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Category: California Apartment & Rental Housing Issues

Last Updated on Friday, May 17 2013 21:33

SB 603 Call-to-Action

AB 1229 Call-to-Action

Updated May 17, 2013

This past week was a busy one, starting with a hearing of the Assembly Committee on Revenue and Taxation on Monday, May 13, when AB 188 (Ammiano), the bill to take the first steps toward creating a split property tax roll in California – so that commercial properties, including rental housing are paying more than single-family homes – was officially put on ice for the rest of the year.   SDCAA has been part of a coalition strongly opposing AB 188.

Also, thanks to SDCAA and its allies mobilizing last week to represent strong opposition to SB 603 (Leno), the bill requiring property owners to, among other things, pay interest on security deposits, it appears stalled in the Senate. Despite the measure having passed the Senate Judiciary Committee just the week before, several senators have indicated to us that they cannot support it. We don’t think Senator Leno has the sufficient number of votes to get SB 603 approved in the Senate, which is probably why he didn’t bring it up for a vote on either Monday or Thursday. We need to keep the pressure on.

Similarly, SDCAA is among several real estate groups, including the California Association of REALTORS® and the California Building Industry Association, working to defeat AB 1229 (Atkins), the bill which, in the name of “preserving” local affordable-housing mandates would trespass on the state’s longstanding rent-control ban on newly constructed apartments and which conflicts with the state’s nexus requirements for taxing single-family housing.   The bill was eligible for a vote by the full Assembly on Thursday, May 16, but the author did not bring it up.

On Wednesday, several constitutional amendments to lower the vote standard for approving new property-tax debt, were approved by the Senate Committee on Governance and Finance. The measures, opposed by SDCAA, would allow special taxes and new general obligation bond debt to finance things like libraries and convention centers to be approved 55% of local voters – a reduction from the current constitutional requirement of 2/3. The measures have one more stop before heading to the Senate floor where it’s expected they will sit until next year.

Finally, SDCAA lobbyists met with the sponsors of and staff responsible for SB 750 (Wolk), the bill to mandate the installation of water submeters in all newly constructed rental housing. While SDCAA currently opposes the bill, which currently ignores some of the practical issues associated with such a mandate, we were encouraged by the apparent willingness to address the Association’s issues.

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SDCAA Needs Your Help in Defeating AB 1229, a Bill that Circumvents State Rent Control Law! The Measure is Unnecessary and Strips the Law of the Requirement that Localities Work to Make Affordable Housing Mandates Economical.

• Existing law requires local governments to negotiate with rental housing developers so that affordable housing mandates like "inclusionary zoning" pencil out.
• Local governments can grant higher densities, reduce parking requirements and waive or defer certain development fees.
• This has been Standard Operating Procedure for dozens of communities in California which have adopted inclusionary zoning.

AB 1229 puts an end to this successful arrangement. Help your fellow rental property owners defeat this unnecessary and punitive measure. Call your state representative, tell them you are an SDCAA member, and ask them to VOTE NO on AB 1229!

Brian Jones (Santee) Capitol office: 916.319.2071 District office: 619.441.2322	Eric Linder (Corona) Capitol office: 916.319.2060 District office: 951.371.6860	Brian Maienschein (San Diego) Capitol office: 916.319.2077 District office: 858.689.6290
Jose Medina (Riverside) Capitol office: 916.319.2061 District office: 951.369.6644	Melissa Melendez (Lake Elsinore) Capitol office: 916.319.2067 District office: 951.894.1232	Marie Waldron (Escondido) Capitol office: 916.319.2075 District office: 760.741.7175
Shirley Weber (San Diego) Capitol office: 916.319.2079

Click here to find your Assembly representative.

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Updated May 10, 2013

On Wednesday, May 8, AB 1229 (Atkins), the bill to circumvent state law prohibiting rent control by legalizing local inclusionary zoning ordinances with non-negotiable rent caps, passed the Assembly Committee on Local Government .   The vote was 6 to 1 in support. Melissa Melendez was the lone “no” vote.

Despite the continuing opposition of SDCAA and others, including the California Association of REALTORS®, the California Building Industry Association and several local apartment associations like AACSC, AAGLA, AAOC and SBRPA, Committee members were persuaded by the number of representatives of local governments who showed up to testify in support of the measure. In addition, because of her senior stature in the Assembly, Majority Leader Atkins is a commanding influence.

The bill now heads to the Assembly floor. We are consulting with the head of the so-called “moderate Democrats” to see if enough of them are willing to break rank with fellow partisans and vote against Assembly leadership.

On Tuesday, May 7, two other bills SDCAA is opposing SB 603 (Leno), the bill requiring property owners to, among other things, pay interest on security deposits, and SB 750 (Wolk), the well-intentioned bill to require water submeters in all new rental housing both passed the left-leaning Senate Judiciary Committee. San Diegan Joel Anderson was by himself in voting no on both bills.

Though SB 750 still needs improvement in order for SDCAA and other apartment groups to remove their opposition, Senator Wolk, the author, signaled she wants to deal. It’s our belief that the measure could be defeated on the Assembly floor so it’s in her interest to work with us to try to fix the measure.

By contrast, there is no redeeming element or aspect of SB 603, to which SDCAA is strongly opposed. The bill has been accompanied by a smear campaign being waged by the bill’s sponsors, casting rental property owners as villains who are literally “stealing money” from renters. The measure could be considered by the full Senate as early as Monday, May 13, so SDCAA needs your help, with faxes and phone calls to San Diego area senators, seeking their NO vote.  

Finally, AB 969 (Ammiano), a scheme to give renters a legal shield to avoid paying rent (SDCAA was strongly opposed), failed on Tuesday to muster enough votes in the Assembly Judiciary Committee and was withdrawn until January of next year.

