SB21 - Single-room occupancy units: demolition and replacement: housing assistance programs: eligibility for homeless individuals and families.

Senate Bill No. 21 CHAPTER 511 An act to amend Section 66300.6 of, and to add Section 66300.6.5 to, the Government Code, and to add Section 50406.6 to the Health and Safety Code, relating to housing. [ Approved by Governor October 10, 2025. Filed with Secretary of State October 10, 2025. ] LEGISLATIVE COUNSEL'S DIGEST SB 21, Durazo. Single-room occupancy units: demolition and replacement: housing assistance programs: eligibility for homeless individuals and families. (1) Existing law, known as the Housing Crisis Act of 2019, among other things, prohibits an affected city or an affected county, as defined, from approving a housing development project that will require the demolition of occupied or vacant protected units, as defined, or that is located on a site where protected units were demolished in the previous 5 years unless specified requirements are met. Among these requirements, existing law requires that the project replace all existing protected units and protected units demolished on or after January 1, 2020, and, if the project is a housing development project, as defined, it will include at least as many residential dwelling units as the greatest number of residential dwelling units that existed on the project site within the last 5 years. Existing law requires that specified protected units replaced under these provisions be considered in determining whether the housing development project satisfies certain state and local requirements that the project provide a certain percentage of residential rental units affordable to, and occupied by, households with incomes that do not exceed the limits for moderate-income, lower income, very low income, or extremely low income households, as specified. This bill would additionally require that the above-described replaced protected units be considered in determining whether the housing development project satisfies requirements that the project provide a certain percentage of residential rental units affordable to, and occupied by, households with incomes that do not exceed the limits for acutely low income households, as specified. This bill, notwithstanding the above-described requirements, in the case of rehabilitation or replacement of an existing single-room occupancy building that meets prescribed criteria, would permit an affected city or an affected county to reduce the number of replacement units required if the project meets specified requirements, including, among others, that the reduction in replacement units is necessary to accommodate the conversion of single-room occupancy units, as provided, and that the converted units will be rental units with affordable rents, as specified. The bill would include specified findings declaring legislative intent with respect to these provisions. The bill would permit a borrower to conduct a market study to support the unit sizes proposed in the replacement housing plan, as provided. (2) Existing law establishes the Department of Housing and Community Development and requires it to administer various programs intended to promote the development of housing, including, among others, the Multifamily Housing Program, pursuant to which the department provides financial assistance in the form of deferred payment loans to pay for the eligible costs of development of specified types of housing projects. Existing law sets forth various general powers of the department in implementing these programs, including authorizing the department to enter into long-term contracts or agreements of up to 30 years for the purpose of servicing loans or grants or enforcing regulatory agreements or other security documents. This bill, for purposes of determining eligibility for an individual displaced from or returning to a single-room occupancy unit undergoing rehabilitation or a replacement unit that received funds from the department and is for a homeless individual or family, would (A) specify that an individual is deemed homeless if they meet certain criteria and (B) prohibit an individual or family meeting these criteria from being subject to a requirement that the unit be filled through a referral from a coordinated entry system, as defined, or a similar referral system. 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 declares its intent in adding Section 66300.6.5 of the Government Code to not preempt, preclude, or invalidate local laws, settlement agreements or judgments that provide greater protections for single-room occupancy tenants or require more replacement housing. Specifically, nothing in Section 66300.6.5 of the Government Code shall invalidate the validated judgment that incorporates the settlement in Wiggins, et al. v. Community Redevelopment Agency of Los Angeles, et al., Los Angeles Superior Court, Case No. BC 276472. SEC. 2. Section 66300.6 of the Government Code is amended to read: 66300.6. (a) Notwithstanding any other law and notwithstanding local density requirements, and except as provided in Section 66300.6.5, an affected city or an affected county shall not approve a housing development project that will require the demolition of one or more residential dwelling units unless the project will create at least as many residential dwelling units as will be demolished. (b) Notwithstanding any other law and notwithstanding local density requirements, and except as provided in Section 66300.6.5, an affected city or an affected county shall not approve a development project that will require the demolition of occupied or vacant protected units, or that is located on a site where protected units were demolished in the previous five years, unless all of the following requirements are satisfied: (1) (A) The project will replace all existing protected units and protected units demolished on or after January 1, 2020. (B) Any protected units replaced pursuant to this paragraph shall be considered in determining whether the housing development project satisfies the requirements of Section 65915 or a locally adopted requirement that requires, as a condition of the development of residential rental units, that the project provide a certain percentage of residential rental units affordable to, and occupied by, households with incomes that do not exceed the limits for moderate-income, lower income, very low income, extremely low income, or acutely low income households, as specified in Sections 50063.5, 50079.5, 50093, 50105, and 50106 of the Health and Safety Code, as applicable. (C) This paragraph shall not apply to a project that meets all of the following conditions: (i) The project is an industrial use. (ii) The project site is entirely within a zone that does not allow residential uses. (iii) The zoning applicable to the project site that does not allow residential uses was adopted prior to January 1, 2022. (iv) The protected units that are or were on the project site are or were nonconforming uses. (2) (A) If the project is a housing development project, it will include at least as many residential dwelling units as the greatest number of residential dwelling units that existed on the project site within the last five years. (B) If the project is not a housing development project, the proponent will ensure that any required replacement housing is developed prior to or concurrently with the development project. The required replacement housing may be located