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SB 1003: Prohousing enhanced infrastructure financing districts.

California · Senate · 2025–2026 Regular Session · last verified August 22, 2026

What SB 1003 does, verified August 22, 2026

The bill aims to enhance infrastructure financing districts in prohousing jurisdictions. A city or county designated as prohousing can establish a prohousing enhanced infrastructure financing district if certain requirements are met. The district can finance public capital facilities and projects with significant benefits to the district and surrounding community, including affordable housing for low-income individuals. The bill expands the definition of "prohousing local policies" to include the establishment of these districts. Prohousing jurisdictions that establish and project within these districts will receive enhanced points or preference in program applications.

Bill journey

✓IntroducedComplete

✓In CommitteeComplete

✓First Chamber FloorComplete

4Second ChamberCurrent

5GovernorPending

6ChapteredPending

Last action: Ordered to inactive file on request of Assembly Member Aguiar-Curry. (2026-08-20)Alert me

Author and sponsors

Sen. Tim GraysonAuthor · California State Senate

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Recent actions25 total · showing 5

Aug. 20, 2026	Ordered to inactive file on request of Assembly Member Aguiar-Curry.
Aug. 06, 2026	Read second time. Ordered to third reading.
Aug. 05, 2026	From committee: Do pass. (Ayes 15. Noes 0.) (August 5).
Jun. 25, 2026	From committee: Do pass and re-refer to Com. on APPR. (Ayes 11. Noes 0.) (June 24). Re-referred to Com. on APPR.
Jun. 18, 2026	From committee: Do pass and re-refer to Com. on H. & C.D. (Ayes 10. Noes 0.) (June 17). Re-referred to Com. on H. & C.D.

Full action history, 20 earlier actionsConnect Plus

Latest bill textAmended version, May 14, 2026 · 3,059 words

Amended IN Senate May 14, 2026

Amended IN Senate April 23, 2026

Amended IN Senate April 08, 2026

Amended IN Senate March 19, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Senate Bill

No. 1003

Introduced by Senator Grayson

February 09, 2026

An act to amend Section 65589.9 of, and to add Article 5 (commencing with Section 53398.89) to Chapter 2.99 of Part 1 of Division 2 of Title 5 of, the Government Code, ~~and to add Chapter 20 (commencing with Section 50899.15) to Part 2 of Division 31 of the Health and Safety Code,~~ relating to land use.

LEGISLATIVE COUNSEL'S DIGEST

SB 1003, as amended, Grayson. Prohousing enhanced infrastructure financing ~~districts: Infrastructure Partnership Financing Program.~~ districts.

The Planning and Zoning law requires each planning agency to prepare and the legislative body of each county and city to adopt a comprehensive, long-term general plan for the physical development of the county or city that includes specified elements, including a housing element. The law requires the Department of Housing and Community Development to designate jurisdictions as prohousing, as specified. The law requires that jurisdictions that have adopted a housing element that has been found by the department to be in substantial compliance with specified requirements and that have been designated as prohousing based on their adoption of prohousing local policies, as defined, be awarded additional points or preference in the scoring of program applications for certain programs.

Existing law authorizes the legislative body of a city or county to designate a proposed enhanced infrastructure financing district to finance public capital facilities or other specified projects of communitywide significance that provide significant benefits to the district or the surrounding community, including, among other things, the acquisition, construction, or rehabilitation of housing for persons of very low, low, and moderate income for rent or purchase, as specified. Existing law authorizes an infrastructure financing plan to contain a provision for the division of taxes levied upon taxable property in the area included within the district, and authorizes the public financing authority of the district to issue bonds, as provided.

This bill would authorize a city or county that is designated as prohousing to establish a prohousing enhanced infrastructure financing district if certain requirements are met, as specified. The bill would prescribe requirements applicable to those districts. The bill would expand the definition of “prohousing local policies” for purposes of the above-described provisions to include the establishment of one of these districts, and would require that the jurisdiction that established, and projects located within, a district receive enhanced points or preference than the baseline provided to other prohousing jurisdictions.

This bill would establish the Infrastructure Partnership Financing Program, to be administered by the Department of Housing and Community Development, and authorize prohousing enhanced infrastructure financing districts to apply for funding from the program, as specified. Upon appropriation, the bill would require the department to provide loans or grants to applicants for qualifying housing developments, as defined and specified. The bill would require the department to adopt emergency regulations to implement the program, as specified.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Article 5 (commencing with Section 53398.89) is added to Chapter 2.99 of Part 1 of Division 2 of Title 5 of the Government Code, to read:

Article 5. Prohousing Enhanced Infrastructure Financing Act

53398.89.

