Preservation and Conversion (Rental or Ownership)

Preservation applies to existing affordable housing that may be at risk due to expiring affordability restrictions, ownership changes, or market pressures. Efforts can include renewing expiring restrictions, acquiring at-risk properties, or adding new affordability agreements. Rehabilitation is also considered preservation if it includes a new affordability mechanism to extend affordability protections.

Conversion applies to market-rate units that are newly designated as affordable, as well as non-residential properties repurposed into affordable housing. This can include office buildings, hotels, or other commercial spaces that are converted into residential use while maintaining affordability restrictions.

Proposition 123 Submission Package Checklist

Portal for Unit Count Submissions

When to Count Preservation or Conversion

A preservation or conversion unit can be counted toward a jurisdiction’s Proposition 123 commitment. No matter the type of preservation or conversion, the units count at the later of:

• The date the project is fully funded.
• The date that a permit for the work required is issued.

If neither funding nor permitting is applicable, then the units count at the date when an affordability mechanism is executed.

Types of Preservation and Conversion

• Preservation of an Expiring Affordable Unit
• Preservation Through Acquisition
• Preservation Through Rehabilitation
• Conversion of Market-Rate to Affordable
• Conversion of a Non-Residential Property (Adaptive Reuse)

Rental Housing Preservation and Conversion

To qualify as an affordable rental unit under Proposition 123, a project must maintain affordability for households earning at or below 60% AMI through an affordability mechanism. The affordability period must be extended beyond its previous expiration date or newly placed on market-rate units.

Rental preservation projects commonly involve renewing affordability restrictions on expiring rental agreements, acquiring at-risk properties, or preventing displacement through mobile home park acquisitions. Rental conversion projects include converting market-rate rental units into deed-restricted affordable units or repurposing non-residential buildings, such as hotels or offices, into rental housing.

Ownership Housing Preservation and Conversion

To qualify as an affordable ownership unit under Proposition 123, a project must maintain affordability for households earning up to 100% AMI through an affordability mechanism. Preservation projects extend existing affordability agreements, while conversion projects designate previously unrestricted ownership units as affordable through new deed restrictions or affordability covenants.

Common ownership preservation strategies include deed restrictions limiting resale prices, acquisitions by Community Land Trusts (CLTs), and mobile home park purchases by nonprofit organizations or local jurisdictions. Ownership conversion projects may involve transitioning rental units into affordable homeownership opportunities or repurposing non-residential buildings into ownership housing.