Summary:

California’s housing affordability crisis has long been a barrier to recruiting and retaining educators.  Rising rents and home prices have forced many teachers and classified staff to commute long distances or leave the profession entirely.  In response, Assembly Bill 1021 (AB 1021)—authored by Assemblymembers Buffy Wicks and Al Muratsuchi—offers a bold solution: repurposing underutilized school district land for affordable workforce housing.

Background and Legislative Intent

AB-1021 builds on the framework established by AB-2295 (2022), which first allowed housing development on property owned by local educational agencies (LEAs).  The new bill expands these provisions, aiming to:

• Streamline approvals for housing projects on school-owned land.
• Reduce regulatory barriers, including specific California Environmental Quality Act (CEQA) requirements.
• Provide fiscal incentives, such as property tax exemptions for qualifying rental housing.

Key Provisions of AB-1021

·       Eligible Properties and Projects

o   Applies to real property owned by LEAs, including school districts and county offices of education.

o   Requires at least 10 housing units per development.

o   Extends authorization through 1 January 2036.

·       Affordability and Tenant Priority

of 100% rental housing.

o   Priority for LEA employees, then other public employees, then the general public.

o   At least 30% deed-restricted for lower-income households for 55 years.

·       Zoning and Density Bonuses

o   Housing is deemed an allowable use under the Planning and Zoning Law.

o   Eligible for state density bonuses.

o   Height limits: 35 feet in single-family zones; up to 65 feet near major transit stops.

·       Environmental and Procedural Streamlining

o   Exempt from certain CEQA reviews.

o   Removes advisory committee requirement before leasing/selling excess property.

·       Fiscal Incentives

o   Property tax exemptions for qualifying rental housing.

Implementation Guide for School Districts

To successfully leverage AB 1021, districts should follow these steps:

Step 1: Inventory and Feasibility Analysis

• Identify underutilized land, such as parking lots, surplus property, and administrative sites.
• Conduct site feasibility studies:
• Zoning compatibility.
• Infrastructure availability (utilities, transit access).
• Environmental constraints.

Step 2: Engage Stakeholders Early

• Internal stakeholders include Board members, staff unions, and facilities teams.
• Community outreach: Hold informational meetings to address concerns about density and traffic.
• Local government coordination: Work with planning departments to confirm a streamlined approval process.

Step 3: Secure Financing

• Explore public-private partnerships with developers experienced in affordable housing.
• Apply for state and federal grants, such as:
• California Housing Finance Agency programs.
• Low-Income Housing Tax Credits (LIHTC).
• Consider lease-leaseback arrangements to maintain ownership while enabling development.

Step 4: Compliance and Legal Framework

• Draft long-term affordability covenants (55-year requirement).
• Ensure priority leasing policies for LEA employees.
• Confirm property tax exemption eligibility.

Step 5: Project Delivery

• Use design-build contracts for efficiency.
• Incorporate sustainable design to reduce operating costs.
• Plan for ongoing property management—either in-house or through a third-party operator.

                    Benefits for Districts

• Recruitment and retention: Affordable housing near schools reduces turnover.
• Revenue opportunities: Ground leases can generate income while preserving land ownership.
• Community goodwill: Demonstrates proactive solutions to housing challenges.

AB 1021 vs. AB 2295: What Changed?

·        AB 2295 (2022) laid the foundation for housing on school-owned land.  AB 1021 builds on it with significant enhancements: