California Code of Regulations
Title 25 - Housing and Community Development
Division 1 - Housing and Community Development
Chapter 7 - Department of Housing and Community Development Programs
Subchapter 8 - California Housing Rehabilitation Program
Article 2 - Program Requirements
Section 7683 - Rent Standards

Universal Citation: 25 CA Code of Regs 7683

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

(a) The department shall establish initial rent for assisted units in each project in accordance with the tables in section 6932 and the following:

(1) Rents for units reserved for occupancy by lower income households shall not exceed 30 percent of 60 percent of the monthly area median income for the household size specified in subsection (a)(2) below at the time of initial occupancy.

(2) The household size to be used in calculating maximum rent shall vary based on unit size as follows:

Unit Size		Applicable Household Size to Determine Income Limit
residential hotel unit or bedroom in a group home or congregate home		75 percent of 1 person, which may be multiplied by 2 for group homes if there are 2 occupants per bedroom
	0 bedroom		1 person
	1 bedroom		2 person
	2 bedrooms		3 person
	3 bedrooms		4 persons
	4 bedrooms		6 persons
	5 bedrooms		8 persons

(3) The maximum rent to be charged to tenants shall be determined by deducting from the maximum amounts calculated pursuant to (a)(1) and (a)(2) a utility allowance (for the appropriate unit size) determined or approved by the United States Department of Housing and Urban Development under section 8 of the United States Housing Act of 1937, section 1437f, Title 42 U.S.C., for the locality in which the rental housing development is located. Where a tenant does not directly pay for utilities, the utility allowance deduction shall be zero.

(4) As used in this section "rent" does not include any payment to a sponsor under section 8 of the United States Housing Act of 1937, section 1437f, Title 42 U.S.C., or any comparable federal or state rental assistance program.

(5) For an assisted unit occupied by an eligible household at the time of initial application to the program, the after-rehabilitation rent may not exceed the greater of (i) the rent charged at the time of initial program application, or (ii) 25% of the subject tenant household's monthly gross income. In no event is the rent to exceed that which could be charged pursuant to subdivision (a)(1), (2), and (3) above.

(b) After the initial operating year, rents in assisted units may be adjusted no more often than annually. The amount of adjustment for assisted units shall be in accordance with the following:

(1) Rents may be increased at a rate not to exceed the most recently published annual average percentage change in the United States Department of Labor, Bureau of Labor Statistics Consumer Price Index, Residential Rent for All Urban Consumers for the West (CPI), multiplied by the ratio of the previous year's budgeted operating expenses plus required reserves to the previous year's operating income attributed to residential units;

(2) In addition to the rent increase allowed pursuant to subdivision (b)(1), rents may be increased by that amount necessary to increase the operating income to cover changes in debt service on an adjustable rate mortgage approved by the department as part of the project;

(3) Notwithstanding the provisions of subdivisions (b)(1) and (b)(2), rents shall be decreased if there are changes in debt service approved by the department after loan closing when such changes improve the financial condition of the project. The rent shall be decreased by an aggregate amount equal to the amount of the monthly payment reduction.

(4) Except as provided in section 7685(e)(1), the first adjustment after the initial operating year shall be prorated based on the allowable rent increase multiplied by the fraction of a full year which constitutes the initial operating year.

(c) The sponsor may request for a greater rent increase if the sponsor can demonstrate, to the department's satisfaction, that the increase is necessary to pay for unusual or unforeseeable increases in costs related to the assisted units and to preserve fiscal integrity. The sponsor may not receive a greater rent increase on the grounds that fiscal integrity is threatened by a shortfall in income, unanticipated expenses or other financial problems attributable to nonresidential space or nonassisted units.

(d) Any allowable rent increase or portion thereof not implemented by the sponsor in any given year may not be accumulated for implementation in subsequent years.

(e) Where the assisted units are rent restricted as a condition of the low-income housing tax credit or other state and federal rent subsidy programs, the initial rent for assisted units and subsequent rent increases shall be the lower of those permitted under subdivisions (a), (b), or (c), or those permitted under the applicable tax credit or other programs.

(f) The sponsor shall submit requests for rent adjustments pursuant to subdivision (c) above as part of the annual operating budget pursuant to section 7696.

1. New section filed 6-12-89 as an emergency pursuant to Health and Safety Code section 50668.5(g); operative 6-12-89 (Register 89, No. 24). A Certificate of Compliance must be transmitted to OAL within 120 days or the regulation will be repealed on 10-10-89. For history of former subchapter 8 (sections 7700-7714.5, not consecutive), see Register 85, No. 33.
2. New section refiled 10-6-89 as an emergency pursuant to Health and Safety Code section 50668.5(g) and Government Code section 11346.1(h); operative 10-10-89 (Register 89, No. 42). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed on 2-7-90.
3. New section refiled 2-5-90 as an emergency pursuant to Health and Safety Code section 50668.5(g) and Government Code section 11346.1(h); operative 2-7-90 (Register 90, No. 6). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed on 6-7-90.
4. Amendment of subsections (a)(1)(D) and (E) filed 3-5-90 as an emergency pursuant to Health and Safety Code section 50668.5(g); operative 3-5-90 (Register 90, No. 12). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed on 7-3-90.
5. Certificate of Compliance as to 2-5-90 and 3-5-90 orders including amendment of subsection (a), (b), and (c) transmitted to OAL 5-22-90 and filed 5-29-90 (Register 90, No. 29).

Note: Authority cited: Section 50668.5, Health and Safety Code. Reference: Sections 50668.5 and 50670, Health and Safety Code.

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