 

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Updated May 3, 2013

On Wednesday, May 1, AB 1229 (Atkins), the bill to circumvent state law prohibiting rent control by legalizing local inclusionary zoning ordinances with non-negotiable rent caps, passed the Assembly Committee on Housing and Community Development .   The vote was 5 to 2 in support.

Despite the opposition of SDCAA and others, including the California Association of REALTORS®, the California Building Industry Association and several local apartment associations like AACSC, AAGLA, AAOC and SBRPA, all Committee Democrats, including Chair Norma Torres (D-Pomona), voted for the bill. Assembly Member Maienschein voted no. AB 1229 now goes to the Assembly Committee on Local Government where it will be heard next Wednesday afternoon. Chances are the measure will pass that committee as well, leading to a major fight on the Assembly floor later this month.

In what will be a busy week next week, three other bills to which SDCAA is opposed will be heard. On Tuesday morning, AB 969 (Ammiano), the bill to create a legal shield for tenants to withhold rent payments, will be heard by the Assembly Judiciary Committee.   Later that day, the Senate Judiciary Committee will hear both SB 603 (Leno), the bill requiring property owners to, among other things, pay interest on security deposits, and SB 750 (Wolk), the well-intentioned bill to require water submeters in all new rental housing.

Finally, since AB 1220 (Skinner) was recently and significantly amended – potentially creating a new administrative burden as well as new liability for rental property owners and tenant screeners – several groups have raised concerns with this bill. Businesses like banks, car dealers and others who rely on credit agencies are beginning to mobilize against the measure.

First to raise concerns about AB 1220 was SDCAA. The bill proposes new rules for how credit-reporting agencies and they’re customers, including property owners, manage credit reports when they’re used to deny consumers credit or, in the case of rental housing, an apartment.

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Updated April 26, 2013

We're gearing up for next week's battle over AB 1229 (Atkins), the bill to circumvent state law prohibiting rent control by legalizing local inclusionary zoning ordinances with non-negotiable rent caps. The bill will be heard next Wednesday in the Assembly Committee on Housing and Community Development.

SDCAA is unalterably opposed to the measure, which has been popularized by the court case it seeks to overturn, Palmer v. City of Los Angeles. That opposition is shared by the California Association of REALTORS®, the California Building Industry Association and several local apartment associations including AACSC, AAGLA, AAOC and SBRPA.

The author, Capitol sophomore Toni Atkins (D-San Diego), a well-respected housing enthusiast and the Assembly's second-in-command, is a formidable opponent and will make the bill hard to defeat. Atkins' message is simple, albeit contrived and incorrect: "Palmer outlawed local affordable housing mandates and, with diminished funding for affordable housing inclusionary zoning is all we have left. AB 1229 simply restores things to where they were before Palmer."

In fact, AB 1229 abrogates Costa-Hawkins, the state law which, among other things, outlaws rent control on newly constructed rental housing. In doing so, the bill also eliminates the current requirement that affordable housing mandates must be negotiated with housing developers. AB 1229's radical surgery on the law is being pursued even though no localities with which we're familiar are able to demonstrate that Palmer prevents them from negotiating affordable housing like Costa-Hawkins requires. Indeed, both before and after Palmer (2009), no such problems have been reported.

Unfortunately, just like its 2011 predecessor, SB 184 (Leno), AB 1229 is expected to pass its obligatory policy committee stop, leading to a major battle on the floor of the Assembly in late May.

Meanwhile, thanks to a heads up from Alan and Molly, SDCAA lobbyists have added to the Association's bill-tracking list AB 1220 (Skinner), a recently amended bill that would significantly alter the relationship between property owners and credit-reporting agencies, likely burdening the practice of using credit reports to screen tenants. The bill affects a wide range of users of credit reports and it's likely those groups as well as SDCAA will oppose the measure.

 

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Updated April 19, 2013
This past week was highlighted by SDCAA's Leg Day visit to Sacramento, which started with a GSHP meeting on Tuesday followed by dinner with several freshmen San Diego-area legislators. On Wednesday, SDCAA members visited the offices of over a dozen lawmakers.

The benefits of SDCAA's visit are immense. At the heart of successful political advocacy are the relationships formed with legislators by constituents. That relationship-building was on display at dinner on Tuesday and at the Capitol all day Wednesday. Based on reports, the messages of SDCAA delegates regarding the four bills they came to Sacramento to discuss resonated with lawmakers. And, as good as your SDCAA lobbyists may be, the testimonials of practitioners are golden. Thanks to all who participated in this year's Leg Day.

While SDCAA members were traversing the Capitol building this past Wednesday morning, AB 746 (Levine), the bill to prohibit smoking in multifamily housing, was being debated in a hearing of the Assembly Committee on Housing and Community Development. SDCAA was joined by several apartment groups and others in testifying in opposition to the bill.

While supporting the Assembly Member Levine's objectives – reducing exposure to second-hand cigarette smoke – SDCAA identified deficiencies in the bill which would create the likelihood that property owners would be tasked to enforce the smoking ban and would be subject to liability stemming from a resident's violation of the ban. At the conclusion of the debate on the bill, three Democrats voted against AB 746 and it was defeated 2 to 5.

In other news, sponsors of a couple of bills opposed by SDCAA – SB 550 (Jackson) and SB 612 (Leno) – indicated a willingness to amend their respective bills to satisfy our concerns. SB 550 would impose new disability-access on rental housing. Sponsors said they only intend to have the measure cover government-assisted housing and are crafting amendments.

SB 612 would allow individuals to break existing leases if someone other than a law enforcement official identified the renter as a victim of domestic violence. SDCAA wants to be sure that the individual making the victim determination is legally recognized.

