Sunnyvale — Below Market Rate Housing

Applicability: Existing Recorded BMR Agreements

A rental housing development is subject to Chapter 19.69 when it has a BMR housing agreement recorded before enactment of Chapter 19.69. The chapter applies for the duration identified in that recorded agreement. § 19.69.030(a)

This is materially narrower than a rule applying automatically to every new Sunnyvale rental project. A property owner, buyer, lender, or manager should therefore review the property’s recorded documents to determine:

• Whether a BMR housing agreement was recorded;
• Whether the agreement predates the chapter’s enactment;
• The agreement’s term, covered units, affordability restrictions, and operational requirements; and
• Whether any units have been released after the agreement term ended.

The director must report annually on units released from restrictions by the end of the applicable agreement term. § 19.69.070

District Applicability

No Chapter 19.69 Zoning District Designation

Chapter 19.69 does not identify any R-1, R-2, R-3, C-N, commercial, industrial, or overlay district as the trigger for BMR rental preservation. It applies based on a qualifying recorded BMR housing agreement, rather than a parcel’s zoning district. §§ 19.69.030(a), 19.69.040

Accordingly, Chapter 19.69 provides no district-specific permitted-use list, lot-area rule, setback, height limit, floor-area ratio, or parking ratio. Verify the parcel’s separate zoning, overlay district, and entitlement requirements with the jurisdiction.

Core BMR Rental Standards

Income, Household Size, and Housing Cost

For Chapter 19.69, a BMR rental unit is a rental dwelling unit that is affordable to lower-income households and regulated under the chapter. A market-rate unit is not subject to Chapter 19.69 occupancy or rent restrictions, or to another affordability covenant. § 19.69.020

The affordability baseline relies on Santa Clara County AMI, adjusted for household size. The chapter defines an assumed household size as the number of bedrooms plus one person—for example, a three-bedroom BMR home uses a four-person assumed household. § 19.69.020

For rent-related purposes, housing cost means rent plus utility costs charged to the tenant. It does not include telecommunications charges for phone, cable television, or internet. § 19.69.020

The specific affordable rent schedule, income-documentation procedures, and calculation details are not found in source materials. The chapter incorporates the City’s BMR Rental Housing Guidelines, so those guidelines and the recorded agreement should be reviewed for project-specific requirements. § 19.69.030(b)

Tenant Eligibility and Annual Compliance

An eligible tenant is a lower-income household meeting Chapter 19.69 eligibility requirements for a BMR rental unit. The property manager must make that determination before the household occupies the unit and repeat it annually. § 19.69.020

The City director verifies compliance through annual audits of property-manager leasing files and other related records. This makes continued file maintenance important: a one-time move-in determination is not the full compliance obligation. § 19.69.020

Chapter 19.69 does not state the form of required income documentation, recertification notices, rent increase notices, tenant-selection preferences, or consequences of an adverse eligibility determination. These matters are not found in source materials; verify the recorded agreement and BMR Rental Housing Guidelines with the jurisdiction. §§ 19.69.020, 19.69.030(b)

Administration and City Reporting

The director is responsible for developing detailed BMR Rental Housing Guidelines to administer Chapter 19.69 efficiently. Because the guidelines are incorporated into the chapter, they are operationally important even though their detailed text is not included in the source materials. § 19.69.030(b)

Each year, the director must provide the City Council a report identifying the number, size, type, compliance status, and general location of BMR rental units maintained under Chapter 19.69. The report must also address units released at the end of their agreement terms and the BMR rental vacancy rate. § 19.69.070

Relationship to Other Sunnyvale Requirements

Chapter 19.69 is not a substitute for the site-development rules that may apply to a rental property. Requirements for parking, design review, and ADUs are outside this chapter and should be evaluated separately where relevant.

Likewise, Chapter 19.69 does not establish construction-code standards under the California Building Standards Code. It also does not define the separate tenant-rights framework; consult Sunnyvale Residential Tenant Protections for that related topic.

Checklist

• Confirm that the development is a rental housing development with a recorded BMR housing agreement covered by Chapter 19.69. § 19.69.030(a)
• Obtain and review the recorded agreement to identify the applicable BMR units, restrictions, and agreement term. §§ 19.69.030(a), 19.69.040
• Apply the agreement’s BMR requirement rather than assuming a citywide percentage or fee applies under Chapter 19.69. § 19.69.040
• Determine whether applicant households qualify as lower income households under the applicable AMI standard. § 19.69.020
• Use the chapter’s bedrooms plus one assumed-household-size rule where the applicable affordability procedure calls for assumed household size. § 19.69.020
• Determine tenant eligibility before BMR-unit occupancy. § 19.69.020
• Complete tenant eligibility review annually after occupancy and retain leasing files and related records for City audit. § 19.69.020
• Calculate tenant housing cost by including rent and applicable utilities, while excluding telecommunications services. § 19.69.020
• Review the BMR Rental Housing Guidelines and verify project-specific procedures with the jurisdiction. § 19.69.030(b)
• Separately confirm zoning, site, building, and entitlement requirements that Chapter 19.69 does not establish. Not found in source materials.

Risks & Ambiguities

Plain-English Summary

If an older Sunnyvale rental property has a recorded BMR agreement, the owner must follow that agreement for as long as it lasts. BMR renters generally must be lower-income households, the manager must check eligibility before move-in and every year, and the City can audit the leasing records. §§ 19.69.020, 19.69.030, 19.69.040

Source References

• Sunnyvale Municipal Code, purpose and preservation scope for existing BMR rental housing: § 19.69.010
• Sunnyvale Municipal Code, BMR rental definitions, income thresholds, household size, housing cost, eligibility, and audits: § 19.69.020
• Sunnyvale Municipal Code, applicability and BMR Rental Housing Guidelines: § 19.69.030
• Sunnyvale Municipal Code, controlling effect of the recorded BMR housing agreement: § 19.69.040
• Sunnyvale Municipal Code, annual BMR rental-unit report: § 19.69.070
• City of Sunnyvale Municipal Code source: https://ecode360.com/SU5020