California 2021 2021-2022 Regular Session

California Assembly Bill AB1850 Amended / Bill

Filed 04/25/2022

                    Amended IN  Assembly  April 25, 2022 Amended IN  Assembly  March 29, 2022 CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Assembly Bill No. 1850Introduced by Assembly Member WardFebruary 08, 2022 An act to add Part 2.8 (commencing with Section 18970) to Division 13 of the Health and Safety Code, relating to housing. LEGISLATIVE COUNSEL'S DIGESTAB 1850, as amended, Ward. Public housing: unrestricted multifamily housing. Existing law, the Planning and Zoning Law, requires each county and city to adopt a comprehensive, long-term general plan for the physical development of the county or city, and specified land outside boundaries, that includes, among other mandatory elements, a housing element.Existing law provides for the establishment of various special districts that may support and finance housing development, including affordable housing special beneficiary districts that are authorized to promote affordable housing development with certain property tax revenues that a city or county would otherwise be entitled to receive.This bill would prohibit a city, county, city and county, joint powers authority, or any other political subdivision of a state or local government from acquiring unrestricted multifamily housing, as defined, unless each unit in the development meets specified criteria, including that the aggregate initial rent for the first 12 months all units postconversion is at least 10% less than the average aggregate monthly rent charged for the unit all units over the 12-month period prior to conversion and at least 20% less than the small area fair market rent. rent for at least half of the units. The bill would specify that those provisions do not apply to a development that is or will be subject to a regulatory agreement with the California Tax Credit Allocation Committee or the Department of Housing and Community Development.The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.Digest Key Vote: MAJORITY  Appropriation: NO  Fiscal Committee: NO  Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Part 2.8 (commencing with Section 18970) is added to Division 13 of the Health and Safety Code, to read:PART 2.8. UNRESTRICTED MULTIFAMILY HOUSING18970. (a) A public entity shall not acquire unrestricted multifamily housing unless each unit in the development meets all of the following criteria: (1) (A) The unit is subject to a long-term recorded regulatory agreement with a public entity that requires the unit to be affordable to, and occupied by, low- or moderate-income persons and families for a term of 55 years.(B) Notwithstanding subparagraph (A), all households at the time of acquisition, regardless of income, shall be allowed to remain in residency.(C) For purposes of this paragraph, rent limits shall be consistent with rent limits published by the California Tax Credit Allocation Committee, extrapolated from the 100 percent area median income rent for any income levels not directly stated by the committee.(2) (A) The initial rent for the first 12 months postconversion for the unit is aggregate initial monthly rents for all units postconversion are at least 10 percent less than the average aggregate monthly rent charged for the unit all units over the 12-month period prior to conversion and the initial rents for at least 50 percent of the units are at least 20 percent less than the small area fair market rent, as determined by the United States Department of Housing and Urban Development, for the ZIP Code in which the development is located and the number of bedrooms in the unit.(B)To determine the maximum rental rate in subsequent years, the initial postconversion rent for the unit shall be compared to the rent limit at the 100-percent income level published by the California Tax Credit Allocation Committee for the year of conversion, and the regulatory agreement shall limit the rent on the unit for the term of the regulatory agreement to that ratio multiplied by the 100-percent income level rent limit for the respective year, except that in no case shall the maximum rental rate increase by more than 3 percent over the previous 12 months.(B) Increases to the initial rents postconversion shall be limited per year to the lesser of the annual increase in the area median income for the county, as determined by the Department of Housing and Community Development, or 3 percent.(C) Notwithstanding subparagraphs (A) and (B), a project owner may shift rent restrictions on units within a given property so long as the overall distribution of regulated rents remain the same.(3) The unit is in decent, safe, and sanitary condition at the time of occupancy following the conversion.(4) The unit was not acquired by eminent domain as part of the conversion.(5)The unit is subject to a governmental monitoring program to ensure continued affordability and occupancy by qualifying households.(5) The city in which the property is located, or the county for a property in an unincorporated area, monitors the property for compliance with the regulatory agreement for the term of the regulatory agreement consistent with the monitoring standards and protocols of the California Tax Credit Allocation Committee. The city or county may charge a fee for this purpose and may contract with a state entity or another city or county for this purpose.(6) The projected income from the property is adequate to repay all debt over a period not to exceed 30 35 years.(7) (A)Except as provided in subparagraph (B), subdivision (b), a public entity shall approve all debt on the property and hold an assignable right to purchase the development, any interest in the development, or any interest in a partnership that owns the development for a price that does not exceed the principal amount of outstanding indebtedness secured by the building and all federal, state, and local taxes attributable to that sale.(B)(b) This paragraph section shall not apply to a development that is or will be subject to a regulatory agreement with the California Tax Credit Allocation Committee. Committee or the Department of Housing and Community Development.(b)(c) For the purposes of this section:(1) Public entity shall mean a city, county, city and county, joint powers authority, or any other political subdivision of a state or local government.(2) Unrestricted multifamily housing shall mean a development consisting of five or more residential units that is not subject to a deed restriction limiting rents or the incomes of occupants.(c)(d) The Legislature finds and declares that ensuring housing, especially publicly owned housing, is affordable and safe is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this section applies to all cities, including charter cities.