 

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Updated April 12, 2013
When it rains it pours. That can be said about this past week when several bills about which SDCAA is concerned, were set for an imminent hearing. The following four bills were scheduled for hearing next week:
• SB 603 (Leno) – security deposit penalties; to be heard in Senate Judiciary on Tuesday, April 16 at 1:30 p.m.
• SB 612 (Leno) – domestic violence; to be heard in Senate Judiciary on Tuesday, April 16 at 1:30 p.m.
• AB 746 (Levine) – smoking prohibition; to be heard in Assembly Housing on Wednesday, April 17 at 9:00 a.m.
• AB 1229 (Atkins) – rent control; to be heard in Assembly Housing on Wednesday, April 17 at 9:00 a.m. (though may be postponed).

The notation on the scheduled hearing of AB 1229 reflects a new, potentially positive development. SDCAA lobbyists contacted Housing Committee Chair Norma Torres (D-Pomona) to register strong opposition to the bill, encouraging her to oppose it. The Chair's response, coming during a meeting today at the Capitol, was to at least put the bill off for two weeks.

Last week we reported to you our concerns with SB 550 (Jackson), a bill that the author says is intended to only affect state-subsidized housing – requiring it to meet certain new disability access standards. However, as we had said, language in the bill is overly broad and could be interpreted to include (and impose new requirements on) private, market-rate housing. On Thursday of this past week, we met with the bill sponsors who said there was no intention to cover private, unsubsidized housing and pledged to work with SDCAA and other concerned groups to clarify the bill.

Also, SDCAA lobbyists were making final preparations this week for next week's Leg Day. Last-minute arrangements were being made for dinner with legislators on Tuesday night, materials were being prepared for Wednesday's visits and we're happy to report that Assembly Housing Committee Chair Torres will be addressing our group at the Leg Day lunch on the 17th.

 

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Updated April 5, 2013

Business in Sacramento is back to being brisk as legislators returned from their Spring break. Bills that SDCAA cares about are now being set for hearing and some we were only watching are now shaping up to be ones we will likely oppose.

Notably, AB 969 (Ammiano) is a measure that while asserting that existing law leaves tenants exposed to retaliatory evictions is wholly unnecessary and, if enacted, will potentially make it impossible for property owners in successful unlawful detainer actions to collect rent that is owed them.

Sponsors of the bill claim that landlords are pursuing retaliatory evictions against tenants who withhold rent payments due to claims that properties have become uninhabitable. In truth, the law already provides ample protection for tenants who win habitability complaints. AB 969 would, in effect, disallow collection of withheld rent in a successful unlawful detainer action. SDCAA lobbyists are recommending that AB 969 be included in the list of bills to be discussed with lawmakers on Leg Day, April 17.

In addition to AB 969, SDCAA lobbyists are increasingly concerned about SB 550 (Jackson), a bill that purports only to require state-subsidized housing to meet certain new disable accessibility standards. However, definitions in the bill are potentially troublesome and a conversation this week with the author's staff did not dissuade us from believing Senator Jackson intends to impose new accessibility requirements on market-rate housing. That bill may as well become a topic for discussion on Leg Day.

 

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Updated April 1, 2013

Things in Sacramento were understandably quiet this week as legislators enjoyed their Spring break – some, according to news reports, taking the opportunity to travel abroad, to places like Eastern Europe and Taiwan.

Meantime, SDCAA lobbyists spent most of the week gearing up for the steady hearings on bills that begin when the Legislature reconvenes on April 1. Preliminary meetings were held to discuss opposition to AB 1229 (Atkins), authorizing inclusionary zoning for rental housing, and SB 750 (Wolk), the bill to mandate water submeters in all new multifamily housing.

In addition, much time was spent scheduling meetings with lawmakers on Leg Day, April 17 as well as nailing down arrangements with selected freshmen to dine with the SDCAA delegation on April 16.

Finally, SDCAA signed onto several coalition letters this week, notably those opposing several measures to make it easier to increase property taxes. Among those, all scheduled for hearing in the Senate Committee on Governance and Finance on May 8, were:

• SCA 3 (Leno), a measure to lower the vote standard for approving local parcel taxes for school financing from 2/3 to 55%;
• SCA 8 (Corbett), like SCA 4, would lower the vote standard for approving local special taxes to fund transportation projects from 2/3 to 55%; and
• SCA 11 (Hancock), a measure to lower the vote standard for approving any local special taxes from 2/3 to 55%.

Again, "SCA" is the abbreviation for Senate Constitutional Amendment and, by the way, is not subject to the normal deadlines and other rules governing movement of bills through the Legislature. The reported plan for these and other similar measures is to have the Committee pass them on May 8 then send them to the floor where they will sit until Senate leadership decides when to move them as a "property tax" package.

Updated March 22, 2013

SDCAA Legislative Day in Sacramento Less Than a Month Away

On April 17, a contingency of SDCAA members will travel to Sacramento to meet with our state legislators about bills that will impact the rental housing industry. SDCAA is tracking many bills this session on topics such as security deposits, water submetering & billing, inclusionary housing, and pest management, to name a few. For more information on SDCAA’s state advocacy, click here. If you are interested in attending Legislative Day, please email SDCAA’s Director of Public Affairs, Molly Kirkland, at This email address is being protected from spambots. You need JavaScript enabled to view it. or call 858-751-2200 for more information. Click here for more information.

 

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Updated 04.05.2013

This past week was occupied by SDCAA lobbyists attempting to gather more information and begin to develop lobbying efforts involving the several bills that have been identified as problematic. Among those to report new information on are:
• AB 188 (Ammiano), a bill to create a so-called split property-tax roll;
• AB 746 (Levine), a bill to ban smoking in multifamily housing;
• AB 967 (Hueso), a bill to reassign local government's pest-control duties;
• SB 108 (Yee), a bill to require renters to lock up their guns when not at home;
• SB 612 (Leno), a bill to allow various individuals to certify that a rental housing resident is a victim of domestic violence; and
• SB 750 (Wolk) , a bill to mandate the installation of water submeters in all newly constructed rental housing.

