Adaptive reuse: streamlining: incentives.

Assembly Member Haney's adaptive reuse legislation establishes a streamlined approval process for converting existing buildings into residential and mixed-use developments across California. The bill creates two key programs: a ministerial review process for qualifying projects and an optional local incentive program based on increased property tax revenue.

Projects qualifying for streamlined approval must meet specific affordability requirements. Rental housing developments must dedicate either 8% of units to very low-income households and 5% to extremely low-income households, or 15% to lower-income households. Owner-occupied developments must offer either 30% of units at affordable costs to moderate-income households or 15% to lower-income households. Mixed-use projects must allocate at least half their square footage to residential uses.

The legislation exempts qualifying projects from parking requirements if the existing building lacks onsite parking. It also limits impact fees to those directly related to the conversion from nonresidential to residential use. Local governments must process applications within 60 days for projects with 150 or fewer units and 90 days for larger developments. Projects involving buildings over 50 years old must undergo historic resource evaluation and may need to meet federal preservation standards.

Local governments can establish adaptive reuse investment incentive programs starting in 2026-27, allowing them to redirect increased property tax revenue from approved projects toward affordable housing subsidies for up to 30 years. While cities and counties may adopt implementing ordinances, they cannot impose additional development standards requiring alterations to existing building envelopes beyond building code requirements.