AB 2110 lets cities, counties, consolidated city‑counties, or joint powers authorities create tax increment financing districts whose revenues may be used to build or rehabilitate deed‑restricted housing targeted to specified workforce groups. The bill sets membership rules for a governing board, requires public hearings and annual auditing, and allows districts to issue bonds if voters approve.
This is a targeted financing tool: it ties local incremental property tax and other pledged revenues to housing that prioritizes public safety, education, health care, and manufacturing personnel while embedding affordability requirements and relocation protections. For local officials, planners, and housing developers, the bill creates a new path to pool revenue for workforce housing—but it also reallocates local revenue streams and imposes oversight and procedural steps that will shape project timing and risk.
At a Glance
What It Does
Authorizes local legislative bodies or JPAs to form tax‑increment financing districts that can finance construction, rehabilitation, and planning for workforce housing and related improvements. Districts adopt a financing plan, may pledge incremental property tax and other revenues to repay debt, and may issue bonds subject to voter approval.
Who It Affects
Cities, counties, city‑counties, joint powers authorities, participating affected taxing entities (excluding school districts and community college districts), developers of affordable housing, and targeted workforce groups (public safety, education, health care, manufacturing). Residents and landowners inside proposed districts are given formal protest and voting rights under the process.
Why It Matters
AB 2110 gives local governments an explicit, locally controlled financing vehicle to assemble capital for workforce housing where other state programs may not fit. It changes how incremental property tax revenue can be committed locally, creates new governance and reporting requirements, and raises practical questions about revenue allocation, bond security, and long‑term enforcement of affordability.
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What This Bill Actually Does
AB 2110 establishes a standalone, locally created tax increment financing tool for workforce housing. A legislative body (city, county, city and county, or JPA) can adopt a resolution of intention and map out a proposed district; owners and residents in the area must be notified and the governing board must hold at least two hearings with specific public notice and language‑access rules.
The financing plan required for any district must include a detailed map, project descriptions, cost estimates, a financing section with revenue projections, a dollar cap on tax allocation, a schedule for when the district will cease to receive incremental revenues or repay indebtedness, and analyses of fiscal impacts on local service providers.
The bill tightly defines eligible housing: developments must prioritize specified workforce groups and include deed restrictions so that a large share of units are targeted to lower‑income households with the remainder set for moderate‑income households. The district can acquire and transfer property and contract with developers, but it may not exercise eminent domain.
If housing demolition occurs as part of district‑financed work, the financing plan must include replacement and relocation provisions consistent with the statute.Governance is a mix of elected officials and designated public members. The governing board is formed when the resolution of intention is adopted; membership rules vary by how many taxing entities participate but always require public members drawn from the targeted workforce categories.
The board operates under the Brown Act, the Public Records Act, and the Political Reform Act; it must publish annual reports, require an independent financial audit, and hold public hearings to adopt or amend financing plans. Amendments that add territory, increase an allocated dollar limit, or approve unplanned projects trigger the same notice and hearing protections as original plans.Revenue mechanics and debt: the financing plan may allocate a portion of incremental property tax revenues from participating affected taxing entities into a district special fund and may also rely on pledges of other revenues or loans.
Project areas within a district may each have an independent time limit on receiving incremental revenue, not to exceed a statutory maximum tied to receipt of a modest baseline of incremental revenues. Bonds can be issued only after a separate bond resolution and an election; bond approvals require voter support and the statute limits refunding and protects that bonds are payable only from district funds, not the issuing city, county, or state general fund.
The bill also clarifies subordination where former redevelopment obligations exist and requires counties’ administrative costs in dividing taxes to be paid by the district.
The Five Things You Need to Know
Housing eligibility: projects must reserve at least 80% of units for public safety, education, health care, or manufacturing personnel, with the remaining 20% open to other tenants.
Affordability split: all units must be deed‑restricted so that at least 70% serve lower‑income households and the remaining 30% serve moderate‑income households.
No eminent domain: the district has authority to acquire and transfer property and contract with developers, but the bill expressly prohibits the use of eminent domain.
Protest and election thresholds: a majority protest (over 50% of combined landowners and adult residents) terminates formation; if protests total 25–50% the plan goes to a landowner/resident election.
Bond approval and limits: the governing board can put bonds to voters but issuance requires a two‑thirds voter approval; refunding is allowed only if it does not increase total net interest cost to maturity.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Who and what the chapter covers
This opening section sets the scope: it defines an "affected taxing entity" (explicitly excluding county offices of education, school districts, and community college districts), the forms of debt that count, the targeted workforce categories, and income categories referenced for affordability. Practically, the exclusion of school and community college districts narrows which local revenues can be allocated unless those entities elect to participate later under the approval provisions.