 Amended IN  Assembly  April 25, 2022 Amended IN  Assembly  March 29, 2022 CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Assembly Bill No. 1850Introduced by Assembly Member WardFebruary 08, 2022 An act to add Part 2.8 (commencing with Section 18970) to Division 13 of the Health and Safety Code, relating to housing. LEGISLATIVE COUNSEL'S DIGESTAB 1850, as amended, Ward. Public housing: unrestricted multifamily housing. Existing law, the Planning and Zoning Law, requires each county and city to adopt a comprehensive, long-term general plan for the physical development of the county or city, and specified land outside boundaries, that includes, among other mandatory elements, a housing element.Existing law provides for the establishment of various special districts that may support and finance housing development, including affordable housing special beneficiary districts that are authorized to promote affordable housing development with certain property tax revenues that a city or county would otherwise be entitled to receive.This bill would prohibit a city, county, city and county, joint powers authority, or any other political subdivision of a state or local government from acquiring unrestricted multifamily housing, as defined, unless each unit in the development meets specified criteria, including that the aggregate initial rent for the first 12 months all units postconversion is at least 10% less than the average aggregate monthly rent charged for the unit all units over the 12-month period prior to conversion and at least 20% less than the small area fair market rent. rent for at least half of the units. The bill would specify that those provisions do not apply to a development that is or will be subject to a regulatory agreement with the California Tax Credit Allocation Committee or the Department of Housing and Community Development.The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.Digest Key Vote: MAJORITY  Appropriation: NO  Fiscal Committee: NO  Local Program: NO 

 Amended IN  Assembly  April 25, 2022 Amended IN  Assembly  March 29, 2022

Amended IN  Assembly  April 25, 2022
Amended IN  Assembly  March 29, 2022

 CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION

 Assembly Bill 

No. 1850

Introduced by Assembly Member WardFebruary 08, 2022

Introduced by Assembly Member Ward
February 08, 2022

 An act to add Part 2.8 (commencing with Section 18970) to Division 13 of the Health and Safety Code, relating to housing. 

LEGISLATIVE COUNSEL'S DIGEST

## LEGISLATIVE COUNSEL'S DIGEST

AB 1850, as amended, Ward. Public housing: unrestricted multifamily housing. 

Existing law, the Planning and Zoning Law, requires each county and city to adopt a comprehensive, long-term general plan for the physical development of the county or city, and specified land outside boundaries, that includes, among other mandatory elements, a housing element.Existing law provides for the establishment of various special districts that may support and finance housing development, including affordable housing special beneficiary districts that are authorized to promote affordable housing development with certain property tax revenues that a city or county would otherwise be entitled to receive.This bill would prohibit a city, county, city and county, joint powers authority, or any other political subdivision of a state or local government from acquiring unrestricted multifamily housing, as defined, unless each unit in the development meets specified criteria, including that the aggregate initial rent for the first 12 months all units postconversion is at least 10% less than the average aggregate monthly rent charged for the unit all units over the 12-month period prior to conversion and at least 20% less than the small area fair market rent. rent for at least half of the units. The bill would specify that those provisions do not apply to a development that is or will be subject to a regulatory agreement with the California Tax Credit Allocation Committee or the Department of Housing and Community Development.The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

Existing law, the Planning and Zoning Law, requires each county and city to adopt a comprehensive, long-term general plan for the physical development of the county or city, and specified land outside boundaries, that includes, among other mandatory elements, a housing element.

Existing law provides for the establishment of various special districts that may support and finance housing development, including affordable housing special beneficiary districts that are authorized to promote affordable housing development with certain property tax revenues that a city or county would otherwise be entitled to receive.

