Navigating the Surplus Land Act for Property of Historic, Open-Space, or Recreational Importance

February 5, 2026

Surplus Land Act

When a local agency disposes of agency-owned surplus land—including by sale or certain long-term leases—it must comply with the Surplus Land Act (SLA) and the Department of Housing and Community Development SLA Guidelines. The SLA encourages land to be used for housing development, park and recreation, or open space purposes. It requires local agencies to give entities including affordable housing developers, park and recreation districts, and/or school districts notice that land is available and allow them a chance to purchase or lease that land through good faith negotiations before making it available to other potential purchasers or lessees. The particular entities to whom the local agency must provide notice depends on multiple factors, including the characteristics of the property, the type of transaction, and the prospective buyer or lessee.

Exempt Surplus Land

In some cases, property may qualify as “exempt surplus land” under the statute, in which case a local agency is not required to make land available to affordable housing developers. The SLA specifies categories of exempt surplus land including, for example, land transferred for affordable housing development within specified parameters; small parcels under half an acre; land exchanged for other property needed for the agency’s use; or land transferred to another local, state, federal agency or a tribe.

The local agency must designate the property as exempt surplus land, generally by making a declaration at a regular public meeting with supporting written findings and documentation.

Just because a local agency declares property as “exempt” surplus land does not mean that it is exempt from all further SLA notice requirements. Though the agency need not issue notices of availability, it still must notify HCD of the designation as exempt surplus land through HCD’s online portal. HCD has up to 30 days to review documentation submitted by the local agency before issuing a notice confirming the property qualifies, or to request additional information if it identifies a deficiency. The agency cannot proceed with disposing of the property before it receives this notice from HCD, or, if HCD does not respond, until the 30 days have elapsed.

Additional Requirements for Land with Scenic, Recreational, or Historic Importance

These exemptions are not absolute. The SLA acknowledges there is insufficient land available for recreational use in California and recognizes the importance of making land available for open-space, park, and recreation purposes. In order to address this deficiency, local agencies must first make exempt surplus land available to park and recreation districts if the exempt surplus land is located in the coastal zone, adjacent to a historical unit of the State Parks System, in the Lake Tahoe region, or is listed on the National Register of Historic Places or determined eligible for the register by the State Office of Historic Preservation.

In those cases, the local agency must issue a notice of availability for open-space purposes to any park or recreation departments of the city and county where the surplus land is located, any regional park authority with jurisdiction in the area, and to the California Natural Resources Agency (CNRA) or its successor. Once the notice is sent, those entities have 60 days to notify the local agency if they are interested in acquiring the exempt surplus land. If one of these entities expresses interest within that time period, the local agency must negotiate with that entity in good faith for a period of at least 90 days to allow the entity an opportunity to acquire the property before negotiating a disposition to another party.

And, as with other disposals, the local agency must then report to HCD and provide documentation of its compliance with the SLA.

It is critical that agencies consider during the planning process whether they will be required to issue notices of availability for open space purposes, as this step can add several months to the timeline for the contemplated disposition, and requires engaging with local and regional park and recreation districts and CNRA.

Takeaways

SLA compliance requires that agencies consider a complicated set of factors including the current and future contemplated use, the parties involved, the type of conveyance, and physical characteristics of the property including location and size.

Agencies must take additional steps when they dispose of surplus land in areas of potential scenic, recreational, or historic importance. In these areas, agencies must carefully consider the location and characteristics of the property to determine if it must issue notices of availability for open space use, even if the surplus land is exempt.

Every transaction is unique, and nuances in the SLA may allow or demand an agency to follow alternative procedures not captured above.

For additional information on Surplus Land Act requirements, contact Jenna Archer.

Photo: West Shore, Lake Tahoe. Credit: Rick Cooper (Creative Commons BY 2.0)