Cal. Code Regs. Tit. 4, § 10336 - Laws, Rules, Guidelines, and Regulations for Tenants of Low-Income Units

(a) Rent Increase Limit.

(1) Gross rents for a low-income household shall not increase in any 12-month period more than the lesser of five percent plus the percentage increase in the cost of living as defined in paragraph (3) of subdivision (g) of Section 1947.12 of the Civil Code or ten percent of the lowest rental rate charged for that household at any time during the 12 months prior to the effective date of the increase, except as follows:

(A) to increase the rent up to 30 percent of the monthly income of the household occupying the unit.

(B) for projects with terminated project-based rental assistance or operating subsidy as described in Section 10337(a)(3)(B); or

(C) a transfer of a household to another unit in the same property that has a different bedroom count or transfer to a higher AMI designation, as required by a public regulatory agreement or deed restriction, due to a change in the household's income or occupancy from initial qualification

(2) The Executive Director may grant a waiver to exceed the limit prescribed in subdivision (a)(1) if the waiver is consistent with the CTCAC Rent Increase Limit Waiver Memorandum, available on the CTCAC website and incorporated herein by reference, and the owner shows that the proposed rent increase is necessary to ensure financial stability or fiscal integrity of the property and does not unreasonably impact the tenants. A waiver denial is subject to the appeals process in Section 10330.

(3) In the notice required to be provided to tenants under Civil Code section 827, owners shall provide sufficient information explaining why the rent increase does not exceed programmatic maximum rents and the requirements of subdivision (a)(1) or (a)(2), if applicable. The explanation shall be in plain and accessible language and include the name, telephone number, and email address for a representative who can answer the tenant's questions about the rent increase.

(4) On or before June 30, 2026, and annually thereafter, the Executive Director shall assess the limit established pursuant to subdivision (a) and may make a recommendation to the Committee to adjust the limit based on the assessment.

(5) The requirements of this subdivision shall apply to all properties subject to a CTCAC regulatory agreement except that the requirements of this subdivision shall apply to properties that received an allocation of tax credits prior to April 3, 2024, starting January 1, 2025.

(6) Failure to comply with the provisions of this subdivision may result in the assessment of negative points under Section 10325(c)(2)(R) and fines under Section 10337(f)

(b) All projects shall adopt the following policies and procedures in furtherance of the Fair Housing Laws and Housing and Accessibility Requirements in compliance with Section 10322(h)(1)(F) and submit them to CTCAC upon request:

(1) To the furthest extent applicable and subject to federal preemption, owners, property managers, and service providers must comply with all relevant laws, including, without limitation, the Fair Housing Laws, the Housing and Accessibility Requirements, and Housing First.

(2) The owners, property managers, and service providers, as applicable, must do the following:

(A) Adopt a written nondiscrimination policy requiring that no person shall, on the grounds of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, age, medical condition, genetic information, citizenship, primary language, immigration status (except where explicitly prohibited by federal law), criminal history, arbitrary characteristics, and all other classes of individuals protected from discrimination under federal or state Fair Housing Laws, individuals perceived to be a member of any protected class, individuals having a record of membership in a protected class, or any individual or person associated with any protected class be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any program or activity benefiting in whole or in part from Tax Credits.

(B) Adopt a written tenant selection policy in clear, intelligible, and unambiguous language that complies with state and federal law, include the Fair Housing Laws, and is consistent with any Housing Type requirements, including Housing First.

(i) All new and existing projects with Accessible Housing Units shall adopt a process to market information about Accessible Housing Units to eligible individuals with disabilities and take reasonable nondiscriminatory steps to maximize use of Accessible Units by eligible individuals with disabilities requiring accessibility features. When an Accessible Housing Unit becomes vacant, the owner or property manager shall offer the unit:

(a) First, to a current occupant of another unit of the same project, or comparable projects under common control, having a disability requiring the accessibility features of the vacant unit and occupying a unit not having such features, or if no such occupant exists, then

(b) Second, to an eligible qualified applicant on the waiting list having a disability requiring the accessibility features of the vacant unit.

(c) If no applicant meeting the criteria in subsections (a) or (b) is available, the Accessible Housing Unit may be offered to a tenant or applicant who does not need the unit's accessibility features.

(d) When offering an Accessible Housing Unit to an applicant not having a disability requiring the accessibility features of the unit, the owner or manager shall require the applicant to agree to move to a non-accessible unit when a comparable unit is available. This agreement shall be incorporated in the lease or a lease addendum.

