Click here to read the full update.
The bill will be heard in the Senate Appropriations Committee in the coming weeks. SDCAA has taken a “watch” position and is tracking its progress.
SB 2 (Atkins) - cleared its first hurdle at the state Capitol this week, passing out of the Senate Transportation and Housing Committee on a 9-3-1 vote (9 AYES, 3 Noes and 1 Not Voting). The bill, also known as The Building Homes and Jobs Act, would impose a $75 recording fee on real estate documents, excluding property sales.
Click here to read the full update.
The bill will be heard in the Senate Appropriations Committee in the coming weeks. SDCAA has taken a “watch” position and is tracking its progress.
Late this past Friday, the last day to introduce legislation, three members of the assembly introduced a bill to repeal the Costa-Hawkins Rental Housing Act, commonly referred to as Costa-Hawkins. What is Costa Hawkins you ask? It is the 1995 law that placed limitations on rent control in California, such as prohibiting ‘vacancy control’ and instead reinstated the owner’s right to set rental rates when an apartment is vacated. Costa-Hawkins also exempts single family homes, condos and properties with a certificate of occupancy issued after February 1, 1995 from rent control.
AB 1506, introduced by Assembly Members Bloom, Chiu, and Bonta (and coauthored by Senator Allen), as written, would repeal Costa-Hawkins. Repeal! Here is the language of the bill:
The Costa-Hawkins Rental Housing Act prescribes statewide limits on the application of local rent control with regard to certain properties.
This bill would repeal that act.
No proposed changes, no suggestions to fix any parts that may not be working. Simply repeal the act.
This could not come at a worse time. Let’s forget all the rhetoric that usually surrounds rent control and focus on one thing: Housing Supply! At a time when local and state governments are trying to address a severe housing shortage and proposing ways to streamline development and incentive construction, why would these legislators seek to reinstate a policy that is known to discourage construction? That is not rhetorical. Really, can someone answer this for us? According to a January 2017 report from the California Department of Housing & Community Development, “Production averaged less than 80,000 new homes annually over the last 10 years, and ongoing production continues to fall far below the projected need of 180,000 additional homes annually.”
Even if rent control is in place everywhere in the state, it does nothing to provide the additional housing units that are so desperately needed. People without housing will be even worse off as those already lucky enough to have a rent-controlled home will not move. Remember, rent control is based purely on luck, not need. One need only to look at New York and the famous people who have taken advantage of rent-controlled units over the years.
SDCAA and our team of lobbyists in Sacramento are already reaching out to the authors of this bill. Rent control is a core policy issue for SDCAA and the association is poised to opposed this bill…strongly. We will likely need your help. Click here to sign up for advocacy center. SDCAA will send you updates on this bill and others, as well as important “Calls-to-Action” when you’re needed to contact your legislators. More to come…
The deadline to introduce bills in the State Legislature in February 17. With only a few days to go before the deadline, SDCAA is already tracking dozens of bills that could impact the rental housing industry.
Several bills have been introduced to address affordable housing, including San Diego Senator Toni Atkin's bill SB 2 (Building Homes and Jobs Act) which would assess a $75 fee on a number of real estate transactions to fund affordable housing. SDCAA is reviewing the bill as it impacts over twenty types of document filings, although owner occupied single family home sales are currently exempt in the proposal.
SB 35 has been introduced by newly elected San Francisco area Senator Scott Wiener. The bill would streamline, incentivize, and remove local barriers to housing creation, although specific details and bill language has not been published as of yet. SDCAA is closely monitoring this bill and hopeful that it will be crafted in a way to truly help create much needed housing throughout the state.
SDCAA is also working on AB 291 (Chiu) with regards to housing and immigration. The California Legislature has introduced a number of bills and resolutions in response to recent federal immigration issues. This bill addresses immigration in rental housing by proposing a myriad of changes to exisitng law. Some of those changes include:
These are just a few of the bills SDCAA will be working on this legislative session on your behalf. Keep up with these issues and more via our magazine, eNewsletters, and via our Advocacy Center. Click here to sign up to be an SDCAA Advocate; you will receive legislative updates and important "Calls-to-Action" that will keep you updated and involved in our statewide advocacy efforts.
Read a post election update from SDCAA's State Lobbying firm, Aaron Read & Associates. Find out who won key races in the Legislature and which ballot measures passed or failed.
