Cal. Health & Safety Code § 50506

The department may conduct programs of subsidies for occupants of existing housing pursuant to Section 8 of the United States Housing Act of 1937, or other federal programs, but may not submit any competitive application for operation of an existing housing program in a geographic area which includes a local public entity that has applied. However, in conducting subsidy programs pursuant to this section, the department shall not operate housing developments or engage in the purchase, lease, or sublease of housing developments.