SF Apartment : May 2018

SACRAMENTO REPORT

Buried by Bills

by Debra Carlton

As the second half of the California legislative session unfolds, more and more bills have been introduced that will impact the rental housing industry. At press time, CAA’s Legislative Steering Committee was actively reviewing those bills. Below is a highlight of the first bills identified to date. For a complete list of all bills identified, go to caanet.org.

CAA Co-Sponsored Bills

AB 1759 (D-McCarty): Housing and Transportation 

A bill co-sponsored by the California Apartment Association would create financial consequences for local governments that fail to allow their fair share of housing. AB 1759 would withhold road maintenance funds from cities and counties until they meet their housing production goals as assigned by the state.

Along with CAA, the California Association of Realtors is co-sponsoring the legislation. The bill comes as California continues to struggle with an unprecedented housing crisis caused by a severe lack of housing construction at all levels. One of the most significant impediments to housing construction is unjustified local resistance, and for decades, most local governments in California have failed to meet their housing requirements.

Unfortunately, under existing law, there is no real consequence for a local government that fails to meet its housing element. Creating a process where local governments are held accountable for their housing requirements is critical to addressing California’s affordability challenges. AB 1759 is the latest in a line of CAA-sponsored bills intended to address California’s ongoing housing crisis by boosting housing inventory.

Additionally, in 2017, CAA sponsored and the governor signed two additional CAA-sponsored bills: AB 678 and a companion bill, SB 167. These bills will help boost California’s supply of housing, which has long lagged behind job and population growth. They force cities to justify any denial of new housing and penalize them for failing to approve the housing without reasonable objections. The legislation adds much-needed teeth to California’s Housing Accountability Act, financially penalizing local governments that arbitrarily deny housing projects in violation of state law.
The governor also signed AB 352. This new law will help prevent local governments from establishing roadblocks to “efficiency dwelling units,” which usually measure 220 square feet or less. These units are used by some cities to provide housing for university students, as well as shelter and services for homeless individuals.

AB 943 (D-Santiago): Votes for Housing

A third bill sponsored by CAA last year and pending in the legislature is AB 943 by Assemblyman Miguel Santiago, D-Los Angeles. This bill would require local measures that curb, slow or deter housing productions to be approved by at least 55 percent of the voters instead of the current 51 percent vote requirement.

Landlord-Tenant Management

AB 1919 (D-Wood): State of Emergency

AB 1919 would provide clarification to California’s State of Emergency Anti-Price Gouging Law, specifically as it relates to insurance payments for rent. It clarifies that a landlord cannot accept a payment from an insurance company on behalf of the tenant for the payment of rent that far exceeds the market rate of that unit.

CAA is working with the author to define the “base rent” from which the 10 percent increase would be measured and to clarify the penalty provision of the law. Current law prohibits a property owner from increasing the rent more than 10 percent above pre-emergency levels during the declared state of emergency. The current law is unclear, however, on what an owner can and cannot do when the unit is vacated after the emergency declaration goes into effect. Given the fact that the existing declaration impacts much of the rental housing throughout California, this bill will provide much needed clarification. For more information about the current State of Emergency, which is still in effect in California, go to caanet.org/fire.

AB 2219 (D-Ting): Third-Party Payment

This bill would prohibit a landlord from refusing to accept a rental payment from a third party for a tenant’s rent.

AB 2413 (D-Chiu): Emergency Services

In a response to local ordinances that fine rental property owners when calls are made to law enforcement or that force owners to evict tenants, this bill adds protections for property owners and tenants who make calls to law enforcement for help. Among other things, it provides that property owners and tenants cannot be penalized (e.g., fined or evicted) by local officials for those calls.

AB 2618 (D-Bonta): Education

This bill would require the Department of Real Estate (DRE) to administer a mandatory education program for landlords and property managers.

Notices and Evictions

AB 2343 (D-Chiu): Unlawful Detainer

AB 2343 would, among other things, extend the current three-day notices that a landlord serves on a tenant for nonpayment of rent to 10 days and the three-day notice that a landlord serves a tenant who is causing a nuisance to 5 days. It would also extend the time for a tenant to respond to an unlawful detainer court filing from 5 days to 28 days.

AB 2925 (D-Bonta): Just Cause Eviction

This bill would prohibit a landlord from terminating a tenancy except upon good cause. The bill provides that its provisions are in addition to, and do not supersede or preempt, any other state or local law that requires the landlord to list a “good cause” prior to the termination of a tenancy.

A landlord would be unable to serve a 30- or 60-day notice without listing a good cause, “with particularity in the notice.” Unlike local just-cause ordinances, AB 2925 provides no specific causes for which a landlord may terminate the tenancy. Any local just-cause ordinance would continue as is.

Rent Control

AB 1506 (D-Bloom): Costa Hawkins Repeal

AB 1506 finally had its first hearing in January of this year. This bill would have repealed the current law that sets limits on what local governments can and cannot do when it comes to controlled rents. This law is known as the Costa-Hawkins Rental Housing Act and it prohibits local governments from controlling rents on single family homes and condominium units. It also prohibits local governments from controlling rents on new construction built after 1995, and allows owners who do have units under local rent control to set a new rental rate when the unit is vacated by a tenant.

Over 800 property owners and tenants attended the hearing to show their support and opposition for the bill. After a nearly four-hour hearing, the bill was rejected by Assembly Housing and Community Development Committee members.

Unfortunately, this issue will not be going away any time soon. A ballot-initiative drive is currently underway to repeal the 1995 act. At press time, supporters had at least a quarter of the 365,880 signatures needed to get the measure on the November ballot.

Debra Carlton is the Senior Vice President of Public Affairs for the California Apartment Association.