Sacramento Report
Silver Linings Yearbook
written by Debra Carlton
2020 was a turbulent year for just about everyone, but not all of the news was bad.
With a pandemic, a recession, civil unrest, and wildfires, it's safe to chalk up 2020 as a horrible year for just about everyone. But believe it or not, not all of the news from 2020 was terrible.
Landlords certainly had it tough. Plummeting rents (especially here in San Francisco), rising vacancies, and unreasonable eviction restrictions made operations extremely challenging.
While most of the news was awful, a few things went right.
Here are some of the silver linings from 2020.
Proposition 21 Was Defeated
Beyond a doubt, the best thing to happen to the rental housing industry in 2020 was the defeat of Proposition 21. Thanks largely to a campaign led by the California Apartment Association, voters in the November 3 election rejected this statewide ballot measure, which would have invited back the radical rent control policies that proliferated in the 1970s and 1980s.
Proposition 21 would have repealed key provisions of the Costa-Hawkins Rental Housing Act (1995), authorizing local governments to bring back vacancy controls, capping rents between tenancies. Moreover, it would have allowed cities and counties to apply local rent control ordinances to newer apartments—as soon as they turn 15 years old—and to a greater number of condos and single-family homes.
These policies would have prompted many existing landlords to take their homes and buildings off the rental market, converting them to other uses, and prompted developers to take their housing project proposals across state lines.
Proposition 21 was modeled after 2018’s Proposition 10, another radical rent control measure that targeted Costa-Hawkins, which also failed at the polls by a wide margin. Both propositions were bankrolled by Michael Weinstein and his nonprofit AIDS Healthcare Foundation.
CAA Helps Elect Solid Leaders
Besides defeating Prop. 21 and local rent control measures in Sacramento and Burbank, CAA helped elect candidates to the state Legislature and to city councils who support the rental housing industry and understand the vital role it plays in the state’s economy. The association accomplished this through its political action committees, including the California Apartment
Association Political Action Committee (CAAPAC). In the Assembly, Republicans retained the five GOP-held seats up for re-election this year. And all moderate Assembly Democrats—some facing significant opponents—secured re-election. The partisan blend of the Assembly remained substantially the same, with 60 Democrats, 19 Republicans, and 1 Independent.
In the State Senate, Democrats gained two seats, expanding their supermajority from 29 to 31 Democrats to 9 Republicans. In a safe Democratic seat, moderate, business-friendly Democrat Steve Glazer won re-election to a four-year term after drawing a primary challenge from his left flank.
Both locally and at the Capitol, CAA this year will continue its efforts to protect the rental housing industry from destructive policy proposals, such as unreasonable moratoria on evictions or collecting rent, while advocating for housing production, especially for working-class families.
Worst Statewide COVID Bill Failed
In August, CAA stopped Assemblymember David Chiu’s AB 1436, which would have encouraged tenants—including those without financial hardships from COVID-19—to skip rent payments without fear of eviction. AB 1436, tantamount to a government-sanctioned rent strike, would have granted tenants the legal right to withhold their unpaid rent until April 1, 2022.
To prevent AB 1436 from passing, CAA negotiated a less-burdensome alternative, AB 3088. This legislation ensured that landlords could evict for lease violations unrelated to COVID-19. This legislation also required that COVID-affected tenants pay at least 25% of their rent between September of last year and January 31, 2021. As of this writing, Assemblymember Chiu has proposed an extension of AB 3088 with additional tenant protections. As of this writing, that bill— AB 15—is not helpful for the rental housing industry. Watch for updates as hearings begin on the bill.
Bill Limiting Security Deposits Derailed
Back in June, CAA helped defeat a bill that would have provided tenants with an unreasonable amount of time to provide a security deposit. AB 3260 would have required property owners to allow a new tenant to pay a security deposit over a six‐month period or to obtain a security deposit insurance policy to cover damages they cause at the property. CAA argued that the legislation, which died on the Assembly floor, would have made housing more expensive, lead to higher security deposits, and would have prompted more stringent credit standards for prospective tenants.
Housing-Supply Bills Pass
Even though COVID-19 took up much of the Legislature’s time and energy in 2020, lawmakers did pass some legislation to increase housing supply. Three examples:
AB 1851 by Assemblymember Buffy Wicks (D-Oakland) will eliminate residential parking requirements for housing developed at faith-based properties, so long as it does not reduce existing parking spaces by over 50 percent. Given California’s housing crisis, AB 1851 seeks to bring to the market more housing units that would otherwise be restricted by local ordinances.
In a support letter, CAA said, “The clarification to existing law that Assemblymember Wicks provided with AB 1851 will help ease the burden for construction of housing on religious institution affiliated properties, providing much needed housing for Californians.”
AB 3308, written by Assemblymember Jesse Gabriel (D-San Fernando Valley), will allow school districts to add housing to district property and reserve it exclusively for teachers and other school district employees. The author argued that many public school teachers and other school district employees struggle to afford a place to live close to their jobs, and AB 3308 will incentivize building crucially needed housing in California.
AB 2345, written by Assemblymember Lorena Gonzalez (D-San Diego), will increase the maximum allowable density and the number of concessions and incentives a developer is allowed when affordable housing is included within the project. “AB 2345 is the right approach that will continue to help increase overall housing production and create more affordable units in mixed-income buildings,” CAA said in a support letter.
CAA Introduced New and Updated Products
The association released an updated edition of its textbook Managing Rental Housing. The book is a veritable encyclopedia of state rental housing law, explains the cycle of tenancy, and provides practical information needed to operate rental property efficiently, ethically, and profitably in California.
Now in its 10th edition, CAA’s premiere textbook is more user-friendly and addresses the biggest change in California landlord-tenant law in decades: The Tenant Protection Act of 2019, the statewide rent cap and “just cause” eviction law also known as AB 1482. The book is available for purchase, either as a digital or print edition, at the CAA website, caanet.org.
Further, to help rental housing professionals prepare for the new year, CAA has updated its rental forms and instruction sheets. These include new and updated forms for complying with AB 1482. The association also updated its rental/lease agreements, among other documents. Visit CAA’s website, caanet.org, for these forms and instruction sheets.
Speaking of CAA’s website, it’s getting a major revamp. Updates to CAA’s site include improved navigation and search tools, faster load times, and a more modern look. CAA plans to roll out its redesigned site in the first quarter of 2021. It’s been a long time coming. CAA launched its current website in March of 2015.
Thank you for your support. CAA will continue to fight for the industry as we head into the 2021-2022 legislative session.
Debra Carlton is the executive vice president of state government affairs at the California Apartment Association.