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

Senator Durazo, with coauthors Senator Blakespear and Assembly Member Kalra, anchors the measure in a central aim: to treat replacement housing as part of the affordability calculus for projects that demolish protected units or repurpose single-room occupancy stock, and to permit limited flexibility for rehabilitating SROs under tight safeguards. A core change is to count replaced units toward affordability requirements for a range of income levels, explicitly including acutely low income households, while preserving local protections and allowing targeted adjustments for SRO rehab and replacement.

The bill would require that when a project demolishes occupied or vacant protected units, or sits on a site where protected units were demolished in the prior five years, the replacement must include all existing protected units and those demolished on or after a specified date, and these replacement units would be counted toward the project’s compliance with state and local affordability targets. For housing development projects, the replacement must be at least as many units as the greatest number of residential units that existed on the site in the previous five years; for non-housing development projects, replacement housing must be developed prior to or concurrently with the project, and may be located off-site within the same jurisdiction. The plan also requires six months of advance notice to occupants, relocation benefits for lower-income tenants, and a right of first refusal for a comparable affordable unit, with detailed protections and conditions tied to funding sources.

In a separate but related framework, the measure introduces provisions governing rehabilitation or replacement of existing single-room occupancy buildings, allowing a reduction in the number of required replacement units if certain conditions are met. These include converting SROs to studio or larger units or adding accessibility or safety features, completing the conversion within four years (with possible extensions upon a good faith plan or extenuating circumstances), and ensuring the new units are rental units at affordable rents for households at or below specified income levels. A covenant of affordability would run for at least 55 years, and displaced SRO tenants would have a right of first refusal for admission to replacement units, subject to funding-source constraints; initial rents are capped relative to displacement rents and income, with further controls on subsequent increases.

The proposal also adds a new Health and Safety Code provision to define a coordinated entry system for homelessness programs and to establish homelessness eligibility criteria for individuals displaced from or returning to SRO units funded by the department. Under the bill, some displaced individuals would be deemed homeless under specified conditions and would not be required to have their replacement unit filled through a coordinated-entry referral system. Definitions in the measure clarify terms such as complete private bathrooms, kitchens, SRO units, and studio units, shaping how units are categorized for replacement and affordability calculations. The legislation preserves local flexibility by stating it does not preempt more protective local laws or judgments and by restricting applicability in narrowly defined circumstances, including certain industrial zones and pre-2022 zoning restrictions.