Sacramento Report
by Debra Carlton
The Board of Directors of the California Apartment Association (CAA) has elected to move on a number of fronts to protect the interests of the rental housing industry. In addition to monitoring and impacting the multitude of bills introduced at the State Capitol each year, CAA will sponsor two bills on behalf of the industry. The Association has also elected to devote legal funds to investigate the activities of unscrupulous eviction delay firms and will actively participate in a number of initiatives planned for the California November ballot. Below is an overview of CAA’s plan of action.
The Legislative Front
CAA is the sponsor of SB 1722 by Senator Denise Ducheny (D-San Diego). This
bill is intended to prevent abusive Proposition 65 lawsuits by private attorneys
that have plagued the business community. The bill clarifies that private
attorneys cannot bring a lawsuit against a business if the claim has already
been decided by a court of law. This bill will protect rental housing owners
from copycat lawsuits filed after they have settled a Proposition 65 case.
Proposition 65 was enacted by the voters in 1986. It requires the state to publish a list of chemicals known to cause cancer or birth defects or other reproductive harm; and it also requires businesses with 10 or more employees to notify individuals of potential exposure to these listed chemicals.
CAA has also elected to sponsor AB 2194 by Assemblymember David Cogdill (R-Modesto). This bill is intended to encourage affordable housing development and to allow builders a decent return on their investment. Specifically, it would ensure that private property owners who construct rental housing on their properties are not required to pay workers at the prevailing wage when the owner enters into an agreement with the local city or county to provide affordable housing in accordance with a local incentive-based inclusionary housing program. Labor unions have argued that prevailing wages should be paid by housing builders and have successfully sponsored bills that require nonprofit developers who rely on public funds to pay workers at the prevailing wage. This bill is important to the entire rental housing industry, not just to builders and developers. As a result of the dearth of rental housing in California, lawmakers have been pressured by interest groups to enact measures to protect tenants from eviction and rising rents. The availability of affordable housing would certainly change the legislative demands for housing regulation.
Aside from these two measures, CAA will continue its work to impact the legislation introduced by lawmakers in Sacramento. This spring, CAA’s State Government Affairs Committee met and took positions on just over 80 bills. Below are brief descriptions of some of the measures introduced this year, including CAA’s position.
SB 1145 (D-Burton)—Omnibus Tenant Bill—CAA Position: Oppose. This bill intends to make permanent three existing tenant protections. (The first two are currently scheduled for termination on January 1, 2006; and the third on January 1, 2005.) If signed into law, the bill would (1) require rental property owners to continue to provide tenants (who have lived in the unit for one year or longer) with a 60-day notice prior to terminating the tenancy; (2) require owners to continue to provide tenants with a 60-day notice when rent is increased in excess of 10 percent; and (3) continue to prohibit rental property owners from discriminating against existing or prospective tenants on the basis of their sources of income.
AB 2521 (D-Nation)—Eviction—CAA Position: Oppose. This bill declares the Legislature’s intent to enact legislation protecting tenants with terminal illnesses from eviction.
AB 2582 (D-Lieber)—Environmental Hazards—CAA Position: Oppose. This bill would require rental property owners to disclose to tenants any substance on the property that may be an environmental hazard. An owner who fails to provide the notice is liable for actual damages and civil penalties up to $5,000 for each separate violation. A tenant would have the right to void a rental agreement if the owner failed to provide the notice.
AB 2583 (D-Lieber)—Tenant Information—CAA Position: Oppose. This bill would prohibit a rental property owner from demanding private or personal information from existing tenants as a condition of continuing residency.
SB 115 (D-Torlakson)—Cash Payments—CAA Position: Oppose Unless Amended. This bill would prohibit a rental property owner from establishing a cash-only policy for rent and security deposits.
The Legal Front
CAA has established a $100,000 Legal Fund aimed at shutting down illegal eviction
delay firms that destroy tenants’ credit ratings and cheat property
owners out of tens of thousands of dollars in lost rent.
These so-called eviction delay firms purportedly counsel tenants to take advantage
of crowded court calendars by requesting jury trials and later canceling the
hearing. They also counsel tenants to claim the property is substandard and
that rent should, therefore, be withheld.
CAA will host a series of town hall meetings in the coming months to collect additional information from owners. The first meeting will be conducted in Oakland.
The Initiative Front
We anticipate that November 2004 may bring one of the longest ballots in the
state’s history to California voters. At this writing, there are a
number of measures out for signature on which the rental housing industry
will have a keen interest if they qualify for the November ballot.
Split Roll
One of the most harmful initiatives for the rental housing industry, intended
to take a bite out of Proposition 13, is the initiative entitled Improving
Classroom Education Act. It intends to raise commercial and residential rental
property taxes to support voluntary universal preschool for children; to
reduce class size; to purchase textbooks and instructional materials, supplies,
and equipment; and to improve teachers’ salaries and benefits. It is
sponsored by the California Teachers Association and movie director and activist
Rob Reiner. CAA will be part of the leadership, along with other businesses,
working to defeat this measure.
Workers’ Compensation
Reform
CAA, along with other business groups such as the California Chamber of Commerce and the California
Manufacturers and Technology Association, had worked diligently to
qualify a reform measure for the November ballot, addressing the serious problems
with workers’ compensation. However, thanks to the tactical pressure
from Governor Schwarzenegger, the Legislature in late April reached a compromise
on this issue and enacted serious workers’ compensation legislation.
Limits on Unfair Competition Lawsuits
This measure is intended to stop frivolous lawsuits that have been initiated
by unscrupulous attorneys against the rental housing industry and other businesses
as a way to generate fees without creating a corresponding public benefit.
CAA has contributed financial resources toward this effort and will continue
to work to ensure its passage.
The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of the SFAA or the San Francisco Apartment Magazine. Debra Carlton is the Vice President of Policy and Research for the California Apartment Association and is CAA’s chief lobbyist. Copyright © 2004.