Multifamily Housing Program: Homekey: adaptive reuse.

Adaptive reuse was removed as a distinct eligible project category under subdivision (a)(8). The Assembly version had made it eligible for funds awarded on or after January 1, 2027; the Senate deleted that provision entirely.

The requirement that adaptive reuse projects be treated as a distinct eligible project category not subject to per-unit cost caps (former subdivision (m)) was removed. Adaptive reuse projects may now be subject to standard cost caps.

The definition of 'adaptive reuse' was simplified from a multi-sentence provision that excluded rehabilitation affecting existing residential units and specifically addressed hotels/motels, to a single sentence: 'retrofitting and repurposing of an existing building to create new units.'

A new definition was added: 'Substantial rehabilitation, reconstruction, or demolition' means a project in which at least 55 percent of the existing structure is demolished, replaced, or substantially reconstructed.

Specific construction completion (24 months for new construction/gap financing/adaptive reuse; 14 months for others) and capital expenditure/occupancy (24 months for new construction/gap financing/adaptive reuse; 15 months for others) deadlines for awards made on or after July 1, 2026 were removed entirely.

The timeline extension provision for adaptive reuse was narrowed. The Assembly version allowed the department to consider giving adaptive reuse applicants the same timelines as new construction generally. The Senate version limits this to cases where the adaptive reuse involves substantial rehabilitation, reconstruction, or demolition (meeting the 55 percent threshold).

The guideline modification language was changed from 'modifications allowing for additional time set forth by the guidelines' to simply 'modifications set forth by the guidelines,' removing the explicit reference to time extensions.

A new requirement was added in Section 50675.1.1(k)(2)(B) stating that the department shall consider allowing applicants that utilize funds for adaptive reuse to be subject to the same timelines as new construction, as set forth by the department. This gives the department discretion to potentially extend or adjust timelines for adaptive reuse beyond what is already specified in the statute.

The definition of 'adaptive reuse' was slightly expanded with the addition of the phrase 'an existing building to create new units' at the end, providing additional clarification about what qualifies as adaptive reuse.

The definitions subsection (l) was reorganized: the introduced version had a confusing structure where it defined 'individuals and families who are homeless' before introducing the list of definitions. The amended version cleanly states 'the following definitions shall apply' and then lists both definitions in order.

A duplicate subsection label was fixed: the introduced version had two subsections both labeled (m). The amended version renumbers the second one as (n), which addresses the department's authority to expand the population served beyond those specified in subdivision (l).