Sacramento News

 

We’re gearing up for next week’s battle over AB 1229 (Atkins), the bill to circumvent state law prohibiting rent control by legalizing local inclusionary zoning ordinances with non-negotiable rent caps. The bill will be heard next Wednesday in the Assembly Committee on Housing and Community Development.

SDCAA is unalterably opposed to the measure, which has been popularized by the court case it seeks to overturn, Palmer v. City of Los Angeles. That opposition is shared by the California Association of REALTORS®, the California Building Industry Association and several local apartment associations including AACSC, AAGLA, AAOC and SBRPA.  

The author, Capitol sophomore Toni Atkins (D-San Diego), a well-respected housing enthusiast and the Assembly’s second-in-command, is a formidable opponent and will make the bill hard to defeat.   Atkins’ message is simple, albeit contrived and incorrect: “Palmer outlawed local affordable housing mandates and, with diminished funding for affordable housing inclusionary zoning is all we have left. AB 1229 simply restores things to where they were before Palmer.”

In fact, AB 1229 abrogates Costa-Hawkins, the state law which, among other things, outlaws rent control on newly constructed rental housing.   In doing so, the bill also eliminates the current requirement that affordable housing mandates must be negotiated with housing developers.   AB 1229’s radical surgery on the law is being pursued even though no localities with which we’re familiar are able to demonstrate that Palmer prevents them from negotiating affordable housing like Costa-Hawkins requires. Indeed, both before and after Palmer (2009), no such problems have been reported.

Unfortunately, just like its 2011 predecessor, SB 184 (Leno), AB 1229 is expected to pass its obligatory policy committee stop, leading to a major battle on the floor of the Assembly in late May.

Meanwhile, thanks to a heads up from Alan and Molly, SDCAA lobbyists have added to the Association’s bill-tracking list AB 1220 (Skinner), a recently amended bill that would significantly alter the relationship between property owners and credit-reporting agencies, likely burdening the practice of using credit reports to screen tenants. The bill affects a wide range of users of credit reports and it’s likely those groups as well as SDCAA will oppose the measure.

 


 

Updated April 19, 2013

This past week was highlighted by SDCAA’s Leg Day visit to Sacramento, which started with a GSHP meeting on Tuesday followed by dinner with several freshmen San Diego-area legislators. On Wednesday, SDCAA members visited the offices of over a dozen lawmakers.

The benefits of SDCAA’s visit are immense. At the heart of successful political advocacy are the relationships formed with legislators by constituents. That relationship-building was on display at dinner on Tuesday and at the Capitol all day Wednesday. Based on reports, the messages of SDCAA delegates regarding the four bills they came to Sacramento to discuss resonated with lawmakers. And, as good as your SDCAA lobbyists may be, the testimonials of practitioners are golden. Thanks to all who participated in this year’s Leg Day.

While SDCAA members were traversing the Capitol building this past Wednesday morning, AB 746 (Levine), the bill to prohibit smoking in multifamily housing, was being debated in a hearing of the Assembly Committee on Housing and Community Development. SDCAA was joined by several apartment groups and others in testifying in opposition to the bill.

While supporting the Assembly Member Levine’s objectives – reducing exposure to second-hand cigarette smoke – SDCAA identified deficiencies in the bill which would create the likelihood that property owners would be tasked to enforce the smoking ban and would be subject to liability stemming from a resident’s violation of the ban. At the conclusion of the debate on the bill, three Democrats voted against AB 746 and it was defeated 2 to 5.

In other news, sponsors of a couple of bills opposed by SDCAA – SB 550 (Jackson) and SB 612 (Leno) – indicated a willingness to amend their respective bills to satisfy our concerns. SB 550 would impose new disability-access on rental housing. Sponsors said they only intend to have the measure cover government-assisted housing and are crafting amendments.

SB 612 would allow individuals to break existing leases if someone other than a law enforcement official identified the renter as a victim of domestic violence. SDCAA wants to be sure that the individual making the victim determination is legally recognized.

 


 

Updated April 12, 2013

When it rains it pours.   That can be said about this past week when several bills about which SDCAA is concerned, were set for an imminent hearing. The following four bills were scheduled for hearing next week:

  • SB 603 (Leno) – security deposit penalties; to be heard in Senate Judiciary on Tuesday, April 16 at 1:30 p.m.
  • SB 612 (Leno) – domestic violence; to be heard in Senate Judiciary on Tuesday, April 16 at 1:30 p.m.
  • AB 746 (Levine) – smoking prohibition; to be heard in Assembly Housing on Wednesday, April 17 at 9:00 a.m.
  • AB 1229 (Atkins) – rent control; to be heard in Assembly Housing on Wednesday, April 17 at 9:00 a.m. (though may be postponed).