Developments
• AB 188 was removed from the hearing calendar of the Assembly Committee on Revenue and Taxation – likely in the face of strong opposition, memorialized in the attached letter.
• AB 746 will face stronger opposition than previously expected – CAA is now opposed and we expect tenant groups are too.
• AB 967 is a better bill than what its sponsors were initially pitching but is going to be more difficult to accomplish than the author wants. The bill's author now advises that he is seeking to resolve a reported overlap local jurisdictions – counties and cities – in enforcing pest management in rental housing.
• SB 108 is the subject of some internal disagreement as to whether rental property owners need an amendment to the bill that would immunize them from liability should a resident violate the law. A resolution of this disagreement will determine whether SDCAA will seek an amendment.
• SDCAA is concerned that SB 612 removes important legal protection in cases of domestic violence and is working with CAA and others on possible amendments that will preserve that protection. CAA has indicated it wants to support the bill.
• SDCAA had several discussions with allies about SB 750, who are unanimous in their opposition to the measure. The apartment industry is generally concerned about the one-size-fits-all approach to submetering the bill takes as well as the prohibition on cost recovery. Homebuilders object to the absence of protections against installation gouging by local water agencies and adopting building standards outside the normal state building-code-adoption process.

 

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Updated 03.01.2013

On the property-tax legislation front – SDCAA advocates attended a meeting of lobbyists of private companies and business associations who are opposed to the subject legislation (there are nearly a dozen of these bills).

It was agreed that they would be fought through two, separate efforts: 1) combat those aimed at establishing a split tax roll (AB 59 and AB 188); and 2) combat those that would make it easier to approve local GO bonds or parcel taxes (all the ACAs and SCAs). Action on these measures appears to be imminent – already one constitutional amendment (SCA 7) is on the move.

Meantime, SDCAA lobbyists have been huddling with their apartment industry allies to discuss the dozens of other bills that will compromise and complicate the business of operating rental housing in California. Among those being discussed:

• AB 969 (Ammiano), a bill to upset the way in which owners pursue unlawful detainers for a tenant's failure to pay rent.
• AB 1229 (Atkins), a bill to authorize local governments to mandate affordable rental housing on a take-it-or-leave-it basis.
• SB 603 (Leno), a bill to further penalize property owners for security-deposit offenses (sponsors are asserting that the Legislature must act "to stop the theft" of those reserves).

Also of importance to SDCAA is the introduction of SB 750 (Wolk), a bill to mandate water submeters in all new rental housing. This bill, the ones listed above and others will be discussed during SDCAA's upcoming meeting of the State Governmental Affairs Committee, soon to be scheduled.

 

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Updated February 22, 2013

The bills just kept rolling in this week as today’s 5:00 p.m. introduction deadline looms.  More than 300 bills were introduced yesterday, making the total so far this week to be roughly 600 bills.  Another 500 or so are expected today.

Among those introduced over the past week that are potentially troubling to rental housing interests is a bill to ban smoking in all multi-family housing.  The bill, AB 746 by freshman Marc Levine (D-San Rafael), tracks several local ordinances in California which maintain such a ban.   The measure is sponsored by the American Lung Association and is backed by other public health organizations.

SDCAA lobbyists were asked by the author to attend a meeting yesterday to discuss the bill.  Assembly Member Levine acknowledged that AB 746 will be an immensely controversial bill and is prepared for the fireworks to come.  Unfortunately, however, A/M was unable to fully respond to the many concerns raised by SDCAA and allies.   In particular, the bill does not now specify how the smoking ban will be enforced (other than by language in new lease agreements).  We made it clear that enforcement responsibilities as well as potential liability should not fall on property owners or their managers.

A/M Levine also didn’t say much about the likely strong opposition of tenant groups to AB 746 nor was he prepared to say if or how existing smokers would be grandfathered.  He did promise that talks would continue.

Assembly Majority Leader Toni Atkins (D-San Diego) contacted SDCAA lobbyists on Wednesday to report that, unfortunately, she had decided to introduce legislation to allows caps to be imposed on rents through local inclusionary zoning ordinances.   As of this morning the bill, which will abrogate the decision in Palmer v. City of Los Angeles, which said state law prohibits government-mandated rent caps, not yet been introduced but we expect it to be logged by 5:00 p.m. today. 

 

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Updated Febraury 19, 2013

Lawmakers continued to introduce bills this week, heading up to next Friday's deadline. So far, those that represent the most serious threat to rental housing come in the form of both individual bills and constitutional amendments that would change the rules for assessing property taxes on both residential and commercial properties.

No fewer than eight amendments to the state constitution have been proposed thus far, several affecting the provisions of Proposition 13 – the initiative passed in 1978 that placed limits on property tax rates and assessments. All of the measures deals with parcel taxes – authorizing their approval by a majority of 55% of area voters, down from today's 2/3 standard. Each one of the proposed amendments would restrict the new vote standard to specific capital improvements, such as school facilities, transportation, libraries, police stations and firehouses. Several also propose to lift the 1% property tax rate, created by Proposition 13.

In addition to these measures, two bills have so far been introduced which too would affect the way property taxes are imposed. AB 188 (Ammiano) would re-define a real estate sale so that business properties could be assessed at higher values and, consequently, increase their property-tax obligations. AB 59 (Bonta) would overturn an appellate court decision which rightly said parcel taxes could not be assessed at different rates, depending on the use of the property. Bonta and his backers want unfettered authority to tax property at whatever rate they chose.

Not surprisingly, the assault on Proposition 13 and the companion sweeping effort to increase property taxes have business groups in California, including SDCAA, concerned. A coalition of affected organizations is quickly forming and will soon meet to discuss strategy. SDCAA lobbyists will participate in that meeting, tentatively scheduled for February 26.

