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 Bill Text - AB-2689 Low-income housing tax credits: lease nonrenewal: good cause.

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 |Add To My Favorites |Track Bill | Version: 06/22/26 - Amended Senate
 04/30/26 - Amended Assembly
 04/06/26 - Amended Assembly
 03/19/26 - Amended Assembly
 02/20/26 - Introduced

 AB-2689 Low-income housing tax credits: lease nonrenewal: good cause.(2025-2026)

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 Date Published: 06/22/2026 02:00 PM

AB2689:v95#DOCUMENTBill 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 subdivisi