action in a regular public meeting declaring that the land is surplus and is not necessary for the agency’s use. Land shall be declared either “surplus land” or “exempt surplus land,” as supported by written findings, before a local agency may take any action to dispose of it consistent with an agency’s policies or procedures. A local agency, on an annual basis, may declare multiple parcels as “surplus land” or “exempt surplus land.” (2) “Surplus land” includes land held in the Community Redevelopment Property Trust Fund pursuant to Section 34191.4 of the Health and Safety Code and land that has been designated in the long-range property management plan approved by the Department of Finance pursuant to Section 34191.5 of the Health and Safety Code, either for sale or for future development, but does not include any specific disposal of land to an identified entity described in the plan. (3) Nothing in this article prevents a local agency from obtaining fair market value for the disposition of surplus land consistent with Section 54226. (4) Notwithstanding paragraph (1), a local agency is not required to make a declaration at a public meeting for land that is “exempt surplus land” pursuant to subparagraph (A), (B), (E), (K), (L), or (Q) of paragraph (1) of subdivision (f) if the local agency identifies the land in a notice that is published and available for public comment, including notice to the entities identified in subdivision (a) of Section 54222, at least 30 days before the exemption takes effect. (c) (1) Except as provided in paragraph (2), “agency’s use” shall include, but not be limited to, land that is being used, or is planned to be used pursuant to a written plan adopted by the local agency’s governing board, for agency work or operations, including, but not limited to, utility sites, property owned by a port that is used to support logistics uses, watershed property, land being used for conservation purposes, land for demonstration, exhibition, or educational purposes related to greenhouse gas emissions, sites for broadband equipment or wireless facilities, and buffer sites near sensitive governmental uses, including, but not limited to, waste disposal sites, and wastewater treatment plants. “Agency’s use” by a local agency that is a district shall also include land disposed for uses described in subparagraph (B) of paragraph (2). (2) (A) “Agency’s use” shall not include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development. Property disposed of for the sole purpose of investment or generation of revenue shall not be considered necessary for the agency’s use. (B) In the case of a local agency that is a district, excepting those whose primary mission or purpose is to supply the public with a transportation system, “agency’s use” may include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development or be for the sole purpose of investment or generation of revenue if the agency’s governing body takes action in a public meeting declaring that the use of the site will do one of the following: (i) Directly further the express purpose of agency work or operations. (ii) Be expressly authorized by a statute governing the local agency, provided the district complies with Section 54233.5 if applicable. (d) (1) “Dispose” means either of the following: (A) The sale of the surplus land. (B) The entering of a lease for surplus land, which is for a term longer than 15 years, inclusive of any extension or renewal options included in the terms of the initial lease, entered into on or after January 1, 2024. (2) “Dispose” shall not mean either of the following: (A) The entering of a lease for surplus land, which is for a term of 15 years or less, inclusive of any extension or renewal options included in the terms of the initial lease. (B) The entering of a lease for surplus land on which no development or demolition will occur, regardless of the term of the lease. (e) “Open-space purposes” means the use of land for public recreation, enjoyment of scenic beauty, or conservation or use of natural resources. (f) (1) Except as provided in paragraph (2), “exempt surplus land” means any of the following: (A) Surplus land that is transferred pursuant to Section 25539.4 or 37364. (B) Surplus land that is less than one-half acre in area and is not contiguous to land owned by a state or local agency that is used for open-space or low- and moderate-income housing purposes. (C) Surplus land that a local agency is exchanging for another property necessary for the agency’s use. “Property” may include easements necessary for the agency’s use. (D) Surplus land that a local agency is transferring to another local, state, or federal agency, or to a third-party intermediary for future dedication for the receiving agency’s use, or to a federally recognized California Indian tribe. If the surplus land is transferred to a third-party intermediary, the receiving agency’s use must be contained in a legally binding agreement at the time of transfer to the third-party intermediary. (E) Surplus land that is a former street, right-of-way, or easement, and is conveyed to an owner of an adjacent property. (F) (i) Surplus land that is to be developed for a housing development, which may have ancillary commercial ground floor uses, that restricts 100 percent of the residential units to persons and families of low or moderate income, with at least 75 percent of the residential units restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Section 50052.5 or 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability, and in no event shall the maximum affordable sales price or rent level be higher than 20 percent below the median market rents or sales prices for the neighborhood in which the site is located. (ii) The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation. (G) (i) Surplus land that is subject to a local agency’s open, competitive solicitation or that is put to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process, for a housing or a mixed-use development that is more than one acre and less than 10 acres in area, consisting of either a single parcel, or two or more adjacent or non-adjacent parcels combined, that includes not less than 300 residential units, and that restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability. (ii) The requirements of clause (i) shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation. (H) (i) Surplus land totaling 10 or more acres, consisting of either a single parcel, or two or more adjacent or non-adjacent parcels combined for disposition to one or more buyers pursuant to a plan or ordinance adopted by the legislative body of the local agency, or a state statute. That surplus land shall be subject to a local agency’s open, competitive solicitation process or put out to open, competitive bid by a local agency, provided that all entities identified in subdivision (a) of Section 54222 will be invited to participate in the process for a housing or mixed-use development. (ii) The aggregate development shall include the greater of the following: (I) Not less than 300 residential units. (II) A number of residential units equal to 10 times the number of acres of the surplus land or 10,000 residential units, whichever is less. (iii) At least 25 percent of the residential units shall be restricted to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent pursuant to Sections 50052.5 and 50053 of the Health and Safety Code, for a minimum of 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability. (iv) If nonresidential development is included in the development pursuant to this subparagraph, at least 25 percent of the total planned units affordable to lower income households shall be made available for lease or sale and permitted for use and occupancy before or at the same time with every 25 percent of nonresidential development made available for lease or sale and permitted for use and occupancy. (v) A violation of this subparagraph is subject to the penalties described in Section 54230.5. Those penalties are in addition to any remedy a court may order for violation of this subparagraph. A local agency shall only dispose of land pursuant to this subparagraph through a disposition and development agreement that includes an indemnification clause that provides that if an action occurs after disposition violates this subparagraph, the person or entity that acquired the property shall be liable for the penalties. (vi) The requirements of clauses (i) to (v), inclusive, shall be contained in a covenant or restriction recorded against the surplus land at the time of sale that shall run with the land and be enforceable against any owner who violates the covenant or restriction and each successor in interest who continues the violation. (I) A mixed-use development, which may include more than one publicly owned parcel, that meets all of the following conditions: (i) The development restricts at least 25 percent of the residential units to lower income households, as defined in Section 50079.5 of the Health and Safety Code, with an affordable sales price or an affordable rent, as defined in Sections 50052.5 and 50053 of the Health and Safety Code, for 55 years for rental housing, 45 years for ownership housing, and 50 years for rental or ownership housing located on tribal trust lands, unless a local ordinance or a federal, state, or local grant, tax credit, or other project financing requires a longer period of affordability. (ii) At least 50 percent of the square footage of the new construction associated with the development is designated for residential use. (iii) The development is not located in an urbani [Text truncated for display. Full text available on Congress.gov.]