CHICO, California — Virginia Heredia is one of the residents of B20 Senior Apartments in Chico who was surprised earlier this month to find a note on her door warning of an impending rate increase. “I thought it was some other kind of notice, I didn’t know what it was, but when I read it I was just shocked,” she said.

The letter said the rent increase was tied to a “significant reduction” in PG&E’s solar power bill. For Heredia, her rent would rise from $820 to $991 in November – more than 20 percent.

“If you go online, you see ‘affordable housing for seniors,’ but it’s no longer affordable, not after November 1,” she said.

The development, which was touted as an affordable option for seniors, was to include 60 units, including 22 for low-income residents, 31 for very low-income residents and six units for extremely low-income residents. Because of this, residents will be billed at different rates and subject to different rent increases.

“It makes me nervous, you know, that’s a lot of money,” she said. “One tenant mentioned that his rent increase was 35 percent, so we’re trying to figure out if we can do anything about that.”

A resident who asked not to be identified said she had contacted lawyers but was told there was not much that could be done because the project was being funded through federal tax credits.

“(Residents) thought this was where they were going to stay until they had to be hauled away. We really thought we wouldn’t have to worry about having a place to live, but this has kind of thrown everything into disarray,” the resident said. “It’s really hard for me to imagine California or even the federal government would put all these details together and then allow this because of solar energy.”

B20 was built as a result of the Disaster Low Income Housing Tax Credits made available after the 2018 wildfires. The California Tax Credit Allocation Committee (CTCAC), which reports to the State Treasurer’s Office, administers the credits in California. Subsequently, the Biden-Harris administration took steps this spring to limit rent increases on LIHTC-financed properties. Under the policy, rent increases are capped at 10 percent or less.

KRCR contacted Redding-based housing developer K2 Development Companies and received a response from Folsom-based FPI Management, which manages the apartment complex and is responsible for direct contact with residents.

Senior Apartments at B20 is owned by Bruce Village Commons LP and managed by FPI Management. Rents at B20 are set by the (CTCAC) and are calculated in part based on utility costs. Rates are adjusted based on the output of the solar array, which impacts utility costs. This adjustment was announced well in advance and we look forward to continuing to provide our residents with a quality place to live with affordable rents in accordance with public policy.

FPI Management told KRCR that they would still be able to increase rents despite a federal rent cap due to the apartments’ in-service date of December 2023. An “in-service date” is the date an eligible family can begin occupying the apartments, which is when a 10-year credit period begins during which credits can be claimed.

A spokesman for the Secretary of State for the Treasury said the CTCAC is not responsible for calculating exact rental rates and that work is underway to clarify rental thresholds for catastrophic LIHTC purposes.