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Preserving Existing Affordable Housing

Preserving Existing Affordable Housing

Federal, state, and local governments have invested in the development of more than 500,000 affordable rental homes in California over the last few decades.

As subsidy contracts or regulatory agreements on these homes expire, many of these units are at risk of losing affordability and shifting to market-rate. 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.

Guide to Affordable Housing Preservation Laws

To address the risk of conversion of at-risk units to market-rate, the state began to adopt affordable housing preservation laws starting in 1987. In 2017, affordable housing preservation laws were expanded and enhanced, giving HCD enforcement authority to monitor and ensure compliance.

HCD developed the Guide to Affordable Housing Preservation Laws to explain how these laws work to preserve affordable homes in California. The Guide covers the various protections that promote transparency and accountability as well as incentivize long-term affordability. Finally, the Guide explains HCD’s role in holding owners and operators accountable and the consequences for non-compliance. The Guide includes information on the requirements related to:

  • Tenant and government partner notifications of expiring affordability
  • Registering as a Qualified Entity interested in bidding on affordable properties
  • The process for sales of affordable homes, and the priority for maintaining affordability
  • The consequences for not complying with affordable housing preservation laws

Guide to Affordable Housing Preservation Laws (PDF)

Affordable Housing Preservation Laws

Owners of specified, government assisted projects are required, unless exempted, to provide "notices of intent" when they plan to prepay a federally insured or held mortgage, terminate rent subsidies, or terminate rent restrictions. These notices need to be sent three years, twelve months, and six months prior to the action taking place, and must go to all affected tenants, HCD, local public agencies, and prospective tenants (Gov. Code, § 65863.10, subdivisions (b), (c), and (e)).

All notices must be provided on HCD’s approved forms that can be accessed below (Gov. Code, § 65863.10, subdivision (k)).

The full text for Affordable Housing Preservation Laws are covered in Government Code sections 65863.10, 65863.11, and 65863.13.

For further information, refer to the Guide to Affordable Housing Preservation Laws (PDF). Contact HCD’s Housing Accountability Unit at Preservation@hcd.ca.gov for further assistance.

Three years prior to a scheduled expiration of rental restrictions, prepayment of a federally insured or held mortgage, or anticipated date of the termination of a subsidy contract, the owner of an assisted housing development must provide notice using the HCD-approved form (Gov. Code, § 65863.10, subdivision (e)) unless exempt under Government Code section 65863.13.

Notice must be given to:

  1. every prospective tenant at the time the prospective tenant is interviewed for eligibility.
  2. existing tenants by posting the notice in an accessible location on the property.
  3. affected public entities, which include HCD, the local housing authority, and the city (or county for an unincorporated area).

    All notices to affected public agencies must be made by either first-class mail postage prepaid or electronically to any public entity that has provided an email address for that purpose.

    To notice HCD, please send notices via email to Preservation@hcd.ca.gov (preferred) or via mail to 651 Bannon Street, Suite 400, Sacramento, CA 95811.

Owners must use the HCD-approved forms below to comply with Government Code section 65863.10, subdivisions (b), (c), and (e).

Twelve-Month Notice

Twelve months prior to a scheduled expiration of rental restrictions, prepayment of a federally insured or held mortgage, or anticipated date of the termination of a subsidy contract, the owner of an assisted housing development must provide notice using the HCD-approved form (Gov. Code, § 65863.10, subdivision (b)) unless exempt under Government Code section 65863.13.

Notice must be given to:

  1. every prospective tenant at the time the prospective tenant is interviewed for eligibility.
  2. existing tenants by first-class mail postage prepaid.
  3. affected public entities, which include HCD, the local housing authority, and the city (or county for an unincorporated area).

    All notices to affected public agencies must be made by either first-class mail postage prepaid or electronically to any public entity that has provided an email address for that purpose.

    To notice HCD, please send notices via email to Preservation@hcd.ca.gov (preferred) or via mail to 651 Bannon Street, Suite 400, Sacramento, CA 95811.

Owners must use the HCD-approved forms below to comply with Government Code section 65863.10, subdivisions (b), (c), and (e).

Tenant Resources to Include with Twelve-Month Notice

The Tenant Resources and Tenant Advisory and Options documents below should be included with the twelve-month notice. These documents help inform tenants of the resources available to them. Tenants can contact the agencies/organizations listed on the Tenant Resources document if they have additional questions or need assistance.

Sales of Affordable Properties -- Notice of Opportunity to Submit an Offer to Purchase (NOSOP)

Prior to or concurrent with the 12-month notice, when an owner is contemplating selling an assisted property within five years of expiration or eligibility for termination or prepayment they must provide notice of their intention to sell their affordable property, referred to as the Notice of Opportunity to Submit an Offer to Purchase (NOSOP). 