Finally, no word yet from Assembly Majority Leader Toni Atkins (D-San Diego) as to whether she will author legislation that allows caps to be imposed on rents through local inclusionary zoning ordinances. Similar legislation, SB 184 (Leno), was defeated twice over the course of the 2011-2012 session. SDCAA lobbyists recently met with Assembly Member Atkins, advising her that the Association would oppose such a measure and urged her not to introduce it.

 

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Updated Feb.12, 2013

Attention this past week was devoted to gathering further intelligence and details regarding potential legislation affecting rental housing. As we will discuss during next week's State Government Affairs Committee meeting, there are already serious threats being considered or already having been introduced.

Right now, we're concerned about the following planned or already introduced legislation:

• Property taxes. As many as seven measures have been introduced regarding parcel taxes – all proposing to make it easier to approve them. There will also be another attempt to "split" property tax rolls with the introduction of AB 188 (Ammiano), a bill to re-define a real estate sale.
• Inclusionary zoning. As you know, local inclusionary zoning mandates that all newly constructed housing set prices (or rents) on a certain percentage of the new units at below-market levels. SB 184 (Leno) was introduced in 2011 to legitimize inclusionary zoning for rental housing. The bill was soundly defeated – twice – but tenant activists are seeking to have the substance of SB 184 re-introduced. Assembly Member Toni Atkins (D-San Diego) is being pressured to carry this year's bill.
• Pests. Despite SDCAA's success in persuading Senator Kevin de Leon (D-Los Angeles) not to carry an aimless but punitive bill regarding pest control, the broad coalition backing the idea – which includes tenant groups, public health and social justice advocates and environmentalists – is still actively seeking authorship. We think they will succeed in finding a legislator to carry the bill.
• Security deposits. Tenant groups reported this week they have found an author to carry their bill to add penalties to the law for foot-dragging and other offenses by landlords in returning security deposits.
• Smoking prohibition. We've learned that freshman Assembly Member Marc Levine (D-San Francisco) is all but certain to introduce a bill to ban smoking in rental housing. Next week, we will be meeting with Assembly Member Levine to advise him that everyone's concerns about second-hand smoke notwithstanding, we and other allied groups will strongly oppose his bill. (Last year, you may recall, a bill by Senator Alex Padilla (D-Los Angeles) to affirm the right of property owners to set their own smoking policies in rental housing, passed with strong support and was signed into law by Governor Brown.)

 

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Updated 02-06-2013

 

Speculation grows that tenant groups will seek changes to state law that would, in effect, establish a state affordable-housing mandate on all new apartments. If such a bill is introduced, it would likely resemble SB 184 (Leno), the 2011 bill which would have authorized the imposition of inclusionary zoning on newly constructed rental housing. Tenant groups are targeting Assembly Majority Leader Toni Atkins (D-San Diego) to carry an SB 184-like bill this year.

As you know, local inclusionary zoning ordinances typically mandate that sponsors of all new housing to be constructed in the community set prices or rents on a certain percentage of the new units at below-market levels – to make them affordable for lower-income households. Builders and developers strongly object to these affordability mandates which typically are required by the host localities as take-it-or-leave-it conditions on new projects.

The enactment of Costa-Hawkins, the 1995 law which prohibits rent control on newly vacated and newly constructed apartments, was seen by many as making the legality of inclusionary zoning policies for rental housing questionable. It wasn't until an appellate decision was handed down in Palmer v. The City of Los Angeles that that illegality was affirmed.

The Court did recognize a provision in Costa-Hawkins that essentially says developers and localities may agree to accomplish lower-income rents through economic incentives and other cooperative efforts:

(b) Subdivision (a) does not apply where the owner has otherwise agreed by contract with a public entity in consideration for a direct financial contribution or any other forms of assistance specified in Chapter 4.3 (commencing with Section 65915) of Division 1 of Title 7 of the Government Code.

SB 184 ignored this provision in law and sought to overturn Palmer. The measure failed two attempts to pass its house of origin (the Senate), attracting opposition from apartment and homebuilder groups, including SDCAA.

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Updated January 25,2013

Governor Brown’s annual State of the State address to a joint session of the Legislature topped activities at the state Capitol this week.  The 25-minute-long speech was praised by those on both the left and the right, as it struck themes of economic recovery as well as the need for fiscal and regulatory restraint.

On the heels of recent reports of increased revenues flowing to Sacramento, Democrats cheered the Governor’s statements about the success of tax-raising initiatives like Proposition 30, the ballot measure passed last November which it’s hoped will produce an annual increase of roughly $7 billion in both income and sales tax revenues.  Republicans applauded the Governor’s vow to not approve spending increases for which the state has no money.   GOP members were also pleased to hear the chief executive’s pledge to keep state regulations in check and to, specifically, seek to reform the much-maligned California Environmental Quality Act (CEQA).

Inclusionary zoning may be back in the news.  SDCAA lobbyists are tracking down reports that an effort to re-introduce SB 184 (Leno), a bill to authorize inclusionary zoning in rental housing, is being made.  SB 184, introduced two years ago, would have vitiated the 2009 appellate decision in Palmer v. The City of Los Angeles – thereby making inclusionary zoning on new apartment construction a lawful local mandate.   SDCAA and other apartment groups opposed and ultimately defeated the measure.   

Meanwhile, SDCAA lobbyists continue to meet with new members of the Legislature.

 

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Updated January 14, 2013

The Legislature is in full swing and already we face a threat concerning pest-control methods practiced in rental housing.  A coalition of public health activists, tenant advocates, environmental groups and social justice organizations is pushing for state controls on how apartment owners manage their pest problems.

It’s not clear what the coalition wants but under the banner of “integrated pest management” (IPM) they are talking about giving tenants authority to determine what method and means of pest control are used by property owners as well as the ability to pursue legal action against property owners who don’t satisfy IPM standards and practices.  

