Sacramento Report

Housing Bills Signed by Governor Davis

by Debra Carlton

Governor Davis recently signed a slew of housing-related bills at the close of this year’s legislative session. The following are some of the bills:

AB 284 (Jackson) – Mold – CAA Position: Support – This bill requires the California Research Bureau to perform a study of mold contamination in indoor environments.
Translation: This bill is a companion bill to SB 732, described below. It authorizes California to proceed with appropriate research prior to establishing mold guidelines.

AB 369 (Dutra) – Affordable Housing Projects – CAA Position: Support – This bill allows a court to award attorney’s fees to an affordable housing developer who has had a project unfairly denied by a local agency.
Translation: This bill is one tool to make it easier for property owners to build housing in our communities. It provides some incentive for a property owner to challenge the actions of a local government.

AB 1112 (Goldberg) – Rental Housing Registry – CAA Position: Support – This bill requires a multi-unit residential property owner to register specified personal information with the Los Angeles County Board of Supervisors in the event that their property, located in Los Angeles County, is deemed substandard.

Translation: If rental property owners in Los Angeles refuse to correct a substandard condition after notice and a hearing, they will be required to file specific personal information about the property with local officials and they must list a person in California who is responsible for the property. Owners who refuse to file the information will be barred from evicting tenants from their buildings. The legislation is aimed at the pocket books of out-of-state landlords who have no property management and who refuse to keep their property in good repair.

AB 1611 (Keeley) – Student Housing – CAA Position: Support – This bill authorizes the California Educational Facility Authority (CEFA) to enter into agreements with nonprofit entities to finance the cost of constructing student, faculty, and staff housing near the campuses of specified colleges and universities.

Translation: This bill is one tool to put more affordable housing into our communities, thereby relieving the regulatory demands on existing housing providers.

SB 189 (Bowen) – Controlled Substance Release Notification – CAA Position: Oppose – This bill requires an owner of a residential dwelling unit, who knows by receipt of a specified notice or from actual knowledge that release of a controlled illegal substance has come to be located on or beneath the unit, to give written notice to buyers and to prospective tenants prior to the execution of a sales or rental agreement.

Translation: The focus of this bill is illegal drug labs, particularly methamphetamine labs that have been removed by law enforcement. The author reports that even though property owners are required to pay for the clean up of these labs, there are no standards that ensure that cleanup was done efficiently or completely. Future tenants can be harmed by residue left behind. The questions remain whether or not the owner’s liability is decreased as a result of this new disclosure and whether the rental unit is simply “marked” for life.

SB 442 (Vasconcellos) – Housing – CAA Position: Neutral – This bill establishes the California Affordable Housing Connection (CAHC), an internet-based reference site for multi-unit, low-income housing.
Translation: It will help tenants locate low-income housing.

SB 732 (Ortiz) – Toxic Mold – CAA Position: Support – This bill enacts the Toxic Mold Protection Act of 2001. It requires the state Department of Health Services to convene a task force comprised of various individuals including, but not limited to, rental property owners, insurers, builders and managers to advise the department on the development of standards for assessment and remediation of molds in indoor environments.

This bill requires that any person who sells or rents residential, commercial, public or industrial real property who knows or has reasonable cause to believe that mold is present in the unit is required to provide a written disclosure to potential buyers, prospective tenants and existing residents.

The bill prohibits the department from requiring an owner or seller to conduct air tests to determine whether the presence of mold constitutes mold infestation, and it prohibits the department from requiring owners to hire contractors for mold remediation.

The duties and requirements of this bill will not apply until six months after the department adopts the standards. Translation: This bill provides the foundation for objective mold guidelines in California. Lawsuits are on the rise, and tenants who claim to be injured by mold contamination in their homes are winning large settlements from rental property owners. Owners currently have no bright-line that they can point to as a legitimate defense against these lawsuits.

SB 985 (Kuehl) – CAA Position: Opposes – This is an unfortunate amendment to the Costa-Hawkins Rental Housing Act. We believe that this may effect condominium units. We now have our attorneys in San Francisco looking at a final version of the bill and will update you with their analysis when it is complete.

Due to industry opposition, Senator Kuehl, was forced to accept a series of amendments that dramatically altered the bill. When SB 985 was first introduced at the Legislature earlier this year, it required all rental property owners in the State of California to give tenants a 90-day notice prior to terminating the tenancy for no cause. It also initially removed all condominium units from the protections of the Costa-Hawkins Rental Housing Act, making them subject to local rent-control laws, and it imposed various property owner disclosure requirements.

CAA’s success in watering down SB 985 is a direct result of the letters and calls that CAA members sent to legislators. Without the support of CAA members and leadership, CAA would have lost this fight altogether. The Legislature amended the bill to make the termination provisions a pilot project in three cities. The condominium provisions for rent-control cities were also amended to apply only to those units that had not been sold to a bona fide purchaser; and additional clarifying language was also included by the Legislature.

As signed into law at the end of the legislative session, the bill generally has three objectives. For the next three years, it requires that owners in the cities of Los Angeles, Santa Monica and West Hollywood, who wish to terminate a tenancy, give a 60-day notice to a tenant who has lived at the property for at least one year. Single-family rental owners in these cities are not required to provide the extended notice.

Second, it exempts from the protections of the state Costa-Hawkins Rental Housing Act those condominium units that have not been sold separately by the sub-divider to a “bona fide purchaser” for value. The initial rental amount of these units is declared to be the lawful rent in effect on May 7, 2001. Buildings designated as condominiums that have a certificate of occupancy issued after February 1, 1995, or that were already exempt from local rent-control laws in effect on or before February 1, 1995, pursuant to a local exemption for newly constructed units, will continue to be protected from local rent control laws by the Costa-Hawkins Act.

Third, it also requires rental property owners to disclose to a tenant the telephone number, name, and address of the person or entity to whom rent payments are to be made, and the form or forms in which rent payments are required by the owner. The owner must provide a copy of the rental agreement or lease to the tenant within 15 days of its execution by the tenant and, once each calendar year thereafter, within 15 days of a request by the tenant. The bill also provides that if the address given by the owner does not allow for personal delivery, then it shall be presumed that upon the mailing of any rent or notice to the owner by the tenant to the name and address provided, that the notice or rent is deemed received by the owner on the date posted, if the tenant can show proof of mailing to the name and address provided by the owner.

To ensure that members of CAA are in compliance with this new law, CAA will update its forms and background papers prior to this law taking effect on January 1, 2002.

SB 1098 (Alarcon) – CAA Position: Support – After building a coalition with labor unions, tenant advocates, business interests, and environmentalists, and with support from major newspapers from around the state, CAA took this bill to the Governor. It requires local governments to adhere to their general plans and zoning laws. Through research, CAA found that some communities had refused to approve new multi-family housing construction even on parcels already zoned for apartments. Lawmakers, in turn, sought temporary solutions to their housing imbalance by imposing rent control and other housing regulations on the residential rental industry.

SB 1098 turns the spotlight on local governments and prevents them from using temporary ordinances to block multi-family housing unless they can state specific reasons why the housing will hurt the welfare of the community.

Job well done, CAA members. If you have any questions about these bills or others that are pending, please telephone CAA’s Legislative unit at 916-447-7881, ext. 16.

The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of the SFAA or the SF Apartment Magazine. Debra L. Carlton is the Vice President of Policy and Research for the California Apartment Association and is CAA’s chief lobbyist. © Copyright 2001.