Single-room occupancy units: demolition and replacement: housing assistance programs: eligibility for homeless individuals and families.

Replaced enrolled bill headers (Senate/Assembly passage dates, Governor receipt date) with chaptered law headers: 'STATE OF CALIFORNIA AUTHENTICATED ELECTRONIC LEGAL MATERIAL,' Chapter 511 designation, and Governor approval/filing date of October 10, 2025.

Page numbering changed from 'SB 21' page headers with bill number to 'Ch. 511' page headers, and line wrapping adjusted throughout to fit the new layout width.

The bill text was reformatted from the official chaptered document style (with 'STATE OF CALIFORNIA AUTHENTICATED ELECTRONIC LEGAL MATERIAL' header, page numbers, and column layout) to a web page presentation with navigation elements, a version dropdown, and standard website UI components. No legislative language was added, removed, or altered.

Section 50406.6 (Health and Safety Code) was expanded so that the homelessness determination and coordinated entry system exemption now applies to any individual displaced from or returning to a single-room occupancy unit undergoing rehabilitation, not just units that received DHCD funds. This broadens who can be deemed homeless for housing placement purposes.

References to 'Except as provided in Section 66300.6.5' were removed from two provisions in Government Code Section 66300.6(b)(1)(A) and (b)(2)(A). The SRO-specific section still contains its own 'notwithstanding' language, so the practical effect is minimal, but the legal structure was simplified.

Assembly Member Kalra was added as coauthor, reflecting Assembly engagement with the bill.

In multiple provisions of Section 66300.6.5, the phrase 'removal rehabilitation or demolition' was changed to 'rehabilitation or demolition,' removing 'removal' as a separate trigger event for the four-year completion timeline and related requirements.

The timing requirement for recording the affordability covenant with the county recorder now includes 'or completion of work as approved by the local agency' as an alternative to 'issuance of the certificate of occupancy,' providing more flexibility in when the covenant must be recorded.

The trigger for submitting a replacement housing plan was clarified from 'Prior to the approval issuance of a permit' to 'Prior to the issuance of a permit,' making clear that the plan is required before the permit is issued rather than before project approval.

New subclauses (i), (ii), and (iii) added to Section 66300.6.5(b)(6)(D) establishing specific limitations on subsequent rent increases for displaced SRO occupants in replacement units: (i) increases must not exceed the minimum needed to ensure positive cashflow for at least 20 years; (ii) resulting rent must not exceed 50 percent of the occupant's actual household income; and (iii) once rent reaches the lesser of 50 percent of income or the displacement rent, further annual increases are limited to area median income increases under the LIHTC program, with no increase allowed to push the occupant above 50 percent of their actual household income.

Senator Blakespear added as a coauthor alongside Senator Durazo and Assembly Member Kalra.

Page numbers corrected from 96 to 95 throughout the bill, and a typo in the fiscal summary was fixed (changed 'a an individual' to 'an individual').

Section 66300.6(b)(1)(B) now includes 'acutely low income' households (referencing Health and Safety Code Section 50063.5) in the list of income categories for which replaced protected units count toward a project's affordable housing percentage requirement. Previously only moderate-income, lower income, very low income, and extremely low income were included.

A new clause (iv) is added to Section 66300.6.5(b)(6)(D), clarifying that an owner may charge less than the maximum allowable rent for a replacement SRO unit (in consultation with the regulating agency) and that nothing requires reducing rent below the amount charged at the time of the occupant's displacement.

The prior language stating that implementation of the homeless eligibility provisions (Section 50406.6) would be 'contingent upon an appropriation by the Legislature' has been removed, meaning those provisions no longer require a separate legislative appropriation to take effect.

The entire workforce development portion of the bill was deleted, including the creation of the Equity, Climate Resilience, and Quality Jobs Fund (1% transfer from federal jobs act moneys), poverty-reducing labor standards for state agencies, reporting requirements on state and local agencies, and the requirement for the California Workforce Development Board to contract with a research institution for equity and climate resilience analyses.