This bill would prohibit a city, county, city and county, joint powers authority, or any other political subdivision of a state or local government from acquiring unrestricted multifamily housing, as defined, unless each unit in the development meets specified criteria, including that the aggregate initial rent for the first 12 months all units postconversion is at least 10% less than the average aggregate monthly rent charged for the unit all units over the 12-month period prior to conversion and at least 20% less than the small area fair market rent. rent for at least half of the units. The bill would specify that those provisions do not apply to a development that is or will be subject to a regulatory agreement with the California Tax Credit Allocation Committee or the Department of Housing and Community Development.

The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

## Digest Key

## Bill Text

The people of the State of California do enact as follows:SECTION 1. Part 2.8 (commencing with Section 18970) is added to Division 13 of the Health and Safety Code, to read:PART 2.8. UNRESTRICTED MULTIFAMILY HOUSING18970. (a) A public entity shall not acquire unrestricted multifamily housing unless each unit in the development meets all of the following criteria: (1) (A) The unit is subject to a long-term recorded regulatory agreement with a public entity that requires the unit to be affordable to, and occupied by, low- or moderate-income persons and families for a term of 55 years.(B) Notwithstanding subparagraph (A), all households at the time of acquisition, regardless of income, shall be allowed to remain in residency.(C) For purposes of this paragraph, rent limits shall be consistent with rent limits published by the California Tax Credit Allocation Committee, extrapolated from the 100 percent area median income rent for any income levels not directly stated by the committee.(2) (A) The initial rent for the first 12 months postconversion for the unit is aggregate initial monthly rents for all units postconversion are at least 10 percent less than the average aggregate monthly rent charged for the unit all units over the 12-month period prior to conversion and the initial rents for at least 50 percent of the units are at least 20 percent less than the small area fair market rent, as determined by the United States Department of Housing and Urban Development, for the ZIP Code in which the development is located and the number of bedrooms in the unit.(B)To determine the maximum rental rate in subsequent years, the initial postconversion rent for the unit shall be compared to the rent limit at the 100-percent income level published by the California Tax Credit Allocation Committee for the year of conversion, and the regulatory agreement shall limit the rent on the unit for the term of the regulatory agreement to that ratio multiplied by the 100-percent income level rent limit for the respective year, except that in no case shall the maximum rental rate increase by more than 3 percent over the previous 12 months.(B) Increases to the initial rents postconversion shall be limited per year to the lesser of the annual increase in the area median income for the county, as determined by the Department of Housing and Community Development, or 3 percent.(C) Notwithstanding subparagraphs (A) and (B), a project owner may shift rent restrictions on units within a given property so long as the overall distribution of regulated rents remain the same.(3) The unit is in decent, safe, and sanitary condition at the time of occupancy following the conversion.(4) The unit was not acquired by eminent domain as part of the conversion.(5)The unit is subject to a governmental monitoring program to ensure continued affordability and occupancy by qualifying households.(5) The city in which the property is located, or the county for a property in an unincorporated area, monitors the property for compliance with the regulatory agreement for the term of the regulatory agreement consistent with the monitoring standards and protocols of the California Tax Credit Allocation Committee. The city or county may charge a fee for this purpose and may contract with a state entity or another city or county for this purpose.(6) The projected income from the property is adequate to repay all debt over a period not to exceed 30 35 years.(7) (A)Except as provided in subparagraph (B), subdivision (b), a public entity shall approve all debt on the property and hold an assignable right to purchase the development, any interest in the development, or any interest in a partnership that owns the development for a price that does not exceed the principal amount of outstanding indebtedness secured by the building and all federal, state, and local taxes attributable to that sale.(B)(b) This paragraph section shall not apply to a development that is or will be subject to a regulatory agreement with the California Tax Credit Allocation Committee. Committee or the Department of Housing and Community Development.(b)(c) For the purposes of this section:(1) Public entity shall mean a city, county, city and county, joint powers authority, or any other political subdivision of a state or local government.(2) Unrestricted multifamily housing shall mean a development consisting of five or more residential units that is not subject to a deed restriction limiting rents or the incomes of occupants.(c)(d) The Legislature finds and declares that ensuring housing, especially publicly owned housing, is affordable and safe is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this section applies to all cities, including charter cities.

