Sacramento Report

by Monica Williamson

The California Legislature has kicked into high gear. Committee work began in earnest in April, with hundreds of bills beginning their legislative ascent (or descent) as committee members decide what they think is best for the state. This column contains an update on priority legislation tracked by CAA.

CAA-Sponsored Legislation

AB 481 (Tran)
AB 481 was introduced by CAA as a mechanism to combat bad-faith eviction delay tactics as a result of complaints from CAA members. They asserted that eviction-defense attorneys encourage tenants to make groundless claims that the landlord has violated the implied warranty of habitability. Under current law, a tenant may assert habitability violations in his or her answer to an unlawful detainer complaint. The answer, however, is often the first time the owner is notified of a substandard condition.

This bill was heard by the Assembly Judiciary Committee on April 17, 2007. Committee members were not convinced that tenant attorneys are indeed “gaming” the system. Comments from legislators focused on a lack of compelling evidence provided by landlords to substantiate alleged systemic abuses and sympathy for tenants who have few housing options. In support of CAA’s position, committee member Anthony Adams (R-San Bernardino) rhetorically asked the committee members why someone would want to operate rental housing when the Legislature refuses to do anything that might make rental property operations equitable between landlords and tenants. He succinctly pointed out that he has heard so much about the (affordable) housing crisis since his arrival in the Legislature just a few months ago, yet the laws appear to favor tenants.

AB 1173 (Keene)
This CAA-sponsored legislation spells out a fair allocation formula for distribution of the water bill to all tenants in a building. The bill is necessary to address growing concerns about a lack of incentives for tenants to conserve water and to develop a fair mechanism to allocate water usage so everyone is encouraged to conserve. With some exceptions, the legislation also requires the installation of submeters or meters on each newly constructed apartment unit after 2010.
The bill passed out of the Assembly Water Parks & Wildlife Committee on April 18, 2007, with unanimous support of all 12 members. The bill has been referred to the Assembly Appropriations Committee and, as of this writing, no hearing date has been set.

AB 1197 (Aghazarian)
This CAA-sponsored legislation would provide that a landlord who makes a housing decision concerning a sex offender has done so to “protect a person at risk.” The bill was introduced to bring much needed clarification to a vague area of the law that places landlords in an untenable situation by restricting their use of the Megan’s Law database for purposes of housing or accommodation. After years of hearing from the Legislature about the rights of sex offenders, this bill was crafted in a manner that struck a careful balance between those rights and the rights of all tenants living in rental housing.

After receiving a 25-page committee analysis, the bill was heard by the Assembly Public Safety Committee on April 24, 2007. Committee members expressed sympathy for the industry’s plight, but failed, once again, to pass out a bill. In a scenario that is becoming all too familiar, members of the rental housing industry are now left to hold their breath, hoping the “incident” that breaks through the legislative inertia does not happen on their property.

Other Legislation of Interest

AB 976 (Calderon, C.)
AB 976 was introduced to foreclose the type of ordinance that was adopted in the City of Escondido last year, which penalized landlords for renting to illegal aliens. Given the fact that CAA and its San Diego-affiliated chapter were the only landlord organizations that joined in a legal challenge to restrain implementation of the ordinance, CAA is clearly supportive of legislation that would preempt local government efforts to turn landlords into border patrol agents. AB 976, however, takes one step too far. The bill as currently drafted prohibits a landlord from making any inquiry about the immigration or citizenship status of a tenant or applicant. The net effect of this prohibition would make it difficult to make a “proper” identification of a potential tenant when there is no social security number, driver’s license or other state identification provided by the applicant. Under the current language of the bill, landlords are prohibited from using Visas such as the I20 (Student Status for Academic and Language Students) or the H-1B (which allows companies and universities to seek temporary help from skilled foreign workers).

The bill was heard in the Assembly Judiciary Committee on April 17, 2007, and passed out of the committee with the chairman’s admonition to the author and sponsor to work with CAA to address its concerns. The bill is now eligible to be heard by the full Assembly.

SB 464 (Kuehl)
SB 464 would force an owner to remain in the rental business for at least five years before converting the property to another use. The bill was introduced to halt condo conversions in rent control jurisdictions. It is, however, very broad and would have the perverse effect of creating significant disincentives to ownership and investment in rental housing. At a time when California struggles to provide sufficient affordable housing opportunities, the state should consider options for adding units rather than constraining existing supply. While CAA does not promote the elimination of rental housing, owners must be given equitable opportunities and solutions to exit the rental market, particularly in jurisdictions where local laws have become overly burdensome to the point that they make it difficult for rental property owners to operate effectively.

The bill passed out of the Senate Judiciary Committee on March 27, 2007, and was before the full Senate at press time.

SB 482 (Yee)
SB 482 is sponsored by Sure Deposit, a company that offers surety bonds for tenants in lieu of posting a security deposit with a landlord. The bill states that a tenant may (but is not required to) purchase a bond or commercial insurance policy in lieu of posting a security deposit. SB 482 also makes clear that the surety bond program is not a mandated program for property owners. CAA has taken a neutral position.

Due to continued concern and opposition from tenant advocates, Sure Deposit has elected to make SB 482 a two-year bill, meaning the bill will not move forward this year, but will be pursued in 2008.

As these and other bills move through the process or are amended, CAA will continue to keep you informed. For additional updates please visit CAA’s website at www.caanet.org.

The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of SFAA or SF Apartment Magazine. Monica Williamson is CAA’s vice president of public affairs. Copyright © 2007 by SF Apartment Magazine. All rights reserved.