IPM is a strategy for pest control that includes environmentally friendly methods and means.  The concept was originally designed to guide outdoor users of pesticides (i.e. agriculture) but recently, backed by several federal government agencies and the United Nations, has been embraced by housing, social justice and environmental interests  as the most effective and appropriate way to manage and ultimately eliminate pests.  

The coalition approached Senator Kevin de Leon (D-Los Angeles) to carry a so-far very loosely designed IPM-based pest control bill which included the ideas about tenant-choice and legal liability described above.  But, after meeting with SDCAA lobbyists, it looks like Senator de Leon will decide against carrying such a measure.  

Meantime, after meeting this week with Sacramento-based tenant advocates, SDCAA lobbyists are convinced the pest-control battle will continue – as will, according to these groups, contests over security deposits and inclusionary zoning.  More on those forthcoming battles in the weeks ahead.

Also this week, both Senate and Assembly leaders – Darrell Steinberg (D-Sacramento) and John Perez (D-Los Angeles), respectively – announced committee assignments for 2013.   A summary of membership of the committees of interest to SDCAA is attached.  

 

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Updated January 4, 2013

Action at the Capitol resumes in earnest on Monday, January 7, as the Legislature returns from its Christmas holiday break.  Among the things SDCAA lobbyists will be doing over the next several weeks is sitting down and getting acquainted with nearly 50 newly elected lawmakers, most of whom are serving their first terms in the Legislature.

Of particular interest to us is getting to know those who are considered to be business-friendly Democrats – particularly important given the lopsided majorities in both the Senate and the Assembly.  Correspondingly, we are encouraging SDCAA leadership and members to get to know Southland-based legislators on their own.

Very few bills were introduced since last Friday and none are of interest to use.  However, as reported over the past several weeks, there is a move afoot to pursue changes to the way Proposition 13 determines how much in property taxes commercial owners pay.  It’s recommended you read the following story: (http://www.sfgate.com/politics/joegarofoli/article/Prop-13-revision-efforts-pick-up-steam-4144515

Meantime, other issues are surfacing.  An LA-based lawmaker has been asked to carry legislation that would require rental property owners to follow a new, state regime for eradicating pests from their properties.  We are currently in discussions with that legislator.  Also, despite the long odds for re-introducing rent control to California, we are concerned that tenant groups may, emboldened by last November’s election, pursue something along these lines – including the re-introduction of SB 184 (Leno), the bill to require a form of rent control on a certain number of newly constructed apartments.  Here’s a (helpful) piece on rent control – proof that the failed public policy is back in the news (http://blog.metrotrends.org/2013/01/rent-control-good-policy/).

 

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Updated January 1, 2013

There was very little activity at the Capitol over the Christmas week.  A few bills were introduced – none with consequences for the rental housing industry.  However, there continues to be much speculation about how far Democrats will go next year in flexing their new, super-majority muscle – particularly when it comes to taxes.

Once more – and to no one’s surprise – whether or not to tinker with the property tax limits contained in Proposition 13 topped the list of issues around which there was much speculation.  Of particular concern, as previously reported, is the growing interest in enacting a “split roll”, so that commercial property owners – including rental housing – pay a higher property tax rate than do single-family homeowners. 

Underscoring this speculation are regular news stories like the one below, appearing in the San Francisco Chronicle, highlighting the split-roll idea.

http://www.sfgate.com/politics/joegarofoli/article/Prop-13-revision-efforts-pick-up-steam-4144515.

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Friday, December 05, 2012

Signs of activity in Sacramento began this week as new lawmakers made their way to the Capitol for orientation, staff interviews, office-space shopping and other forms of acclamation before their swearing in and the formal beginning of the 2013 session next Monday. SDCAA lobbyists will soon commence outreach efforts with legislators after they've begun to settle in.

Meanwhile, chatter has already started about what legislative initiatives will be pursued next year. Among those being discussed that would affect rental property owners is a constitutional amendment to lower the vote standard for approving local parcel taxes from the current 2/3 percent to something less – probably 55 percent . One Senator has already indicated that he intends to pursue such legislation.

Finally, SDCAA lobbyists continue to assess the prospects for pursuing industry-led reforms in 2013.

 

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Friday, November 16, 2012

Again, the week was dominated by a variety of news about the 2012 general election. The week began with reports on the continuation of counting in close legislative and congressional races though by week's end, all the races had been called and speculation grew about what the results now mean.

Of particular importance to SDCAA and the rest of the apartment industry – as well as the wider business community – was the outcome of a closer-than-expected 65th Assembly District where incumbent Republican Chris Norby was ultimately defeated in an upset by Democratic challenger Sharon Quirk-Silva. That switch from Republican to Democrat delivered a 2/3 majority to Assembly Speaker John Perez, putting that house of the Legislature on par with the Senate where Democrats will next year enjoy a 28 to 12 margin and, too, a 2/3 majority.

As we said last week, the dramatically changed, post-election political landscape in Sacramento almost surely means SDCAA will have a greater challenge getting support for affirmative reforms and, importantly, preventing bad things from happening. In particular, chatter has already begun in Sacramento about not just whether or not taxes ought to be increased on businesses but how. Of particular concern to SDCAA is the increased interest being expressed about changing Proposition 13 (i.e. split property tax roll) and lowering the vote standard of 2/3 for approving local parcel taxes.

We've already begun discussions with both allies and adversaries about what to expect next year, while our research into issues like Shriver Act/jury trials in unlawful detainer cases, onsite-manager and service-animal abuses continues. We will continue to report on what develops from those discussions as well as from the research.

 

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Friday, November 6, 2012

In addition the commencement of research into issues including increased court delays and costs (i.e. problems with the so-called "Shriver Project") and water submetering, SDCAA lobbyists are meeting in Sacramento with various allies and adversaries regarding their legislative priorities for 2013.

