Gov. Code § 65400.2

Counting converted moderate-income units in the annual reportTITLE 7. PLANNING AND LAND USE › DIVISION 1. PLANNING AND ZONING › CHAPTER 3. Local Planning › ARTICLE 7. Administration of General Plan

Key provisions · Claude summary, not statute text

Allows a jurisdiction’s annual report to count existing multifamily units converted to deed-restricted moderate-income rental housing toward up to 25 percent of its moderate-income RHNA, subject to conditions.

Reporting conversions. For up to 25% of the moderate-income RHNA, the planning agency may report units in an existing multifamily building converted to deed-restricted moderate-income rental housing through affordability covenants; the report must state they are not newly constructed and include § 65400(a)(2)(H) project- and unit-level information. (a)
Unit eligibility. A unit qualifies only if its pre-conversion rent was not affordable to very low, low-, or moderate-income households; it has a recorded 55-year moderate-income regulatory agreement with a public entity; it is decent, safe, and sanitary at occupancy; it was not acquired by eminent domain; and it is under a governmental monitoring program. (b)(1)–(2), (b)(4)–(6)
Rent limits. Initial post-conversion rent must be at least 10% below the average monthly rent over the prior 12 months; future maximum rents are set by the ratio of that rent to the CTCAC 100-percent income level rent limit for the year of conversion; owners may shift restrictions among units if the overall distribution of regulated rents stays the same. (b)(3)
Public purchase right. Unless subject to a CTCAC regulatory agreement, a public entity must hold an assignable right to purchase the development or interests in it for no more than outstanding secured debt plus taxes attributable to the sale. (b)(7)
RHNA reduction. Qualifying units converted between the start of the projection period and the housing element adoption deadline may reduce the jurisdiction’s RHNA unit-for-unit, up to 25% of the moderate-income need. (c)
Operative date. HCD need not implement the section until January 1, 2023; reports issued after that date may include conversions occurring on or after January 1, 2022. (d)

Paraphrased from the statute text; each point cites its subdivision. Check the text before relying on it.

§ 65400.24 subdivisions

(a)Reporting moderate-income conversions of existing units

For purposes of the housing element portion of the annual report required by paragraph (2) of subdivision (a) of Section 65400, for up to 25 percent of a jurisdiction’s moderate-income regional housing need allocation, the planning agency may include the number of units in an existing multifamily building that were converted to deed-restricted rental housing for moderate-income households by the imposition of affordability covenants and restrictions for the unit. The report shall clearly indicate that these were not newly constructed units, and shall provide all relevant project- and unit-level information as described in subparagraph (H) of paragraph (2) of subdivision (a) of Section 65400.

(b)Requirements for converted units7 paragraphs

For purposes of this section, a unit may be reported as a converted unit under subdivision (a) only if all of the following apply to the unit:

(1)Prior rent not affordable

The rent for the unit prior to conversion was not affordable to very low, low-, or moderate-income households.

(2)55-year moderate-income regulatory agreement

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, persons of moderate income for a term of 55 years.

(3)Postconversion rent limits3 subparagraphs

(4)Decent, safe, and sanitary condition

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

(5)Not acquired by eminent domain

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

(6)Governmental monitoring program

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

(7)Public entity right to purchase

Unless the development is subject to a regulatory agreement with the California Tax Credit Allocation Committee, a public entity shall 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.

(c)RHNA reduction for conversions before adoption

For any units that qualify to be reported pursuant to this section that were converted between the start of the projection period and the deadline for adoption of the housing element, a city or county may reduce its share of the regional housing need on a unit-for-unit basis, provided that the reduction does not exceed 25 percent of the need in the moderate-income category.

(d)Implementation date

The Department of Housing and Community Development shall not be required to implement this section until January 1, 2023. However, for reports issued after January 1, 2023, planning agencies may report conversions pursuant to subdivision (a) that occurred on or after January 1, 2022.

Source. California Code text from the Legislature's bulk download (the same data as leginfo), reproduced character for character (spacing normalized). Current page on leginfo ↗

History. (Added by Stats. 2021, Ch. 350, Sec. 1. (AB 787) Effective January 1, 2022.)

Cites, in this navigator. Gov. Code § 65400

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