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.