20250SB__100395AMD INTRODUCED 2026-02-09 AMENDED_SENATE 2026-03-19 AMENDED_SENATE 2026-04-08 AMENDED_SENATE 2026-04-23 AMENDED_SENATE 2026-05-14 2025 SB AMD Introduced by Senator Grayson LEAD_AUTHOR SENATE Grayson

An act to amend

Section 65589.9 of, and to add

Article 5 (commencing with

Section 53398.89) to

Chapter 2.99 of Part of Division of Title of, the Government Code, relating to land use. land use Prohousing enhanced infrastructure financing districts. The Planning and Zoning law requires each planning agency to prepare and the legislative body of each county and city to adopt a comprehensive, long-term general plan for the physical development of the county or city that includes specified elements, including a housing element. The law requires the Department of Housing and Community Development to designate jurisdictions as prohousing, as specified.

The law requires that jurisdictions that have adopted a housing element that has been found by the department to be in substantial compliance with specified requirements and that have been designated as prohousing based on their adoption of prohousing local policies, as defined, be awarded additional points or preference in the scoring of program applications for certain programs.

Existing law authorizes the legislative body of a city or county to designate a proposed enhanced infrastructure financing district to finance public capital facilities or other specified projects of communitywide significance that provide significant benefits to the district or the surrounding community, including, among other things, the acquisition, construction, or rehabilitation of housing for persons of very low, low, and moderate income for rent or purchase, as specified.

Existing law authorizes an infrastructure financing plan to contain a provision for the division of taxes levied upon taxable property in the area included within the district, and authorizes the public financing authority of the district to issue bonds, as provided. This bill would authorize a city or county that is designated as prohousing to establish a prohousing enhanced infrastructure financing district if certain requirements are met, as specified. The bill would prescribe requirements applicable to those districts.

The bill would expand the definition of “prohousing local policies” for purposes of the above-described provisions to include the establishment of one of these districts, and would require that the jurisdiction that established, and projects located within, a district receive enhanced points or preference than the baseline provided to other prohousing jurisdictions.

This bill would establish the Infrastructure Partnership Financing Program, to be administered by the Department of Housing and Community Development, and authorize prohousing enhanced infrastructure financing districts to apply for funding from the program, as specified. Upon appropriation, the bill would require the department to provide loans or grants to applicants for qualifying housing developments, as defined and specified.

The bill would require the department to adopt emergency regulations to implement the program, as specified.</xhtml:p>"?> MAJORITY NO YES NO NO NO NO NO NO NO NO The people of the State of California do enact as follows:

SECTION

Article 5 (commencing with

Section 53398.89) is added to

Chapter 2.99 of Part of Division of Title of the Government Code , to read: 5. Prohousing Enhanced Infrastructure Financing Act 53398.89. This

article shall be known as the Prohousing Enhanced Infrastructure Financing Act. 53398.90. The Legislature finds and declares all of the following: (

a) California is facing a housing crisis that necessitates additional tools to help local jurisdictions establish new funding streams to address overall housing needs, with a particular focus on supporting affordable housing, associated infrastructure, and community revitalization in infill areas. (

b) The creation of a prohousing enhanced infrastructure financing district will authorize prohousing jurisdictions that take significant measures to accelerate housing production and affordability to capitalize on revenues from enhanced infrastructure financing districts. This will spur private investment and provide additional dollars to support development and revitalization of areas that include housing for all income levels with equitable access to opportunities, including, but not limited to, transportation mobility, goods, services, and economic opportunities. (

c) The benefits of a prohousing enhanced infrastructure financing district include the ability to fund more housing units, as well as needed infrastructure improvements to meet the current and future capacity demands and affirmatively further fair housing, as required by

Section 8899.50. 53398.91. For purposes of this article: (a) “Lower income households” has the same meaning as defined in

Section 50079.5. (b) “Persons and families of low or moderate income” has the same meaning as defined in

Section of the Health and Safety Code. (c) “Prohousing enhanced infrastructure financing district” means an enhanced infrastructure financing district that meets the requirements of

Section 53398.92. (d) “Prohousing jurisdiction” means a city or county that has been designated as prohousing pursuant to

Section 65589.9. (e) “Very low income households” has the same meaning as defined in

Section of the Health and Safety Code. 53398.92. A prohousing jurisdiction may establish a prohousing enhanced financing district by doing all of the following: (

a) Adopting a resolution pursuant to

Section 53398.59. (

b) Finding by resolution that it is in compliance with

Section 8899.50. (

c) Adopting an infrastructure financing plan that does both of the following:

(1) Requires a review to ensure compliance with the requirements of this

section every years.

