California Code of Regulations › Title 4 - Business Regulations › Division 9.5 - California Debt Limit Allocation Committee › Chapter 2 - Qualified Residential Rental Projects › Article 3 - Minimum Requirements › Section 5191 - Income and Rent Restrictions

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
All Qualified Residential Rental Projects must meet the
					 following minimum income and rent restrictions, which will be included in the
					 Committee Resolution.
(a) Minimum
				  Income Restrictions. A minimum of ten percent (10%) of the units in a Qualified
				  Residential Rental Project must have Gross Rents that are restricted to
				  households with incomes no greater than fifty percent (50%) of the AMI. The
				  rent restricted units that meet this requirement, with the exception of Mixed
				  Income Projects, acquisition rehabilitation projects already subject to a
				  Residential Rental Regulatory Agreement or a federal, state, or local operating
				  or rental assistance agreement, and units located on the upper level floors of
				  high-rise developments, shall be generally distributed in terms of location and
				  number of bedrooms throughout the Project. All projects shall offer a range of
				  sizes and number of bedrooms comparable to those units that are available to
				  other tenants.
(b) Minimum Rent
				  Restrictions. Except for projects subject to an existing Residential Rental
				  Regulatory Agreement that propose tenant paid rents and income targeting not
				  exceeding one hundred-five percent (105%) of the current rents and targeting
				  and operate with a vacancy rate of no more than five percent (5%), for single
				  room occupancy and special needs housing a vacancy rate of no more than ten
				  percent (10%) as demonstrated by a market study completed pursuant to
				  26 U.S.C. Section
				  42(m)(1)(A)(iii); the
				  proposed tenant paid rents for each Restricted Rental Unit type (defined by
				  bedroom count) in the proposed development shall be at least ten percent (10%)
				  below the weighted average rent for comparable market rate units and each
				  Restricted Rental Unit's value ratio (dollars per square foot) shall be at or
				  below the weighted average unit value ratio for comparable market rate units as
				  demonstrated in a Rent Comparability Matrix meeting the requirements of article
				  4 of this chapter.
(c) Utility
				  Allowance Evidence. All Projects shall be subject to the use of Gross Rent as
				  defined by Section
				  5170 and shall provide evidence in
				  one of the following forms:
(1) A letter from
				  the local public housing authority that includes a current utility allowance
				  schedule, certifies that the proposed Project is located within its
				  jurisdiction and itemizes which components of the utility allowance schedule
				  applies to the Project. Projects that are subject to a Department of Housing
				  and Urban Development (HUD) Section
				  8 Housing Assistance Payments
				  Program do not require a housing authority certification and may rely solely on
				  the utility allowance included in a HUD rent schedule provided the schedule
				  specifically identifies the name of the Project.
(2) If a Project is to be substantially
				  retrofitted for energy conservation or will be newly constructed with
				  substantial energy conservation, the Applicant may submit revised utility
				  allowances based on the projected reduction in utility costs after construction
				  or retrofit. The revised utility allowances shall be validated by either of the
				  following:
(A) A letter from the public
				  utility or housing authority having jurisdiction over the Project that
				  validates the revised utility allowances based on the proposed use of energy
				  conservation materials, or
(B) A
				  current utility allowance estimate consistent with
				  26 CFR section
				  1.42-10 (4-1-17), which is hereby
				  incorporated by reference. The Applicant must indicate which components of the
				  utility allowance schedule apply to the Project. For buildings that are using
				  an energy consumption model utility allowance estimate, the estimate shall be
				  calculated using the most recent version of the California Utility Allowance
				  Calculator (CUAC) developed by the California Energy Commission; and in
				  accordance with the California Tax Credit Allocation Committee's minimum
				  requirements for utility allowance estimates, Title 4, Division 17, Chapter 1,
				  Section 10322(h)(21).