Effective January 1, 2023, local governments adopting a tenant preference are required to create a webpage on their internet website containing authorizing local ordinance and supporting materials, no more than 90 days after the ordinance becomes operational. Local governments are required to inform HCD about any local tenant preference ordinance the local government maintains when the jurisdiction submits their annual progress report on housing approvals and production, per Government Code 7061 (SB 649, 2022, Cortese).
Gov’t Code 7061 creates state policy supporting local tenant preferences for lower income households that are subject to displacement risk within affordable housing projects financed through low-income housing tax credits (LIHTCs) and tax-exempt private activity bonds, provided the policy is implemented and applied in a manner consistent with robust state and federal fair housing laws, including the duty to affirmatively further fair housing pursuant to Chapter 15 (commencing with Section 8899.50) of Division 1 of Title 2 of the Government Code, the Fair Employment and Housing Act (Part 2.8 (commencing with Section 12900) of Division 3 of Title 2 of the Government Code), the Unruh Civil Rights Act (Section 51 of the Civil Code), Sections 65008 and 11135 of the Government Code, the federal Fair Housing Act (42 U.S.C. Sec. 3601 et seq.), and any implementing regulations thereunder.
Gov’t Code 7061 also creates a state program for local tenant preference policies to be applied to affordable housing developed with LIHTCs, per tax code. Specifically, Internal Revenue Service code requires that LIHTC developments are available for “public use,” but preferences are permitted for members of a specified group under a state program or policy that supports housing for that group (26 U.S.C. Section 42(g)(9)).