(2) Requires either of the following: (

A) At least percent of any new housing units constructed or rehabilitated in the prohousing enhanced infrastructure financing district will be affordable to persons and families of low or moderate income and at least percent of new units will be affordable to very low income households. (

B) At least percent of the total project area will be affordable to lower income households within years of establishment of the prohousing enhanced infrastructure financing district. 53398.93. All of the following apply to a prohousing enhanced infrastructure financing district: (

a) The prohousing enhanced infrastructure financing district shall require, by recorded covenants or restrictions, that affordable housing units financed pursuant to this

article remain available at the applicable required affordable housing costs for the longest feasible time, but not less than years for rental units and years for owner-occupied units. (

b) This

chapter applies to a prohousing enhanced infrastructure financing district except that a prohousing enhanced infrastructure financing district shall not finance highways or interchanges. (c)<xhtml:span class="EnSpace"/>In addition to activities authorized pursuant to this chapter, a prohousing enhanced infrastructure financing district may apply for funding from the Infrastructure Partnership Financing Program (Chapter 20 (commencing with

Section 50899.15) of Part of Division of the Health and Safety Code).</xhtml:p>"?> 53398.94. The public financing authority shall include both of the following in the annual report required by subdivision (

j) of

Section 53398.66. (

a) The compliance review described in paragraph (1) of subdivision (

c) of

Section 53398.92 in the years when that review is conducted. (

b) The progress in complying with affordable housing obligations. 53398.95. A city or county shall not terminate a prohousing enhanced infrastructure financing district if the district has not complied with its affordable housing obligations. 53398.96. "?>A city or county that has established a prohousing enhanced infrastructure financing district that has its prohousing designation under

Section 65589.9 revoked shall make a diligent effort to remedy that status within days of revocation. (b)<xhtml:span class="EnSpace"/>If a city or county that has established a prohousing enhanced infrastructure financing district fails to remedy a revocation of its prohousing designation under

Section 65589.9 by days after revocation, the prohousing enhanced infrastructure financing district shall not apply for or receive any funding from the Infrastructure Partnership Financing Program (Chapter 20 (commencing with

Section 50899.15) of Part of Division of the Health and Safety Code) until the city or county is designated as prohousing under

Section 65589.9.</xhtml:p>"?>

SEC.

Section 65589.9 of the Government Code is amended to read: 65589.9. (

a) It is the intent of the Legislature to create incentives for jurisdictions that are compliant with housing element requirements and have enacted prohousing local policies. It is the intent of the Legislature that these incentives be in the form of additional points or other preference in the scoring of competitive housing and infrastructure programs. It is the intent of the Legislature that, in adopting regulations related to prohousing local policy criteria, the department shall create criteria that consider the needs of rural, suburban, and urban jurisdictions and how those criteria may differ in those areas. (b)

(1) For award cycles commenced after July 1, 2021, jurisdictions that have adopted a housing element that has been found by the department to be in substantial compliance with the requirements of this

article pursuant to

Section 65585, and that have been designated prohousing pursuant to subdivision (

c) based upon their adoption of prohousing local policies, shall be awarded additional points or preference in the scoring of program applications for the following programs: (

A) The Affordable Housing and Sustainable Communities Program established by

Part 1 (commencing with

Section 75200) of Division of the Public Resources Code. (

B) The Transformative Climate Communities Program established by

Part 4 (commencing with

Section 75240) of Division of the Public Resources Code. (

C) The qualifying infill area portion of the Infill Incentive Grant Program of established by

