March 2019

March 2019

March is here, and as the end of the first quarter of 2019 approaches, the year is shaping up to be busy for the rental housing industry. The Board of Directors met in February and, once again, focused on the legislative issues faced by our members on both a local and statewide basis. Long Beach is anticipated to release a staff report shortly (early to mid-March) regarding housing and, in particular, tenant protections that include some form of relocation fees and the possibility of just cause evictions. As mentioned in last month’s article, AACSC attended a meeting at the Mayor’s office regarding the report and it appears the Mayor is sensitive to all sides of the issues, but we will have to wait until the report is released to understand the direction City Council is considering. Given the statewide trend toward tenant protections, owners of rental units can anticipate some uncomfortable provisions. However, I anticipate the provisions will be less burdensome than they might have been had the report come out prior to our meeting with the Mayor.

On the state level, Sacramento has been busy. In the first few weeks of this session, they have produced more than 500 bills, with approximately 120 affecting the housing industry, and 60 directly affecting the rental housing industry. However, many of the bills are merely “spot bills” which are introduced as a method for legislators to meet the deadline to introduce a bill, even if the substantive components of the bill have not yet been entirely hammered out. In other words, spot bills are nonsubstantive placeholder bills whose contents will be replaced with substantive provisions at a later date. Simply stated, they act to buy legislators time to introduce bills beyond the bill deadline.

In this round of bills, there were no real surprises (with one exception I will address below). The bulk of the bills introduced which impact the rental housing industry are direct attempts to deal with the growing housing crises faced by the state, including bills related to accessory dwelling units, the development of low-income and “no-income” (homeless) housing, affordable housing, transitional housing, and rental discrimination.

Additionally, there were several bills of significant importance, including “mandatory Section 8” (prohibiting landlords from denying housing to an applicant based on the applicant’s receipt of Section 8 funds), maximum security deposit amounts for active military members, increased notice requirements for increases in rent (30 days for increases of 10 percent or less, 90 days for increases between 10 percent and 15 percent, and 120-day notices for increases in excess of 15 percent), and a bill addressing independent contractor classifications.

As I discussed in last month’s article, a particularly onerous bill was introduced which deals with new screening limitations for landlords in connection with “criminal history” which will require landlords to jump through a litany of analytical hoops before they can deny the applicant housing based on convictions.

The surprise bill I wrote about above comes in the form of a “rent registry.” More specifically, AB 724 (Wicks) proposes to create a rental registry in which landlords will be required to register their rental units with either cities, counties, or both which will require information about the tenancy, evictions, and a multitude of additional tenant information. Once again, I find myself asking, “what do the legislators know that landlords do not which would justify the bills coming out of Sacramento?”

On a positive note, there were bills introduced providing protection for landlords from lead-based paint suits, streamlined development procedures for multi-family developments, tax credits for the development of single-family and multi-family housing, and a bill allowing landlords up to 30 percent credit of the qualified costs of any seismic retrofits to their rental properties between 2020 and 2025.

Finally, the Apartment Association, California Southern Cities is preparing for the upcoming “Leg Day” which will be held in Sacramento on April 2 and 3, 2019. As many of you know, this is an annual event which provides delegates of AACSC and other rental housing organizations the ability to meet face to face with many of our representatives to discuss bills they sponsor and the interests of our members. The Association will be sending several of the most politically experienced Board members to the event with the goal of reestablishing and strengthening the relationships we need in Sacramento in order to protect the interests of California housing providers. AACSC’s mission and duty is to promote, protect, and enhance the rental housing industry while preserving your private property rights. Leg Day is the perfect opportunity to do so, while reminding our representatives that rental housing owners provide an essential service to our state community; one that should be considered when drafting legislation.