As previously reported, one allied organization is working on possible legislation to deal with liability – or the potential for it – falling on property owners when residents become the basis of nuisance grievances which must be resolved. We will have more on that concept in the coming weeks.

In addition, we are chasing down reports that certain resident-activists are renewing their bid to establish a statewide affordable-housing mandate for all newly constructed rental housing, much like SB 184 (Leno). You will recall SB 184 is the twice-defeated measure that would require a portion of all newly built rental housing units have rents set at below-market levels to make them affordable to lower-income households. We will keep you apprised of what we learn.

Finally, we are concerned as are SDCAA members about the apparent interest in expanding the definition of service animals to include pets being kept as part of therapy tied to psychological problems. A recent story in the Wall Street Journal  details how individuals seek to assign a "therapeutic" status to their pets which, they believe, then entitles them to move freely in both public and private facilities accompanied by their dogs, cats or even iguanas. The disputes that almost surely will arise in California over where these animals can go will equally assuredly become a legislative cause in Sacramento. Stay tuned.

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Friday, October 26, 2012

SDCAA lobbyists are doing due diligence regarding issues about which the industry is concerned in 2013. In addition to working with SDCAA's State Governmental Affairs Committee (SGAC) on various issues, the following were discussed at a recent meeting of AAGLA's State Committee:

•  Shriver Pilot Program and related reforms regarding delays and expenses associated with court actions to resolve landlord-tenant disputes. It was agreed that a variety of research efforts must be undertaken first before moving forward on the possible development of a legislative proposals. Included in the research will be:
  • Consulting with U/D practitioners;
  • Consulting with court clerks; and
  • Considering the idea of moving U/D's to small claims court.
• Water submetering – state and local reforms to improve the ability of property owners to economically install these water-saving devices. Initial actions will:
  • Follow up on Governor Brown's veto of SB 744 (Wyland); and
  • Invite submetering professionals to further educate property owners.
• Revisiting the current 16-unit threshold for hiring a professional property manager.
• Revisiting state definition of service animals which must be accepted as part of normal tenancies.

We will report on these and other issues, as appropriate.

 

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Friday, October 19, 2012

SDCAA will begin discussing whether or not changes to the so-called Shriver Project, the product of past legislation to improve legal representation for the poor, should be pursued in 2013. San Diego was one of seven "pilot" Shriver projects, authorized by AB 590 (Feuer) in 2009. Since its recent inception, several problems have arisen which may or may not be fixable before the law expires in 2018.

In addition to the Shriver pilot issues, SDCAA will be determining to what extent members think legislation would be helpful to deal with other court-related problems and the growing concern about the supply and cost of water.

Preliminary discussions among staff and practitioners on these and other matters will be followed by recommendations to SDCAA's State Governmental Affairs Committee, as necessary.

 

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Friday, October 12, 2012

SDCAA has begun the process of looking forward to and planning for the next legislative year in California, which officially starts on December 3, 2012.  The commencement of this effort was signaled by the Thursday meeting of SDCAA’s State Government Affairs Committee during which the parameters of a formal planning process were discussed.   

During that same meeting, Committee members identified several bills that take effect on January 1, 2013 and which may have an impact on rental housing owners and managers, so that advisory information can be developed and transmitted to SDCAA members before the end of this year.  Those bills are:

•    AB 1679 (Bonilla) – allows property owners to use electronic transfers of security deposit balances.

•    AB 1953 (Ammiano) – the bill to require rental property owners to notify in a timely way where and to whom to send rent checks when properties have changed hands.

•    AB 2521 (Blumenfield) – the SDCAA-backed bill to reform the state process required of property owners to dispose of personal property abandoned by former renters.

•    AB 2610 (Skinner) – a bill to conform state law to federal law regarding tenant protections in the event of foreclosure.  

•    SB 1055 (Lieu) – a bill to prohibit property owners from limiting the form of rent payment to electronic transfers only.

•    SB 1191 (Simitian) – the bill opposed by SDCAA that requires small property owners to warn prospective renters of financial trouble when the owner is notified by the bank of a default.  

•    SB 1394 (Lowenthal) – the bill to ensure that the installation and operation of smoke detectors in multifamily housing is consistent with local building codes.

Appropriate SDCAA legal specialists will be consulted on these measures in preparation of developing the advisories.

 

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Friday, October, 05, 2012

With the 2012 California legislative session having officially ended on October 1, SDCAA will now begin the process of looking forward to next year. Correspondingly, attention will turn to a) what legislation SDCAA would like to see move forward in 2013; and b) discussing what to anticipate given the significant turnover in legislators, particularly in the Assembly.

SDCAA's State Government Affairs Committee will be conducting a conference call next week to begin those discussions.

Also, over the course of the next two months, SDCAA will be working on carefully examining bills that passed in 2012 that may directly affect rental housing and SDCAA members. Bills that fall into this category include:

• AB 1953 (Ammiano), the bill to require rental property owners to notify in a timely way where and to whom to send rent checks when properties have changed hands.
• AB 2521 (Blumenfield), the SDCAA-backed bill to reform the state process required of property owners to dispose of personal property abandoned by former renters.
• AB 2610 (Skinner), a bill to conform state law to federal law regarding tenant protections in the event of foreclosure.
• SB 1055 (Lieu), a bill to prohibit property owners from limiting the form of rent payment to electronic transfers only.
• SB 1191 (Simitian), the bill requires small property owners to warn prospective renters of financial trouble when the owner is notified by the bank of a default.
• SB 1394 (Lowenthal), the bill to ensure that the installation and operation of smoke detectors in multifamily housing is consistent with local building codes.

 

 

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Friday, September 28, 2012

 

Click here to read a summary of legislative actions to date.

