A landlord taking a loan must extend leases, keep units affordable, and cap rent increases
What the document says“cap annual rent increases for each assisted unit at 5 percent of base rent or at the rate of inflation, whichever is lower, for not less than 3 years beginning after the completion of the repairs.”
A loan agreement must bind the landlord to federal accessibility rules and, where tenants do not receive rental assistance, to offer current tenants a lease extension on current terms for at least three years after the repairs, to keep a unit affordable for the rest of that period if the tenant moves out, to show the property meets State and local housing and building codes, to attest to no known serious renter protection violations resulting in fines, penalties, or judgments in the preceding ten years, and to cap annual rent increases at 5 percent of base rent or the rate of inflation, whichever is lower, for at least three years. Where tenants do receive rental assistance, the landlord must follow that program's requirements instead.
What the document actually says“cap annual rent increases for each assisted unit at 5 percent of base rent or at the rate of inflation, whichever is lower, for not less than 3 years beginning after the completion of the repairs.”
Rent may not go up much each year. The rise stops at 5 percent or at the rate prices are rising, whichever is less. That holds for at least three years after the work is done.
The loan is the reason the landlord accepts these terms. A tenant already there can stay. If the tenant leaves, the rent stays low for the rest of the three years.
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