The News

Tenant Relief Act

COVID-19 has brought significant rental housing legislation.

Editor’s Note: State and Federal guidelines and legislation are constantly changing regarding COVID-19. For the latest information, resources, financial aid, and forms, visit www.sfaa.org or www.caanet.org/coronavirus. 

Assembly Bill 3088—COVID-19 Tenant Relief Act
Governor Gavin Newsom signed the COVID-19 Tenant Relief in late August and the law went into effect immediately. The legislation prohibits evictions of renters with genuine COVID-related hardships but reopens the unlawful-detainer process for tenants who cause problems at the property.

To qualify for eviction protection under AB 3088, tenants must sign and return a declaration of hardship due to COVID-19. Tenants earning 130% of the area medium income will have to provide proof of financial hardship. Qualifying tenants cannot be evicted for rent unpaid between March 2020 and September 2020.

Going forward, though, tenants who qualify for eviction protections will still need to pay at least at least 25% of their rent—but can do so flexibly. By January 31, 2021, at least 25% of rent owed (since September) must be paid. If the rent is not paid, eviction proceedings can begin on or after February 1, 2021. The bill expires on January 31, and starting in February, full and timely rent will be due once again.

Under AB 3088, landlords can proceed with eviction cases involving tenants causing problems at properties (such as nuisances or threatening neighbors). Rental property owners can now also evict tenants for nonpayment of rent when the tenant is not experiencing a financial hardship due to COVID-19.

According to Debra Carlton, California Apartment Association’s executive vice president of state public affairs, “COVID-impacted renters need financial assistance, from the Feds, so they can pay their rent. Otherwise, renters will be hard pressed to pay the rent that’s accumulated, and housing providers will go out of business.”

The bill was authored by Senator Anna Caballero (D-Salinas), Senator Steven Bradford (D-Gardena), Assemblymember Monique Limon (D-Santa Barbara), and Assemblymember David Chiu (D-San Francisco).

Rents are flattening or decreasing in many locations across the state. In San Francisco, one- and two-bedroom average rents were down a shocking 11 percent in August compared to one year ago, according to data from listing site Zumper. A recent SFAA survey shows that the vacancy rate among member properties is now 11.5%, four times what it was prior to the pandemic.

Reconsider Utilities Costs
With over 7 million in California filing jobless claims since businesses began closing in March, many are moving in with loved ones to save money or leaving the state altogether. This trend could lead to an even bigger drop in demand in the months ahead. 

It’s safe to say that many owners may be feeling the squeeze of dropping rents and rising vacancies. It might be tempting to include utilities in the monthly rent in an effort to attract renters. But that short-sighted plan could cost owners A LOT in the long run.

As we all know, utilities are not fixed costs. In fact, they tend to just go higher and higher over time. So, including utilities in the rent is a losing proposition in the long term. This is especially true in rent-controlled markets where owners may not unilaterally change the terms of the lease after it has begun. If utilities are included at the start of the lease, they can never be made the tenant’s responsibility no matter how long the tenant stay in the unit.

This long-term losing trend is compounded while people are still working, cooking and largely spending their days at home. With home-schooling a likely reality for the foreseeable future, there are more people in more apartments all day long, using precious resources like water, creating more garbage and recycling, and constantly charging their devices.

In fact, year-over-year residential energy use is 15 to 20 percent higher since shelter-in-place restrictions went into place, according to the California Public Utilities Commission. That figure came out well before an August heatwave, which broiled the West and put so much additional demand on the system that rolling blackouts returned to the state for the first time in years.

Vacancies may be rising and it’s not as easy to find tenants to fill them, but don’t lose out on the opportunity to finally make utilities a new resident’s responsibility. Including utilities in the lease is a short-sighted incentive to new tenants. What seems like giving a little right now will quickly turn into a lot down the line.

If you want to learn more about how to make tenants more responsible for their usage, now is the time to reach out to SFAA associate member Livable. This smart utility billing company has been operating in San Francisco for over a decade and can help you get on the path towards saving up to 90 percent on your utility bills while also motivating tenants to cut back on their usage. Find out more at livable.com or call 877-789-6027.

Online Permitting Changes
The Department of Building Inspection (DBI) is temporarily limiting the types of permits that may be submitted online through the digital permit submission process to new 100% affordable housing projects, new permits for Development Agreement projects, and addenda and revisions for already submitted digital in-house review permits. They are working to retool the digital system and make workflow and process improvements to increase efficiency and integrate the system with DBI’s Permit Tracking System (PTS).

While they are improving the digital permitting system, DBI will continue to offer limited in-person services for paper applications and will continue to process digital permit applications that have already been submitted online. If you submitted a permit application online, you will remain in the queue for permit processing or be asked to resubmit your permit application in paper.

The permitting process in San Francisco is constantly changing. Visit the DBI website (sfdbi.org) for the latest information and for specific instructions for different permit types.

This information was written by Gillian Allen of Reuben, Junius & Rose, LLP.

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

SFAA classes will be available online during the pandemic. 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 50 for a list of classes.