AB 572 Affordable Housing Assessments: New Assessment Caps for California HOAs

California Assembly Bill 572 introduces assessment protections for owners of affordable housing units within common interest developments. For HOA boards, this law creates a new compliance obligation: identifying qualifying units and ensuring assessments do not exceed the statutory cap.

This guide breaks down exactly what AB 572 requires, who qualifies, how to calculate the cap, and what your board needs to do.

What AB 572 Does

AB 572 amends the Davis-Stirling Common Interest Development Act to add protections for owners of deed-restricted affordable housing units within HOAs. Specifically, the law:

• **Caps regular assessments** on qualifying affordable housing units at a percentage of the owner's household income
• **Prohibits special assessments** against qualifying units that would exceed the statutory threshold without providing an alternative payment plan
• **Requires boards to identify** qualifying affordable housing units in their communities
• **Creates disclosure obligations** when selling or transferring units subject to the cap

The purpose is straightforward: prevent HOA fees from making affordable housing unaffordable. As HOA assessments across California continue to rise — the average California HOA fee now exceeds $400 per month in many markets — low-income homeowners in deed-restricted units face an increasingly difficult financial squeeze.

Who Qualifies Under AB 572

Not every low-income homeowner qualifies. AB 572 applies specifically to units that meet all of the following criteria:

Deed-Restricted Affordable Units

The unit must be subject to a recorded deed restriction that limits the resale price or occupancy to households at or below a specified income level. These restrictions are typically created by:

• **Inclusionary housing ordinances** — many California cities require developers to set aside a percentage of units in new developments as affordable
• **Density bonus agreements** — developers who build more units than zoning allows in exchange for including affordable units
• **Government-subsidized developments** — communities that received public financing with affordability requirements
• **Community land trusts** — nonprofit organizations that retain ownership of the land while selling the improvements at below-market prices

Income Qualification

The owner's household income must be at or below 80% of the Area Median Income (AMI) for the county where the property is located. In practice, this means:

County | 80% AMI (2-Person Household) | 80% AMI (4-Person Household)

Los Angeles | $76,100 | $95,100

San Francisco | $102,450 | $128,050

San Diego | $80,600 | $100,750

Sacramento | $67,500 | $84,350

Fresno | $49,250 | $61,550

AMI figures are updated annually by the U.S. Department of Housing and Urban Development (HUD). Your management company or HOA attorney can help you access the current figures for your county.

Self-Certification Process

Qualifying owners must submit an annual self-certification to the HOA confirming:

1. The unit is subject to a recorded affordability restriction
2. The household income is at or below 80% AMI
3. The unit is the owner's primary residence

The association may request supporting documentation but cannot require tax returns or other sensitive financial records beyond what is necessary to verify income qualification.

How the Assessment Cap Works

AB 572 does not set a single dollar cap. Instead, it creates a formula-based limit tied to the owner's income:

Maximum monthly assessment = 10% of the owner's monthly household income ÷ 12

Wait — let's clarify that. The total annual regular assessments on a qualifying unit cannot exceed 10% of the household's annual gross income.

Calculation Example

Consider a qualifying household in Sacramento County with an annual income of $60,000:

• **Assessment cap**: $60,000 × 10% = $6,000 per year, or $500 per month
• **If your HOA's regular monthly assessment is $450**: the owner pays the full $450 (under the cap)
• **If your HOA's regular monthly assessment is $650**: the owner pays only $500 per month (the cap), and the association absorbs the $150 shortfall

What About Special Assessments?

AB 572 does not completely exempt qualifying owners from special assessments. However, if a special assessment would push the owner's total annual payments above the 10% threshold, the board must offer an alternative payment plan that:

• Spreads the special assessment over at least 12 months
• Does not charge interest on the deferred amount
• Does not result in any single month's total payment exceeding the 10% annual cap divided by 12

This means your board needs to model the impact of any proposed special assessment on qualifying units before putting it to a membership vote.

Board Compliance Obligations

AB 572 creates several specific obligations for HOA boards:

1. Identify Qualifying Units

Your board must determine which units in your community are subject to deed restrictions. Start with:

• **Title records**: Review the recorded CC&Rs, supplements, and any deed restrictions filed against individual units
• **City planning department**: Contact your local planning or housing department to identify units subject to inclusionary housing or density bonus requirements
• **Original developer records**: If available, review the development agreement for affordable housing set-asides

2. Establish a Certification Process

Create a simple annual certification form that qualifying owners can submit. The form should collect:

• Owner name and unit number
• Confirmation of deed restriction (with recording reference)
• Household size and annual gross income
• Certification that the unit is the owner's primary residence
• Owner's signature under penalty of perjury

3. Adjust Assessment Billing

For owners who submit valid certifications, adjust their monthly assessment billing to reflect the cap. Your accounting system or HOA management software must be able to handle different assessment amounts for different units.

