Currently the State of California sets a limit of 55 years on all rental units that were constructed with key federal government programs, whereas the federal government limit is 15 + 15, that means the studio can be purchased after 15 years, provided that the rent stays low for the following 15 years.

We are working to get the California law to align with the federal law and are recommending the following statutory language to the State Assembly and the State Senate: “The state of California shall grant a 25 year exemption on the 55 year rental limit for the renters, provided that the renter wishing to purchase the studio lived there for a substantial time period, (over 5 years,) plans to live there for at least 15 years after the purchase, and that the rent shall remain within 30% of AMI. The renter is responsible for making repairs to the studio, as well as paying for utilities and property taxes during this time. Once the time elapsed, the rent owns 100% of the studio, subject to local ordinances and building codes, in Fee Simple.”

Additionally, we have a program where our renters are provided with the education needed to buy their own micro units in another complex that we aim to build, one strictly for home ownership, using different incentives. Our objective is to solve the housing crisis, first by enabling our residents struggling with home payments to rent affordable studios, then by enabling the purchase of very similar studios, which allows future homeowners to build equity. Consider the following chart:

By 2050, or 25 years after owning the studio, the real pay is negative, since more equity is generated then the cost of mortgage, property taxes, utilities, repairs, etc. Home ownership is how most Californians create equity, and start building generational wealth.