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The brief reviews how the exemption operates for subsidized projects and details eligibility requirements for nonprofit or nonprofit-partner ownership, public financing or insured loans, and unit income limits tied to 80% of Area Median Income. Based on interviews, it identifies potential Welfare Exemption changes to stimulate supply while protecting public benefits.",{"@graph":63,"@context":118},[64,80,101],{"@type":65,"itemListElement":66},"BreadcrumbList",[67,71,74,77],{"item":68,"name":69,"@type":70,"position":9},"https://docshare.wps.com","Home","ListItem",{"item":72,"name":10,"@type":70,"position":73},"https://docshare.wps.com/template/",2,{"item":75,"name":51,"@type":70,"position":76},"https://docshare.wps.com/template/general/",3,{"item":78,"name":59,"@type":70,"position":79},"https://docshare.wps.com/template/property-tax-exemptions-to-facilitate-affordable-housing-lessons-from-california-terner-center-brief-may-2025/302587/",4,{"url":78,"name":59,"@type":81,"image":82,"author":87,"headline":59,"publisher":90,"fileFormat":93,"inLanguage":57,"description":61,"dateModified":94,"datePublished":95,"encodingFormat":93,"isAccessibleForFree":96,"interactionStatistic":97},"DigitalDocument",{"url":83,"@type":84,"width":85,"height":86},"https://docshare.wps.com/thumbnails/property-tax-exemptions-to-facilitate-affordable-housing-lessons-from-california-terner-center-brief-may-2025/302587.png","ImageObject",442,249,{"name":88,"@type":89},"Sarah ","Person",{"url":68,"name":91,"@type":92},"DocShare","Organization","application/pdf","2026-09-22","2026-09-19",true,{"@type":98,"interactionType":99,"userInteractionCount":79},"InteractionCounter",{"@type":100},"ViewAction",{"@type":102,"mainEntity":103},"FAQPage",[104,110,114],{"name":105,"@type":106,"acceptedAnswer":107},"What problem does the brief describe in California’s affordable housing supply?","Question",{"text":108,"@type":109},"It describes the loss of unsubsidized affordable housing for low-income households since 2020 and the lack of sufficient new construction, leaving many families in a precarious position each year.","Answer",{"name":111,"@type":106,"acceptedAnswer":112},"How does California’s Property Tax Welfare Exemption work at a high level?",{"text":113,"@type":109},"It provides property tax relief for qualifying rental housing occupied by households meeting specified criteria. Eligibility is co-administered by the state Board of Equalization and county assessors.",{"name":115,"@type":106,"acceptedAnswer":116},"What key eligibility criteria must developers meet to use the Welfare Exemption?",{"text":117,"@type":109},"Developers must be nonprofits or partner with nonprofits through the ownership structure, must receive direct subsidy or an insured loan from a public agency, and units must be restricted to and occupied by households earning 80% of AMI or below.","https://schema.org",{"og:url":78,"og:type":120,"og:title":59,"og:site_name":91,"og:description":61},"article",{"robots":122,"canonical":78},"index,follow",{"doc_id":124,"site_id":56},302587,1789794355,{"code":4,"msg":5,"data":127},{"doc_id":124,"user_id":128,"nickname":88,"user_avatar":129,"doc_module":9,"category_id":50,"category_name":51,"doc_title":59,"doc_description":61,"doc_content":130,"file_id":131,"file_url":132,"file_type":133,"file_size":134,"view_count":73,"is_deleted":4,"is_public":9,"is_downloadable":9,"audit_status":9,"page_count":25,"language":135,"language_code":57,"site_id":56,"html_lang":57,"table_of_contents":136,"faqs":137,"seo_title":138,"seo_description":61,"update_tm":125,"read_time":47},962085320529,"https://ap-avatar.wpscdn.com/davatar_9964176cb1d06d4a9deccf72a44ae3dc","A TERNER CENTER BRIEF-MAY 2025  \nProperty Tax Exemptions to Facilitate Affordable Housing: Lessons from California  \nAUTHORS  \nRachel Ozer-Bearson  \nSarah Karlinsky  \nBen Metcalf  \nCO-AUTHORS  \nDavid Garcia  \nZachary Ferguson  \nAlexa Washburn  \nIntroduction  \nSince 2020, over 160,000 homes in California that were formerly identified as unsubsidized affordable housing are no longer affordable to low-income households.1 This consistently high loss of unsubsidized housing, coupled with insufficient new construction to meet the needs of low-income households, places thousands of families in a precarious position each year. There is a need to scale approaches outside the traditional affordable housing finance system that can add to the supply of lower-cost units.  \nOne potential model is to increase the use of property tax exemptions, which can enable both new construction and preservation of affordable housing, without relying on oversubscribed existing subsidies such as Low-Income Housing Tax Credits (LIHTC) and the HOME program.  \nIn California, the Property Tax Welfare Exemption (“Welfare Exemption”)  \nreleases owners of subsidized housing from paying property taxes, provided that the ownership entity and the renter households meet certain criteria.  \nProjects using LIHTC—the main source of funding for affordable housing—already typically utilize the Welfare Exemption, as long as the owner is a nonprofit organization or partners with a nonprofit.  \nBut the Welfare Exemption can also be used to build or preserve housing that serves households at or below 80 percent of Area Median Income (AMI), even without traditional sources of affordable housing public subsidy, if certain criteria are met. The main criteria are that owners must be a nonprofit or partner with a nonprofit; owners must receive some form of public financing or subsidy for their project, such as local, state, or federal grants or bonds; and units must be restricted to and occupied by households earning 80 percent or below of AMI.  \nCopyright 2025 Terner Center for Housing Innovation For more information on the Terner Center, see our website at  \n[ternercenter.berkeley.edu](ternercenter.berkeley.edu)  \nTERNER CENTER BRIEF-MAY 2025  \nThis paper explores options for utilizing the Welfare Exemption without LIHTC or other significant forms of public financing or subsidy. Drawing on interviews with two dozen individuals, including both for-profit and nonprofit affordable housing developers and finance professionals, this paper identifies opportunities for changes to the Welfare Exemption so that it more effectively spurs the creation of affordable housing, while establishing guardrails to ensure public benefits.  \nWhat is California’s Property Tax Welfare Exemption?2  \nThe Property Tax Welfare Exemption was created through a voter-enacted constitutional amendment in 1944, which gave the California legislature the authority to exempt property “used exclusively for charitable, hospital, or religious purposes, and owned or held in trust by nonprofit organizations”from property taxes. The operation of rental housing affordable to low-income households qualifies as a charitable purpose under this definition.  \nThe Welfare Exemption is co-administered by the state Board of Equalization (BOE) and county assessors. The BOE  \ndetermines whether an organization is eligible for the exemption by verifying whether it operates exclusively for one or more of the qualifying purposes.3 The county assessor then determines whether an organization’s specific property qualifies for the exemption based on the property’s charitable use.  \nTo be eligible for the exemption, the developer must be a nonprofit or have a nonprofit partner as part of the ownership structure (for example, as a limited partner in a corporate partnership), and must receive a direct subsidy or an insured loan from a public agency.4  \nThe county assessor grants exemptions for qualifying, occupied units provided that the h","cbCaiej1l3kz77FO","https://ap.wps.com/l/cbCaiej1l3kz77FO","pdf",889760,"English","# Introduction\n# In California, the Property Tax Welfare Exemption (“Welfare Exemption”) \n# What is California’s Property Tax Welfare Exemption?\n# Establishing Eligibility for the Welfare Exemption\n# Expanding the Use of the Welfare Exemption for Affordable Housing","[{\"question\":\"What problem does the brief describe in California’s affordable housing supply?\",\"answer\":\"It describes the loss of unsubsidized affordable housing for low-income households since 2020 and the lack of sufficient new construction, leaving many families in a precarious position each year.\"},{\"question\":\"How does California’s Property Tax Welfare Exemption work at a high level?\",\"answer\":\"It provides property tax relief for qualifying rental housing occupied by households meeting specified criteria. Eligibility is co-administered by the state Board of Equalization and county assessors.\"},{\"question\":\"What key eligibility criteria must developers meet to use the Welfare Exemption?\",\"answer\":\"Developers must be nonprofits or partner with nonprofits through the ownership structure, must receive direct subsidy or an insured loan from a public agency, and units must be restricted to and occupied by households earning 80% of AMI or below.\"}]","Property Tax Exemptions to Facilitate Affordable Housing: Lessons from California - Terner Center Brief - May 2025 | PDF"]