 

Efforts to win the Governor’s approval of and vetoes on several bills continued this week.

Signature requests
Topping the list is AB 2521 (Blumenfield).  This SDCAA-backed bill would substantially reform the state’s outdated and cumbersome process that rental property owners must follow to lawfully dispose of personal property abandoned by former tenants.  The bill passed both houses of the legislature with strong bi-partisan support and has been sent to the Governor.  As reported last we sent a letter to the Governor and were able to secure signature requests from two other allied organizations.

SB 744 (Wyland) is the SDCAA-supported bill to improve the state process for approving the use of water submeters in rental housing.   It too passed with strong bi-partisan favor and was sent to the Governor.  We have embarked on a significant, broad-based effort to get the Governor to approve the measure, engaging allies, out-of-state interests and key lawmakers.

Veto requests
SDCAA joined AAGLA and SBRPA on a joint letter, asking the Governor to veto  SB 1191 (Simitian), the bill to require small property owners only who are in receipt of a Notice of Default to so notify prospective renters or pay hefty fines if they fail to do so.  SB 1191 would have destructive impacts on property owners, including the likelihood of hastening foreclosures.  Regrettably, the California Apartment Association and the California Association of REALTORS® support SB 1191.  Nevertheless, we are considering having individual SDCAA, AAGLA and SBRPA members weigh in with individual letters.

Finally,  SDCAA will be requesting a veto of AB 1953 (Ammiano), a much-improved but still objectionable measure to disqualify a complaint by an owner for non-payment of rent if the non-payment covered a period where the owner or manager failed to notify tenants to whom and where to send rent checks.   SDCAA had sought clarifying amendments that were continuously rejected.

 

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Friday, September 7, 2012

Efforts began in earnest this week to seek the Governor’s approval of and vetoes on several bills important to SDCAA.

Signature requests
Topping the list is AB 2521 (Blumenfield).  This SDCAA-backed bill would substantially reform the state’s outdated and cumbersome process that rental property owners must follow to lawfully dispose of personal property abandoned by former tenants.  The bill passed both houses of the Legislature with strong bi-partisan support and has been sent to the Governor.  We sent a letter this week requesting a signature.

SB 744 (Wyland) is the SDCAA-supported bill to improve the state process for approving the use of water submeters in rental housing.   It too passed with strong bi-partisan favor and was sent to the Governor.  We are currently plotting a plan to overcome strong opposition to the bill from at least one agency of state government.  The strategy will include a letter to the Governor from SDCAA and other housing and development groups requesting a signature.

Veto requests
SDCAA is seeking a veto of SB 1191 (Simitian), the bill to require small property owners only who are in receipt of a Notice of Default to so notify prospective renters or pay hefty fines if they fail to do so.  SB 1191 may be well-intentioned but in an effort to help consumers make better-informed decisions, the author has overlooked the potentially destructive impacts the bill could have on property owners, including the likelihood of hastening foreclosures.  Regrettably, the California Apartment Association and the California Association of REALTORS® support SB 1191.  Nonetheless, SDCAA is being joined by all independent local associations in seeking a gubernatorial veto.

Finally,  SDCAA is likely to request a veto of AB 1953 (Ammiano), a much-improved but still objectionable measure to disqualify a complaint by an owner for non-payment of rent if the non-payment covered a period where the owner or manager failed to notify tenants to whom and where to send rent checks.   SDCAA had sought clarifying amendments that were continuously rejected.

Last-minute news
SB 1055 (Lieu), a bill to prohibit property owners from demanding that rent only be paid electronically, was signed by the Governor today.  After helping the author with the bill’s language, SDCAA adopted a NEUTRAL position.

 

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Friday, August 31, 2012

The final week of the 2012 legislative session was devoted to winning passage of the SDCAA-supported SB 744 (Wyland), the bill to improve the state process for approving the use of water submeters in rental housing.   

After a harrowing experience in the Assembly – during which Assembly Member Mike Gatto (D-Burbank), who had earlier agreed to manage SB 744 on the Assembly floor, pulled off a remarkable, come-from-behind victory – the effort to win final passage in the Senate began.  (As you may know, having Mr. Gatto present the Wyland bill on the Assembly floor is one of the requirements for moving legislation through both houses of the Legislature.  Since, when a bill gets to the floor of the so-called “second house” a member of that side of the Legislature must be found to manage the bill on the floor of that second house.)   In the end, the bill was approved by the Assembly by a vote of 43 to 27.

Complicating the effort to complete SB 744’s legislative journey with a concurrence vote in the Senate was absence of the author of SB 744 – San Diego Senator Mark Wyland (R).  Mr. Wyland, as a delegate to the GOP convention, had traveled to Tampa, FL, and reportedly wouldn’t be returning until Friday, August 31, the last day of the 2012 legislative session.  Ultimately, Senator Wyland decided to fly back to Sacramento on Wednesday so that the measure could be brought up on Thursday – leaving him with a second try on Friday in the event the bill failed its initial vote (sort of like kicking a field goal on third down).

Meanwhile, opponents of SB 744 launched a campaign – aimed at getting Democrats in the Senate to abandon their previous support of the measure – to discredit a damning study of California’s submeter testing facilities.  To add to the efforts to defeat the bill, the California Department of Food and Agriculture (CDFA) piled on and sent to all senators a strongly worded letter of opposition.
Lobbyists moved quickly to uncover the campaign’s many falsehoods, aided by the many faxes and phone calls made by SDCAA members to key senators.  In the end, 30 senators voted for SB 744 – nine more than needed – sending the bill to the Governor.   Thanks to all at SDCAA who weighed in.  

But, despite the resounding victory in the Senate, the real battle to enact SB 744 will be in the Governor’s office where CDFA will have significant influence on the decision of Governor Brown to sign or veto the bill.