SB1091 - Community Anti-Displacement and Preservation Program.

Enrolled August 30, 2026 Passed IN Senate August 27, 2026 Passed IN Assembly August 25, 2026 Amended IN Assembly August 19, 2026 Amended IN Assembly August 13, 2026 Amended IN Assembly June 03, 2026 Amended IN Senate April 06, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Senate Bill No. 1091 Introduced by Senator Caballero (Principal coauthor: Assembly Member Quirk-Silva) (Coauthors: Senators Allen, Arreguín, Cabaldon, Pérez, and Wiener) (Coauthors: Assembly Members Haney and Caloza) February 13, 2026 An act to add Chapter 4.5 (commencing with Section 50580) to Part 2 of Division 31 of the Health and Safety Code, relating to housing. LEGISLATIVE COUNSEL'S DIGEST SB 1091, Caballero. Community Anti-Displacement and Preservation Program. Existing law establishes the Department of Housing and Community Development in the Business, Consumer Services, and Housing Agency. Existing law, the Governor’s Reorganization Plan No. 1 of 2025 (GRP), which became effective on July 5, 2025, transfers the Department of Housing and Community Development to the California Housing and Homelessness Agency, which the GRP also establishes, as of July 1, 2026. Existing law makes the department responsible for administering various housing programs throughout the state, including, among others, the Multifamily Housing Program and the California Emergency Solutions Grants Program. Existing law, upon appropriation, authorizes the department to make either or both loans and grants to rehabilitate, capitalize operating subsidy reserves for, and extend the long-term affordability of department-funded housing projects that have an affordability restriction that has expired, that have an affordability restriction with a remaining term of less than 10 years, or are otherwise at risk for conversion, as provided. This bill would establish the Community Anti-Displacement and Preservation Program for purposes of funding the acquisition and rehabilitation of unrestricted housing and attaching long-term affordability restrictions on the housing, while safeguarding against the displacement of current residents. The bill would require the department to issue a request for qualification to select a private sector entity or consortium to manage the program for a period of 5 years. The bill would require the department to grant prescribed funds to the program manager to implement the program and the program manager to make loans or grants to eligible borrowers, as defined, based on underwriting guidelines approved by the department. The bill would authorize the department to issue program funds to regional housing entities, as defined, upon request through a solicitation or other process determined by the department, for purposes of allowing the regional housing entity to use the moneys to issue loans or grants to eligible borrowers within its jurisdiction in accordance with the bill’s provisions and department regulations. The bill would require the department to adopt regulations for the operation of the program on or before July 1, 2028, and would exempt the adoption of regulations by the department for these purposes from the Administrative Procedure Act. This bill would apply specified tenant protections to projects funded by the program and would require the department to develop technical assistance and capacity building for the development and ongoing operation of projects funded pursuant to the program, as specified. This bill would establish the Community Anti-Displacement and Preservation Fund in the State Treasury. The bill would make moneys available to the department for purposes of the program, upon appropriation by the Legislature. The bill would set forth requirements for the use of moneys in the fund. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. Chapter 4.5 (commencing with Section 50580) is added to Part 2 of Division 31 of the Health and Safety Code, to read: CHAPTER 4.5. Community Anti-Displacement and Preservation Program 50580. (a) The Community Anti-Displacement and Preservation Program (CAPP) is hereby established for purposes of funding the acquisition and rehabilitation of unrestricted housing and attaching long-term affordability restrictions on the housing, while safeguarding against the displacement of current residents. (b) For purposes of this chapter, the following definitions apply: (1) “Administering entity” means the program manager or a regional housing entity administering funds allocated by the department. (2) “Capitalized operating subsidy reserve” means funds that are set aside before a property is acquired pursuant to this chapter to cover the property’s operating expenses over time. (3) “Department” means the Department of Housing and Community Development. (4) “Eligible borrower” means an entity that is at least one of the following: (A) A nonprofit corporation that has a principal place of business in the state and whose primary mission includes the development or ownership of housing that is affordable to low-income households and that has demonstrated experience in acquiring, rehabilitating, and operating multifamily housing for the benefit of low-income households. (B) A community land trust, as defined in clause (ii) of subparagraph (C) of paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code. (C) A limited partnership in which the managing general partner is a nonprofit corporation described in subparagraph (A) or a community land trust described in subparagraph (B) and that has a principal place of business in the state. (D) A limited liability company in which the managing member is a nonprofit corporation described in subparagraph (A) or a community land trust described in subparagraph (B) and that has a principal place of business in the state. (E) A limited-equity housing cooperative as defined in Section 817 of the Civil Code. (F) A local public entity. (5) “Local public entity” means a public entity in the state, including a city, county, city and county, public housing authority, regional housing finance authority, and successor agency to a former redevelopment agency. (6) “Low-income households” has the same meaning as “lower income households” in Section 50079.5. (7) “Program manager” means a private sector entity or consortium selected by the department to manage the program. (8) “Regional housing entity” means any of the following: (A) The Bay Area Housing Finance Authority established pursuant to Section 64510 of the Government Code. (B) The Los Angeles County Affordable Housing Solutions Agency established pursuant to Section 64710 of the Government Code. (C) A regional housing finance authority created locally, including, but not limited to, those created under the Regional Housing Finance Act (Title 6.5 (commencing with Section 62500) of the Government Code). (9) “Rehabilitation” means rehabilitation work necessary to meet health, safety, and quality of life needs, as determined by standards established by the department. (10) “Tenant protections under state law” means the protections provided in Chapter 2 (commencing with Section 1940) of Title 5 of Part 4 of Division 3 of the Civil Code, except for Section 1947.12 of that code, and in the California Fair Employment and Housing Act (Part 2.8 (commencing with Section 12900) of Division 3 of Title 2 of the Government Code). (11) “Unrestricted housing” means a housing development, as defined in subdivision (i) of Section 65915 of the Government Code, that is not currently subject to a recorded deed restriction limiting occupancy to households at specified income levels and rents to levels affordable at those income levels. Mixed-use buildings are eligible if the majority of the building square footage is used for residential purposes. (c) The department shall adopt regulations for the operation of the program on or before July 1, 2028. The adoption of regulations pursuant to this subdivision is hereby exempted from the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). 