CA AB787

Planning agencies may include converted units toward up to 25% of a jurisdiction's moderate-income regional housing need allocation in annual housing element reports.

Converted units must meet seven requirements including: pre-conversion rent was unaffordable to very low, low, or moderate-income households; unit subject to 55-year regulatory agreement; initial post-conversion rent is at least 10% below prior 12-month average rent; unit is in decent, safe, and sanitary condition; and unit is subject to governmental monitoring.

Cities and counties may reduce their regional housing need share on a unit-for-unit basis for qualifying converted units, provided the reduction does not exceed 25% of the moderate-income category need.

Post-conversion rent shall be limited based on a ratio of initial post-conversion rent to the 100-percent income level rent limit established by the California Tax Credit Allocation Committee, applied to future years' rent limits.

Implementation begins January 1, 2023, with planning agencies permitted to report conversions occurring on or after January 1, 2022.