This article shall be known as the Prohousing Enhanced Infrastructure Financing Act.

53398.90.

The Legislature finds and declares all of the following:

(a) California is facing a housing crisis that necessitates additional tools to help local jurisdictions establish new funding streams to address overall housing needs, with a particular focus on supporting affordable housing, associated infrastructure, and community revitalization in infill areas.

(b) The creation of a prohousing enhanced infrastructure financing district will authorize prohousing jurisdictions that take significant measures to accelerate housing production and affordability to capitalize on revenues from enhanced infrastructure financing districts. This will spur private investment and provide additional dollars to support development and revitalization of areas that include housing for all income levels with equitable access to opportunities, including, but not limited to, transportation mobility, goods, services, and economic opportunities.

(c) The benefits of a prohousing enhanced infrastructure financing district include the ability to fund more housing units, as well as needed infrastructure improvements to meet the current and future capacity demands and affirmatively further fair housing, as required by Section 8899.50.

53398.91.

For purposes of this article:

(a) “Lower income households” has the same meaning as defined in Section 50079.5.

(b) “Persons and families of low or moderate income” has the same meaning as defined in Section 50093 of the Health and Safety Code.

(c) “Prohousing enhanced infrastructure financing district” means an enhanced infrastructure financing district that meets the requirements of Section 53398.92.

(d) “Prohousing jurisdiction” means a city or county that has been designated as prohousing pursuant to Section 65589.9.

(e) “Very low income households” has the same meaning as defined in Section 50105 of the Health and Safety Code.

53398.92.

A prohousing jurisdiction may establish a prohousing enhanced financing district by doing all of the following:

(a) Adopting a resolution pursuant to Section 53398.59.

(b) Finding by resolution that it is in compliance with Section 8899.50.

(1) Requires a review to ensure compliance with the requirements of this section every 10 years.

(2) Requires either of the following:

(A) At least 20 percent of any new housing units constructed or rehabilitated in the prohousing enhanced infrastructure financing district will be affordable to persons and families of low or moderate income and at least 6 percent of new units will be affordable to very low income households.

(B) At least 30 percent of the total project area will be affordable to lower income households within 20 years of establishment of the prohousing enhanced infrastructure financing district.

53398.93.

All of the following apply to a prohousing enhanced infrastructure financing district:

(a) The prohousing enhanced infrastructure financing district shall require, by recorded covenants or restrictions, that affordable housing units financed pursuant to this article remain available at the applicable required affordable housing costs for the longest feasible time, but not less than 55 years for rental units and 45 years for owner-occupied units.

(b) This chapter applies to a prohousing enhanced infrastructure financing district except that a prohousing enhanced infrastructure financing district shall not finance highways or interchanges.

(c)In addition to activities authorized pursuant to this chapter, a prohousing enhanced infrastructure financing district may apply for funding from the Infrastructure Partnership Financing Program (Chapter 20 (commencing with Section 50899.15) of Part 2 of Division 31 of the Health and Safety Code).

53398.94.

The public financing authority shall include both of the following in the annual report required by subdivision (j) of Section 53398.66.

(a) The compliance review described in paragraph (1) of subdivision (c) of Section 53398.92 in the years when that review is conducted.

(b) The progress in complying with affordable housing obligations.

53398.95.

A city or county shall not terminate a prohousing enhanced infrastructure financing district if the district has not complied with its affordable housing obligations.

53398.96.

~~(a)~~A city or county that has established a prohousing enhanced infrastructure financing district that has its prohousing designation under Section 65589.9 revoked shall make a diligent effort to remedy that status within 120 days of revocation.

(b)If a city or county that has established a prohousing enhanced infrastructure financing district fails to remedy a revocation of its prohousing designation under Section 65589.9 by 120 days after revocation, the prohousing enhanced infrastructure financing district shall not apply for or receive any funding from the Infrastructure Partnership Financing Program (Chapter 20 (commencing with Section 50899.15) of Part 2 of Division 31 of the Health and Safety Code) until the city or county is designated as prohousing under Section 65589.9.

SEC. 2.

Section 65589.9 of the Government Code is amended to read:

65589.9.

(a) It is the intent of the Legislature to create incentives for jurisdictions that are compliant with housing element requirements and have enacted prohousing local policies. It is the intent of the Legislature that these incentives be in the form of additional points or other preference in the scoring of competitive housing and infrastructure programs. It is the intent of the Legislature that, in adopting regulations related to prohousing local policy criteria, the department shall create criteria that consider the needs of rural, suburban, and urban jurisdictions and how those criteria may differ in those areas.

