Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) Sponsors shall select only eligible households as tenants of assisted units, and shall annually verify household income and size to determine continued eligibility. As part of the management plan required by section 8100(d), the sponsor shall develop a tenant selection plan for assisted units which shall be subject to the approval of the department. Any change to the plan shall be subject to the approval of the department. The plan shall include the following:
(1) an affirmative marketing plan for eligible households which shall include policies and steps to ensure equal access to all housing units in the rental housing development for all persons in any category protected by federal, state or local laws governing discrimination. Where a significant number of persons in the area of the rental housing development have limited fluency in English, the plan shall require that publications implementing the affirmative marketing plan be provided in the native language of those persons.
(2) reasonable criteria for selection or rejection which shall not discriminate in violation of any federal, state or local laws governing discrimination, or any other arbitrary factor.
(3) prohibition of local residency requirements.
(4) tenant selection procedures that include the following requirements:
(A) selection of tenants based on order of application, lottery or other reasonable method approved by the department;
(B) notification to tenant applicants of eligibility for residency and, based on turnover history, for units in the rental housing development, and the approximate date when a unit may be available;
(C) notification of tenant applicants of ineligibility to occupy an assisted unit and the reason for the ineligibility and their right to appeal this determination pursuant to section 8087(e); and
(D) maintenance of a waiting list of eligible households applying to occupy assisted units and if applicable, distinguish between lower- and very low-income applicants.
(5) tenant occupancy standards that shall be used by the sponsor upon both initial occupancy and recertification to determine a tenant's unit size, as follows:
| Unit | No. of Persons in Household |
| Size | Minimum | Maximum |
| SRO | 1 | 2 |
|
| 0-BR | 1 | 2 |
|
| 1-BR | 1 | 3 |
|
| 2-BR | 2 | 5 |
|
| 3-BR | 4 | 7 |
|
| 4-BR | 6 | 9 |
|
| 5-BR | 8 | 11 |
(A) Flexibility for assignment by a sponsor to a different sized unit is permitted if the sponsor reasonably determines that special circumstances warrant such an assignment and the reasons are documented in the tenant's file.
(B) If at the time of recertification, the tenant's household size has changed and no longer meets the occupancy standards pursuant to this subdivision, tenant household shall be required to move to the next available appropriately sized unit pursuant to this subdivision.
(b) Upon prior written approval by the department, the sponsor may set income limits for lower income units at a level below the upper limit for lower-income households.
(c) In limited equity housing cooperatives, share purchase terms for assisted-units shall be limited as follows:
(1) the total share purchase price for the initial occupant shall be not less than two months carrying costs and not more than five percent of the prorated development cost of the unit.
(2) share appreciation upon resale shall be at a rate approved by the department not to exceed eight percent of the paid-in portion of the share purchase price per annum.
(3) for lower-income households, the required cash contribution to be applied towards the total share purchase price upon initial occupancy shall not exceed 2.5 percent of the prorated development cost of the unit, plus allowed appreciation. For very low-income households, the required cash contribution shall not exceed ten percent of the household's income over the twelve months prior to occupancy.
(4) the sponsor may loan members of the cooperative the difference between the total share purchase price and the member's initial cash contribution. The terms and conditions of such loans shall be subject to department approval.
(d) The sponsor shall submit for department approval the form of the rental or occupancy agreement for assisted units prior to its use. The form shall include the following:
(1) provisions requiring good cause for termination of tenancy. One or more of the following constitutes "good cause":
(A) failure by the tenant to maintain eligibility under the program;
(B) material noncompliance by the tenant with the lease, including one or more substantial violations of the lease or habitual minor violations of the lease which
1. adversely affect the health and safety of any person or the right of any tenant to the quiet enjoyment of the leased premises and related project facilities;
2. substantially interfere with the management, maintenance, or operation of the rental housing development;
3. result from the failure or refusal to pay, in a timely fashion, rent or other permitted charges when due. Failure or refusal to pay in a timely fashion is a minor violation if payment is made during the three-day notice period.
(C) material failure by the tenant to carry out obligations under state or local law; or
(D) subletting, by the tenant, of all or any portion of the assisted unit;
(E) any other action or conduct of the tenant constituting significant problems which can be reasonably resolved only by eviction of the tenant, provided that the sponsor has previously notified the tenant that the conduct or action in questions would be considered cause for eviction. Examples of action or conduct in this category include the refusal of a tenant, after written notice, to accept reasonable rules or any reasonable changes in the lease or the refusal to recertify income or household size;
(2) a provision requiring that the facts constituting the grounds for any eviction be set forth in the notice provided to the tenant pursuant to state law;
(3) notice of grievance procedures for hearing complaints of tenants and appeal of management action; and
(4) a requirement that the tenant annually recertify household income and size.
(e) The sponsor shall adopt an appeal and grievance procedure to resolve grievances filed by tenants and appeals of actions taken by sponsors with respect to tenants' occupancy in the rental housing development and prospective tenants' applications for occupancy.
(1) the appeal and grievance procedure shall be included in the sponsor's management plan described in section 8100(d) and shall, at a minimum, include the following:
(A) a requirement for delivery to each tenant and applicant of a written copy of the appeal and grievance procedure;
(B) procedures for informal dispute resolution;
(C) a right to a hearing before an impartial body, which shall consist of one or more persons, with the power to render a final decision on the appeal or grievance;
(D) procedures for the conduct of such hearing and the appointment of the impartial hearing body. The procedures shall include the right to present evidence without regard to formal rules of evidence, the right to be represented by any other person and the right to a written decision from the hearing body. The decision of the hearing body shall be based solely on evidence presented at the hearing; and
(E) a requirement that the sponsor extend any time period imposed pursuant to a formal eviction procedure, including any filing in a court of competent jurisdiction, during the pendency of the hearing.