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

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

SECTION 1. Part 2.8 (commencing with Section 18970) is added to Division 13 of the Health and Safety Code, to read:PART 2.8. UNRESTRICTED MULTIFAMILY HOUSING18970. (a) A public entity shall not acquire unrestricted multifamily housing unless each unit in the development meets all of the following criteria: (1) (A) The unit is subject to a long-term recorded regulatory agreement with a public entity that requires the unit to be affordable to, and occupied by, low- or moderate-income persons and families for a term of 55 years.(B) Notwithstanding subparagraph (A), all households at the time of acquisition, regardless of income, shall be allowed to remain in residency.(C) For purposes of this paragraph, rent limits shall be consistent with rent limits published by the California Tax Credit Allocation Committee, extrapolated from the 100 percent area median income rent for any income levels not directly stated by the committee.(2) (A) The initial rent for the first 12 months postconversion for the unit is aggregate initial monthly rents for all units postconversion are at least 10 percent less than the average aggregate monthly rent charged for the unit all units over the 12-month period prior to conversion and the initial rents for at least 50 percent of the units are at least 20 percent less than the small area fair market rent, as determined by the United States Department of Housing and Urban Development, for the ZIP Code in which the development is located and the number of bedrooms in the unit.(B)To determine the maximum rental rate in subsequent years, the initial postconversion rent for the unit shall be compared to the rent limit at the 100-percent income level published by the California Tax Credit Allocation Committee for the year of conversion, and the regulatory agreement shall limit the rent on the unit for the term of the regulatory agreement to that ratio multiplied by the 100-percent income level rent limit for the respective year, except that in no case shall the maximum rental rate increase by more than 3 percent over the previous 12 months.(B) Increases to the initial rents postconversion shall be limited per year to the lesser of the annual increase in the area median income for the county, as determined by the Department of Housing and Community Development, or 3 percent.(C) Notwithstanding subparagraphs (A) and (B), a project owner may shift rent restrictions on units within a given property so long as the overall distribution of regulated rents remain the same.(3) The unit is in decent, safe, and sanitary condition at the time of occupancy following the conversion.(4) The unit was not acquired by eminent domain as part of the conversion.(5)The unit is subject to a governmental monitoring program to ensure continued affordability and occupancy by qualifying households.(5) The city in which the property is located, or the county for a property in an unincorporated area, monitors the property for compliance with the regulatory agreement for the term of the regulatory agreement consistent with the monitoring standards and protocols of the California Tax Credit Allocation Committee. The city or county may charge a fee for this purpose and may contract with a state entity or another city or county for this purpose.(6) The projected income from the property is adequate to repay all debt over a period not to exceed 30 35 years.(7) (A)Except as provided in subparagraph (B), subdivision (b), a public entity shall approve all debt on the property and hold an assignable right to purchase the development, any interest in the development, or any interest in a partnership that owns the development for a price that does not exceed the principal amount of outstanding indebtedness secured by the building and all federal, state, and local taxes attributable to that sale.(B)(b) This paragraph section shall not apply to a development that is or will be subject to a regulatory agreement with the California Tax Credit Allocation Committee. Committee or the Department of Housing and Community Development.(b)(c) For the purposes of this section:(1) Public entity shall mean a city, county, city and county, joint powers authority, or any other political subdivision of a state or local government.(2) Unrestricted multifamily housing shall mean a development consisting of five or more residential units that is not subject to a deed restriction limiting rents or the incomes of occupants.(c)(d) The Legislature finds and declares that ensuring housing, especially publicly owned housing, is affordable and safe is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this section applies to all cities, including charter cities.

SECTION 1. Part 2.8 (commencing with Section 18970) is added to Division 13 of the Health and Safety Code, to read:

