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Surplus Land Act

You’ve run the numbers, and it pencils, but the process is complicated. The purchase of surplus land is much more involved then other development sites. You know that some of the best land is in developed urban areas, and no one is making any more of it. You see that publicly-owned urban land presents a great opportunity, but need advice on how to navigate a process that is more complicated than usual. When the opportunity is there, and you know you need to get it right, Marcus | Underwood is there to guide you through it.

In 2019, California passed into law AB 1486 (Ting 2019) to connect developers interested in building affordable housing with surplus local public land that is both available and proper for housing development. Under AB 1486, local agencies (cities, counties, and special districts) must send notices about available surplus land to (a) California’s Housing and Community Development Department, (b) any local public entity within the jurisdiction where the surplus local land is located, and (c) developers who have notified HCD of their interest in developing affordable housing on surplus local land.

In April 2021, the State of California issued the Final Surplus Land Act Guidelines that provide updated definitions of “Surplus Land.”

Generally, “surplus land” means land owned in fee simple for which a local agency’s governing body takes formal action at a regular public meeting declaring land to be surplus and not necessary for a local agency’s use.

Under Government Code section 54230, each city and county must make a central inventory of all surplus land before December 31 of each year, and all land in excess of its foreseeable needs in urbanized areas as identified under Government Code section 50569.

Since the late 1960s, California has required that all local governments plan to meet the housing needs of everyone in the community, which is generally accomplished by adopting “housing plans” as part of a local government’s general plan.

In 2019, California’s Governor signed Executive Order N-06-19 to make excess state land available for development of affordable housing, AB 1486 strengthened enforcement of the Surplus Land Act, and AB 1255 required cities and counties to inventory and report on excess public lands in a statewide inventory. As a result, developers and builders can access the expanded Surplus Land Inventory here.

As the population of California continues to grow, and the number of necessary housing units grows correspondingly, the value of land can only grow with it. Often, surplus land is located near the center of cities and other developed areas, which only further increases its value. Those developers able to successfully access Surplus Land will have a benefit in the different options available to their businesses.

The Sacramento Real Estate law firm assists developers with the process of acquiring and negotiating the purchase of surplus land throughout the State of California. If you or your firm find that you are interested in acquiring Surplus Land, but need assistance to ensure that it is done properly, contact Marcus | Underwood to be with you every step of the way.

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