sponsors to acquire, rehabilitate, maintain, or otherwise protect and improve residential hotels as a housing resource for persons of very low and low income. The demonstration projects should be undertaken and designed so as to demonstrate the feasibility of innovative methods of protecting and improving residential hotels and of improving their habitability while assuring their continued availability to persons of very low and low income.

more guestrooms or efficiency units, as defined by Section 17958.1, which is primarily used by transient guests who do not occupy that building as their primary residence.

13, as that law applies to residential hotels.

The purpose of the standards shall be to protect the health, safety, and welfare of the occupants of those residential hotels, to allow the economically feasible rehabilitation of those residential hotels, and to assure to the extent possible the preservation of those residential hotels as housing for very low and low-income persons.

In the event that the agency is unable to implement that program, it shall report to the Legislature on or before July 1, 1981, the reasons for its inability to implement that

program, and recommend methods by which the agency could implement that program.

contracts let pursuant to subdivision (e), the department shall fix, and may alter from time to time, a schedule of rents as may be necessary to assure affordable rents for persons of low income in residential hotels assisted by funds made available under subdivision (e), and to the extent consistent with the maintenance of the financial integrity of the sponsor of the project and with the requirements for repayment of any funds loaned as established by the department. No local government or nonprofit housing sponsor receiving funds through the provisions of subdivision (e) shall alter rents without the prior permission of the department, which permission shall be given only if the sponsor demonstrates that the alteration is necessary to defray necessary operating costs and to avoid jeopardizing the fiscal integrity of the sponsor or to maintain affordable rents to the residents in the project. If the department does not act upon a request for a rent increase within 60 days, the increase shall be deemed

approved. In connection with contracts authorized by subdivision (e), the department may determine standards for the selection by sponsors of the tenants for units in projects funded by contracts pursuant to subdivision (e). The authority of the department to fix and alter rents pursuant to this subdivision shall apply only to units within residential hotels that receive assistance pursuant to subdivision (e).

The department may, subject to appropriation by the Legislature, grant funds for the purpose of providing relocation benefits to persons and families of low or moderate income who are displaced, or who may be displaced if not assisted, as a result of any of the following:

or destroy residential structures.

The department may also provide technical assistance to local agencies in providing relocation benefits, pursuant to Sections 50500 and 50509.

Relocation benefits pursuant to Section 50520 may be provided in the form of grants pursuant to Sections 50504 and 50510 for costs of developing replacement housing or of providing subsidies to assist displaced persons.

The department may obtain federal assistance pursuant to Section 8 of the United States Housing Act of 1937, or any other federal housing program, for use in providing relocation benefits to persons subject to potential or actual displacement by public or private action, where local relocation benefits or rental subsidies are not immediately available.