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o Certain Employee Housing Projects (Gov. Code, § 65914.7): Starting January 1, 2024, a
housing project is an allowable use on any real property owned by a local educational
agency without the need to follow surplus property procedures specified in both the
Education Code and Government Code if all of the following criteria are satisfied:
 The housing development consists of at least 10 housing units.
 The housing development has a 55-year recorded deed restriction that ensures that
most of the units are affordable to lower income or moderate-income households,
with at least 30 percent of the units lower-income.
 All of the units of the housing development are rented by local educational agency
employees, local public employees, and other members of the public pursuant to
legally specified procedures.
 The residential density for the housing development, as measured on the
development footprint, are the greater of the density allowed by the city or county or
that deemed appropriate to accommodate housing for lower-income households in
the jurisdiction.
 The height limit for the housing development shall be the greater of that allowed by
the city/county or 35 feet.
 The property is adjacent to a property that principally permits residential uses.
 The property is located on an infill site as defined by law.
 The development satisfies other local objective zoning standards, objective
subdivision standards, and objective design review standards that do not preclude
the housing development from achieving the permitted residential density or height.
 The property is located entirely within any applicable urban limit line or urban growth
boundary established by local ordinance.
 The housing development complies with all infrastructure-related requirements,
including payment of impact fees to local governments.

o This exemption is limited to “infill” sites, defined as sites that meet one of the following
criteria: (1) in any residential, commercial, public institutional, transit/transportation
facility, or retail area, and has been developed for those “qualified urban uses;” (2)
located next to property that is developed with the above “qualified urban uses;” or (3)
has a minimum of 75% of the surrounding land developed with “qualified urban uses”
under the California Environmental Quality Act (CEQA). (Pub. Resources Code, §§
21061.3 & 21072.)

X. Use of Proceeds of Sale or Lease with Option to Purchase
Statutory limitations on the use of the proceeds of the sale of surplus property apply to (1)
sales and (2) leases with the option to purchase. They do not apply to leases with no option
to purchase.

The proceeds of the sale of surplus property generally must be used for capital outlay or non-
recurring maintenance costs. The proceeds of a lease with option to purchase may be
deposited in a restricted fund for routine repairs for up to a 5-year period. The proceeds

LozanoSmith.com Checklist for Sale or Lease of School District Surplus Property 16