What Is Chula Vista's Value Recapture Agreement?

You may see “Value Recapture Agreement” in a Chula Vista listing, title report or seller document and wonder whether it changes an ordinary home purchase. It does, but only for a restricted for-sale Affordable Unit governed by Chapter 19.93 of the Chula Vista Municipal Code. Not every Chula Vista home is covered. Only a restricted Affordable Unit in a development that falls under Chapter 19.93 is covered.

For a covered home, the agreement can affect eligibility, occupancy, financing, refinancing, title changes and the first resale. It also sets the methodology for sharing equity between the homeowner and the City. This is general information and not legal advice.

Which homes are covered by Chapter 19.93?

Chapter 19.93 applies only to developments that satisfy a City affordable housing obligation by providing restricted for-sale Affordable Units not otherwise regulated by another funding source.

The stated purpose is to establish procedures for developing affordable for-sale housing for very low-income, low-income and moderate-income buyers under City programs. Those programs include Density Bonus under Chapter 19.90 and Inclusionary Housing under Chapter 19.91. Chapter 19.93 was added by Ordinance 3572, section 2, in 2024.

The chapter does not identify particular homes, subdivisions or developments. A location within Chula Vista does not establish that a property is covered. It also does not say that a covered unit has an HOA or Mello-Roos obligation. If either applies, review the relevant documents, including the California HOA disclosure materials and the Otay Ranch and Eastlake Mello-Roos guide.

The City’s Municipal Code Title 19 list places Chapter 19.93 alongside separate chapters governing density bonuses, inclusionary housing and affordable rental housing procedures.

What is an Affordable Unit under the code?

An Affordable Unit is a home restricted for sale to a qualifying income category and sold at an Affordable Housing Cost.

The code ties Affordable Housing Cost to California Health and Safety Code Section 50052.5 and the City’s related Administrative Regulations. The permitted price is limited by a formula tied to area median income, with one calculation for lower-income units and another for moderate-income households. Chapter 19.93 does not give a dollar income limit or a fixed sale price.

The code also defines the Initial Benefit as the difference between the home’s sale price and its unrestricted fair market value when the eligible buyer purchases it. That figure matters because the Value Recapture Agreement must state the Initial Benefit.

“Household” has a specific meaning in this chapter. It refers to all persons who have lived together for at least one year, except in the case of a newborn child, and who will continue living in the residence being purchased.

What must a buyer do before purchasing?

A buyer must meet the chapter’s first-time homebuyer rule, obtain lender prequalification and complete the City’s review process.

Under the code, a First-Time Homebuyer is one for whom no member of the Household has held Ownership anywhere, including in another country, during the three years before applying. Every applicant must provide documentation showing no Ownership.

For this definition, Ownership includes fee simple ownership, joint tenancy, tenancy in common, a cooperative tenant-shareholder interest and a life estate held in trust for the applicant. It does not include a remainder interest, a lease with or without a purchase option, or an interest acquired when the purchase contract is signed.

Prospective buyers must be prequalified by a lender. They may select any licensed mortgage broker or lender, but all loans remain subject to the City’s review and written approval. The buyer must notify City staff in writing of the selected lender at least 30 days before escrow closes. The lender’s documents also must reach the City at least 30 days before closing.

The developer must follow the buyer-priority system established in the Administrative Regulations and provide disclosures describing the responsibilities of the lender, City, developer and buyer.

What does the Value Recapture Agreement control?

The Value Recapture Agreement records the purchase restrictions and establishes how equity is shared between the homeowner and the City.

It is an agreement between the City and the buyer, recorded against the property in the official records of the County of San Diego. The agreement must state the Initial Benefit and the methodology used for equity sharing. The amount due to the City is whatever the agreement provides, subject to the chapter’s requirement that it comply with California Government Code Section 65915(c)(2).

Chapter 19.93 does not state the City’s equity share amount. It also does not provide the affordability term or a complete resale price formula. Those details should come from the recorded agreement and the City’s Administrative Regulations.

For the first resale, the chapter defines Equity using the property’s unrestricted fair market value on the resale date, based on an appraisal approved by the City. The calculation accounts for the original unrestricted fair market value, actual costs of City-approved improvements and the down payment. If the calculation produces a negative number, Equity is treated as zero.

We were reviewing documents for a Chula Vista property when the buyer found a reference to a Value Recapture Agreement. He thought it was an additional tax that every future owner would pay. We traced what the agreement covered and whether it actually attached an obligation to that property before including anything in his ownership costs.

What occupancy rules apply after closing?

The home must remain the buyer’s Principal Residence throughout the Value Recapture Agreement’s term.

The code defines Principal Residence as the primary home in which all homebuyers reside for at least 10 months of each calendar year. The homeowner must certify annually to the City, under penalty of perjury, that the Affordable Unit remains the homeowner’s Principal Residence.

A covered unit cannot be rented on either a long-term or short-term basis while it is subject to affordability restrictions. The homeowner must also notify the City about changes in Household composition. Adding anyone to the property’s title requires the City’s advance written approval.

A buyer should read the recorded agreement before removing contingencies or making plans that depend on renting the property, changing title or using it other than as the required Principal Residence.

What happens when the owner sells or refinances?

A sale, transfer, refinance, conveyance or title change requires the City’s advance written approval.

The approval process is governed by the Administrative Regulations associated with Chapter 19.93. The municipal code does not state how long City approval takes, whether an approval fee applies or what documents the City will request for a particular transaction. A seller should avoid assuming an ordinary resale schedule will work without first checking the agreement and current City procedures.

For a sale, the property’s restrictions belong in the transaction review along with the usual California seller disclosures.

How can you tell whether a property is restricted?

You can check for a restriction by requesting the recorded Value Recapture Agreement and comparing it with the title report, listing information and the seller’s disclosures.

Ask the seller’s agent directly whether the property is an Affordable Unit governed by Chapter 19.93. The title or escrow officer can help identify a recorded agreement in the County of San Diego records.

Read Chula Vista Municipal Code Chapter 19.93, then ask the City for the current Administrative Regulations. The City Manager or designee may adopt those regulations, which are to be published on the City’s website and kept available to the public in the Office of the City Clerk. They become effective 30 days after publication on the City’s website.

As of November 4, 2026, the chapter itself does not identify covered developments, state the affordability term, give the City’s equity share amount or describe the approval timeline for a sale or refinance. Check the recorded agreement and current Administrative Regulations, then raise transaction-specific questions with the City, a title or escrow officer and a licensed lender.

The short version

Not every Chula Vista home is governed by Chapter 19.93. The chapter covers only a restricted Affordable Unit in a development that satisfies a City affordable housing obligation through for-sale units not regulated by another funding source.

A covered buyer must satisfy the first-time homebuyer rule, use the property as a Principal Residence and complete the City’s loan review. While restrictions remain, the property cannot be rented. Sales, refinances, transfers, conveyances and title changes need advance written approval from the City.

The code does not supply every financial or procedural detail. The recorded Value Recapture Agreement and current Administrative Regulations control important terms, so request both before making a decision. For an estimate of an unrestricted property’s current value, visit the home value tool.