The state-mandated local program designation was changed from 'yes no' to 'no,' reflecting the removal of provisions that imposed new duties on local agencies receiving federal moneys.

A new definition of 'kitchen' was added to Section 66300.6.5, specifying it means a section of a dwelling that includes a stove, sink, and refrigerator, with the sink separate from the bathroom. This clarifies what counts as a kitchen for determining whether a unit is an SRO.

The code compliance justification for reducing SRO replacement units was expanded from 'health and safety' to 'health, welfare, life, and safety,' broadening the types of code issues that can justify unit reduction.

A new provision allows a jurisdiction to grant a one-year extension for project completion if the delay is due to circumstances outside the project proponent's control, using objective criteria. This applies both to the conversion timeline and the replacement unit availability timeline.

New rent protections for returning SRO occupants: initial rent upon return cannot exceed the displacement rent by more than 5 percent (or must remain at the same rent if the occupant was paying 40 percent or more of household income in rent). Subsequent rent increases are capped at 40 percent of household income.

Converted SRO units may now be rented at 'affordable rents or lower than' the applicable affordable rent level of the replaced unit, rather than strictly 'at' that level, giving developers more flexibility on pricing.

If a displaced SRO occupant is precluded from returning due to a funding source requirement, the project proponent must identify in writing the specific funding source and requirement, and must offer an alternative comparable unit within their portfolio.

The jurisdiction must review a replacement housing plan within 30 days of submission or resubmission, and may not issue a demolition, rehabilitation, or conversion permit without first approving the replacement housing plan. This creates a clear procedural gate before any SRO work can begin.

The cross-reference exception to Section 66300.6.5 was moved from individual paragraphs within subdivision (b) of Section 66300.6 up to the main text of subdivisions (a) and (b), making the SRO conversion exception apply more broadly across the demolition replacement requirements.

The timeline trigger for SRO conversion was changed from 'date of removal' to 'date of removal rehabilitation or demolition,' and the permit requirement was changed from 'approval' to 'issuance,' clarifying when the clock starts and what triggers the obligation.

The bill now covers housing policy in addition to workforce development. New provisions were added to the Government Code (Sections 66300.6 and 66300.6.5) and Health and Safety Code (Section 50406.6).

The original Section 1 legislative findings referencing the Biden-Harris Good Jobs Executive Order (Executive Order No. 14126) and its implementation priorities were removed from the operative text and replaced with a new Section 1 declaring that the SRO provisions do not preempt local laws or settlement agreements providing greater protections for SRO tenants.

New Section 66300.6.5 allows affected cities or counties to reduce the number of required replacement units when rehabilitating or replacing an SRO building, if: the reduction is necessary to convert SRO units to studio or larger units, add private bathrooms/kitchens, improve accessibility, or address health and safety code compliance; conversion is completed within four years; converted units are rental units at affordable rents matching the replaced unit level; units are available only to households at or below lower income, very low income, extremely low income, or acutely low income levels; affordability covenants run for at least 55 years; displaced SRO occupants have a right of first refusal; and net loss of SRO units does not exceed 25 percent of total SRO units in the development.

Section 66300.6 was amended to carve out an exception: the requirement to replace all existing protected units and to include at least as many dwelling units as existed on the site in the last five years no longer applies strictly when the project qualifies under the new SRO replacement provisions in Section 66300.6.5.

New provision specifies that for DHCD-funded housing units designated for homeless individuals or families, an individual is deemed homeless if they meet certain criteria, and such individuals or families cannot be required to obtain a referral from a coordinated entry system (or similar system) to access the unit. Implementation is contingent on legislative appropriation.

New definitions added for 'complete private bathroom' (toilet and shower with vanity sink), 'single-room occupancy unit' (dwelling without a complete private bathroom and kitchen), and 'studio unit' (dwelling without a separate bedroom but with a complete private bathroom and private kitchen).

The state-mandated local program designation was changed from 'yes' to 'no,' indicating the amended bill no longer imposes costs on local agencies requiring state reimbursement under the California Constitution's mandate reimbursement provisions.