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SB 454 (Lowenthal)

SB 454, would lift the sunset on California’s successful affordable housing preservation law. This law, first enacted in 1990, seeks to ensure the preservation of existing federally assisted affordable housing, by identifying entities interested in purchasing and preserving affordable housing at risk of conversion to market rates.


The State Department of Housing and Community Development (HCD) estimates that there are 149,000 units of privately owned, federally assisted rental housing in California. Each year hundreds of these units are at risk of being lost, because agreements that have kept those units affordable are due to expire. As those agreements expire, owners have the option of converting the units to market-rate housing, thereby increasing rents and displacing low-income families. As a result, even as the state invests in the creation of new affordable housing for working Californians, a significant number of affordable units are disappearing through these expiring restrictions. Instead of expanding the supply of affordable housing, we risk losing ground.


Indeed, the California Housing Partnership Corporation, which tracks subsidized housing at risk of conversion, estimates that in the next five years more than 82,000 units of affordable rental housing are at risk of conversion to market rates. When these units convert we lose not only the affordable units but also the Federal rental subsidies that come with them. We effectively send badly needed affordable housing dollars back to Washington. State preservation law has been effective in ensuring that we preserve as many of these units as possible. Under the law, owners considering a sale of a building eligible for conversion must notify potential buyers interested in preserving the units—such as non-profit affordable housing developers. The law gives such entities an opportunity to purchase the building and preserve the affordability.


In effect, the law brings together willing seller and willing preservation buyer. The law has resulted in the preservation of thousands of units statewide. One example is Washington Square apartments in Sacramento, where in 2006 the state law led directly to the preservation of 62 units of long-time affordable housing. These included affordable 3-bedroom units housing families, something that is difficult to find in many housing markets in California. Lifting the sunset on this law will help ensure we preserve as many of these at-risk units in the coming years as possible. Thank you for authoring this important legislation.

2009-10 Priority Housing Bills