Downtown revitalization and economic recovery financing districts.

Assembly Member Haney's downtown revitalization legislation expands California cities' and counties' ability to establish financing districts that support commercial-to-residential conversion projects through incremental tax revenues. The measure builds upon an existing program currently limited to San Francisco, allowing other local governments to create specialized districts that direct property tax increments toward qualifying residential conversion developments.

The bill establishes specific criteria for eligible projects, requiring them to be located in areas with commercial vacancy rates of 20% or higher, within transit priority zones, and adjacent to existing urban development. Projects must meet defined affordability targets, with at least 5-10% of units reserved for very low, low, or moderate-income households. For jurisdictions outside San Francisco, 30% of district tax revenues must support these affordable housing requirements.

Each district would operate under a governing board comprising three local government officials and two public members, with oversight responsibilities including adoption of a detailed financing plan and annual public reporting. Projects seeking tax increment funding must opt in before receiving their first building permit and no later than December 31, 2032. The legislation also mandates prevailing wages and compliance with locally-adopted labor standards for participating developments.

The measure modifies existing revenue allocation rules by eliminating requirements to return portions of tax increments to local governments upon district dissolution. Districts may operate for up to 45 years from initial project funding, with tax revenues generated by residential portions of conversion projects flowing to a special district fund for continued reinvestment in qualified developments.