AB 2689
Low-income housing tax credits: lease nonrenewal: good cause.
Vote required
Majority
Fiscal committee
No
Appropriation
No
Current location
In Floor Process
Take action
Record your position on this measure.
Sign in to record your position, submit testimony, or contact your legislator.
Sign in to take action- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Bill overview
This bill modifies California’s low-income housing tax credit program to clarify the criteria for lease nonrenewal in qualifying affordable housing projects. Specifically, it defines ‘good cause’ for nonrenewal as situations where a household’s income exceeds 140% of the area median income for at least two consecutive years and 30% of their monthly income exceeds the fair market rent. The bill requires landlords to provide advance notice to tenants if these income thresholds are met and to specify the basis for nonrenewal at least 90 days before the lease expires.
Key provisions
- Defines ‘good cause’ for lease nonrenewal in low-income housing projects.
- Establishes income thresholds: 140% of area median income for at least two consecutive years and 30% of monthly income exceeding fair market rent.
- Requires landlords to provide 30-day written notice of income threshold exceedance.
- Mandates a 90-day notice of nonrenewal with a citation to the bill's provisions.
- Uses HUD’s Fair Market Rent as the benchmark for determining fair market rent.
- Applies to projects with 100% of units restricted to lower-income households.
- Aligns with federal income tax laws regarding low-income housing tax credits.
- Specifies the process for determining good cause based on household income and rent.
Who is affected
- Landlords of low-income housing projects
- Tenants in low-income housing projects
- California Tax Credit Allocation Committee
- Individuals with incomes exceeding 140% of the area median income
Sponsors
Official sponsors from legislative records.
Primary sponsor
Ávila Farías
Cosponsor
Arguments in favor
Reasons to support this legislation.
No arguments in favor have been submitted.
Submit yoursArguments opposed
Reasons to oppose this legislation.
No arguments opposed have been submitted.
Submit yoursRead the latest version inline or switch to a previous version.
AB2689:v95#DOCUMENT
Bill Start
| Amended IN Senate June 22, 2026 |
| Amended IN Assembly April 30, 2026 |
| Amended IN Assembly April 06, 2026 |
| Amended IN Assembly March 19, 2026 |
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
Assembly Bill
No. 2689
| Introduced by Assembly Member Ávila Farías (Coauthor: Senator Caballero) |
| February 20, 2026 |
An act to add Section 50199.28 to the Health and Safety Code, relating to housing.
LEGISLATIVE COUNSEL'S DIGEST
AB 2689, as amended, Ávila Farías. Low-income housing tax credits: lease nonrenewal: good cause.
Existing law, in modified conformity with federal income tax laws, establishes a low-income housing tax credit program through which the California Tax Credit Allocation Committee allocates low-income housing tax credits aimed at providing affordable low-income housing within and throughout the state. Existing federal law sets limitations and guidelines regarding what projects are eligible for credits, including a requirement that an extended low-income housing commitment is in effect, and a prohibition against eviction except for good cause.
This bill would specify, for housing projects where the low-income housing commitment requires 100% of the units, not including any manager’s units, to be restricted to lower income households, as defined, that good cause for nonrenewal of a lease includes cases where the nonrenewal relates to a household whose income exceeds 140% of the area median income for at least 2 consecutive years and 30% of the household’s monthly income exceeds the fair market rent for the county where they reside. rent, determined as specified. The bill would require an owner to provide notice of the potential of good cause for nonrenewal described above if the household’s income exceeds 140% of the area median income during any income certification, as specified. The bill would also require an owner electing to not renew a lease as described above to issue a notice of nonrenewal describing the basis of good cause for nonrenewal at least 90 days prior to the expiration of the lease, as specified.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO
Bill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 50199.28 is added to the Health and Safety Code, to read:
50199.28.
(a) For purposes of implementing Section 42(h)(6) of the Internal Revenue Code, for any qualified low-income building where 100 percent of the units, except for any manager’s unit, are restricted to lower income households, as defined in Section 50093, by an enforceable regulatory agreement with a government entity, good cause for nonrenewal of a lease shall include cases where both of the following apply:
(1) The household’s income exceeds 140 percent of the area median income for at least two consecutive years.
(2) Thirty percent of the household’s monthly income exceeds the fair market rent for the county where the unit is located. greater of the following:
(A) The United States Department of Housing and Urban Development’s Fair Market Rent for an equivalent-sized unit for the county where the unit is located, as updated annually.(B) The United States Department of Housing and Urban Development’s Small Area Fair Market Rent for an equivalent-sized unit for the ZIP Code where the unit is located, as updated annually.
(b) If, during any income certification, the household’s income exceeds 140 percent of the area median income, the owner shall provide the household with written notice of the household’s income threshold exceedance within 30 days of the certification. The notice shall include a statement that the household’s income exceeds 140 percent of the area median income and that if the household’s income exceeds 140 percent of the area median income for two consecutive years, and if 30 percent of the household’s monthly income exceeds the applicable fair market rent, rent provided by paragraph (2) of subdivision (a), the owner may have good cause for nonrenewal of the lease pursuant to this section.
(c) If paragraphs (1) and (2) of subdivision (a) are satisfied and the owner elects to not renew the lease pursuant to this section, the owner shall issue a notice of nonrenewal at least 90 days prior to the expiration of the lease term and include a citation to this section as the basis for nonrenewal and a statement that the nonrenewal is for good cause because the household’s income has exceeded 140 percent of the area median income for two consecutive years and 30 percent of the household’s monthly income exceeds the applicable fair market rent for the county. provided by paragraph (2) of subdivision (a).