The California Apartment Association has identified nine top-priority bills for the rental housing industry in the 2015 legislative session.
This coming Tuesday, attendees of CAA’s Legislative Conference will learn more about the proposals below, and in the afternoon, discuss them with lawmakers during a visit to the Capitol.
POSITIVE BILLS
1. Airbnb, short-term vacation rentals; warns tenants of possible lease violation
SB 761 by Sen. Isadore Hall, D-Los Angeles
This bill is sponsored by the California Apartment Association and would require short-term vacation rental websites such as Airbnb to provide disclosures to prospective tenants. The past few years have witnessed a surge in web-based companies that allow people to rent a room or their entire unit short-term. A CAA-sponsored bill ultimately will require these websites to post a notice similar to this: “If you are a tenant or a renter who does not own the property, unit, or room that you are listing with [individual or company], your listing may be a violation of your rental contract or lease and could result in your eviction if you do not have your owner’s permission. Please refer to your rental contract or lease, or contact your landlord prior to listing with [individual or company name].” Related story
Why CAA is sponsoring this bill
— Unlike homeowners, tenants who list their rooms or units create a host of potential problems and jeopardize their tenancies.
— Tenants often give out security codes and keys, and vacationers who rent the units use the common areas, such as swimming pools, parking spaces and workout rooms, at disproportionate levels. Neighboring tenants complain to landlords about noise and traffic.
— While many rental leases prohibit subletting, many tenants claim they are not aware and continue to sublet their units.
— Under current law, property owners have the right to evict tenants for subletting in violation of their rental agreements, although evicting is not a landlord’s preferred option.
2. Provides time to fix accessibility problems under Americans with Disabilities
AB 52 by Assemblyman Adam Gray, D-Merced; AB 54 by Assemblywoman Kristin Olson, R-Riverbank; SB 67 by Sen. Cathleen Galgiani, D-Manteca
These three bills provide small businesses (25 or fewer employees) a longer time to cure accessibility violations upon notice. They also reduce the penalties that may be imposed upon a small business when a violation is claimed.
Why CAA supports these bills
— Among the five states with the highest disabled populations, more lawsuits have been filed in California than Florida, Pennsylvania, Texas and New York combined. It is estimated that more than 42 percent of all American with Disability lawsuits in the United States are filed in California.
— California’s inflated statutory damages have made the state a hotspot for frivolous lawsuits, particularly against small businesses that lack the means to defend themselves in court.
— ADA lawsuits in California typically result in settlement payouts of $4,000 to $12,000 under the threat that pursuing legal action could double or triple those costs. Small-business owners who made no conscious decision to violate the law face harsh financial decisions that sometimes result in the closure of businesses, often costing the local community jobs and economic productivity.
3. Recording fee yields funding to build affordable housing
AB 1335 by Assemblywoman Toni Atkins, D-San Diego
Like proposed bills before it, AB 1335 would bring about the Building Homes and Jobs Act. The bill would impose a fee of $75 to be paid at the time of the recording of certain documents, excluding any real estate document in connection with a transfer of real property that is an owner-occupied residential dwelling. The bill would require that revenues from this fee be spent supporting affordable housing, home ownership opportunities and other housing-related programs, as specified.
Why CAA supports the bill
— According to the California Housing Partnership Corporation, one million low-income households in California do not have access to an affordable home. The Partnership estimates that there is a shortfall of 956,461 homes affordable and available to California’s lowest income households.
— Not one county or legislative district in the state has an adequate supply of affordable homes.
— The increased cost of living impacts all businesses when it comes to their long-term location decisions – most significantly among employers offering middle to low-wage jobs and it plays a significant role as employers struggle to recover from the recession. (Orange County Business Council 2012 Workforce Housing Scorecard.)
— Since 2006, federal, state and local housing funding has dropped 79 percent. With bond funding exhausted and redevelopment funds eliminated, California is facing virtually no state investment in affordable homes.
