The News

A Tough Spot

COVID-19 has brought with it significant rental housing legislation.

Editor’s Note: State and Federal guidelines and legislation are constantly changing regarding the coronavirus and the shelter-in-place order. For the latest information, resources, financial aid, and forms, visit www.sfaa.org or www.caanet.org/coronavirus.

The COVID-19 pandemic has changed just about everything—the way people work, socialize, wait in line, and even the way they protest.

The examples go on and on. It’s no wonder, then, that California lawmakers, wearing protective face masks all the while, proposed a flood of legislation centered on the pandemic—and how tenants, and to a much lesser degree landlords—might stay afloat financially during the crisis.

In the paragraphs that follow, you’ll find summaries of some of the most significant rental housing legislation that came in response to COVID-19 and where those proposals stood at the time of this writing in late July.

Bills Stopped by the California Apartment Association
Assembly Bill 828 by Assemblymember Phil Ting (D-San Francisco): As initially written, the bill would have given the courts the ability to reduce rent by 25% when an eviction case is filed.  

“While I understand that the COVID-19 pandemic has created a great deal of uncertainty for many Californians, AB 828 will do nothing to address our housing challenges,” CAA’s message to lawmakers said. “It will simply exacerbate divisions between landlords and tenants while creating a great deal of financial uncertainty and distress for the entire rental housing industry.” 

Ting removed that rent-cut provision from the bill following a grassroots opposition campaign spearheaded by the California Apartment Association. This included having members send more than 55,000 opposition messages to lawmakers.

While the rent-reduction provision is out, AB 828 still included some problematic provisions such as:

Requiring very limited proof on the part of tenants that they faced a COVID-hardship in order to stay in the unit;

Protecting nuisance tenants by allowing them to initially ignore the unlawful detainer complaint and remain in the unit;

Mandating that rental property owners demonstrate an economic hardship to collect the contracted rent in a timely manner.

In late July, just before the Legislature returned from its summer recess, CAA learned that this bill would not receive a hearing, rendering it dead for 2020.

Assembly Bill 2406 by Assemblymember Buffy Wicks (D-Oakland): This bill would have created a statewide rental registry and targeted landlords who’ve received government assistance in response to the coronavirus. The bill would have cost taxpayers more than $20 million initially and then $10 million per year to administer the database. 

CAA strongly opposed the bill, which would have required rental property owners with five or more rental units or who accept rental assistance payments from federal or state COVID-19 programs to submit a long list of information about their buildings and their tenants to a state department. CAA also opposed a previous version of this bill that would have applied to all landlords with five units or more.

As with the earlier version of the bill, AB 2406 would have required affected owners, under penalty of perjury, to submit a yearly rental registry form, which would include a variety of data, such as the number of bedrooms and bathrooms in each unit, the number of evictions and the reasons given for those terminations over the past year, and the number of days a unit went vacant. The information would be published on a public online rental registry portal.

This bill died in in early June in the Assembly Appropriations Committee.

Bills Still in Play
Assembly Bill 1436 by Assemblyman David Chiu (D-San Francisco): This legislation would force rental property owners to defer rent payments for tenants who are either unable—or unwilling—to pay for housing during the COVID-19 pandemic. The rent-deferral period would last until April 1, 2021 or until 90 days after the state’s COVID-19 state of emergency is lifted—whichever comes first. In addition to collecting no rent during this time, landlords would receive no funding under the bill to help pay their taxes, mortgages, utilities, or staff.   

“AB 1436 will make our housing crisis worse,” said Debra Carlton, the California Apartment Association’s executive vice president for state public affairs. “It will put hundreds of rental owners into default, leading to mass foreclosures on rental housing.”

CAA expressed its concerns in a letter  to the author.

“The bottom line is that tenants are not only protected from eviction, they are protected from any demand by the owner to pay rent that is owed,” CAA said in its opposition letter. “This equates to free rent.”

Senate Bill 1410 by Senators Anna Caballero (D-Salinas) and Steven Bradford (D-Gardena): This legislation would create a tax credit program to help landlords recoup rent that’s gone unpaid during the COVID-19 crisis. To qualify for the credits, a rental owner would need to sign an agreement, pledging to defer rent that’s gone unpaid due to the coronavirus and not to evict the tenant for nonpayment. The tenant also would need to sign the pact. Instead of collecting back rent from the resident, the landlord would be reimbursed through tax credits from California. The tenant, meanwhile, would be liable for the unpaid rent and would ultimately need to repay California for the tax credits provided to the landlords.

Initially sponsored by the California Apartment Association, SB 1410 previously sought to provide direct payments to landlords for the unpaid rent. With a $58 billion deficit facing California, those immediate payments became unrealistic for the Legislature to approve. Instead, the bill was converted by Senate leadership into this tax credit proposal.

The bill will be heard in the Assembly Judiciary Committee in mid-August. CAA did not continue in a sponsorship role but is working with the Senate on amendments for the bill. SB 1410 is the only legislation that offers both tenant protections and financial assistance to landlords. While the legislation is promising, CAA has concerns about the time frame in which landlords would get tax credits. CAA is working with the authors to create helpful amendments for the bill.

For more up to date information about these and other bills, go to www.caanet.org.

The above content was provided by the California Apartment Association.

Mandatory Soft-Story Retrofit Deadline
The September Tier-4 deadline for San Francisco’s Mandatory Soft Story Program (MSSP) is here. Failure to submit permits and plans to DBI by the deadline will result in code enforcement action and monetary penalties.

Tier-Four Soft Story Property Owners—If you are a property owner of a building containing educational, assembly, or residential care facility uses (Building Code Occupancy E, A, R2.1, R3.1, or R4), your completion of work and issuance of certificate of final completion is due September 15, 2020.

For more information, visit www.sfdbi.org.

SFAA Updates
The SFAA office will remain closed during the pandemic. However, SFAA staff is working round-the-clock to keep the nonprofit running. Timely payment of membership dues is necessary to help the association help you.

As SFAA pivots to provide you services during the coronavirus crisis, there is a new way to connect with SFAA. Email MemberQuestions@sfaa.org to have your questions and concerns promptly addressed.

The annual SFAA Trade Show will be virtual this year (more information coming soon). At the September 24 event, attendees will learn all about the latest trends, products and services in the multifamily housing industry. The event is free and open to the general public, so invite your friends. For more information on the trade show or to become a sponsor, contact vanessa@sfaa.org.

The SFAA Rent Forbearance Form and information on temporary rent reductions are available at www.sfaa.org.

SFAA classes will be available online during the coronavirus crisis. The San Francisco Apartment Association is happy to announce that current CCRM students can continue their education during the pandemic right from home. We understand keeping up education is crucial and want to assist our members to stay up to date. Thus we will be setting up more webinars in the future. See the calendar on page 42 for a full list of classes.