Sacramento Report
by Monica Williamson
Lawmakers returned from their summer recess on August 7 to complete the final month of the 2005-2006 legislative session. At the time they returned, nearly 1,000 bills were awaiting consideration by the State Senate and Assembly. Summarized below are some of the key bills of interest to the California Apartment Association.
Rent Control Bill Stopped
A bill that would have expanded the current timeframe that a price control (including rent controls) may stay in effect during an emergency died on the Assembly floor in the waning hours of the legislative session. Sponsored by Fabian Nunez (D-Los Angeles), AB 457 would have doubled the current 30 days that a price (rent) control could remain in effect, and would have added the proclamation and definition of an “abnormal market disruption” as a price control trigger.
Under current law, price controls (including a 10% cap on rents) and related criminal and civil sanctions apply only in narrow and clearly defined circumstances, and only after an officially declared “state of emergency,” such as earthquakes, fires, floods or riots occurring in California. With the addition of the arbitrary definition of “abnormal market disruptions,” AB 457 would have significantly opened up price control laws and related sanctions, applying them arbitrarily, subjectively and often.
Under the bill, the definition of “abnormal price disruption” was vague and included any “activating event,” anywhere in the world, that suddenly reduces supply. With fluctuations in the marketplace—a normal part of the economic cycle—the vagaries contained in AB 457 would have likely made the application of price controls susceptible to political pressure and trends. At a time when local governments continue to constrain the development of multifamily housing, and as demand for housing continues to outpace supply, AB 457 was bad news for the rental housing industry.
Trial Lawyers Weigh In on Megan’s Law
In a late-night turn of events, trial lawyers stepped up to help Assemblymember Mark Leno (D-San Francisco) pass a bill that promised to provide liability protection to property owners, but will likely do no such thing. AB 2712 provides that “no duty shall arise solely for renting to a sex offender.” It also indicates that the authorization to use the Megan’s Law database to protect a person at risk is discretionary and does not create a duty to act. As CAA’s legal counsel pointed out, however, there is currently no duty placed on a rental property owner solely for renting to a sex offender.
Sponsors of the legislation claimed that the bill bars liability claims if a sex offender harms another tenant (so-called third-party liability protection) on the property. No other experts, including numerous practicing attorneys, the author of the bill, nor the trial lawyer representatives themselves, went on record to support the claim of third-party liability protection as asserted by the proponents.
Of the more than one-dozen Legislators who spoke against AB 2712 on the Assembly floor, the vast majority agreed with CAA: tenant safety is the real issue and legislation that places even one child at risk is unconscionable. The bill was vetoed by Governor Arnold Schwarzenegger.
60-Day Notice Approved
Despite failing passage last year, a new bill seeking to reinstate the 60-day termination notice requirement has now been sent to the governor and received his approval. AB 1169, sponsored by Alberto Torrico (D-Fremont), would require a 60-day notice to terminate a long-term tenancy. The provisions of this bill would expire on December 31, 2009, unless extended by future legislation.
Throughout the debate on AB 1169, proponents did not provide any documentation to support their assertions that significant hardships have developed since the last 60-day notice requirement expired last year. Indeed, the initial 60-day notice pilot was implemented during anomalous market conditions that had contributed to abnormally low vacancy rates (and the associated difficulty finding alternate housing). In reality, California does not bring enough new units online to absorb population growth and to replace units that are removed from the rental market. Constraining the market by making it more difficult to operate rental property, however, will only further contribute to a lack of units and make matters worse by discouraging investment in the rental housing marketplace. At this writing, nearly 1,000 letters have gone to the governor from CAA members asking for his veto of the bill, but at the last moment the governor decided to sign the bill into law.
Towing Legislation
The Legislature has sent the governor a bill, that provides clarification and regulations for the towing of vehicles from private property. AB 2210, sponsored by Jackie Goldberg (D-Los Angeles), clarifies that a person providing written authorization for a tow must be present on the private property at the time of the tow, but need not be physically present at the specified location where the vehicle to be removed is located on the private property. This means that onsite managers may remain in their units while a tow is occurring and need not be standing in the parking lot. In addition, the bill would require a towing company to remove the identifying information of the person who authorized the tow. Finally, the bill allows property owners who operate less than 16 units where no resident manager resides, to authorize the removal of a vehicle without being present at the property. CAA was pleased to work with the author of this legislation to bring clarification to a confusing area of the law. If the governor signs this legislation, CAA will prepare a report that outlines the new procedures under the law.
The Legislature has completed its work for the 2005-2006 legislative session, and Governor Schwarzenegger had until September 30, 2006, to act on legislation sent to him. He had three options: sign, veto or allow a bill to become law without his signature (which happens automatically if he does not act on the bill prior to the September 30, 2006, deadline).
Tune in to next month’s “Sacramento Report” for more information and updates on the governor’s actions on these bills.
The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of SFAA or San Francisco Apartment Magazine. Monica Williamson is CAA’s vice president of public affairs. Copyright © 2006 by San Francisco Apartment Magazine. All rights reserved.