NEGATIVE BILLS
4. Caps rent for seniors already living with rent control
AB 697 by Assemblyman Kansen Chu, D-San Jose
This bill will ultimately be amended to create a temporary demonstration project in the counties of San Francisco, Alameda, Santa Clara and Ventura to halt rent increases for qualifying seniors and intends to reimburse landlords through a tax credit. To qualify for a rent cap, tenants would be required to meet certain criteria, such as being at least 62 years old, living in a rent-controlled unit, having a combined income of $50,000 or less and spending more than 1/3 of the monthly income on rent.
Why CAA opposes the bill
— This bill applies further rent control on already rent-controlled units. The typical allowable rent increase in these communities is already minimal – in some cases less than 1 percent.
— The program will be difficult, time-consuming, and costly for property owners to administer.
— The hundreds of millions of dollars that this bill will cost the state can be better used to build more affordable housing targeted towards seniors.
5. Undermines Ellis Act,property rights; sets dangerous precedent
SB 364 by Sen. Mark Leno, D-San Francisco
This bill authorizes San Francisco to prohibit a residential rental property owner from withdrawing rental units from the market unless the owner has owned the building for five continual years or more. It is identical to a bill last year that was rejected by the Legislature.
Why CAA opposes the bill
— If this bill becomes law, rental property owners must stay in the rental property business, even if they are losing money every month. In no other industry in the United States can a local government force a small-business owner to stay in business against his or her will, even when the business is losing money.
— The bill would prohibit owners from moving into their own units. In many rent-controlled communities, the Ellis Act is the only way for an owner or his or her family to move into their building.
— Ultimately, weakening the Ellis Act would set a very bad precedent throughout the state and all other rent-controlled communities will want to follow suit.
— The Ellis Act is a protective law used by rental property owners when local rent control laws become too onerous for the owner to continue in business.
6. Bans criminal records from tenant screening
AB 396 by Assemblyman Reggie Jones-Sawyer, D-Los Angeles
This bill would prohibit landlords from using criminal background reports to screen prospective residents and to make tenancy decisions about existing residents.
Why CAA opposes the bill
— Criminal background checks can help protect the safety of other tenants at the property.
— Criminal background checks can help a rental property owner identify applicants who pose a risk to other tenants or the property based on relevant prior conduct, such as arson, burglary, assault, forging checks, sex crimes, and domestic violence.
— AB 396 would overturn existing laws that allow owners and local governments to evict existing tenants who are involved in illegal conduct involving weapons, ammunition, and drugs.
— AB 396 would prohibit a rental property owner from screening out perpetrators of domestic violence and sexual abuse of children.
7. Makes housing with mold substandard; vague proposal, enforcement nightmare
SB 655 by Sen. Holly J. Mitchell, D-Los Angeles
This bill would add mold to the conditions that make housing substandard. It makes housing substandard if there is “any visible or otherwise demonstrable mold growth, excluding the presence of mold that is caused by inappropriate housekeeping practices or improper use of natural or mechanical ventilation.”
Why CAA opposes the bill
— SB 655 does not provide a workable standard for code enforcement – or for owners who want to stay in compliance. The reference to “any visible mold” is inconsistent with the existing substandard housing code sections, which require that a listed condition must exist to an extent that it endangers health. There is no standard for how much mold endangers health.
— While “any visible mold” should certainly be cleaned up, and underlying causes fixed, having any amount of mold or just a smell be the trigger for code enforcement – and all penalties and tenant remedies that go with it — is excessive.
— The California Department of Public Health strongly recommends that property owners address water damage and dampness. However, the department recommends against using mold to determine the level of health hazard or the need for urgent remediation.
— The definition of substandard housing already includes “dampness of habitable rooms.” Mold cannot exist in the absence of moisture.
— While CAA agrees that an owner should not be cited for substandard conditions that are caused by the tenant, the terms “inappropriate housekeeping practices” and “improper use of natural or mechanical ventilation” are too vague to be enforceable.