### SECTION 1.

PART 2.8. UNRESTRICTED MULTIFAMILY HOUSING18970. (a) A public entity shall not acquire unrestricted multifamily housing unless each unit in the development meets all of the following criteria: (1) (A) The unit is subject to a long-term recorded regulatory agreement with a public entity that requires the unit to be affordable to, and occupied by, low- or moderate-income persons and families for a term of 55 years.(B) Notwithstanding subparagraph (A), all households at the time of acquisition, regardless of income, shall be allowed to remain in residency.(C) For purposes of this paragraph, rent limits shall be consistent with rent limits published by the California Tax Credit Allocation Committee, extrapolated from the 100 percent area median income rent for any income levels not directly stated by the committee.(2) (A) The initial rent for the first 12 months postconversion for the unit is aggregate initial monthly rents for all units postconversion are at least 10 percent less than the average aggregate monthly rent charged for the unit all units over the 12-month period prior to conversion and the initial rents for at least 50 percent of the units are at least 20 percent less than the small area fair market rent, as determined by the United States Department of Housing and Urban Development, for the ZIP Code in which the development is located and the number of bedrooms in the unit.(B)To determine the maximum rental rate in subsequent years, the initial postconversion rent for the unit shall be compared to the rent limit at the 100-percent income level published by the California Tax Credit Allocation Committee for the year of conversion, and the regulatory agreement shall limit the rent on the unit for the term of the regulatory agreement to that ratio multiplied by the 100-percent income level rent limit for the respective year, except that in no case shall the maximum rental rate increase by more than 3 percent over the previous 12 months.(B) Increases to the initial rents postconversion shall be limited per year to the lesser of the annual increase in the area median income for the county, as determined by the Department of Housing and Community Development, or 3 percent.(C) Notwithstanding subparagraphs (A) and (B), a project owner may shift rent restrictions on units within a given property so long as the overall distribution of regulated rents remain the same.(3) The unit is in decent, safe, and sanitary condition at the time of occupancy following the conversion.(4) The unit was not acquired by eminent domain as part of the conversion.(5)The unit is subject to a governmental monitoring program to ensure continued affordability and occupancy by qualifying households.(5) The city in which the property is located, or the county for a property in an unincorporated area, monitors the property for compliance with the regulatory agreement for the term of the regulatory agreement consistent with the monitoring standards and protocols of the California Tax Credit Allocation Committee. The city or county may charge a fee for this purpose and may contract with a state entity or another city or county for this purpose.(6) The projected income from the property is adequate to repay all debt over a period not to exceed 30 35 years.(7) (A)Except as provided in subparagraph (B), subdivision (b), a public entity shall approve all debt on the property and hold an assignable right to purchase the development, any interest in the development, or any interest in a partnership that owns the development for a price that does not exceed the principal amount of outstanding indebtedness secured by the building and all federal, state, and local taxes attributable to that sale.(B)(b) This paragraph section shall not apply to a development that is or will be subject to a regulatory agreement with the California Tax Credit Allocation Committee. Committee or the Department of Housing and Community Development.(b)(c) For the purposes of this section:(1) Public entity shall mean a city, county, city and county, joint powers authority, or any other political subdivision of a state or local government.(2) Unrestricted multifamily housing shall mean a development consisting of five or more residential units that is not subject to a deed restriction limiting rents or the incomes of occupants.(c)(d) The Legislature finds and declares that ensuring housing, especially publicly owned housing, is affordable and safe is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this section applies to all cities, including charter cities.