Section 53545.13 of the Health and Safety Code. (

D) The qualifying infill area and catalytic qualifying infill area portions of the Infill Infrastructure Grant Program of established by

Section of the Health and Safety Code. (

E) Additional bonus points may be awarded to other state programs when already allowable under state law. (2) (

A) Both of the following shall receive enhanced points or preference beyond the baseline provided pursuant to paragraph (1): (

i) A jurisdiction that has established a prohousing enhanced infrastructure financing district pursuant to

Article 5 (commencing with

Section 53398.89) of

Chapter 2.99 of Part of Division of Title 5. (ii) An eligible project located within a prohousing enhanced infrastructure financing district described in

Article 5 (commencing with

Section 53398.89) of

Chapter 2.99 of Part of Division of Title 5. (

B) Funding awarded to a jurisdiction that has established a prohousing enhanced infrastructure financing district pursuant to

Article 5 (commencing with

Section 53398.89) of

Chapter 2.99 of Part of Division of Title 5, or to an eligible project located within one of those districts may be used for infrastructure components that directly support, strengthen, or accelerate implementation of the district, including house-enabling infrastructure, but only to the extent consistent with the requirements of the program pursuant to which funding was awarded. (c)

(1) The department shall designate jurisdictions as prohousing pursuant to the permanent regulations adopted pursuant to subdivision (

d) and report these designations to the Office of Land Use and Climate Innovation, and any other applicable agency or department, annually and upon request. (2) (

A) Beginning with the seventh housing element cycle, the department shall, upon request by a small rural jurisdiction, to the extent feasible, evaluate materials from the small rural jurisdiction’s housing element submission, pursuant to

Section 65585, for evidence of prohousing local policies in order to minimize the need for jurisdictions to submit supplementary documentation. (

B) The department shall only conduct the evaluation described in subparagraph (

A) for small rural jurisdictions that have a compliant housing element. (3) (

A) The department shall not require small rural jurisdictions to renew their prohousing designations for at least four years. (

B) This paragraph shall not be construed to limit the authority of the department to revoke a jurisdiction’s prohousing designation.

(4) Any additional points or preferences awarded for a prohousing local policy described in subparagraphs (

L) to (N), inclusive, of paragraph (3) of subdivision (

f) shall not exceed the minimum value of points or preferences awarded for a prohousing local policy that directly relates to the planning, approval, or construction of housing. (d)

(1) By July 1, 2021, the department, in collaboration with stakeholders, shall adopt emergency regulations to implement this section.

(2) Notwithstanding

Section 11346.1, the emergency regulations adopted pursuant to this subdivision shall remain in effect until the date that permanent regulations to implement this

section become effective. (

e) On or before January 1, 2021, and annually thereafter, the department shall publish on its internet website the list of programs included under subdivision (b). (

f) For purposes of this section, the following

definitions shall apply: (1) “Adaptive reuse” shall have the same meaning as in

Section 53559.1 of the Health and Safety Code. (2) “Compliant housing element” means an adopted housing element that has been found to be in substantial compliance with the requirements of this

article by the department pursuant to

Section 65585. (3) “Prohousing local policies” means policies that facilitate the planning, approval, or construction of housing, or policies that keep people housed. These policies may include, but are not limited to, the following: (

A) Local financial incentives for housing, including, but not limited to, establishing a local housing trust fund. (

B) Reduced parking requirements for sites that are zoned for residential development. (

C) Adoption of zoning allowing for use by right for residential and mixed-use development. (

D) Zoning more sites for residential development or zoning sites at higher densities than is required to accommodate the minimum existing regional housing need allocation for the current housing element cycle. (

E) Adoption of accessory dwelling unit ordinances or other mechanisms that reduce barriers for property owners to create accessory dwelling units beyond the requirements outlined in

Article 2 (commencing with

Section 66314) of

Chapter 13, as determined by the department. (

F) Reduction of permit processing time. (

G) Creation of objective development standards. (

H) Reduction of development impact fees. (

I) Establishment of a Workforce Housing Opportunity Zone, as defined in

Section 65620, or a housing sustainability district, as defined in

Section 66200. (

J) Preservation of affordable housing units through the extension of existing project-based rental assistance covenants to avoid the displacement of affected tenants and a reduction in available affordable housing units. (