The notation on the scheduled hearing of AB 1229 reflects a new, potentially positive development. SDCAA lobbyists contacted Housing Committee Chair Norma Torres (D-Pomona) to register strong opposition to the bill, encouraging her to oppose it. The Chair’s response, coming during a meeting today at the Capitol, was to at least put the bill off for two weeks.

Last week we reported to you our concerns with SB 550 (Jackson), a bill that the author says is intended to only affect state-subsidized housing – requiring it to meet certain new disability access standards. However, as we had said, language in the bill is overly broad and could be interpreted to include (and impose new requirements on) private, market-rate housing. On Thursday of this past week, we met with the bill sponsors who said there was no intention to cover private, unsubsidized housing and pledged to work with SDCAA and other concerned groups to clarify the bill.

Also, SDCAA lobbyists were making final preparations this week for next week’s Leg Day.   Last-minute arrangements were being made for dinner with legislators on Tuesday night, materials were being prepared for Wednesday’s visits and we’re happy to report that Assembly Housing Committee Chair Torres will be addressing our group at the Leg Day lunch on the 17th.

 


 

Things in Sacramento were understandably quiet this week as legislators enjoyed their Spring break – some, according to news reports, taking the opportunity to travel abroad, to places like Eastern Europe and Taiwan. 

Meantime, SDCAA lobbyists spent most of the week gearing up for the steady hearings on bills that begin when the Legislature reconvenes on April 1.  Preliminary meetings were held to discuss opposition to AB 1229 (Atkins), authorizing inclusionary zoning for rental housing, and SB 750 (Wolk), the bill to mandate water submeters in all new multifamily housing. 

In addition, much time was spent scheduling meetings with lawmakers on Leg Day, April 17 as well as nailing down arrangements with selected freshmen to dine with the SDCAA delegation on April 16.

Finally, SDCAA signed onto several coalition letters this week, notably those opposing several measures to make it easier to increase property taxes.  Among those, all scheduled for hearing in the Senate Committee on Governance and Finance on May 8, were: 

  • SCA 3 (Leno), a measure to lower the vote standard for approving local parcel taxes for school financing from 2/3 to 55%;
  • SCA 8 (Corbett), like SCA 4, would lower the vote standard for approving local special taxes to fund transportation projects from 2/3 to 55%; and
  • SCA 11 (Hancock), a measure to lower the vote standard for approving any local special taxes from 2/3 to 55%.

Again, “SCA” is the abbreviation for Senate Constitutional Amendment and, by the way, is not subject to the normal deadlines and other rules governing movement of bills through the Legislature.  The reported plan for these and other similar measures is to have the Committee pass them on May 8 then send them to the floor where they will sit until Senate leadership decides when to move them as a “property tax” package.

 


 

Updated on March 1, 2013

On the property-tax legislation front – SDCAA advocates attended a meeting of lobbyists of private companies and business associations who are opposed to the subject legislation (there are nearly a dozen of these bills).

It was agreed that they would be fought through two, separate efforts: 1) combat those aimed at establishing a split tax roll (AB 59 and AB 188); and 2) combat those that would make it easier to approve local GO bonds or parcel taxes (all the ACAs and SCAs). Action on these measures appears to be imminent – already one constitutional amendment (SCA 7) is on the move.

Meantime, SDCAA lobbyists have been huddling with their apartment industry allies to discuss the dozens of other bills that will compromise and complicate the business of operating rental housing in California. Among those being discussed:

  • AB 969 (Ammiano), a bill to upset the way in which owners pursue unlawful detainers for a tenant's failure to pay rent.
  • AB 1229 (Atkins), a bill to authorize local governments to mandate affordable rental housing on a take-it-or-leave-it basis.
  • SB 603 (Leno), a bill to further penalize property owners for security-deposit offenses (sponsors are asserting that the Legislature must act "to stop the theft" of those reserves).

Also of importance to SDCAA is the introduction of SB 750 (Wolk), a bill to mandate water submeters in all new rental housing. This bill, the ones listed above and others will be discussed during SDCAA's upcoming meeting of the State Governmental Affairs Committee, soon to be scheduled.


Updated February 22, 2013

The bills just kept rolling in this week as today’s 5:00 p.m. introduction deadline looms.  More than 300 bills were introduced yesterday, making the total so far this week to be roughly 600 bills.  Another 500 or so are expected today.

Among those introduced over the past week that are potentially troubling to rental housing interests is a bill to ban smoking in all multi-family housing.  The bill, AB 746 by freshman Marc Levine (D-San Rafael), tracks several local ordinances in California which maintain such a ban.   The measure is sponsored by the American Lung Association and is backed by other public health organizations.