The 2015-16 legislative session saw the introduction of many bills targeting the rental housing business, and not all were friendly. There were bills dealing with bed bugs (AB 551), the Ellis Act (SB 1053), Unlawful Detainers (AB 2819), inclusionary housing requirements (AB 2502), and water submeters (SB 7) to name just a few and thanks to SDCAA lobbying efforts, both locally and here in Sacramento, most of these bills were amended to address our concerns or we defeated them in committee. The Governor has until September 30th to sign bills.
Bills Defeated by SDCAA
AB 396 (Jones-Sawyer) - The bill would have prohibited landlords from using criminal background checks when screening prospective tenants. While we killed the bill in 2015, it had the potential to resurrect itself as a two-year bill. Fortunately, it stayed dead.
AB 723 (Rendon) - SDCAA opposed AB 723 requiring that a rental agreement for a single-family rental or apartment unit to include a written disclosure stating the property owner’s responsibility to replace all noncompliant plumbing fixtures with water-conserving plumbing fixtures and whether they had done so. When the bill was gutted and amended during the conclusion of the 2015 legislative year, SDCAA engaged with the author (who subsequently became speaker) explaining our opposition. After several conversations, Assembly Member Rendon agreed to hold the bill in 2015. It was eventually amended to address other issues.
AB 2282 (Calderon) - SDCAA opposed this bill requiring single-family rental homeowners to register their units with the State Department of Business Oversight. As a result of SDCAA lobbying efforts, and others, the bill was amended to require publicly traded companies that own more than 100 single family homes to register with the State Department of Business Oversight. The bill failed passage and was placed on the Assembly inactive file.
AB 2502 (Mullin) - SDCAA opposed this inclusionary zoning bill, and it was one of the bills discussed during our legislative day meetings. The bill attempted to give authority to local government to mandate that a percentage of a new rental development be designated as affordable for low-income individuals and families. It proposed to overturn provisions of Costa Hawkins that were preserved through the Appellate Court decision in Palmer vs. City of Los Angeles. SDCAA, and others, opposed the bill in the Assembly where it failed passage.
SB 1053 (Leno) - SDCAA opposed this bill requiring landlords to accept Section 8 housing vouchers. This was one of the bills discussed during our legislative day meetings, and with the Pro Tem of the Senate during our meeting with him that day as well. SDCAA vigorously opposed this bill in the Senate where it failed passage.
SB 1267 (Allen) - SDCAA opposed this bill that would have required rental property owners, who elected to go out of the rental housing business, to provide a one-year notice to families with school-age children who had lived in the rental home for at least one year prior to the notice of termination. The bill died in Senate Transportation and Housing.
SB 8 (Hertzberg) - This bill proposed to expand the state’s retail sales tax to “services,” that would have included property management, accounting firms, legal, landscaping, painting, etc. However, should the Democrats achieve a 2/3 majority in both houses in November 2016, this may be revisited.
SB 608 & SB 876 (Liu) - SDCAA opposed the bills that would have granted rights to homeless individuals to rest in “public places,” which included sidewalks in front of private buildings. The bills were held by the Legislature.
SCA 5 (Hancock) - SDCAA opposed this measure to amend the state constitution to allow for regular reassessments of commercial and industrial property to their fair market value, starting with the 2018-19 fiscal year.
Bills significantly amended as a result of SDCAA
AB 551 (Nazarian) - SDCAA was opposed unless amended when this bill was first introduced and through much of its lifecycle. As a result of the final amendments, SDCAA changed to a Neutral position. The bill proposes to put in place disclosure requirements about the prevention and reporting of bedbugs. Prohibits landlords from renting units in which they know bedbugs exist and prohibits landlords from retaliating against tenants who report the pests. Prior to going neutral, AB 551 required landlords to notify all tenants of the presence of bed bugs in a unit whether or not they were directly affected. Also included the term “knew, or should have known,” in the section of the bill the prohibited the rental of units with bed bugs. As a result of SDCAA opposition, the term was removed and the language changed to “prohibits landlords from renting units in which they know bedbugs exist.” This was a long, hard fought battle, ending in a positive way for SDCAA. As of this writing, the bill is on the Governor’s desk. *Update: Signed by Governor, Sept. 25, 2016.
SB 7 (Wolk) - SDCAA was opposed unless amended. As amended SDCAA was Neutral. SB 7 requires the installation of submeters in multi-unit rental housing units built after Jan. 1, 2018, and that residents receive accurate information about the volume and cost of their water use. The bill clarifies how multifamily property owners can charge tenants for water use, and it allows for late fees and eviction when tenants don’t pay their bills. The bill does not affect existing properties without submeters where tenants are billed separately through ratio-allocation utility systems (RUBS). SDCAA worked tirelessly to have the bill amended so it would be workable for property owners. It took some doing, but we eventually got to that place. The bill also exempts the City of San Diego from the effects of the legislation as they already have a local water submetering ordinance in place. As of this writing, the bill is on the Governor’s desk. *Update: Signed by Governor, Sept. 25, 2016.