K) Facilitation of the conversion or redevelopment of commercial properties into housing, including the adoption of adaptive reuse ordinances or other mechanisms that reduce barriers for these conversions. (

L) A safe parking program that provides safe parking locations and options for individuals and families living in their vehicles and that does all of the following: (

i) Provides a bathroom facility and onsite security. (ii) Establishes an application or enrollment process for the program that may include a background check requirement. (iii) Establishes rules and regulations for the program. (

M) A safe camping program that provides safe camping locations and options for individuals and families experiencing unsheltered homelessness. (

N) Adoption of ordinances, processes, or other mechanisms that expedite, or remove barriers to, the approval of any of the following: (

i) Low-barrier navigation centers beyond the requirements in

Article 12 (commencing with

Section 65660). (ii) Emergency shelters beyond the requirements in

Section 65583. (iii) Supportive housing beyond the requirements in

Article 11 (commencing with

Section 65650). (

O) Establishment of a prohousing enhanced infrastructure financing district pursuant to

Article 5 (commencing with

Section 53398.89) of

Chapter 2.99 of Part of Division of Title 5. (4) “Small rural jurisdiction” means either of the following: (

A) A city with a population of fewer than 25,000 persons. (

B) A county with a population of fewer than 200,000 persons. <caml:Num>SEC. 3.</caml:Num><caml:ActionLine action="IS_ADDED" xlink:href="urn:caml:codes:HSC:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'31.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'20.'%5D)" xlink:label="fractionType: LAW_SPREAD||commencingWith: 50899.15" xlink:type="locator">Chapter 20 (commencing with

Section 50899.15) is added to Part of Division of the <caml:DocName>Health and Safety Code</caml:DocName>, to read:</caml:ActionLine><caml:Fragment><caml:LawHeading id="id_D6C6FD10-2B7C-4156-9D10-E0F29273D03E" type="CHAPTER"><caml:Num>20.</caml:Num><caml:LawHeadingVersion id="id_12CB5BC2-183E-4839-9758-56683AD196FA"><caml:LawHeadingText>Infrastructure Partnership Financing Program</caml:LawHeadingText></caml:LawHeadingVersion><caml:LawSection id="id_3CD99926-3DB7-4193-9616-52AF1F400056"><caml:Num>50899.15.</caml:Num><caml:LawSectionVersion id="id_E88850D0-85C4-4C1B-815F-5525D9EFA9F0"><caml:Content><xhtml:p>For the purposes of this chapter:</xhtml:p><xhtml:p>(a)<xhtml:span class="EnSpace"/>“Applicant” means a prohousing enhanced infrastructure financing district established pursuant to

Article 5 (commencing with

Section 53398.89) of

Chapter 2.99 of Part of Division of Title of the Government Code.</xhtml:p><xhtml:p>(b)<xhtml:span class="EnSpace"/>“Program” means the Infrastructure Partnership Financing Program established in

Section 50899.16.</xhtml:p><xhtml:p>(c)<xhtml:span class="EnSpace"/>“Qualified housing development project” means a housing development project, as defined in

Section 65589.5 of the Government Code, that meets the following requirements:</xhtml:p><xhtml:p>(1)<xhtml:span class="EnSpace"/>The parcel or parcels on which the project is located is an infill site, as defined in

Section 21061.3 of the Public Resources Code.</xhtml:p><xhtml:p>(2)<xhtml:span class="EnSpace"/>A portion of the housing development project is subject to a recorded affordability restriction pursuant to