SDCAA lobbyists were asked by the author to attend a meeting yesterday to discuss the bill.  Assembly Member Levine acknowledged that AB 746 will be an immensely controversial bill and is prepared for the fireworks to come.  Unfortunately, however, A/M was unable to fully respond to the many concerns raised by SDCAA and allies.   In particular, the bill does not now specify how the smoking ban will be enforced (other than by language in new lease agreements).  We made it clear that enforcement responsibilities as well as potential liability should not fall on property owners or their managers.

A/M Levine also didn’t say much about the likely strong opposition of tenant groups to AB 746 nor was he prepared to say if or how existing smokers would be grandfathered.  He did promise that talks would continue.

Assembly Majority Leader Toni Atkins (D-San Diego) contacted SDCAA lobbyists on Wednesday to report that, unfortunately, she had decided to introduce legislation to allows caps to be imposed on rents through local inclusionary zoning ordinances.   As of this morning the bill, which will abrogate the decision in Palmer v. City of Los Angeles, which said state law prohibits government-mandated rent caps, not yet been introduced but we expect it to be logged by 5:00 p.m. today. 


Updated Febraury 19, 2013

Lawmakers continued to introduce bills this week, heading up to next Friday's deadline. So far, those that represent the most serious threat to rental housing come in the form of both individual bills and constitutional amendments that would change the rules for assessing property taxes on both residential and commercial properties.

No fewer than eight amendments to the state constitution have been proposed thus far, several affecting the provisions of Proposition 13 – the initiative passed in 1978 that placed limits on property tax rates and assessments. All of the measures deals with parcel taxes – authorizing their approval by a majority of 55% of area voters, down from today's 2/3 standard. Each one of the proposed amendments would restrict the new vote standard to specific capital improvements, such as school facilities, transportation, libraries, police stations and firehouses. Several also propose to lift the 1% property tax rate, created by Proposition 13.

In addition to these measures, two bills have so far been introduced which too would affect the way property taxes are imposed. AB 188 (Ammiano) would re-define a real estate sale so that business properties could be assessed at higher values and, consequently, increase their property-tax obligations. AB 59 (Bonta) would overturn an appellate court decision which rightly said parcel taxes could not be assessed at different rates, depending on the use of the property. Bonta and his backers want unfettered authority to tax property at whatever rate they chose.

Not surprisingly, the assault on Proposition 13 and the companion sweeping effort to increase property taxes have business groups in California, including SDCAA, concerned. A coalition of affected organizations is quickly forming and will soon meet to discuss strategy. SDCAA lobbyists will participate in that meeting, tentatively scheduled for February 26.

Finally, no word yet from Assembly Majority Leader Toni Atkins (D-San Diego) as to whether she will author legislation that allows caps to be imposed on rents through local inclusionary zoning ordinances. Similar legislation, SB 184 (Leno), was defeated twice over the course of the 2011-2012 session. SDCAA lobbyists recently met with Assembly Member Atkins, advising her that the Association would oppose such a measure and urged her not to introduce it.

Governor Brown’s annual State of the State address to a joint session of the Legislature topped activities at the state Capitol this week.  The 25-minute-long speech was praised by those on both the left and the right, as it struck themes of economic recovery as well as the need for fiscal and regulatory restraint.

On the heels of recent reports of increased revenues flowing to Sacramento, Democrats cheered the Governor’s statements about the success of tax-raising initiatives like Proposition 30, the ballot measure passed last November which it’s hoped will produce an annual increase of roughly $7 billion in both income and sales tax revenues.  Republicans applauded the Governor’s vow to not approve spending increases for which the state has no money.   GOP members were also pleased to hear the chief executive’s pledge to keep state regulations in check and to, specifically, seek to reform the much-maligned California Environmental Quality Act (CEQA).

Inclusionary zoning may be back in the news.  SDCAA lobbyists are tracking down reports that an effort to re-introduce SB 184 (Leno), a bill to authorize inclusionary zoning in rental housing, is being made.  SB 184, introduced two years ago, would have vitiated the 2009 appellate decision in Palmer v. The City of Los Angeles – thereby making inclusionary zoning on new apartment construction a lawful local mandate.   SDCAA and other apartment groups opposed and ultimately defeated the measure.   

Meanwhile, SDCAA lobbyists continue to meet with new members of the Legislature.