Flawed Masking Bill Becomes Law
AB 2819 (Chiu) - The San Diego County Apartment Association strongly opposed this bill. Under California’s unlawful detainer (UD) “masking” law,” UD court filings are hidden from public view for 60-days following the initial court filing, and then are unmasked. If during this period the tenant prevails, the filing is permanently masked.
AB 2819 will permanently mask all UD actions, unless the rental property owner obtains a judgment in court within 60-days. The bill unfairly places on property owners ALL costs, burdens, and responsibilities for ensuring public notice of tenant defaults.
AB 2819 will unfairly keep a majority of all UD actions hidden from public view. Most property owners who get possession of their properties before a UD proceeding concludes do not go back to court for a judgment. There is no incentive to do so. They’ve already lost months of rent, and they’ve paid court and attorney fees to file the UD action. The last thing they should be required to do is pay more court and attorney fees to get a judgment. Because judgments will not be sought, thousands upon thousands of rent default records will remain hidden from public view.
Requiring property owners to obtain a judgment in order to unmask a UD proceeding only serves to promote more delays and frivolous claims. UDs are supposed to be expeditious proceedings, and one of the few policies that encourage resolution is the masking law. Because proceedings become unmasked at the 60-day mark, parties are encouraged to settle or complete trial within that period. This bill removes the incentive to settle quickly, while encouraging the practice of lodging baseless and meritless claims to further delay proceedings.
Property owners have the right to know whether a prospective tenant is a serial rent defaulter or vexatious litigant. AB 2819 unfairly keeps rental property owners in the dark and from knowing the truth about prospective tenants. We sent a letter and met with the Governor’s staff on this bill. SDCAA also sent Legislative Calls-to-Action asking members to request a Veto. Thank you to all those that called or wrote. Unfortunately, we received word late on Tuesday, September 13 that Governor Brown signed the bill. SDCAA will work to advise members on the implications of this law.
SDCAA supported several bills this year as well, several of which passed and are expected to become law. These included bills to make it easier to develop second units and improve the usefulness of the Density Bonus program. While some other supported bills, such as those to fix abuses in the unlawful detainer process did not make it through the legislature, we remain positive that we can pursue legislation in the coming years that will make it easier for you to do business. The Legislature will return in December for a brief organizational session (elect Speaker, to swear-in the members, etc.). They will then return in January to begin the first year of a new two-year session.
Some good news from the state capitol – SB 1053 (Leno), a bill that would have required property owners to participate in Section 8, was held on the Appropriations Suspense file today. As you may recall, Senator Leno introduced a bill that would have made it unlawful to deny housing based on an applicant receiving Section 8 assistance. SDCAA testified in opposition to the measure in the policy committee and actively lobbied against the bill during and after our lobby day in Sacramento.
SDCAA recently issued another Red Alert recently regarding AB 2502. AB 2502 is a bill to sneak rent control on new housing construction and reverse 21-years of state law to restrict that failed public policy. AB 2502 gives local governments the power to adopt a my-way-or-the highway policy of requiring a rental housing developer to build rent- controlled units without consideration for the economic viability of such projects.
Click here to read more on both of these bills.
Eviction Masking Bill Moves to Senate, Governor Signs ADA Reform Bill
Earlier this week, AB 2819 (Chiu) passed off the Assembly floor and now goes to the Senate. AB 2819, also known as the “masking bill,” seeks to keep tenant court records in eviction lawsuits from becoming public unless the landlord prevails within 60 days of having filed the lawsuit (existing law provides for the release of court records unless the tenant prevails within 60 days after filing of the complaint). SDCAA is strongly opposed to this bill. While the author has taken some amendments, they do not go far enough to ensure that a property owner is not renting to a serial defaulter. This bill serves to do one thing: hide non-payment of rent from the next property owner. SDCAA will work to stop this bill in the Senate.
On a better note, Governor Brown last week signed SB 269 (Roth), a bipartisan measure supported by SDCAA and designed to give small businesses with fewer than 50 employees time to fix access violations. Businesses that hire a certified access specialist will have 120 days to make specified minor repairs to their establishments. In 2013-14 several dozen businesses (including apartment buildings) in the Riverside area, which Senator Roth represents, were hit with ADA related lawsuits by two plaintiffs, similar to what has been experienced throughout the San Diego region.