Section 53398.93 of the Government Code.</xhtml:p></caml:Content></caml:LawSectionVersion></caml:LawSection><caml:LawSection id="id_D7F44A90-456C-4C51-8E90-5C571EA1D9D7"><caml:Num>50899.16.</caml:Num><caml:LawSectionVersion id="id_0E2622FE-2AFF-4F97-A5F6-4EFF6D7E4FE9"><caml:Content><xhtml:p>(a)<xhtml:span class="EnSpace"/>There is hereby established the Infrastructure Partnership Financing Program for the purpose of financing infrastructure projects needed to assist the development of qualified housing development projects.</xhtml:p><xhtml:p>(b)<xhtml:span class="EnSpace"/>The department shall administer the program.</xhtml:p></caml:Content></caml:LawSectionVersion></caml:LawSection><caml:LawSection id="id_0F5A767F-4564-483F-A122-F89AB0BEB956"><caml:Num>50899.17.</caml:Num><caml:LawSectionVersion id="id_B9CB92B7-741E-45D1-AA85-4F67D90F1361"><caml:Content><xhtml:p>(a)<xhtml:span class="EnSpace"/>Upon appropriation by the Legislature for purposes of the program, the department shall provide loans or grants to applicants for qualifying housing development projects.</xhtml:p><xhtml:p>(b)<xhtml:span class="EnSpace"/>The department shall prioritize applications based on all of the following factors:</xhtml:p><xhtml:p>(1)<xhtml:span class="EnSpace"/>An application that proposes more housing units to be produced shall be given higher priority.</xhtml:p><xhtml:p>(2)<xhtml:span class="EnSpace"/>An application that has more housing units subject to a recorded affordability restriction shall be given higher priority.</xhtml:p><xhtml:p>(3)<xhtml:span class="EnSpace"/>An application that shows relative benefits to the public are higher in the analysis provided pursuant to subdivision (

f) of

Section 50899.18 shall be given higher priority.</xhtml:p></caml:Content></caml:LawSectionVersion></caml:LawSection><caml:LawSection id="id_566C2E51-2F67-4E0E-9F51-81CA8AF51184"><caml:Num>50899.18.</caml:Num><caml:LawSectionVersion id="id_B529F743-09D0-4B37-94C3-08C4306AB730"><caml:Content><xhtml:p>To be eligible for the funding described in 50899.17, an applicant shall submit an application to the department with all of the following:</xhtml:p><xhtml:p>(a)<xhtml:span class="EnSpace"/>The name of the development proponent that is seeking funding.</xhtml:p><xhtml:p>(b)<xhtml:span class="EnSpace"/>A description of the qualified housing development project, including, but not limited to, the total number of housing units and the total number of housing units subject to a recorded affordability restriction.</xhtml:p><xhtml:p>(c)<xhtml:span class="EnSpace"/>The amount and type of funding requested.</xhtml:p><xhtml:p>(d)<xhtml:span class="EnSpace"/>A description of the local resources that will be used to finance infrastructure associated with the qualified housing development project.</xhtml:p><xhtml:p>(e)<xhtml:span class="EnSpace"/>A list of any infrastructure project needed to assist the development of the qualified housing development project and an estimated cost and completion date for each infrastructure project.</xhtml:p><xhtml:p>(f)<xhtml:span class="EnSpace"/>An analysis showing that the benefits to the public in terms of the number of units subject to a recorded affordability restriction or more affordable rents is likely to exceed the benefit to the development proponent in terms of reduced production costs.</xhtml:p></caml:Content></caml:LawSectionVersion></caml:LawSection><caml:LawSection id="id_D567C428-42EB-4D20-B674-6C281CC4F106"><caml:Num>50899.19.</caml:Num><caml:LawSectionVersion id="id_582AECBA-EB11-4CC3-A535-ED7D9ADB0C35"><caml:Content><xhtml:p>(a)<xhtml:span class="EnSpace"/>The department, in collaboration with stakeholders, shall adopt emergency regulations to implement this chapter.</xhtml:p><xhtml:p>(b)<xhtml:span class="EnSpace"/>Notwithstanding

Section 11346.1 of the Government Code, emergency regulations adopted pursuant to this

section shall remain in effect until the date that nonemergency regulations to implement this

chapter become effective.</xhtml:p></caml:Content></caml:LawSectionVersion></caml:LawSection></caml:LawHeading></caml:Fragment></caml:BillSection>"?>