California Apartment Association

In 2015, CAA’s government affairs team fought numerous battles to stop legislative attacks on the rental housing industry. The legislative session, which ended Oct. 11, packed negative proposals on a wide spectrum of issues, from rent control to taxes to public safety.

Below is a sampling of some of the most onerous proposals, organized by subject, that CAA helped prevent from reaching the governor’s desk. The authors of these bills, however, can have them reconsidered in 2016, so CAA’s work is far from over.

Landlord-Tenant

AB 396 (D-Jones-Sawyer) – Criminal Records – AB 396 attempted to prohibit landlords from using criminal background checks when screening prospective tenants.

AB 723 (D-Rendon) – Plumbing Fixtures: Lease Disclosures – The author of AB 723 proposed to amend the bill to do the following:

• Require multifamily rental agreements entered into, renewed, or amended after July 1, 2016, to be accompanied by a written disclosure stating the property owner’s responsibility to replace plumbing fixtures with water-conserving fixtures that are required to be installed by Jan. 1, 2019.
• Allow a tenant who pays for their own water bill after Jan. 1, 2019, to deduct from the rent all reasonable charges paid to the water utility that are related to higher water use because the property owner failed to comply with the 2019 installation requirement.
• Prohibit a rental property owner from initiating an unlawful detainer action against a tenant who deducts from the rent the amount paid to the water agency.

SB 608 (D-Liu) – Homeless Persons: Right to Rest – SB 608 proposed to grant rights to homeless individuals to rest in “public places,” which were defined as property that is owned, in whole or in part, by any state or local government entity or any property upon which there is an easement for public use and that is held open to the public, including parking lots, sidewalks, public transportation facilities and services, public buildings, shopping centers, and parks. The definition of “homeless persons” in the bill included individuals and members of families who are sharing the housing of other persons due to a lack of housing, economic hardship, or a similar reason.

AB 1229 (D-Campos) – Rent Control: Senior Citizens – AB 1229 intended to establish the Senior Citizen Rent Increase Exemption Program, a demonstration project to be implemented in the Counties of Alameda, Ventura, Santa Clara and the City and County of San Francisco. The program would have permitted senior citizens in a rent-controlled property to apply to the local agency (e.g., rent control board) for a 12 month exemption from rent increases. It would have provided a tax credit to the landlord in an amount equivalent to the rent increase that the landlord otherwise would have received if not for that exemption.

SB 364 (D-Leno) – Ellis Act: Withdrawal of Accommodations – SB 364 attempted to prohibit a rental property owner from removing rental units from the market unless the owner had owned the property for five years or more.

Fees and Taxes

These bills would have increased taxes and fees on rental housing and businesses in general, greatly increasing the cost of doing business in California.

AB 1040 (D-Ting) – Property Assessments – AB 1040 proposed to broaden the current legal definition of  “change in ownership” for property tax reassessment purposes so that any time a percentage (the percentage was not yet defined in the bill) of a legal entity’s direct or indirect ownership interests were transferred or sold in a “single transaction,” the property would be reassessed.

SB 8 (D-Hertzberg) – Taxation of Services – SB 8 proposed to expand the state’s retail sales taxes to “services,” which would include property management, legal advice, and other types of services.

SB 684 (D-Hancock) – Taxes: Corporate Tax Rates – SB 684 attempted to impose a corporate tax rate, ranging from 7 percent to 13 percent. The tax rate would have been calculated based on the difference between the salary paid to the chief executive officer or highest paid employee compared to the median compensation of all employees in the company: the greater the difference, the higher the tax.

SB 789 (D-Wiecowski) – Water Usage: Penalties – SB 789 proposed to authorize a local public entity to impose an excise tax of up to 300 percent on an excessive user of water.\

SCA 5 (D-Hancock and D-Mitchell) – Split Roll – SCA 5 attempted 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.