Lastly, SDCAA wishes to express its thanks to all the members who wrote to their Senator asking them to oppose SB 1053 (Leno), which would mandate property owners accept Section 8. The bill is still on “suspense” in the Senate Appropriations Committee. We hope your letters will help keep the bill from moving forward. Should it go to the Senate floor, we will again call on our members to make their voices heard in the State Capitol.
Assembly Democrats hoping to alleviate California’s affordable housing crunch are asking Governor Jerry Brown to sign off on more than a 1.3 billion dollar boost. The Assembly Democrats’ plan represents a one-time budget investment in five priority areas to meet the range of housing needs for working, lower-income families and Californians who are homeless or at risk of becoming homeless:
• Rental housing for lower income working families
• Home Ownership opportunities and rental housing for working families
• Affordable housing for rural California, including for farm workers and their families
• Seismic retrofitting of “soft-story” homes
• Housing assistance and production for homeless individuals and their families
The proposal is a massive outlay of local grants and tax credits aimed at building or updating lower-cost housing, including
multi-family rental units, homes for farm workers and units with supportive services for homeless people. They said a
sizable budget surplus justifies the one-time funding package. The Governor’s 2016-17 budget proposal contains a combined $376 million for the Department of Housing and Community Development and California Housing Finance Agency.
Another $400 million is budgeted for housing and transit out of a swelling cap-and-trade fund that is filled by businesses
purchasing permits for carbon emissions. This would be in addition to the Governor’s proposal.
Click here to read more about this plan.
As part of the CalRHA Legislative Day, SDCAA came to Sacramento and met with the San Diego legislative delegation and discussed several bills of importance to the industry. It was a very productive Legislative Day beginning on Wednesday, March 29th, with a briefing by the lobbyists for all California Rental Housing Association (CalRHA) members. Upon the briefing’s conclusion, a legislative reception was held and well attended by CalRHA members, legislators and their staff. On Thursday, the real work began. The day started with a morning briefing at Aaron Read & Associates (ARA) headquarters where we reviewed the legislative packet and the dos and don’ts of lobby day.
Then it was off to the Capitol to meet with legislators. To SDCAA’s credit and with help from ARA, SDCAA members met with most of their San Diego and Southern Riverside legislators. On busy days when there are many committee hearings being held, it is sometimes difficult to get members to meet, in which case SDCAA representatives met with staff (who are important). It shows how important your issues are to the members and is an indication of the hard work put in at the local level to cultivate relationships with your San Diego contingent. It was a productive day and ARA was happy and proud to be a part of it.
As SDCAA members made their way through the Capitol halls, the bills discussed included;
AB 2003 (Lackey) – Support - AB 2003 seeks to address fraudulent habitability claims by requiring the tenant to share details of any habitability concerns when responding to the lawsuit (prior to appearing in court) and specify if they have contacted the owner or code enforcement about the problems. In some cases, this may help clarify any misunderstandings and allow landlords to work directly with the tenant to correct these issues so that an unlawful detainer lawsuit is not necessary. In others, it may allow both parties to be better prepared for the court hearing and eliminate the need for delays.
This bill requires that if a tenant claims they are not current on their monthly rent due to the property being uninhabitable, they must disclose whether they have contacted the owner about the problem or their respective local code enforcement, and provide details about the nature of the problem. It also reaffirms that notification must be given to the landlord in a timely manner when the tenant hires an attorney to represent them. Additionally, it specifies that unlawful detainer cases should be processed in the courthouse closest to the property.
NOTE: The bill was heard in the Assembly Judiciary. While we received support from the Republican members of the committee, the bill failed to garner enough votes for passage and was held in committee.
AB 2312 (Gatto) – Support - The purpose of the bill is to mitigate the abuse of the unlawful detainer process in many jurisdictions through the assertion of spurious defenses, extortionate use of requests for jury trials to exact settlements, and other tactics largely, if not solely, for the purpose of delaying the owner’s regaining possession of the property during which time tenant does not pay rent. Most owners own 10 units or less, they are overwhelmingly mom and pops and cannot afford to lose months of rent or to pay unconscionable settlements. These tactics are very often urged or encouraged by eviction defense “mills” which are exploiting the process for their own gain.
The bill requires a represented defendant who contests an unlawful detainer action to deposit with his or her attorney the future contract rent as it otherwise would become due during the pendency of UD proceeding. That attorney will hold and protect the future rent payments in his or her trust account until termination of the proceeding. Upon conclusion of the proceeding, the court will direct distribution of the trust funds.
