Assembly BillChaptered/SignedHealth and Safety
AB 2689: Low-income housing tax credits: lease nonrenewal: good cause.
What AB 2689 does, verified October 2, 2026
This bill aims to modify California's low-income housing tax credit program. The program allocates tax credits to provide affordable low-income housing. The bill specifies that good cause for nonrenewing a lease includes cases where a household's 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. This provision applies to housing projects that require 100% of the units to be restricted to lower-income households.
Bill journey
✓IntroducedComplete
✓In CommitteeComplete
✓First Chamber FloorComplete
✓Second ChamberComplete
✓GovernorComplete
6ChapteredCurrent
Last action: Chaptered by Secretary of State - Chapter 958, Statutes of 2026. (2026-09-30)Alert me
Author and sponsors
Full contact details, staff, and committees with Connect, $16/moUnlockRecent actions24 total · showing 5
| Sep. 30, 2026 | Chaptered by Secretary of State - Chapter 958, Statutes of 2026. |
| Sep. 30, 2026 | Approved by the Governor. |
| Sep. 10, 2026 | Enrolled and presented to the Governor at 3 p.m. |
| Aug. 30, 2026 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 69. Noes 2. Page 6884.). |
| Aug. 28, 2026 | In Assembly. Concurrence in Senate amendments pending. |
Latest bill textChaptered version, September 30, 2026 · 689 words
Assembly Bill No. 2689
CHAPTER 958
An act to add Section 50199.28 to the Health and Safety Code, relating to housing.
[ Approved by Governor September 30, 2026. Filed with Secretary of State September 30, 2026. ]
LEGISLATIVE COUNSEL'S DIGEST
AB 2689, 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, 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.
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 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 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 provided by paragraph (2) of subdivision (a).
Text of AB 2689 as chaptered, from the official record. Connect Plus keeps every version and highlights what changed.Compare versions