50581. (a) (1) The Community Anti-Displacement and Preservation Fund is hereby created as a fund in the State Treasury. All money in the fund shall be available, upon appropriation by the Legislature, to the department for purposes of this chapter. (2) The administrative expenses of the department shall not exceed 5 percent of the moneys deposited in the fund for the purposes of this chapter. (3) Up to an additional 5 percent of the moneys may be expended to provide technical assistance and capacity building to eligible borrowers pursuant to Section 50586. (b) The following moneys shall be paid into the fund: (1) Any moneys appropriated and made available by the Legislature for purposes of this chapter. (2) Any moneys that the department receives in repayment of loans made from the fund, including interest therefrom. (3) Any other moneys that may be made available to the department for purposes of this chapter from any other source. (c) (1) Any funds made available to the department for purposes of this chapter with a specified timeline for allocation shall be allocated by an administering entity within the specified timeline following the initial Notice of Funding Availability issued by that administering entity. (2) An administering entity shall issue an initial Notice of Funding Availability on or before one year following receipt of funds from the department. 50582. (a) (1) The department shall issue a request for qualification to select a private sector entity or consortium to manage the program for a period of five years. (2) The agreement between the department and the program manager may be extended in additional five-year increments. (b) (1) The selected program manager shall be responsible for reviewing and approving loan and grant applications, originating and servicing loans, and, subject to department approval, establishing terms and conditions for loan and grant applications, and reporting to the department to demonstrate compliance with program regulations and summarize program impacts. (2) The private sector entity or consortium shall meet at least all of the following criteria to be eligible to be selected as a program manager: (A) Be a nonprofit lender or consortium of nonprofit lenders, including community development financial institutions or credit unions, with experience making similar loans in the state. (B) Have originated and serviced loans in an aggregate amount of not less than thirty million dollars ($30,000,000) that were used to develop or acquire affordable housing. At least ten million dollars ($10,000,000) or more of the loans shall have been in the form of an acquisition loan. (C) Provide geographic coverage across the state. (c) In selecting a program manager, the department shall consider the following objectives: (1) The provision of loans for the longest possible time, up to 30 years. (2) The provision of loans on the most competitive terms. (3) Proposed processes and procedures to ensure timely application review and loan closing. (4) The ability to work with a variety of borrowers, including, but not limited to, affordable housing developers, community development corporations, community land trusts, limited-equity housing cooperatives, and local public entities. (5) The ability to work with a variety of stewardship models, including, but not limited to, rental housing, affordable homeownership, and community land trusts. 50583. (a) The department shall grant funds to the program manager to implement the program, which shall include funds for all of the following, pursuant to this chapter: (1) Loans or grants. (2) Capitalized operating subsidy reserves. (3) (A) Administrative costs, not to exceed 5 percent. (B) Funds granted pursuant to this paragraph shall not be sourced from moneys deposited in the Community Anti-Displacement and Preservation Fund for administrative expenses of the department pursuant to paragraph (2) of subdivision (a) of Section 50581. (b) (1) The program manager shall make loans or grants to eligible borrowers based on underwriting guidelines approved by the department. (2) Loans or grants shall not exceed the cost of acquisition plus the cost of rehabilitation and other reasonable soft costs. (3) With the approval of the department, the program manager may establish a maximum loan to value ratio. Based on underwriting guidelines approved by the department, a portion of the loan to be funded with nonprogram funds may require amortized payments, and a portion funded with department funds shall have deferred interest and principal payments for the term of the loan. (4) The department may establish priority uses of funds or establish set asides for specified project types, for specified types of borrowers, based on levels of affordability, or to ensure geographic equity. (5) Loans or grants shall not be made for projects within the jurisdiction of a regional housing entity that has received moneys pursuant to Section 50584, unless the program manager determines there is insufficient demand for funding in nondelegated jurisdictions and the department approves the funding. For purposes of this paragraph, “nondelegated jurisdiction” means the jurisdiction of any local public entity that has not received moneys pursuant to Section 50584. (6) An administering entity shall not disqualify an applicant on the basis that the applicant does not hold the deed of the property if the applicant is in the process of acquiring the property. (7) Loans and grants may be awarded to finance a portion of units in the property. Only units that receive program funds shall be subject to the requirements of this chapter. (c) (1) (A) Properties that will remain rental housing developments following acquisition or rehabilitation with a loan or grant made pursuant to this chapter shall be subject to a recorded regulatory agreement between the borrower and the department that requires that the unit or units, upon the first turnover of tenancy, remain affordable to, and occupied by, low-income households for a term of 55 years from the date of the loan closing or disbursement of grant funds. However, the term required by a local ordinance, a federal, state, or local grant, a federal or state tax credit, or other project financing shall instead apply if that required term is greater than 55 years and the local ordinance, grant, tax credit, or other project financing requires the rental housing development’s units be affordable to and occupied by low-income households for that term. (B) For projects involving properties described in subparagraph (A), the department may convert, upon the borrower’s request, the deferred portion of a loan provided to fund the project into a grant if the d [Text truncated for display. Full text available on Congress.gov.]