AB939 - Housing development: density bonuses: affordability of for-sale units.

Enrolled September 01, 2026 Passed IN Senate August 26, 2026 Passed IN Assembly August 27, 2026 Amended IN Senate August 21, 2026 Amended IN Senate August 17, 2026 Amended IN Assembly January 15, 2026 Amended IN Assembly January 05, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 939 Introduced by Assembly Member Schultz (Coauthors: Assembly Members Solache and Wicks) February 19, 2025 An act to add Section 65915.4 to the Government Code, relating to housing. LEGISLATIVE COUNSEL'S DIGEST AB 939, Schultz. Housing development: density bonuses: affordability of for-sale units. Existing law, commonly referred to as the Density Bonus Law, requires a city or county to provide a developer that proposes a housing development, as defined, within the city or county with a density bonus, other incentives or concessions, and waivers or reductions of development standards, as specified, if the developer agrees to construct specified units and meets other requirements. Existing law, among other things, requires compliance with certain affordability requirements, including requiring that the applicant agree to ensure, and that the city, county, or city and county ensure, that a for-sale unit that qualified the applicant for the award of the density bonus is either (1) initially sold to and occupied by a person or family of very low, low, or moderate income, as specified, or (2) if the unit is not purchased by an income-qualified person or family within 180 days after the issuance of the certificate of occupancy, the unit is purchased by a qualified nonprofit housing corporation, as provided. This bill would additionally allow the applicant and the city, county, or city and county to comply with the above-described affordability requirements with respect to a for-sale unit by ensuring that the unit is purchased by a nonprofit housing corporation, as specified, for properties to be sold to and occupied by extremely low, very low, or lower income families who participate in a below market interest rate loan program, as described. By adding to the duties of local agencies to implement the Density Bonus Law, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. Section 65915.4 is added to the Government Code, to read: 65915.4. (a) (1) Notwithstanding subparagraph (A) of paragraph (2) of subdivision (c) of Section 65915, an applicant may alternatively agree to ensure, and the city, county, or city and county shall ensure, that a for-sale unit that qualified the applicant for the award of the density bonus is purchased by a nonprofit housing corporation organized pursuant to Section 501(c)(3) of the Internal Revenue Code that receives a welfare exemption under Section 214.15 of the Revenue and Taxation Code for properties to be sold to, and occupied by, extremely low, very low, or lower income families who participate in a below market interest rate loan program that incorporates within their contracts for initial purchase a repurchase option that requires a subsequent purchaser of the property that desires to resell or convey the property to offer the nonprofit corporation the right to repurchase the property prior to selling or conveying that property to any other purchaser pursuant to an equity sharing agreement and affordability restrictions on the sale and conveyance of the property that ensure that the property will be preserved for lower income housing for at least 45 years for owner-occupied housing units and will be sold or resold only to persons or families of extremely low, very low, or lower income, as defined in Section 50052.5 of the Health and Safety Code. (2) An equity sharing agreement under this section shall, at a minimum, include in the real property deed restriction a provision for homeowners to recover their investments in home maintenance or improvements, ensuring that the homeowner receives a minimum of 20 percent of the property value increase during their term of ownership. (b) The local government shall enforce an equity sharing agreement required pursuant to this section, unless it is in conflict with the requirements of another public funding source or law or may defer to the recapture provisions of the public funding source. The following shall apply to the equity sharing agreement: (1) Upon resale, the seller of the unit shall retain the value of any improvements, the downpayment, and the seller’s proportionate share of appreciation. (2) Except as provided in paragraph (5), the local government shall recapture any initial subsidy, as defined in paragraph (3), and its proportionate share of appreciation, as defined in paragraph (4), which amount shall be used within five years for any of the purposes described in subdivision (e) of Section 33334.2 of the Health and Safety Code that promote home ownership. (3) For purposes of this section, the local government’s initial subsidy shall be equal to the fair market value of the home at the time of initial sale minus the initial sale price to the moderate-income household, plus the amount of any downpayment assistance or mortgage assistance. If upon resale the market value is lower than the initial market value, then the value at the time of the resale shall be used as the initial market value. (4) For purposes of this section, the local government’s proportionate share of appreciation shall be equal to the ratio of the local government’s initial subsidy to the fair market value of the home at the time of initial sale. (5) If the unit is purchased or developed by a nonprofit housing corporation pursuant to this section, the local government may enter into a contract with the nonprofit housing corporation under which the qualified nonprofit housing corporation would recapture any initial subsidy and its proportionate share of appreciation if the nonprofit housing corporation is required to use 100 percent of the proceeds to promote home ownership for lower income households, as defined by Section 50079.5 of the Health and Safety Code within the jurisdiction of the local government. SEC. 2. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code.