on a site other than the project site but shall be located within the same jurisdiction. The project proponent may contract with another entity to develop the required replacement housing. (3) (A) Any existing occupants will be allowed to occupy their units until six months before the start of construction activities. The project proponent shall provide existing occupants with written notice of the planned demolition, the date they must vacate, and their rights under this section. Notice shall be provided at least six months in advance of the date that existing occupants must vacate. (B) Any existing occupants that are required to leave their units shall be allowed to return at their prior rental rate if the demolition does not proceed and the property is returned to the rental market. (4) The developer agrees to provide both of the following to the existing occupants of any protected units that are lower income households: (A) Relocation benefits that are equivalent to the relocation benefits required to be paid by public entities pursuant to Chapter 16 (commencing with Section 7260) of Division 7 of Title 1 and any implementing regulations. (B) A right of first refusal for a comparable unit available in the new housing development, or in any required replacement units associated with a new development that is not a housing development, affordable to the household at an affordable rent or an affordable housing cost. This subparagraph shall not apply to any of the following: (i) A development project that consists of a single residential unit located on a site where a single protected unit is being demolished. (ii) (I) Units in a housing development in which 100 percent of the units, exclusive of a manager’s unit or units, are reserved for lower income households. (II) Notwithstanding subclause (I), this subparagraph shall apply to protected units occupied by an occupant who qualifies for residence in the new development and for whom providing a comparable unit would not be precluded due to unit size limitations or other requirements of one or more funding source of the housing development. (iii) A project that meets the requirements of subparagraph (C) of paragraph (1). (C) (i) For purposes of complying with subparagraph (B), if one or more single-family homes that qualify as protected units are being replaced in a development project that consists of two or more units, “comparable unit” means either of the following, as applicable: (I) A unit containing the same number of bedrooms if the single-family home contains three or fewer bedrooms. (II) A unit containing three bedrooms if the single-family home contains four or more bedrooms. (ii) For purposes of this subparagraph, a comparable unit is not required to have the same or similar square footage or the same number of total rooms. (D) This subparagraph does not apply to an occupant of a short-term rental that is rented for a period of fewer than 30 days. (5) This subdivision does not confer additional legal protections upon an unlawful occupant of a protected unit. (c) This section shall not supersede any objective provision of a locally adopted ordinance that places restrictions on the demolition of residential dwelling units or the subdivision of residential rental units that are more protective of lower income households, requires the provision of a greater number of units affordable to lower income households, or that requires greater relocation assistance to displaced households. (d) This section shall not apply to a housing development project for which an application was submitted after January 1, 2019, but prior to January 1, 2020, in a jurisdiction with a population of under 31,000 as of the 2020 United States Census that has a rent or price control ordinance. SEC. 3. Section 66300.6.5 is added to the Government Code, immediately following Section 66300.6, to read: 66300.6.5. (a) For the purposes of this section, the following definitions apply: (1) “Complete private bathroom” means a bathroom that consists of a toilet and a shower, with a vanity sink that may or may not be in the same room. (2) (A) “Kitchen” means a section of a dwelling that includes a stove, sink, and refrigerator. (B) The sink described in subparagraph (A) shall be separate from the bathroom. (3) “Single-room occupancy unit” means a dwelling unit that does not include a complete private bathroom and kitchen. (4) “Studio unit” means a dwelling unit that does not include a separate bedroom, but includes a complete private bathroom and a private kitchen. (b) Notwithstanding paragraphs (1) and (2) of subdivision (b) of Section 66300.6, in the case of rehabilitation or replacement of an existing single-room occupancy building where units are deed restricted at affordable rents to low-income households, do not have separate bedrooms, and do not include both a complete private bath and a kitchen, an affected city or an affected county, as applicable, may reduce the number of required replacement units if it finds, based on substantial evidence in the record, that all of the following conditions are met: (1) The reduction is necessary to accommodate the conversion of a single-room occupancy unit to a studio or larger unit, to accommodate the addition of facilities, including, but not limited to, private bathrooms, kitchens, or community rooms, to increase accessibility for persons with disabilities, or to address code compliance for matters related to health, welfare, life, and safety. (2) The conversion of the single-room occupancy unit will be completed within four years from the date of rehabilitation or demolition of the single-room occupancy unit. If the completion of improvements will take longer than four years, the project proponent may present to the jurisdiction an explanation for the delay and a good faith plan demonstrating how occupancy will be achieved at the earliest possible date. If the delay is due to circumstances outside the project proponent’s control, the jurisdiction may, at its discretion, and using objective criteria, grant a one-year extension for project completion. (3) The converted single-room occupancy unit will be a rental unit with affordable rents or lower than at the applicable affordable rent level of the replaced single-room occupancy unit, provided the affordable rent level would not be precluded due to limitations or other requirements of one or more funding source of the housing development. (4) The converted single-room occupancy unit will only be available to households with a household income at or below the income levels for lower income, very low income, extremely low income, or acutely low income households, as specified in Sections 50063.5, 50079.5, 50093, 50105, and 50106 of the Health and Safety Code, as applicable. (5) A converted unit will remain available at the applicable affordable rent level of the replaced single-room occupancy unit for the longest feasible amount of time, but not less than 55 years. A covenant of affordability shall be recorded with the county recorder prior to the issuance of the certificate of occupancy or completion of work as approved by the local agency. (6) (A) A displaced single-room occupancy unit occupant shall have a right of first refusal for admission to a replacement unit, provided the single-room occupancy unit occupant would not be precluded due to unit size limitations or other requirements of one or more funding source [Text truncated for display. Full text available on Congress.gov.]