NOTE: The bill will be heard in committee on May 3, 2016.
AB 2502 (Mullin) – Oppose - Restores authority of locals to enact inclusionary housing policies. This reverses the Palmer decision from 2009. In 2009, a state appellate court ruling in the Palmer v. City of Los Angeles case indicated that the state’s Costa-Hawkins Rental Housing Act (Costa-Hawkins) prohibits local governments from creating affordable rental housing through local inclusionary programs. AB 2502 is identical to AB 1229 (Atkins), which Governor Brown vetoed in 2013. In his veto message, the Governor indicated that prior to making a legislative change regarding inclusionary housing; he wanted to wait for the California Supreme Court to issue its decision on the California Building Industry Association (CBIA) v. City of San Jose case. In this case, CBIA argued that San Jose’s 15% inclusionary housing ordinance is unconstitutional on the basis of the Fifth Amendment, which indicates that private property should not be taken for public use without just compensation. In June 2015, the Supreme Court unanimously upheld San Jose’s inclusionary housing ordinance and ruled that the ordinance is an exercise of the city’s police power. The U.S. Supreme Court just decided not to hear the case.
AB 2502 restores local governments’ ability to enact inclusionary housing policies by saying the Costa-Hawkins rent control law does not apply to inclusionary housing policies. This bill amends the state’s Planning and Zoning law to indicate that inclusionary zoning is an allowable land use power.
SDCAA is opposed to the bill and testified in opposition in both the Assembly Local Government Committee and the Assembly Housing Committee. The bill did receive the requisite number of votes for passage but, if left unchanged, will have a difficult time getting off of the Assembly floor. After the last hearing, Assembly Member Mullin approached and asked if we could meet and discuss changes to the bill that would alleviate the industries concerns. We will be meeting with him in the coming weeks.
AB 2819 (Chiu) – Oppose - Under California Code of Civil Procedure § 1161.2(a)(5), court records in eviction lawsuits (termed “unlawful detainers” or “UDs”) become public within 60 days unless tenants win before the deadline. While UDs are supposed to be heard within 20 days of filing, statewide delays can push hearings past the 60-day mark.
The bill is sponsored by the Western Center on Law and Poverty and they contend that as a result of the delays, the identities of thousands of tenants—many of whom eventually win or whose cases may never be heard—are revealed at the 60-day mark. Companies capture and publish lists of these tenants’ names, where they may remain for up to seven years. In other words, mere involvement in an eviction lawsuit becomes grounds for tenant blacklisting. Landlords who rely on this information, unable to distinguish between problematic and innocent tenants, end up screening out meritorious applicants. WCLP fix is to change existing law and keep tenant records private unless landlords prevail within 60-days of filing eviction lawsuits.
The bill was heard in the Assembly Judiciary Committee and passed on a bipartisan vote. We are currently reviewing amendments to the bill that may make it more agreeable. Until a decision has been reached, SDCAA will continue to oppose.
SB 1053 (Leno) – Oppose - Senator Leno’s bill forces residential rental property owners to participate involuntarily in the federal and local government’s voluntary Section 8 housing program [governed by the U.S. Department of Housing and Urban Development (HUD)]. By requiring all rental property owners to accept Section 8 housing vouchers, the government is forcing owners to accept all government-mandated lease terms and regulations, the manual of which is approximately 400 pages long. In the guise of preventing discrimination based on “source of income,” the bill conversely creates a special class of residents with more rights and fewer responsibilities than other residents
The significant administrative burdens imposed on property owners who participate in the Section 8 program drive up costs and increase vacancies through additional complicated legal guidelines, regulatory inspections, payment delays, heightened eviction standards, and the government’s ability to terminate a Section 8 lease with no penalty. Property owners should not be forced to agree to these one-sided contracts with the local and federal government in order to rent their properties. Not only are they stuck with unpalatable lease terms, they also are required to enter into a separate third party contract with the local housing authority representing HUD interests, with varying and inconsistent standards for compliance. This is particularly troubling for owners having properties in different jurisdictions with different operating procedures.
While SDCAA is not opposed to Section 8, we believe that it should be voluntary and that property not be required to accept Section 8 housing if they do not want to. SDCAA is opposed and has called upon its members to voice their opposition to the bill. The bill is currently in the Senate Appropriations Committee, on suspense where it will hopefully stay. If not, we will work to defeat the bill on the floor
We will continue to keep you posted on the outcomes of these, and other important bill affecting your industry.