Cal. Code Regs. Tit. 25, § 8088 - Rent Standards

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

(1) At the time of the initial occupancy of a unit, rents for very low- income units, and for units in residential hotels and group homes, shall not exceed 30 percent of 35 percent of area median income, divided by 12, adjusted by unit size pursuant to subdivision (a)(3), and with an allowance for utility costs pursuant to subdivision (a)(4). The unit size adjustment in subdivision (a)(3) is employed by identifying the size of the unit for which rent must be determined and reading across to determine the applicable household size for that unit. Area median income is determined by selecting from the tables provided in section 6932 for the county in which the unit is located, the amount of income provided as the very low-income standard for the "number of persons in the family," which equates with the "applicable household size" identified in subdivision (a)(3).

(2) Except for residential hotel units and rooms in group homes, at the time of the initial occupancy of a unit, rents for lower-income units shall not exceed 30 percent of 60 percent of area median income, divided by 12, adjusted by unit size pursuant to subdivision (a)(3), and with an allowance for utility costs pursuant to subdivision (a)(4). The unit size adjustment in subdivision (a)(3) is employed by identifying the size of the unit for which rent must be determined and reading across to determine the applicable household size for that unit. Area median income is determined by selecting from the tables provided in section 6932 for the county in which the unit is located, the amount of income provided as the lower-income standard for the "number of persons in the family," which equates with the "applicable household size" identified in subdivision (a)(3).

(3) Maximum rent calculated pursuant to (a)(1) and (a)(2) above shall be adjusted by unit size as follows:

Unit Size	Applicable Household Size
	to Determine Rent Limit
residential hotel unit or 0 bedroom	1 person
group home bedroom with one occupant	1 person
group home bedroom with two occupants	1 person
	(Maximum rent shall be
	twice the maximum rent
	for bedrooms with one occupant.)
1 bedroom	2 persons
2 bedrooms	3 persons
3 bedrooms	4 persons
4 bedrooms	6 persons
5 bedrooms	8 persons

(4) The maximum rent to be charged to tenants shall be determined by deducting from the maximum amounts calculated pursuant to (a)(1), (a)(2) and (a)(3) a utility allowance for the appropriate unit size. Where a tenant does not directly pay for utilities, the utility allowance deduction shall be zero. The utility allowance shall be the allowance for monthly utility costs made or approved by the U.S. Department of Housing and Urban Development pursuant to 24 CFR section 813.102. In order to obtain the current utility allowances for cities and unincorporated areas located in the following counties, please contact the Department of Housing and Community Development, Attention: Housing Assistance Program, Post Office Box 952054, Sacramento, CA 95252-2054 or phone (916) 324-7696:

Amador		Modoc
Calaveras		Mono
Colusa		Nevada
El Dorado		Placer
Glenn		Sierra
Inyo		Siskiyou
Lassen		Trinity
Lake		Tuolumne
Mendocino

Utility allowances for the balance of cities and unincorporated areas in California not located in the above noted counties may be obtained by contacting the Housing Authority established for that county pursuant to section 34240 of the Health and Safety Code.

(5) Upon demonstration by the sponsor that the amount of utility costs per unit anticipated for the proposed project differs from the amount of the utility allowance per unit derived pursuant to the preceding subdivision, the department shall allow as a utility allowance use of the utility cost per unit demonstrated by the sponsor. The demonstration by the sponsor shall consist of the submittal of actual utility usage cost data per unit for an existing project constructed within the last five years; of the same type of construction as the proposed project; and with the same type of tenant population as the proposed project.

(6) 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 or any comparable federal or state rental assistance program.

(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 recent annual average percentage change in the Western Region for residential rents for all urban consumers as published by the United States Department of Labor, Bureau of Labor Statistics in the monthly publication, "CPI Detailed Report," multiplied by the ratio of the previous year's budgeted operating expenses attributed to assisted units plus required reserves attributed to assisted units to the previous year's budgeted operating income attributed to assisted units.

(2) In addition to the rent increase allowed pursuant to subdivision (b)(1), rents shall be increased by an amount not to exceed the amount necessary to increase the operating income to cover changes in debt service:

(A) on an adjustable rate mortgage approved by the department as part of the project; or

(B) resulting from a refinancing approved by the department and required to maintain fiscal integrity.

(3) Notwithstanding the provisions of subdivisions (b)(1) and (b)(2), rents shall be decreased, or the amount of the otherwise allowable increase reduced, if there is a reduction in the amount of required payments on an adjustable rate mortgage on the project due to a decrease in the interest rate for that mortgage. The aggregate monthly amount of this rent decrease, or reduction in an otherwise allowable increase, shall be equal to the amount of the monthly payment reduction attributable to assisted units;

(4) Any rent adjustment at the end of the initial operating year shall be prorated based on the length of the initial operating year.

(c) The sponsor shall be allowed to implement 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 shall 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 commercial space or nonassisted units.

(d) Any allowable rent increase or portion thereof not implemented by the sponsor in any given year shall 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 8102.

Notes

Cal. Code Regs. Tit. 25, § 8088

Note: Authority cited: Section 50771.1, Health and Safety Code. Reference: Section 50771.1, Health and Safety Code.

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 section transmitted to OAL 5-15-91 and filed 6-14-91 (Register 91, No. 38).