 


Updated January 4, 2013

Action at the Capitol resumes in earnest on Monday, January 7, as the Legislature returns from its Christmas holiday break.  Among the things SDCAA lobbyists will be doing over the next several weeks is sitting down and getting acquainted with nearly 50 newly elected lawmakers, most of whom are serving their first terms in the Legislature.

Of particular interest to us is getting to know those who are considered to be business-friendly Democrats – particularly important given the lopsided majorities in both the Senate and the Assembly.  Correspondingly, we are encouraging SDCAA leadership and members to get to know Southland-based legislators on their own.

Very few bills were introduced since last Friday and none are of interest to use.  However, as reported over the past several weeks, there is a move afoot to pursue changes to the way Proposition 13 determines how much in property taxes commercial owners pay.  It’s recommended you read the following story: (http://www.sfgate.com/politics/joegarofoli/article/Prop-13-revision-efforts-pick-up-steam-4144515

Meantime, other issues are surfacing.  An LA-based lawmaker has been asked to carry legislation that would require rental property owners to follow a new, state regime for eradicating pests from their properties.  We are currently in discussions with that legislator.  Also, despite the long odds for re-introducing rent control to California, we are concerned that tenant groups may, emboldened by last November’s election, pursue something along these lines – including the re-introduction of SB 184 (Leno), the bill to require a form of rent control on a certain number of newly constructed apartments.  Here’s a (helpful) piece on rent control – proof that the failed public policy is back in the news (http://blog.metrotrends.org/2013/01/rent-control-good-policy/).


Updated January 1, 2013

There was very little activity at the Capitol over the Christmas week.  A few bills were introduced – none with consequences for the rental housing industry.  However, there continues to be much speculation about how far Democrats will go next year in flexing their new, super-majority muscle – particularly when it comes to taxes.

Once more – and to no one’s surprise – whether or not to tinker with the property tax limits contained in Proposition 13 topped the list of issues around which there was much speculation.  Of particular concern, as previously reported, is the growing interest in enacting a “split roll”, so that commercial property owners – including rental housing – pay a higher property tax rate than do single-family homeowners. 

Underscoring this speculation are regular news stories like the one below, appearing in the San Francisco Chronicle, highlighting the split-roll idea.

http://www.sfgate.com/politics/joegarofoli/article/Prop-13-revision-efforts-pick-up-steam-4144515.


Friday, December 05, 2012

Signs of activity in Sacramento began this week as new lawmakers made their way to the Capitol for orientation, staff interviews, office-space shopping and other forms of acclamation before their swearing in and the formal beginning of the 2013 session next Monday. SDCAA lobbyists will soon commence outreach efforts with legislators after they've begun to settle in.

Meanwhile, chatter has already started about what legislative initiatives will be pursued next year. Among those being discussed that would affect rental property owners is a constitutional amendment to lower the vote standard for approving local parcel taxes from the current 2/3 percent to something less – probably 55 percent . One Senator has already indicated that he intends to pursue such legislation.

Finally, SDCAA lobbyists continue to assess the prospects for pursuing industry-led reforms in 2013.

 


 

Friday, December 3, 2012

Efforts to win the Governor’s approval of and vetoes on several bills continued this week.

Signature requests
Topping the list is AB 2521 (Blumenfield).  This SDCAA-backed bill would substantially reform the state’s outdated and cumbersome process that rental property owners must follow to lawfully dispose of personal property abandoned by former tenants.  The bill passed both houses of the legislature with strong bi-partisan support and has been sent to the Governor.  As reported last we sent a letter to the Governor and were able to secure signature requests from two other allied organizations.

SB 744 (Wyland) is the SDCAA-supported bill to improve the state process for approving the use of water submeters in rental housing.   It too passed with strong bi-partisan favor and was sent to the Governor.  We have embarked on a significant, broad-based effort to get the Governor to approve the measure, engaging allies, out-of-state interests and key lawmakers.

Veto requests
RHC and SDCAA joined AAGLA and SBRPA on a joint letter, asking the Governor to veto  SB 1191 (Simitian), the bill to require small property owners only who are in receipt of a Notice of Default to so notify prospective renters or pay hefty fines if they fail to do so.  SB 1191 would have destructive impacts on property owners, including the likelihood of hastening foreclosures.  Regrettably, the California Apartment Association and the California Association of REALTORS® support SB 1191.  Nevertheless, we are considering having individual SDCAA, AAGLA and SBRPA members weigh in with individual letters.

Finally,  SDCAA will be requesting a veto of AB 1953 (Ammiano), a much-improved but still objectionable measure to disqualify a complaint by an owner for non-payment of rent if the non-payment covered a period where the owner or manager failed to notify tenants to whom and where to send rent checks.   SDCAA had sought clarifying amendments that were continuously rejected.

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