On August 13th, the Senate Committee on Governmental Organization met to discuss the State’s housing crisis and identify ways in which the state is seeking to address it. Under the Governor’s Executive Order N-06-19 (EO), signed in January of this year, Governor Newsom ordered the Department of General Services (DGS) and the Department of Housing and Community Development (HCD) to identify and prioritize excess state-owned property and aggressively pursue sustainable, innovative, cost-effective housing projects. This hearing served as an opportunity for the legislature and the public to better understand what steps have been taken and what the path is moving forward to identify and utilize excess property for affordable housing.
Senator Dodd’s opening remarks addressed the severity of the current crisis and welcomed the panelists to the hearing.
Update on Executive Order N-06-19: Jason Kenney – Deputy Director of Real Estate Services Division, Department of General Services and Sasha Wisotsky – Data and Research Manager Housing Policy at Department of Housing and Community Development spoke first. They explained the process for identifying potential parcels, the average number of parcels identified yearly, and the actions taken since the EO was signed.
When property no longer serves the needs of a state department or agency, the state looks at alternative reuses for other state agencies or departments. It is uncommon to transfer to a different state agency and generally, most land usually goes on to be considered surplus. In a really good year, the state may have 4 properties declared as surplus, it’s fairly uncommon to receive that designation. In response to the EO, the State went on mission to search for excess property and conducted a first-of-its kind inventory – the Department of General Services (DGS) utilized county assessor data to identify state-owned parcels. DGS visually reviewed each parcel for potential viability of constructing housing. Parcels that were unsuitable for development (ex: beaches, lakes, freeways, forest/mountain sites, etc.) have been excluded from consideration. An initial inventory of 44,370 state-owned parcels was identified and 1,330 parcels were flagged as potentially viable and will undergo additional screening. While additional parcels may be reviewed and added to this list if DGS discovers state owned parcels that are not recorded by local assessors, this listing will be further analyzed and refined through real estate due diligence and consultation with state departments.
Questions from members of the committee varied – Senator Nielsen asked whether the lots were being considered specifically for homelessness or just in general, to which panelists replied that they were open to all options and considering housing overall. In part, due to the nature of the high cost of building and various factors in different communities. Additional considerations include the resources available within the community to serve the needs of the tenants and homeowners. Senator Allen focused his questions on the environmental impact and the relationship of the EO with the local governments. Panelists responded to note that all development would have to go through standard environmental reviews and additional points would be given to those that made sustainability a priority. They also noted that while the EO does require the inventory to be taken, development would be done with local cooperation. Another important point of interest, particularly for Habitat, is that the state intends to partner with developers to provide identified parcels at low cost, so the state would be bringing in long term low-cost, deed-restricted land on which developers would then build, which would allow for higher affordability levels.
Role of Local Governments and Affordable Housing Organizations: John Dunbar, Mayor town of Yountville and Vice President, League of Cities expressed his support of SB 5 and believed it would provide needed housing for locals. He noted his concern regarding the agricultural preserve in their community and and did not want to see that converted into housing. On the flip side, he also stated the need to increase vocational opportunities because so many workers, particularly at the veteran’s home, are leaving as they can’t afford to live where they work
David Zisser – Asst Director, Housing California expressed his belief that the EO is an out of the box, creative option to promote new housing. Pedro Galvao – Senior Policy Manager, Nonprofit Housing Association of California stated, in response to a comment by Mayor Dunbar. that surplus lands would not consider something like agricultural preserves because it continues to be used for its intended purpose so there should be no concern in that regard. He also noted, that the state prioritizes housing for certain professions – i.e. they are able to target particular types of people, such as veterans, farmworkers, teachers.
In addition to the comments made above and concurrent to the screening process (noted), DGS will conduct further real estate due diligence on potential state owned parcels to validate state ownership, identify encumbrances that would inhibit development, and discuss future uses with state departments currently using the property. Those parcels that remain viable will be publicly posted with an overlay showing where affordable housing development is most feasible and impactful. This map is expected to be posted during Summer 2019. Beginning in September 2019, DGS, in consultation with HCD, shall issue Requests for Proposals and begin the development process, with a September 30th deadline.