AB 846: Housing programs: rent increases.

Existing law, the Zenovich-Moscone-Chacon Housing and Home Finance Act, prohibits affordable rent for certain rental housing developments that receive assistance on or after January 1, 1991, from exceeding a specified percentage based on the area median income adjusted for family size appropriate for the unit and whether the household is an acutely low income household, extremely low income household, very low income household, lower income household, or moderate-income household. Existing law defines area median income, adjustments for family size appropriate to the unit, and moderate-income household for these purposes.

This bill would, for an above-described rental housing development that dedicates 80% of units to lower income households, as specified, prohibit affordable rent from exceeding the rent prescribed by deed restrictions or regulatory agreements pursuant to the terms of public financing or public financial assistance for the rental housing development, if the rental housing development receives specified awards on or after January 1, 2025. The bill would also modify the above-described definitions. By altering affordable rent, and thereby revising the duties of local government officials with respect to administering various programs and requirements that require a determination of affordable rent, this bill would impose a state-mandated local program.

Existing law establishes a low-income housing tax credit program, through which the California Tax Credit Allocation Committee allocates low-income housing tax credits aimed at providing affordable low-income housing within and throughout the state. Existing law authorizes the committee to undertake specified responsibilities in allocating the tax credit, including entering into regulatory agreements relating to projects that are allocated the tax credit. Existing law requires the committee, when allocating the tax credit, to prefer specified projects, including projects that serve lowest income tenants at rents affordable to those tenants.

This bill would require the committee, on or before June 30, 2025, to adopt regulations limiting annual rent increases for tenants in properties that received an allocation of the low-income housing tax credit, prior to April 3, 2024, as specified. The bill would require the committee, on or before June 30, 2026, and annually thereafter, to assess the limit, as specified. The bill would also make a related statement of legislative findings and declarations.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.