Report 2021-114 Recommendations

To determine whether additional viable properties exist for affordable housing development, by September 2022 DGS should contact the related agencies for the remaining properties it identified as potentially viable but for which it has not yet gathered additional information and make a determination as to the viability of the parcels those agencies possess.

To identify additional state-owned land suitable for affordable housing development, DGS should, by September 2022, develop a set of criteria to consistently evaluate state parcels for suitability as affordable housing sites.

To identify additional state-owned land suitable for affordable housing development, DGS should, beginning by July 2023 and every four years thereafter, conduct and document a review of all state-owned property and identify parcels that are potentially viable for affordable housing based on the established criteria. Once this review is complete, follow up with all possessing agencies to finalize property availability. Finally, DGS should work with HCD to prioritize the identified properties for development.

To increase the number of properties offered for affordable housing annually and to conduct a periodic review of all state owned properties, DGS should seek additional staffing as appropriate to provide dedicated support to the program, either by transferring existing positions or seeking a budget change for additional positions.

To ensure that reporting to the SPI occurs as required, DGS should contact agencies that do not certify their SPI submissions by the deadline to determine the reasons for the delay and assist in correcting the deficiency. DGS should conduct this work annually, beginning with the reports due in December 2022.

To improve the State's ability to track public property, DGS should do the following:

- By September 2022, begin reconciling the SPI and county assessors' real property records and update the SPI as necessary.

- Ensure that county and state real property records remain in alignment by reviewing records and resolving any mismatches in the year before each periodic review occurs.

To better promote development of affordable housing on local surplus land, HCD should, by January 2023, update its guidelines on the local surplus property law to indicate how it will respond to instances where local agencies do not notify it of their intention to sell property before disposing of it, and where DGS was unable to issue a notice of violation before the sale. Further, HCD should seek legislative changes to the extent it believes they are needed to clarify its authority or the law.

To better promote development of affordable housing on local surplus land, HCD should, by January 2023, update its guidelines related to the local surplus property law to provide information on how it will assess and support good faith negotiations to mitigate the risk that local agencies may negotiate with developers in bad faith.

To better promote development of affordable housing on local surplus land, HCD should, by January 2023, increase outreach as planned to local agencies and interest groups to advise them of the notice requirements of the local surplus property law.

To ensure that the creation of affordable housing made available under the excess state property executive order continues, the Legislature should enact state laws to require that DGS and HCD carry out the duties prescribed in Executive Order N-06-19. Further, the Legislature should require the following:

- By September 2022, DGS should develop a set of criteria to consistently evaluate state parcels for suitability as affordable housing sites.

- By July 2023 and every four years thereafter, DGS should conduct a review of all state-owned property and identify parcels that are potentially viable for affordable housing based on the established criteria. Once this review is complete, follow up with all related agencies to determine property availability. After the completion of each review, DGS and HCD should prioritize the identified properties for development.

To facilitate a comprehensive review of state land for affordable housing uses, the Legislature should require DGS to issue, by July 2023 and every four years thereafter, a report on the results of its review of state property, including a determination as to which parcels are suitable for affordable housing and the results of DGS's contact with the possessing agencies.

To ensure that the SPI's reporting of state-owned property is accurate and supports the needs of the Legislature, the Legislature should require DGS to verify annually a sample of the responses agencies provide.

To maximize the amount of affordable housing that can be created using state land, the Legislature should amend state law to allow Caltrans to sell available excess property to DGS at less than current fair market value if that property is to be used for the development of affordable housing.