PART 2.8. UNRESTRICTED MULTIFAMILY HOUSING18970. (a) A public entity shall not acquire unrestricted multifamily housing unless each unit in the development meets all of the following criteria: (1) (A) The unit is subject to a long-term recorded regulatory agreement with a public entity that requires the unit to be affordable to, and occupied by, low- or moderate-income persons and families for a term of 55 years.(B) Notwithstanding subparagraph (A), all households at the time of acquisition, regardless of income, shall be allowed to remain in residency.(C) For purposes of this paragraph, rent limits shall be consistent with rent limits published by the California Tax Credit Allocation Committee, extrapolated from the 100 percent area median income rent for any income levels not directly stated by the committee.(2) (A) The initial rent for the first 12 months postconversion for the unit is aggregate initial monthly rents for all units postconversion are at least 10 percent less than the average aggregate monthly rent charged for the unit all units over the 12-month period prior to conversion and the initial rents for at least 50 percent of the units are at least 20 percent less than the small area fair market rent, as determined by the United States Department of Housing and Urban Development, for the ZIP Code in which the development is located and the number of bedrooms in the unit.(B)To determine the maximum rental rate in subsequent years, the initial postconversion rent for the unit shall be compared to the rent limit at the 100-percent income level published by the California Tax Credit Allocation Committee for the year of conversion, and the regulatory agreement shall limit the rent on the unit for the term of the regulatory agreement to that ratio multiplied by the 100-percent income level rent limit for the respective year, except that in no case shall the maximum rental rate increase by more than 3 percent over the previous 12 months.(B) Increases to the initial rents postconversion shall be limited per year to the lesser of the annual increase in the area median income for the county, as determined by the Department of Housing and Community Development, or 3 percent.(C) Notwithstanding subparagraphs (A) and (B), a project owner may shift rent restrictions on units within a given property so long as the overall distribution of regulated rents remain the same.(3) The unit is in decent, safe, and sanitary condition at the time of occupancy following the conversion.(4) The unit was not acquired by eminent domain as part of the conversion.(5)The unit is subject to a governmental monitoring program to ensure continued affordability and occupancy by qualifying households.(5) The city in which the property is located, or the county for a property in an unincorporated area, monitors the property for compliance with the regulatory agreement for the term of the regulatory agreement consistent with the monitoring standards and protocols of the California Tax Credit Allocation Committee. The city or county may charge a fee for this purpose and may contract with a state entity or another city or county for this purpose.(6) The projected income from the property is adequate to repay all debt over a period not to exceed 30 35 years.(7) (A)Except as provided in subparagraph (B), subdivision (b), a public entity shall approve all debt on the property and hold an assignable right to purchase the development, any interest in the development, or any interest in a partnership that owns the development for a price that does not exceed the principal amount of outstanding indebtedness secured by the building and all federal, state, and local taxes attributable to that sale.(B)(b) This paragraph section shall not apply to a development that is or will be subject to a regulatory agreement with the California Tax Credit Allocation Committee. Committee or the Department of Housing and Community Development.(b)(c) For the purposes of this section:(1) Public entity shall mean a city, county, city and county, joint powers authority, or any other political subdivision of a state or local government.(2) Unrestricted multifamily housing shall mean a development consisting of five or more residential units that is not subject to a deed restriction limiting rents or the incomes of occupants.(c)(d) The Legislature finds and declares that ensuring housing, especially publicly owned housing, is affordable and safe is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this section applies to all cities, including charter cities.

PART 2.8. UNRESTRICTED MULTIFAMILY HOUSING

PART 2.8. UNRESTRICTED MULTIFAMILY HOUSING

18970. (a) A public entity shall not acquire unrestricted multifamily housing unless each unit in the development meets all of the following criteria: (1) (A) The unit is subject to a long-term recorded regulatory agreement with a public entity that requires the unit to be affordable to, and occupied by, low- or moderate-income persons and families for a term of 55 years.(B) Notwithstanding subparagraph (A), all households at the time of acquisition, regardless of income, shall be allowed to remain in residency.(C) For purposes of this paragraph, rent limits shall be consistent with rent limits published by the California Tax Credit Allocation Committee, extrapolated from the 100 percent area median income rent for any income levels not directly stated by the committee.(2) (A) The initial rent for the first 12 months postconversion for the unit is aggregate initial monthly rents for all units postconversion are at least 10 percent less than the average aggregate monthly rent charged for the unit all units over the 12-month period prior to conversion and the initial rents for at least 50 percent of the units are at least 20 percent less than the small area fair market rent, as determined by the United States Department of Housing and Urban Development, for the ZIP Code in which the development is located and the number of bedrooms in the unit.(B)To determine the maximum rental rate in subsequent years, the initial postconversion rent for the unit shall be compared to the rent limit at the 100-percent income level published by the California Tax Credit Allocation Committee for the year of conversion, and the regulatory agreement shall limit the rent on the unit for the term of the regulatory agreement to that ratio multiplied by the 100-percent income level rent limit for the respective year, except that in no case shall the maximum rental rate increase by more than 3 percent over the previous 12 months.(B) Increases to the initial rents postconversion shall be limited per year to the lesser of the annual increase in the area median income for the county, as determined by the Department of Housing and Community Development, or 3 percent.(C) Notwithstanding subparagraphs (A) and (B), a project owner may shift rent restrictions on units within a given property so long as the overall distribution of regulated rents remain the same.(3) The unit is in decent, safe, and sanitary condition at the time of occupancy following the conversion.(4) The unit was not acquired by eminent domain as part of the conversion.(5)The unit is subject to a governmental monitoring program to ensure continued affordability and occupancy by qualifying households.(5) The city in which the property is located, or the county for a property in an unincorporated area, monitors the property for compliance with the regulatory agreement for the term of the regulatory agreement consistent with the monitoring standards and protocols of the California Tax Credit Allocation Committee. The city or county may charge a fee for this purpose and may contract with a state entity or another city or county for this purpose.(6) The projected income from the property is adequate to repay all debt over a period not to exceed 30 35 years.(7) (A)Except as provided in subparagraph (B), subdivision (b), a public entity shall approve all debt on the property and hold an assignable right to purchase the development, any interest in the development, or any interest in a partnership that owns the development for a price that does not exceed the principal amount of outstanding indebtedness secured by the building and all federal, state, and local taxes attributable to that sale.(B)(b) This paragraph section shall not apply to a development that is or will be subject to a regulatory agreement with the California Tax Credit Allocation Committee. Committee or the Department of Housing and Community Development.(b)(c) For the purposes of this section:(1) Public entity shall mean a city, county, city and county, joint powers authority, or any other political subdivision of a state or local government.(2) Unrestricted multifamily housing shall mean a development consisting of five or more residential units that is not subject to a deed restriction limiting rents or the incomes of occupants.(c)(d) The Legislature finds and declares that ensuring housing, especially publicly owned housing, is affordable and safe is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this section applies to all cities, including charter cities.



