Preserving Existing Affordable Housing
Potential conversion of affordable housing to market-rate housing is an ongoing and critical statewide problem. In California, there are approximately 149,000 units of privately owned, federally assisted, multifamily rental housing, plus additional tax-credit and mortgage-revenue bond properties, many with project-based rental assistance. A large percentage of these units may convert to market rate as subsidy contracts or regulatory agreements expire. These at-risk units are home to seniors and families with lower incomes who cannot afford to pay market-rate rents and who could be displaced if the developments convert. Affordable Rental Housing at Risk of Conversion (PDF) provides an overview of this issue in California.
State Preservation Notice Requirements
Owners of specified, federally assisted projects are required (by California Government Code Section 65863.10) to provide "notices of intent" to prepay a federally assisted mortgage, terminate mortgage insurance, or terminate rent subsidies or restrictions at twelve and six months, unless the projects are exempted. These notices of intent must be sent to all affected households and to affected public agencies. Affected public agencies include the city or county where the development is located, the local public housing authority, and the California Department of Housing and Community Development (HCD).
Owners of government-assisted developments cannot terminate subsidy contracts, prepay a federally assisted mortgage, or discontinue use restrictions without first providing an exclusive "notice of opportunity to submit an offer to purchase" (California Government Code Section Self Certification as a Qualified Entity (PDF) and Qualified Entity Certification (PDF) to request placement on the list of qualified entities.
Exemption: California Government Code Section 65863.10, 65863.11, and 65863.13.
Owners contemplating pre-payment, termination, or restructuring under applicable federal or state programs, or selling affected properties, should contact HCD prior to taking any action. Contact the Division of Housing Policy Development at (916) 263-2911 for additional information.
Owners Considering Market-Rate Conversion / Entities Seeking to Purchase At-Risk Properties
Owners of at-risk multifamily developments who are contemplating conversion to market rate housing — as well as entities seeking to become "qualified" to purchase at-risk properties — should review the following sample letters, certification forms, and technical bulletins:
- State Preservation Notice Requirements: Rights and Responsibilities (Technical Bulletin)- Revised 03/2014 (DOC)
- Sample Twelve-Month Notice to Tenants of Owner’s Intent to Prepay or Terminate - Revised 03/2014 (DOC)
- Sample Twelve-Month Notice to Tenants of Owner's Intent to Prepay or Terminate — Other Projects - Revised 03/2014 (DOC)
- Sample Six-Month Notice to Tenants of Owner's Intent to Prepay or Terminate - Revised 03/2014 (DOC)
- Sample Six-Month Notice to Tenants of Owner’s Intent To Prepay or Terminate — Other Projects - Revised 03/2014 (DOC)
- Tenant Advisory and Options: Attachment to Notice of Intent — HUD Projects (DOC)
- Tenant Advisory and Options: Attachment to Notice of Intent (DOC)
- Tenant Resources: Attachment to Notice of Intent (DOC)
- Sample Letter to Qualified Entities from Owners: Notice of Opportunity to Submit an Offer to Purchase - Revised 12/2011 (DOC)
- Self-Certification as a Qualified Entity - Revised 05/2017 (PDF)
- Qualified Entity Certification - Revised 05/2017 (PDF)
- Sample Six-Month Letter to Affected Public Agencies (DOC)
View list of notices (six- and twelve-month) received by HCD (XLS). HCD makes no representation of the accuracy or compliance with statutory notice provisions.
The following two charts provide a brief overview of state notice requirements according to Government Code Section 65863.10 and 65863.11 by type of notice, the parties involved, timelines, and notice contents. All notices are required to be sent in writing by first-class mail, postage prepaid (Section 65863.10) OR certified mail, return receipt requested (Section 65863.11).
- Revised State Notice Requirement Charts Section 65863.10 - Revised 12/2011 (DOC)
- Revised State Notice Requirement Charts Section 65863.11 - Revised 12/2011 (DOC)
- Preservation technical assistance (California Housing Partnership)
- Preservation strategies (California Housing Partnership)
Learn how local governments and nonprofit organizations can request access to the California Housing Partnership's database of at-risk affordable developments.