Real property tax: welfare exemption: moderate-income housing

The law lowers property-tax costs for eligible nonprofit and veterans’ housing owners that reserve units for low- and moderate-income households. It ties the savings to long-term affordability and rent limits.

What the law does ​

• Exempts the assessed value of units serving low- and moderate-income households in qualifying rental developments.
• Limits eligibility to homes newly built or converted from commercial use from January 1, 2027, through January 1, 2030, in Alameda County, Sacramento County, or the City and County of San Francisco.
• Requires affordability restrictions lasting at least 55 years, initial rents below applicable small-area fair-market rents, and capped rent increases for continuing tenants.
• Requires owners to use property-tax savings to preserve affordability or reduce rents that would otherwise be necessary.
• Limits the exemption to 15 consecutive lien dates beginning from 2027 through 2029.
• Requires the State Board of Equalization to collect annual exemption data from county assessors and report to the Legislature by January 1, 2033.

Who it affects ​

• Eligible nonprofit entities, qualifying nonprofit-led limited partnerships and limited liability companies, and veterans’ organizations that own qualifying rental housing.
• Low- and moderate-income households living in designated rent-restricted units.
• County assessors administering exemption claims in the three covered jurisdictions.

Context ​

The Legislature states that the exemption is intended to support new housing affordable to moderate-income households.