With little public input or the opportunity to raise concerns about its sweeping changes, Assembly Bill 130, the housing budget trailer bill, was quickly amended, adopted by the Legislature and signed into law by Gov. Gavin Newsom on June 30.

While the housing budget trailer bill does not typically impact local educational agencies, this year is an exception as AB 130 eliminates existing law that helped ensure LEAs can identify, develop, sell or transfer excess school property for the benefit of their students.

Intended to assist in the development of affordable housing to help address the state’s housing crisis, the bill includes two problematic and under-reviewed changes to the state’s Surplus Lands Act (SLA).

Specifically, AB 130 eliminates two provisions in law that allowed LEAs to determine how best to identify excess school property, and determine whether to sell or transfer that property to help fund the development of school facilities or the acquisition of property to meet the needs of students. Now, LEAs must adhere to the specific requirements of the SLA. Under the SLA, before developing, selling or leasing land deemed “surplus,” local agencies, including LEAs, must first offer it to entities that will develop affordable housing for very low-, low- and moderate-income households. This includes requirements of the local agency to enter into “good-faith” negotiations to sell the property at below-market rates to housing developers or other local agencies before selling, transferring or developing the property to generate funding for LEA needs.

Surplus school property can be a critical tool in helping an LEA address its facilities needs. In cases where an LEA lacks the debt capacity or political ability to pass a local school facilities bond, the identification and development or transfer of excess school property can generate needed funding to help meet its existing and ongoing facilities needs.

State law previously recognized the right of local agencies, including LEAs, to identify and determine whether to dispose of its own excess school property. This included two provisions of the Education Code whereby the LEA could render itself exempt from the SLA if it fulfilled their requirements. Education Code Section 17536 permitted LEAs to exchange or transfer real property; Education Code Section 17388 required an appointed community advisory committee to “advise the governing board in the development of districtwide policies and procedures governing the use or disposition of school buildings or space in school buildings which is not needed for school purposes.” Referred to as a “7/11 committee” because it must contain seven to 11 members, it served as an important tool LEAs could use to ensure community input and exempt itself from the bureaucratic requirements of the SLA.

By removing these exemptions, the state eliminated two of the most common processes LEAs use to retain their authority on how to best address excess school property. As such, it creates uncertainty and unpredictability for LEAs seeking to utilize their surplus property to help serve their students. This includes prolonging and possibly jeopardizing the ability of LEAs to develop education workforce housing to help address the state’s education workforce shortages crisis, to construct nutritional services facilities to meet the state’s goal of providing universal school meals, and to provide onsite mental health and health care clinics for students, among other initiatives.

Recognizing the importance of these exemptions, CSBA has identified this as an issue needing immediate resolution. Since the adoption of AB 130, CSBA has helped to bring awareness to this issue, bringing its fellow education advocacy organizations and LEAs into a statewide coalition to help address its impacts. This includes the California Association of School Business Officials, the Coalition for Adequate School Housing, the Suburban School Districts Association of California and the Los Angeles Unified School District, among others.

Although it remains unclear whether a solution may be attainable before the Legislature adjourns the first year of the two-year 2025–26 legislative session, CSBA will continue to pursue a resolution to this issue to maintain local decision-making authority and the ability of LEAs to determine the best outcomes for its school property and its students.