HomeMy WebLinkAbout06 - June 12, 2026 - Update on Expiring BMR Rental Units in Cupertino
COMMUNITY DEVELOPMENT DEPARTMENT
CITY HALL
10300 TORRE AVENUE • CUPERTINO, CA 95014-3255
TELEPHONE: (408) 777-3308
CUPERTINO.GOV
CITY COUNCIL INFORMATIONAL MEMORANDUM
Date: June 12, 2026
To: Cupertino City Council
From: Benjamin Fu, Director of Community Development
Re: Update on Expiring Below Market Rate (BMR) Rental Units in Cupertino
Purpose
This memo is intended to inform the City Council of the status of expiring BMR units in
the City, including the process for expiring affordability restrictions.
Background
On April 30, 2026, Mayor Moore received a six-month notice of expiring affordability
restrictions for four Below Market Rate (BMR) units at the Cupertino Park Center, as
required by the California State Department of Housing and Community Development
(HCD). These four (4) units will transition out of the BMR program and effectively become
market rate units on November 1, 2026.
The City’s BMR rental housing program is an affordable housing program designed to
assist low and low-income households. Currently, the City’s BMR portfolio includes 142
rental units across nine properties. The period of affordability for these units is set by a
Declaration of Resale Controls or Regulatory Agreement between the City and the
property. The terms of affordability for these units are 30 years, as they were established
before the 1999 update of the Housing Mitigation Program Procedural Manual, which
extended affordability restrictions to a term of 99 years, or for the life of the property.
Discussion
Expiring BMR Units
Of the City’s 142 BMR rental units, 114 units across eight properties will be expiring out
of the program within the next 13 years. Prior to expiration, property owners are required
to send expiration notices to the renters and the Mayor/City, as required by California
Government Code 65863.10. Required notices must be sent at the following intervals:
three years in advance, 12 months in advance, and six-months in advance of the expiration
of affordability restrictions. Staff conduct annual audits with the property owners to
confirm and verify completion of the notification requirements for the 3-year and 12-
month notices. Check-ins are conducted as needed for 6-month notices. If the property
owner misses any of the notices, the terms are automatically extended relative to the
noticing period that was missed. For example, a missed three-year notice would extend
the affordability by three additional years, a missed 12-month notice would extend
affordability by an additional 12 months, and so forth. Once expired, the units become
market rate rental units.
The Park Center units are the first in the City’s BMR portfolio scheduled to expire. Mayor
Moore received the required six-month notice on April 30, as the four (4) units are
scheduled to expire on October 31, 2026.
Figure 1. Expiring BMR Units
Apartment
Building
Units Restrictions
Expire
New
Restriction
3-Year
Notification
12-Month
Notification
6-Month
Notification
Aviare 20 7/8/2026 1/1/2028 Yes – Ext
Forge
Homestead
15 7/15/2026 11/8/2027 Yes – Ext
Park (City
Center)
4 7/31/2026 10/31/2026 Yes – Ext Yes – Ext Yes
Hamptons 34 10/20/2027 Yes
Arioso 20 1/29/2028
Biltmore 2 8/30/2029
Aviare 2 7/8/2038
Markham 17 11/4/2039
TOTAL 114
Staff will continue to conduct annual audits (and check-ins for 6-month noticing) with
various housing property managers for compliance with state law for noticing and will
inform property managers of their responsibilities for notifying all the required affected
parties. Non-compliance will be rectified with extension of affordability terms per the
regulations of state law.
Sustainability Impact
No sustainability impact.
Fiscal Impact
No fiscal impact.
City Work Program (CWP) Item/Description
Yes – Preserve existing and develop new BMR/ELI housing: Explore opportunities to
preserve existing expiring BMR housing. Develop ELI (Extremely Low Income) and BMR
housing units for Developmentally Disabled Individuals (IDD) on City-owned property
as well as the County-owned sites.
Council Goal:
Housing
California Environmental Quality Act
No California Environmental Quality Act impact.
___________________________________________
Prepared by: Evelin Meza, Assistant Housing Coordinator
Nicky Vu, Senior Housing Coordinator
Reviewed by: Benjamin Fu, Community Development Director
Approved for Submission by: Tina Kapoor, City Manager