(a)  Notwithstanding Section 14670, the director, with the consent of the state agency concerned, may let for any period of time any real property or interest in real property that belongs to the state, when the director deems the letting serves a beneficial public purpose limited to the development of housing, including permanent supportive or traditional housing and emergency shelters or park and recreation facilities.

(b) Notwithstanding subdivision (a), the director may permit commercial development on property leased pursuant to this section for affordable housing purposes if the Director of Housing and Community Development deems the commercial development necessary for the successful delivery of housing to lower income households and deems the commercial development to provide community benefits, including community-serving retail and amenities.

(c) The leases under this section shall be let in accordance with procedures prescribed by the director that facilitate development of housing or park and recreation facilities when such use is compatible with current use and foreseeable future use of the property. All proposed leases shall be reviewed by the State Public Works Board.

(d) (1) In all cases, at least 20 percent of the housing units developed on state property leased pursuant to this section shall be available for the term of the lease to, and occupied by, lower income households, of which at least 10 percent shall be available to, and occupied by, very low income households.

(2) For each lease, the minimum percentage in each income category shall be prescribed by the Director of Housing and Community Development, taking into account economic feasibility and housing need in the jurisdiction or region where the property is located. The Director of Housing and Community Development may prescribe alternative minimum percentages in each income category in instances when the alternative income mix results in a greater net gain of units affordable to lower income households and does not result in less than 20 percent of all units being affordable to lower income households and less than 10 percent of all units being affordable to very low income households.

(e) Upon a written formal recommendation from the Director of Housing and Community Development that it is in the best interest of the state and reasonably necessary to facilitate the development of affordable housing, the director may permit phased development, subject to those terms, conditions, restrictions, and financial incentives and disincentives as the director determines are necessary to ensure that commitments for subsequent phases will be fulfilled.

(f) (1) Upon a written formal recommendation from the Director of Housing and Community Development that it is in the best interest of the state and reasonably necessary to facilitate the development of affordable housing, the director may sell property or portions of a property that have been leased for housing pursuant to this section to a lessee for the purposes of affordable homeownership consistent with the affordability provisions of this section.

(2) Not less than 30 days before entering into any lease when selling portions of state property is contemplated, the director shall notify the Chairperson of the Joint Legislative Budget Committee, or the chairperson’s designee, in writing of the director’s intention to enter into the agreement. The notification shall include a written finding of the director’s determination that the proposed sale is in the best interest of the state and is reasonably necessary to facilitate development of housing affordable to lower income households.

(g)  In letting leases pursuant to this section, the director shall give preference to projects that provide for either the greatest number of units affordable to lower and very low income households, or that provide for more units affordable to lower and very low income households than required by the Director of Housing and Community Development pursuant to subdivision (d).

(h)  The director may enter into leases pursuant to this section at less than market value, provided that the cost of administering the lease is recovered. The Department of Housing and Community Development shall recommend to the director a lease amount that will enable the provision of housing for lower income households.

(i)  All leases executed pursuant to this section shall contain a recital that the director has found the letting serves the required beneficial public purpose and complies with all provisions of this section, which recital shall be conclusive in favor of lessees from the state and their mortgagees.

(j) For purposes of this section:

(1) “Director” means the Director of General Services.

(2) “Lower income households” means the same as defined in § 50079.5 of the Health and Safety Code.

(3) “Very low income households” means the same as defined in § 50105 of the Health and Safety Code.

(Amended by Stats. 2021, Ch. 111, Sec. 2. (AB 140) Effective July 19, 2021.)