(ii) To the extent possible, projects where one or more of the Low-Income Units is restricted to occupancy by Chronically Homeless or Homeless must fill vacancies for such units with local CES referrals of people experiencing Homelessness or At-Risk of Homelessness. Where the CES system is not operational, referrals shall be through another similar system compliant consistent with WIC Section 8255, subdivision (b)(3).

(a) If the local CES system fails to refer a tenant within 30 days of written notification of a vacancy, units may be occupied by tenants referred from other sources consistent with WIC Section 8255, subdivision (b)(3).

(b) Where the local office of the U.S. Department of Veterans Affairs is not participating in a CES, vacancies may be filled with those Veterans who are referred directly by that local office.

(c) If acuity (the severity of presenting issues) is used as the basis for selecting tenants, it must be measured using the VI-SPDAT or some other standardized assessment tool approved by the Executive Director.

(C) Adopt and implement a written policy for providing reasonable accommodations, reasonable modifications, and auxiliary aids and services for effective communication with residents and applicants with disabilities. All project owners must provide notice in plain language and accessible formats to tenants in units with adaptable features of their ability to request conversion of the adaptable features to make their unit more accessible.

(D) Develop and implement an affirmative fair housing marketing plan consistent with HUD's equal opportunity regulations at 24 CFR part 200, subpart M.

(E) Where applicable, ensure individuals are not denied assistance, evicted, or have their assistance terminated because of their status as survivors of domestic violence, dating violence, sexual assault, or stalking, or for being affiliated with a victim, pursuant to 34 USC Section 12491. Owners and managers have an obligation to inform such prospective and existing tenants of the rights and protections available to them under federal law by providing them with a Notice of Occupancy Rights Form HUD-5380 and VAWA Self-Certification Form HUD-5382. Notice must be given at the time an applicant is denied housing, at the time an applicant is admitted to housing, or when a tenant is notified of eviction or termination. Owners and managers are also required to comply with additional protections afforded to survivors under state law pursuant to Civil Code Section 1946.7 (early lease termination without penalty) and Civil Code Sections 1941.5 and 1941.6.

(F) Adopt a policy allowing service animals as of right, reasonable accommodations for assistance under FEHA, and tenants to own or otherwise maintain one or more common household pets pursuant to the Pet Friendly Housing Act of 2017. (HSC § 50466).

(G) Unless required by another federal, state, or local program, adopt a tenant grievance and appeal procedure to resolve grievance filed by tenants and appeals of adverse actions taken by owners or managers regarding tenant occupancy of a Low-Income Unit, and prospective tenants' applications for occupancy.

(i) The grievance and appeal procedure shall be subject to CTCAC review upon request and, at a minimum, shall include:

(a) A requirement for the delivery to each tenant and applicant of a written copy of the appeal and grievance procedure;

(b) Procedures for informal dispute resolution;

(c) A right to a hearing before an impartial body, which shall consist of one or more persons with the power to render a final decision on the appeal or grievance; and

(d) Procedures for the conduct of an appeal or grievance hearing and the appointment of an impartial body.

(ii) Neither use of, nor participation in any of the appeal and grievance procedures shall constitute a waiver of or affect the rights of the tenant, prospective tenant, or Owner to a trial de novo or judicial review in any judicial proceeding which may thereafter be brought in the matter or the rights to file a judicial or administrative complaint under applicable Fair Housing Laws.

(H) Provide meaningful language access to Limited English Proficiency (LEP) tenants that, at a minimum, includes a written language access plan providing for the translation of notices concerning tenants' rights and the provision of interpretive services to facilitate communication between LEP tenants and Owners.

Notes

Cal. Code Regs. Tit. 4, § 10336

Note: Authority cited: Sections 50199.17 and 50199.25, Health and Safety Code. Reference: Sections 827 and 1947.12, Civil Code; Sections 12206, 17058 and 23610.5, Revenue and Taxation Code; and Sections 50199.4, 50199.5, 50199.6, 50199.7, 50199.8, 50199.9, 50199.10, 50199.11, 50199.12, 50199.13, 50199.14, 50199.15, 50199.16, 50199.17, 50199.18, 50199.20, 50199.21 and 50199.22, Health and Safety Code.

1. New section filed 2-3-2025; operative upon adoption by the California Tax Credit Allocation Committee on 12/11/2024 pursuant to Health and Safety Code section 50199.17(c). Submitted to OAL for filing and printing only pursuant to Health and Safety Code section 50199.17 (Register 2025, No. 6).