Notice of Opportunity to Submit an Offer to Purchase (DOC)

This notice must be:

  1. Sent to geographically relevant Qualified Entities (QEs) and to QEs that directly contact the owner. QEs are those groups interested in bidding on affordable properties and deemed qualified by HCD.
    1. Geographically relevant QEs include all QEs in the county where the development is located and those whose area of interest includes “All Counties.”
    2. The most current list of QEs can be found in the “Qualified Entities” section below.
    3. The notices to QEs must be made by registered or certified mail, return receipt requested. Additional information and the contact list of QEs can be found in the “Qualified Entities” section below.
  2. To notice HCD, please send notices via email to Preservation@hcd.ca.gov (preferred) or via mail to 651 Bannon Street, Suite 400, Sacramento, CA 95811.
  3. Posted in a conspicuous place in the common area of the development. (Gov. Code, § 65863.11).

One-Year Period Prioritizing Affordability for Sales and Purchase of Properties

This Notice of Opportunity to Submit an Offer to Purchase (NOSOP) initiates a one-year offer period, during which preservation is prioritized. The owner may not accept an offer from any entity other than a QE during these first 180 days. If the owner receives one or more bona fide offers from a QE or QEs that meet these requirements, the owner must notify HCD of all bona fide offers and either:

  • Accept one of the bona fide offers from a QE subject to the valuation process described in Government Code section 65863.11, subdivision (k); or
  • Declare in writing under penalty of perjury to the QE or QEs and HCD on an HCD-approved form that if the property is not sold to a QE during the first 180 days or pursuant to the right of first refusal provisions during the second 180 days, it will not sell the property for at least five years from after the end of the one-year notice period (Five-Year Declaration). The form can be obtained by emailing Preservation@hcd.ca.gov. The owner must record this Five-Year Declaration with the county immediately after the one-year offer period. (Gov. Code, § 65863.11, subdivision (i))

Further details on the one-year offer period can be found in our Guide to Affordable Housing Preservation Laws (PDF).

Six months prior to a scheduled expiration of rental restrictions, prepayment of a federally insured or held mortgage, or anticipated date of the termination of a subsidy contract, the owner of an assisted housing development must provide notice using the HCD-approved form (Gov. Code, § 65863.10, subdivision (c)) unless exempt under Government Code section 65863.13.

Notice must be given to:

  1. every prospective tenant at the time the prospective tenant is interviewed for eligibility.
  2. existing tenants by first-class mail postage prepaid.
  3. affected public entities, which include HCD, the local housing authority, and the city (or county for an unincorporated area).

    All notices to affected public agencies must be made by either first-class mail postage prepaid or electronically to any public entity that has provided an email address for that purpose.

    To notice HCD, please send notices via email to Preservation@hcd.ca.gov or via mail to 651 Bannon Street, Suite 400, Sacramento, CA 95811.

Owners must use the HCD-approved forms below to comply with Government Code, § 65863.10, subdivisions (b), (c), and (e).

7-Day Notice of Significant Change to Six-Month Notice

Owners must notify each existing tenant, HCD, and the affected public entities within seven business days of any significant change in the information required in the six-month notice to tenants (Gov. Code, § 65863.10 subdivision (d)). “Significant change” includes, but is not limited to, any change to the date of termination, prepayment, or expiration or any change in the anticipated new rent.

Tenant Resources to Include with Six-Month Notice

The Tenant Resources and Tenant Advisory and Options documents must be included with the six-month notice. These documents help inform tenants of the resources available to them. Tenants can contact the agencies/organizations listed on the Tenant Resources document if they have additional questions or need assistance.

Owners of multifamily residential developments that receive governmental assistance under programs defined in Government Code Section 65863.10, subdivision (a)(3) must register their properties and complete an annual certification of compliance with affordable housing preservation laws. All assisted housing developments with five or more units in which at least 25 percent of the units are subject to affordability restrictions or a rent or mortgage subsidy contract must be certified.

If a property is operated under a ground lease or similar structure, the title holder and the lessee are mutually responsible for the completion of the certification (Gov. Code, § 65863.11, subdivision (o)(3)(B)).

The California Housing Preservation Portal below is how responsible parties must complete their annual certifications.

California Housing Preservation Portal (CaHPP)

If you need assistance navigating the CaHPP Portal, please view Annual Owner Certification Training Video

Contact HCD's Housing Accountability Unit at Preservation@hcd.ca.gov for additional information or assistance.

Qualified entities are tenant associations, local non-profit organizations and public agencies, regional/national non-profit organizations and regional/national public agencies, or profit-motivated housing organizations or individuals that are interested in bidding on affordable properties and have been deemed certified to own and operate assisted housing developments by HCD.

Use the form below to apply to be registered as a Qualified Entity:

Owners must notify all relevant Qualified Entities of potential opportunities to purchase an assisted housing development (see NOSOP section for further details).

HCD makes enforcement letters, actions, and a list of notices received available to the public. The report of all letters issued is organized by jurisdiction, date, and letter type.

Technical Assistance and Enforcement Letters

The report of all notices received is organized by date received, project name, property information, and notice type. HCD makes no representation of the accuracy or compliance with statutory notice provisions.

Notices Received by HCD

To request technical assistance or report violations of affordable housing preservation laws, please submit your inquiry to Preservation@hcd.ca.gov.

Learn how local governments and nonprofit organizations can request access to the California Housing Partnership's database of at-risk affordable developments.

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