Composition, transparency, and meeting rules for district governance
The bill prescribes a governing board that blends elected officials from participating taxing entities with at least two public members drawn from the targeted workforce groups; membership rules scale depending on how many taxing entities participate. The board must follow the Brown Act, Public Records Act, and Political Reform Act, and members receive only expense reimbursement. These rules build in open‑government obligations that will shape staffing, meeting cadence, and political accountability for financing and project decisions.
What districts may finance, and acquisition limits
Districts can fund new construction, rehabilitation, and planning tied to qualifying workforce housing, including mixed‑use projects with a residential majority. The statute requires replacement of any demolished units and mandates relocation assistance per the financing plan. While districts may acquire property and contract with developers, the law denies them eminent domain power—meaning negotiations, land assemblage, and deal structures will have to rely on voluntary sale, option agreements, or public‑private partnership tools rather than compulsory acquisition.
Detailed financing plans, notice, hearings, and protests
Establishment proceeds from a resolution of intention through a two‑hearing process with specified mailed and published notices and language‑access obligations for jurisdictions where non‑English languages meet a threshold. Financing plans must include maps, project lists, financing tables, revenue projections, a dollar limit on tax allocations, and a timeline for when allocations cease. The statute creates a robust protest mechanism: less than 25% protest allows adoption after two hearings; 25–50% triggers an election; over 50% ends the proceedings. There are also annual reporting, audit, and amendment procedures with extra steps for adding territory or increasing dollar caps.
How incremental tax revenue is allocated and fiscal protections
The financing plan may specify portions of incremental property tax to be redirected into a district special fund for district purposes; allocations are calculated off the last equalized assessment roll prior to district formation. The statute preserves priority for any enforceable obligations of former redevelopment project areas and excludes certain redevelopment trust fund deposits from allocation. It also allows a city or county to dedicate a share of its "net available revenue" from the Redevelopment Property Tax Trust Fund, subject to preexisting commitments. Counties' administrative costs for managing the tax division are chargeable to the district.
Bonding mechanics, voter approval, and limits on refunding
The governing board must adopt a bond initiation resolution describing projects, estimated costs, and revenue available to repay bonds, and publish notice requirements. Bond issuance requires submission to district voters and two‑thirds approval. If approved, the board sets series, maturities, redemption terms, and payment mechanics; bonds are payable solely from district funds and do not constitute debt of the sponsoring jurisdiction. The law permits refunding only when it reduces net interest cost and forbids extending maturity beyond the refunded bonds' original terms.
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Explore Housing in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Public safety, education, health care, and manufacturing personnel: receive prioritized access to deed‑restricted, locally financed housing intended to be affordable at lower and moderate income levels.
- Lower‑ and moderate‑income households in district areas: increased stock of affordable units due to mandatory deed restrictions tied to financed projects.
- Local governments and planners seeking project‑level financing flexibility: gain a tool to concentrate incremental tax and other pledged revenues toward workforce housing without relying wholly on state programs.
- Affordable‑housing developers and community development corporations: obtain a new source of pledged revenues and potential bond financing to underwrite projects that might not pencil with market financing alone.
Who Bears the Cost
- Participating affected taxing entities (cities, counties, special districts that opt in): may forgo part of future incremental property tax revenue they would otherwise receive while the district exists.
- Developers and property owners in the district: must accept deed‑restrictions, replacement and relocation obligations for demolished units, and any conditions in the financing plan, which can add compliance cost and complexity.
- District governing boards and local agency staff: take on recurring administrative duties, public engagement, annual audits, and reporting obligations paid from district revenues.
- Voters and residents in the district (if bonds are proposed): bear the risk of voter‑approved bonded indebtedness being serviced from pledged district revenues, which may affect local tax allocation and service priorities.
Key Issues
The Core Tension
AB 2110 balances two legitimate goals that pull in opposite directions: directing local incremental revenues to produce deed‑restricted workforce housing versus preserving those revenues for existing local services and obligations. The choice to empower local tax‑increment financing increases the chance of producing targeted housing quickly, but it reallocates future tax growth and concentrates repayment risk within a single project vehicle—so communities must weigh immediate housing gains against long‑term fiscal flexibility and debt service risk.
The bill layers a number of technical design choices that create implementation friction and fiscal risk. Allocating incremental property tax to a district requires careful baseline valuation calculations and coordination among county auditors and multiple local agencies; small errors or optimistic revenue projections can leave pledged bonds undercollateralized if development is delayed or assessed values grow slowly.
The statute allows districts to pledge non‑tax revenues and net available RPTTF distributions, but those pledges cross into areas with competing statutory commitments and potential political pushback.
The bill also creates governance and accountability obligations—Brown Act compliance, annual audits, and public reporting—but enforcement of long‑term deed restrictions and relocation protections will depend on the governing board’s capacity and clarity in contracts with developers. The prohibition on eminent domain reduces legal and political risk for displaced residents but makes land assembly and cost containment harder.
Finally, the provision subordinating new district obligations to enforceable obligations from former redevelopment project areas could materially reduce available revenues in places with legacy debt, complicating project finance and investor assessment of bond security.
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