18970. (a) A public entity shall not acquire unrestricted multifamily housing unless each unit in the development meets all of the following criteria: 

(1) (A) The unit is subject to a long-term recorded regulatory agreement with a public entity that requires the unit to be affordable to, and occupied by, low- or moderate-income persons and families for a term of 55 years.

(B) Notwithstanding subparagraph (A), all households at the time of acquisition, regardless of income, shall be allowed to remain in residency.

(C) For purposes of this paragraph, rent limits shall be consistent with rent limits published by the California Tax Credit Allocation Committee, extrapolated from the 100 percent area median income rent for any income levels not directly stated by the committee.

(2) (A) The initial rent for the first 12 months postconversion for the unit is aggregate initial monthly rents for all units postconversion are at least 10 percent less than the average aggregate monthly rent charged for the unit all units over the 12-month period prior to conversion and the initial rents for at least 50 percent of the units are at least 20 percent less than the small area fair market rent, as determined by the United States Department of Housing and Urban Development, for the ZIP Code in which the development is located and the number of bedrooms in the unit.

(B)To determine the maximum rental rate in subsequent years, the initial postconversion rent for the unit shall be compared to the rent limit at the 100-percent income level published by the California Tax Credit Allocation Committee for the year of conversion, and the regulatory agreement shall limit the rent on the unit for the term of the regulatory agreement to that ratio multiplied by the 100-percent income level rent limit for the respective year, except that in no case shall the maximum rental rate increase by more than 3 percent over the previous 12 months.



(B) Increases to the initial rents postconversion shall be limited per year to the lesser of the annual increase in the area median income for the county, as determined by the Department of Housing and Community Development, or 3 percent.

(C) Notwithstanding subparagraphs (A) and (B), a project owner may shift rent restrictions on units within a given property so long as the overall distribution of regulated rents remain the same.

(3) The unit is in decent, safe, and sanitary condition at the time of occupancy following the conversion.

(4) The unit was not acquired by eminent domain as part of the conversion.

(5)The unit is subject to a governmental monitoring program to ensure continued affordability and occupancy by qualifying households.



(5) The city in which the property is located, or the county for a property in an unincorporated area, monitors the property for compliance with the regulatory agreement for the term of the regulatory agreement consistent with the monitoring standards and protocols of the California Tax Credit Allocation Committee. The city or county may charge a fee for this purpose and may contract with a state entity or another city or county for this purpose.

(6) The projected income from the property is adequate to repay all debt over a period not to exceed 30 35 years.

(7) (A)Except as provided in subparagraph (B), subdivision (b), a public entity shall approve all debt on the property and hold an assignable right to purchase the development, any interest in the development, or any interest in a partnership that owns the development for a price that does not exceed the principal amount of outstanding indebtedness secured by the building and all federal, state, and local taxes attributable to that sale.

(B)



(b) This paragraph section shall not apply to a development that is or will be subject to a regulatory agreement with the California Tax Credit Allocation Committee. Committee or the Department of Housing and Community Development.

(b)



(c) For the purposes of this section:

(1) Public entity shall mean a city, county, city and county, joint powers authority, or any other political subdivision of a state or local government.

(2) Unrestricted multifamily housing shall mean a development consisting of five or more residential units that is not subject to a deed restriction limiting rents or the incomes of occupants.

(c)



(d) The Legislature finds and declares that ensuring housing, especially publicly owned housing, is affordable and safe is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this section applies to all cities, including charter cities.