(b) (1) For award cycles commenced after July 1, 2021, jurisdictions that have adopted a housing element that has been found by the department to be in substantial compliance with the requirements of this article pursuant to Section 65585, and that have been designated prohousing pursuant to subdivision (c) based upon their adoption of prohousing local policies, shall be awarded additional points or preference in the scoring of program applications for the following programs:

(A) The Affordable Housing and Sustainable Communities Program established by Part 1 (commencing with Section 75200) of Division 44 of the Public Resources Code.

(B) The Transformative Climate Communities Program established by Part 4 (commencing with Section 75240) of Division 44 of the Public Resources Code.

(C) The qualifying infill area portion of the Infill Incentive Grant Program of 2007 established by Section 53545.13 of the Health and Safety Code.

(D) The qualifying infill area and catalytic qualifying infill area portions of the Infill Infrastructure Grant Program of 2019 established by Section 53559 of the Health and Safety Code.

(E) Additional bonus points may be awarded to other state programs when already allowable under state law.

(2) (A) Both of the following shall receive enhanced points or preference beyond the baseline provided pursuant to paragraph (1):

(i) A jurisdiction that has established a prohousing enhanced infrastructure financing district pursuant to Article 5 (commencing with Section 53398.89) of Chapter 2.99 of Part 1 of Division 2 of Title 5.

(ii) An eligible project located within a prohousing enhanced infrastructure financing district described in Article 5 (commencing with Section 53398.89) of Chapter 2.99 of Part 1 of Division 2 of Title 5.

(B) Funding awarded to a jurisdiction that has established a prohousing enhanced infrastructure financing district pursuant to Article 5 (commencing with Section 53398.89) of Chapter 2.99 of Part 1 of Division 2 of Title 5, or to an eligible project located within one of those districts may be used for infrastructure components that directly support, strengthen, or accelerate implementation of the district, including house-enabling infrastructure, but only to the extent consistent with the requirements of the program pursuant to which funding was awarded.

(c) (1) The department shall designate jurisdictions as prohousing pursuant to the permanent regulations adopted pursuant to subdivision (d) and report these designations to the Office of Land Use and Climate Innovation, and any other applicable agency or department, annually and upon request.

(2) (A) Beginning with the seventh housing element cycle, the department shall, upon request by a small rural jurisdiction, to the extent feasible, evaluate materials from the small rural jurisdiction’s housing element submission, pursuant to Section 65585, for evidence of prohousing local policies in order to minimize the need for jurisdictions to submit supplementary documentation.

(B) The department shall only conduct the evaluation described in subparagraph (A) for small rural jurisdictions that have a compliant housing element.

(3) (A) The department shall not require small rural jurisdictions to renew their prohousing designations for at least four years.

(B) This paragraph shall not be construed to limit the authority of the department to revoke a jurisdiction’s prohousing designation.

(4) Any additional points or preferences awarded for a prohousing local policy described in subparagraphs (L) to (N), inclusive, of paragraph (3) of subdivision (f) shall not exceed the minimum value of points or preferences awarded for a prohousing local policy that directly relates to the planning, approval, or construction of housing.

(d) (1) By July 1, 2021, the department, in collaboration with stakeholders, shall adopt emergency regulations to implement this section.

(2) Notwithstanding Section 11346.1, the emergency regulations adopted pursuant to this subdivision shall remain in effect until the date that permanent regulations to implement this section become effective.

(e) On or before January 1, 2021, and annually thereafter, the department shall publish on its internet website the list of programs included under subdivision (b).

(f) For purposes of this section, the following definitions shall apply:

(1) “Adaptive reuse” shall have the same meaning as in Section 53559.1 of the Health and Safety Code.

(2) “Compliant housing element” means an adopted housing element that has been found to be in substantial compliance with the requirements of this article by the department pursuant to Section 65585.

(3) “Prohousing local policies” means policies that facilitate the planning, approval, or construction of housing, or policies that keep people housed. These policies may include, but are not limited to, the following:

(A) Local financial incentives for housing, including, but not limited to, establishing a local housing trust fund.

(B) Reduced parking requirements for sites that are zoned for residential development.

(D) Zoning more sites for residential development or zoning sites at higher densities than is required to accommodate the minimum existing regional housing need allocation for the current housing element cycle.

(E) Adoption of accessory dwelling unit ordinances or other mechanisms that reduce barriers for property owners to create accessory dwelling units beyond the requirements outlined in Article 2 (commencing with Section 66314) of Chapter 13, as determined by the department.