(2) Neither utilization of nor participation in any of the appeal and grievance procedures shall constitute a waiver of or affect the rights of the tenant, prospective tenant, or sponsor to a trial de novo or judicial review in any judicial proceeding which may thereafter be brought in the matter.
(f) If, at the time of recertification, the tenant's household income exceeds the upper limit for lower-income households, the tenant's lease for the unit as an assisted unit shall terminate six months after the date of recertification.
(1) In rental housing developments containing nonassisted units, the tenant shall have the right of first refusal for any available nonassisted unit of a size consistent with the occupancy standards set forth in section 8087(a)(5). This right shall begin upon recertification and shall expire upon termination of the tenant's lease of the assisted unit.
(2) If the tenant provides to the sponsor additional evidence which establishes income eligibility prior to the expiration of the tenant's lease, the tenant's lease shall not be terminated.
(3) The sponsor may approve one additional six-month extension of the lease if the project:
(A) is located in a market area where the vacancy rate for rental housing is less than five percent; and
(B) is located is an area where the Fair Market Rent exceeds the average of the Fair Market Rents for all metropolitan statistical areas in California. For purposes of this subsection, "Fair Market Rent" means the most current fair market rent for existing housing for two-bedroom units, as published annually in the "Federal Register" by the U.S. Department of Housing and Urban Development pursuant to section 8(c)(1) of the United States Housing Act of 1937.
(4) If the assisted unit is subject to state or federal rules governing low-income housing tax credits, as referenced in section 10300, title 4, California Code of Regulations, those eligibility provisions shall govern continued eligibility for occupancy.
(5) In a limited equity housing cooperative where the household income of a cooperative member occupying an assisted unit exceeds the upper limit for lower income households, the member shall not be required to vacate the assisted unit.
(A) After recertification and determination of ineligibility, the sponsor shall immediately notify the member that the carrying charge will increase to a market rate payment six months after said notification. Market rate payment shall be the carrying charge paid for a comparable nonassisted unit, without an allowance for utilities, or where there are no comparable nonassisted units, the rent charged for comparable units in the area. This market rate payment shall be subject to department approval.
(B) The next available membership share for occupancy in a comparable unit shall be sold to an eligible household until the mix between lower- and very low-income units required by the Regulatory Agreement is achieved.
(6) If the tenant's income exceeds the limit for lower-income units established by the sponsor pursuant to subdivision (b), but remains below the lower-income limit, that fact alone shall not be cause for termination of the tenant's lease or for requiring the tenant to vacate their unit.
(g) If the income of a household residing in a very low-income unit changes from very low-income to other lower-income at the time of recertification, the following shall apply:
(1) The household shall not be required to vacate the unit;
(2) The sponsor shall charge rent that does not exceed the current rent allowed for any comparable lower-income unit pursuant to section 8088, or where there are no such units, the maximum rent which would be allowed pursuant to section 8088;
(3) The sponsor shall designate the unit as a lower-income unit; and
(4) The sponsor shall designate the next available comparable assisted unit as a very low-income unit until the mix between lower-income and very low-income units required by the Regulatory Agreement is achieved.
(5) In a limited equity housing cooperative, where the tenant member in a very low-income unit becomes an other lower-income household, the sponsor shall comply with the provisions of subdivisions (g)(1) through (g)(4).
1. New section filed 12-29-89 as an emergency; operative 12-29-89 (Register 90, No. 3). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed by operation of law on 4-30-90.
2. New section refiled 4-26-90 as an emergency; operative 4-26-90 (Register 90, No. 23). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed by operation of law on 8-24-90.
3. New section refiled 8-27-90 as an emergency; operative 8-27-90 (Register 90, No. 42). A Certificate of Compliance must be transmitted to OAL by 12-26-90 or emergency language will be repealed by operation of law on the following day.
4. New section refiled 12-19-90 as an emergency pursuant to Health and Safety Code section 50771.3; operative 12-19-90 (Register 91, No. 4). A Certificate of Compliance must be transmitted to OAL by 4-18-91 or emergency language will be repealed by operation of law on the following day.
5. Certificate of Compliance as to 12-19-90 order transmitted to OAL 1-4-91; disapproved by OAL 2-4-91 (Register 91, No. 13).
6. New section refiled 2-20-91 as an emergency; operative 2-20-91 (Register 91, No. 13). A Certificate of Compliance must be transmitted to OAL by 6-17-91 or emergency language will be repealed by operation of law on the following day.
7. Certificate of Compliance as to 6-14-91 order including amendment of subsections (a), (b), (c), (d), (e), (f) and (g) transmitted to OAL 5-15-91 and filed 6-14-91 (Register 91, No. 38).
8. Editorial correction of printing error in subsections (a)(5) changing O to 0; (f)(B)(6) and HISTORY 7 (Register 91, No. 46).
Note: Authority cited: Section 50771.1, Health and Safety Code. Reference: Sections 33007.5, 50010, 50736, 50079.5, 50771.1 and 50894, Health and Safety Code.
