A proposed 75% trigger can turn a rehab into new-construction counts

Here's the thing: under a proposed California rule, a single calculation decides whether a public-housing rehab is "just an alteration" or owes the accessible-unit counts of new construction. The number is 75% of the replacement cost of the completed facility. Cross it, and a 15-unit-or-larger affordable property is treated as substantially altered.

That trigger doesn't exist in the code today. It lives in a new section — 11B-233.2.6.1 — inside the Division of the State Architect's DSA-AC 01/25 package, the same rulemaking that would fill the long-"Reserved" 11B-233.2 slot with HUD's Section 504 Deeming Notice. (We covered the broader rewrite separately: Public housing is set to lose five 11B accessibility exceptions.)

Verified against the DSA-AC 01/25 Final Statement of Reasons (p. 19), which quotes the proposed text: "A facility is substantially altered when the adjusted construction cost, as defined, of alterations to a facility containing 15 or more dwelling units, or 15 or more sleeping rooms in housing at a place of education, exceeds 75% of the replacement cost of the completed facility."

What the code does today

Right now, CBC 11B-233.3.4 handles alterations piece by piece. The accessible-unit requirement follows the individual units you touch: under 11B-233.3.4.2, when a bathroom or kitchen is substantially altered and at least one other room is altered, that unit counts toward the mobility and communication minimums. There's a separate rule for emptied buildings — 11B-233.3.4.1 — where a building vacated for alteration that ends up with more than 15 residential dwelling units must make at least 5 percent of units comply with mobility features and 2 percent with communication features.

The proposal adds something different: a facility-wide switch. Instead of counting unit by unit, 11B-233.2.6.1 asks one question about the whole project — did the cost of the work cross 75% of what it would cost to replace the finished building? If yes, the facility is "substantially altered," and it's scoped like new construction.

The number that moved: 50% to 75%

The 75% figure wasn't the first proposal. DSA started from the old UFAS threshold of 50 percent. During the comment periods, Disability Rights California pointed to HUD's own rule, and DSA raised it.

Verified against the FSOR (p. 18): DSA-AC "concurred with comments specific to … HUD regulations which use a 75% substantial alteration threshold instead of the UFAS 50% threshold," and "issued amendments for the 15-day comment period … that raised the threshold to 75%."

The federal anchor is 24 CFR 8.23(a). As DSA quotes it in the rulemaking record, if alterations to a project with 15 or more units cost 75 percent or more of the replacement cost of the completed facility, the new-construction provisions of HUD's Section 8.22 apply.

The fight is over how you measure it

Here's where it gets practical. HUD's rule compares "the cost of the alterations" to replacement cost. DSA's proposed text uses a different, California-defined term in the numerator: "adjusted construction cost." And that term has carve-outs. Per CBC §202, adjusted construction cost covers the labor, materials, and equipment directly related to construction — but it excludes architectural and engineering fees, project-management fees and expenses, testing and inspection fees, and utility-connection or service-district fees.

That mismatch is exactly what CALBO objected to. In its 15-day comment, the building officials argued that using the CBC's "adjusted construction cost" rather than HUD's own terminology "creates ambiguity and deviation from federally established terminology." DSA's answer: HUD never defines "the cost of the alterations," so it should be read as the project cost — which, DSA says, is "equitable to the CBC definition for 'adjusted construction cost.'"

Who's right isn't settled, and it matters at the margin. Because the CBC term strips out soft costs like design and inspection fees, the same rehab can total to a smaller numerator than a straight "cost of the alterations" count — enough to push a borderline project onto either side of the 75% line. Until the record is clearer, the safe move is to run a replacement-cost estimate early, state which cost basis your numerator uses, and confirm the method with the AHJ or DSA before the trigger gets decided at plan check.

This is proposed — not adopted

Hold onto this: none of it is in the code yet. These are Final Express Terms that went to the Building Standards Commission at its August 25–27, 2026 meeting, and the item sits on the Commission's Yellow action matrix — the contested pile. CALBO recommended disapproval; Disability Rights California supported the proposal as amended. As of this writing, no recorded Commission adoption action is posted. Treat everything here as proposed, and confirm the final text with your jurisdiction before you rely on it.

One boundary worth knowing: this public-housing trigger is a different animal from the 11B-202.4 path-of-travel rule that caps accessibility spend at 20% of adjusted construction cost. That one is written mainly for non-residential alterations — and its Exception 1 sends residential dwelling units to 11B-233.3.4.2 instead. We broke the 20% cap down here: Touch one wall in a TI, and you may owe an accessible path to the door.

What CrossBeam does with it

CrossBeam reads an affordable-housing rehab against the accessibility rules in force today and flags where a pending trigger like this one would move the line — so a 15-unit-plus recapitalization gets its substantial-alteration question raised while the scope is still on paper. You see the cost-basis ambiguity, and the number that turns on it, before it surfaces at the counter.