(F) Reduction of permit processing time.

(G) Creation of objective development standards.

(H) Reduction of development impact fees.

(I) Establishment of a Workforce Housing Opportunity Zone, as defined in Section 65620, or a housing sustainability district, as defined in Section 66200.

(J) Preservation of affordable housing units through the extension of existing project-based rental assistance covenants to avoid the displacement of affected tenants and a reduction in available affordable housing units.

(K) Facilitation of the conversion or redevelopment of commercial properties into housing, including the adoption of adaptive reuse ordinances or other mechanisms that reduce barriers for these conversions.

(L) A safe parking program that provides safe parking locations and options for individuals and families living in their vehicles and that does all of the following:

(i) Provides a bathroom facility and onsite security.

(ii) Establishes an application or enrollment process for the program that may include a background check requirement.

(iii) Establishes rules and regulations for the program.

(M) A safe camping program that provides safe camping locations and options for individuals and families experiencing unsheltered homelessness.

(N) Adoption of ordinances, processes, or other mechanisms that expedite, or remove barriers to, the approval of any of the following:

(i) Low-barrier navigation centers beyond the requirements in Article 12 (commencing with Section 65660).

(ii) Emergency shelters beyond the requirements in Section 65583.

(iii) Supportive housing beyond the requirements in Article 11 (commencing with Section 65650).

(O) Establishment of a prohousing enhanced infrastructure financing district pursuant to Article 5 (commencing with Section 53398.89) of Chapter 2.99 of Part 1 of Division 2 of Title 5.

(4) “Small rural jurisdiction” means either of the following:

(A) A city with a population of fewer than 25,000 persons.

(B) A county with a population of fewer than 200,000 persons.

SEC. 3.Chapter 20 (commencing with Section 50899.15) is added to Part 2 of Division 31 of the Health and Safety Code, to read:
20.Infrastructure Partnership Financing Program
50899.15.
~~For the purposes of this chapter:~~
(a)“Applicant” means a prohousing enhanced infrastructure financing district established pursuant to Article 5 (commencing with Section 53398.89) of Chapter 2.99 of Part 1 of Division 2 of Title 5 of the Government Code.
~~(b)“Program” means the Infrastructure Partnership Financing Program established in Section 50899.16.~~
~~(c)“Qualified housing development project” means a housing development project, as defined in Section 65589.5 of the Government Code, that meets the following requirements:~~
~~(1)The parcel or parcels on which the project is located is an infill site, as defined in Section 21061.3 of the Public Resources Code.~~
~~(2)A portion of the housing development project is subject to a recorded affordability restriction pursuant to Section 53398.93 of the Government Code.~~
50899.16.
(a)There is hereby established the Infrastructure Partnership Financing Program for the purpose of financing infrastructure projects needed to assist the development of qualified housing development projects.
~~(b)The department shall administer the program.~~
50899.17.
~~(a)Upon appropriation by the Legislature for purposes of the program, the department shall provide loans or grants to applicants for qualifying housing development projects.~~
~~(b)The department shall prioritize applications based on all of the following factors:~~
~~(1)An application that proposes more housing units to be produced shall be given higher priority.~~
~~(2)An application that has more housing units subject to a recorded affordability restriction shall be given higher priority.~~
~~(3)An application that shows relative benefits to the public are higher in the analysis provided pursuant to subdivision (f) of Section 50899.18 shall be given higher priority.~~
50899.18.
~~To be eligible for the funding described in 50899.17, an applicant shall submit an application to the department with all of the following:~~
~~(a)The name of the development proponent that is seeking funding.~~
(b)A description of the qualified housing development project, including, but not limited to, the total number of housing units and the total number of housing units subject to a recorded affordability restriction.
~~(c)The amount and type of funding requested.~~
~~(d)A description of the local resources that will be used to finance infrastructure associated with the qualified housing development project.~~
~~(e)A list of any infrastructure project needed to assist the development of the qualified housing development project and an estimated cost and completion date for each infrastructure project.~~
(f)An analysis showing that the benefits to the public in terms of the number of units subject to a recorded affordability restriction or more affordable rents is likely to exceed the benefit to the development proponent in terms of reduced production costs.
50899.19.
~~(a)The department, in collaboration with stakeholders, shall adopt emergency regulations to implement this chapter.~~
(b)Notwithstanding Section 11346.1 of the Government Code, emergency regulations adopted pursuant to this section shall remain in effect until the date that nonemergency regulations to implement this chapter become effective.

Text of SB 1003 as amended, from the official record. Connect Plus keeps every version and highlights what changed.Compare versions