4. Budget for the Shortfall

Here is the part that surprises many boards: the assessment shortfall on capped units cannot be passed to other owners. The association must absorb it. This means:

• Budget for the total shortfall as a line item
• Consider the number of qualifying units when setting next year's assessments
• Factor the shortfall into your long-term reserve planning

For communities with a small number of affordable units (the typical case), the financial impact is usually manageable. For communities with 10% or more affordable units, the cumulative shortfall can be significant and requires careful financial planning.

5. Maintain Records

Keep records of all certifications, income verifications, and cap calculations for at least five years. These records are subject to the Davis-Stirling Act's document retention requirements and may be reviewed if the association faces a compliance challenge.

Impact on Your HOA's Finances

The financial impact of AB 572 depends entirely on how many qualifying units are in your community and how your assessments compare to the income-based cap.

Low-Impact Scenario

A 100-unit community with 3 deed-restricted affordable units and a $350 monthly assessment. If all three qualifying owners have incomes near $50,000, their cap is $417/month — above the actual assessment. Net financial impact: zero.

Moderate-Impact Scenario

A 200-unit community with 15 deed-restricted units and a $550 monthly assessment. If qualifying owners average $55,000 income, their cap is $458/month — a $92/month shortfall per unit. Annual financial impact: approximately $16,560 that the association must absorb.

High-Impact Scenario

A 50-unit community with 10 deed-restricted units (20% affordable) and a $700 monthly assessment. If qualifying owners average $48,000 income, their cap is $400/month — a $300/month shortfall per unit. Annual financial impact: $36,000 — potentially requiring a significant budget adjustment.

Run the numbers for your community early. If the impact is significant, you may need to adjust your next budget cycle accordingly. Review our California HOA budget guide for help with the budgeting process.

How AB 572 Interacts with Other California HOA Laws

AB 572 does not exist in isolation. Here is how it connects with other key California HOA statutes:

Davis-Stirling Act Assessment Rules

The regular assessment increase limits in Civil Code Section 5605 still apply. AB 572 adds an additional constraint for qualifying units on top of the existing rules. Your Davis-Stirling compliance checklist should be updated to include AB 572 verification.

AB 130 Fine Caps

AB 130 limits HOA fines to $200 for an initial violation ($100 in some cases). AB 572 does not affect fines — only assessments. However, boards should be aware that for affordable housing owners, even modest fines on top of assessment obligations can create financial hardship that leads to delinquency issues.

Fair Housing Considerations

AB 572 intersects with both state and federal fair housing laws. Income-based assessment caps function similarly to reasonable accommodations — they ensure that housing remains accessible to protected populations. Boards should treat AB 572 compliance with the same seriousness as other fair housing obligations.

Common Questions About AB 572

What if an owner's income changes mid-year?

The certification is annual. If an owner's income increases above 80% AMI during the year, the cap remains in effect until the next annual certification period. If income decreases, the owner can submit an updated certification to lower their cap.

Can we require owners to re-certify more than once per year?

No. AB 572 limits certification to an annual process. Requiring more frequent income verification would create an undue burden on qualifying owners.

What if we suspect fraud in a certification?

If the board has reasonable grounds to believe a certification is fraudulent, it may request additional documentation (such as the first two pages of a tax return). However, the board cannot unilaterally revoke the cap — it must follow due process, including notice and an opportunity to be heard under Civil Code Section 5855.

Does this apply to rental units?

AB 572 applies to owner-occupied affordable units. If a deed-restricted unit is rented out, the owner (not the tenant) is responsible for assessments, and the cap does not apply because the unit is not the owner's primary residence.

How do we handle the shortfall in our reserve study?

The shortfall should be noted as a recurring operating expense, not a reserve component. However, your reserve study should acknowledge the reduced assessment income from capped units when projecting future reserve contributions.

Action Steps for Your Board

1. **Identify deed-restricted units** in your community by reviewing title records and contacting your local planning department
2. **Create an annual certification form** and distribute it to owners of qualifying units
3. **Calculate the potential financial impact** using the formula and scenarios above
4. **Update your budget** to account for any assessment shortfall
5. **Train your management team** or board treasurer on the new billing procedures
6. **Consult your HOA attorney** for community-specific guidance, especially if you have a large number of affordable units
7. **Add AB 572 compliance to your [annual compliance calendar](https://blog.propty.io/2026-california-hoa-compliance-calendar)** alongside other Davis-Stirling requirements

How Propty Helps

Managing different assessment amounts for different unit types is exactly the kind of complexity that manual spreadsheet tracking cannot handle well. Propty gives California HOAs the tools to track unit classifications, manage owner certifications, and handle variable billing — all while keeping your board organized and compliant with the Davis-Stirling Act.

*This article is for informational purposes only and does not constitute legal advice. Consult a California HOA attorney for guidance specific to your community's situation.*