Legislation Update: What You Should Know

Read the current status of the most important legislation to the real estate industry. Most of the following are bills in the California State Legislature, and two in Congress. We are closely following these bills as they all have potential to influence you as our members.

State Legislation

AB 1481 (Grayson and Bonta): Just cause for eviction [OPPOSE]

If a lessor of residential property issues a notice to terminate tenancy for no-fault just cause, the lessor shall assist the lessee, regardless of the lessee’s income, to relocate by providing a direct payment to the lessee. If a lessor issues a notice to terminate tenancy for no-fault just cause, the lessor shall notify the lessee of the lessee’s right to relocation assistance pursuant to this section.

  1. The amount of relocation assistance shall be determined as follows:
    • (A) If the lessee has resided in the rental property for six months or more, but less than two years, the amount shall be equal to two months’ rent.
    • (B) If the lessee has resided in the rental property for two years or more, the amount shall be equal to three months’ rent.
  2. This subdivision will not apply to a lessor who is a natural person and who leases four or fewer single-family residence.

If this had been passed, the provisions would have expired in January of 2030

Current Status: 6/3/2019 Ordered to inactive file at the request of Assembly Member Grayson.

SAR's Commentary: Just cause eviction will not proceed under AB 1481 this year as it missed “house of origin deadline.” It is possible existing legislation will be amended to include these provisions.

AB 1482 (Chiu): Rent cap: "Anti-rent gouging" [NEUTRAL]

AB 1482 prohibits an owner of a residential property from increasing the rental rate for that property in an amount that is greater than 7% plus the percentage change in the cost of living, as defined, more than the lowest rental rate in effect for the immediately preceding 12 months, subject to specified conditions. Cost of living averages approximately 2.5% in California per year.

  •    Will not apply to property owners who own fewer than ten single family units
  •    Will apply to all rental units in the state, except those covered by a local rent control ordinance, deed-restricted affordable housing, or dormitories

If passed, the provisions would expire in January of 2023

Current Status: 6/12/2019 Passed Assembly. Read first time in Senate, referred to Committee on the Judiciary.

SAR's Commentary: SAR and C.A.R. both intuitively understand the sensitive nature of private property rights, rent caps, and a landlord’s need to maintain fair profit margins to enable them to continue providing rental housing. C.A.R. received significant requested amendments to narrow the scope and make this truly “anti-gouging” in nature. After receiving these amendments, C.A.R. changed their position from oppose to neutral.

AB 1568 (McCarty): Housing law compliance [DEAD]

This bill would require a city or county to adopt a general plan for land use development within its boundaries that includes a housing element.

Current Status: 5/16/2019 In committee: Hearing postponed by committee, will not move forward in current status due to missing house of origin deadline.

AB 1590 (Blanca Rubio): Tax break for first time home buyers [SUPPORT]

AB 1590 creates a first-time homebuyer tax credit for low- and moderate-income individuals and families purchasing a home in a disadvantaged community

Would allocate $50 million to help first-time homebuyers who have never owned a principal residence, earn 120% or less of the area median income, and are purchasing a home in a disadvantaged community.

Current Status: 6/06/2019 Passed Assembly. Read first time in the Senate, referred to committee on Government and Finance. **

SB 329 (Mitchell): Mandatory Section 8 Housing Accommodations [OPPOSE]

This bill refines “source of income” to include Section 8, EVERY residential rental property owner will effectively be forced to enter into a contract with the local housing authority, requiring they accept tenants who use Section 8 housing vouchers to pay a portion of their rent.

Current Status: 6/06/2019 Passed in Senate. (Ayes 24 Noes 11) In Assembly, referred to Committees on H. & C.D. and Judiciary.

SB 50 (Weiner): Housing Development [SUPPORT]

Would establish a streamlined ministerial approval process for neighborhood multifamily and transit-oriented projects, thereby exempting these projects from the CEQA approval process.

Current Status: Postponed

AB 36 (Bloom): Costa Hawkins Reform [OPPOSE]

This bill would have amended Costa Hawkins for rent control to apply on a rolling basis to currently exempt properties.

Provided limited, reasonable updates to the Costa Hawkins Rental Housing Act, would allow local jurisdictions to apply rent stability measures to more units, if they so choose. Specifically, this bill would allow local rent controls to apply to:

  •    Single-family rentals and condos, with an exemption for landlords who own 10 or fewer residential units within the same jurisdiction as the dwelling or unit for which the owner seeks to establish the initial or subsequent rental rate
  •    Rental units that are more than 20 years old (set on a rolling date).

Current Status: Postponed

Federal Legislation

HR 5 (Cicilline): Equality Act [SUPPORT]

Prohibits discrimination based on sex, sexual orientation, and gender identity in areas including public accommodations and facilities, education, federal funding, employment, housing, credit, and the jury system. Specifically, the bill defines and includes sex, sexual orientation, and gender identity among the prohibited categories of discrimination or segregation.

Current Status: 5/17/19 Passed in the House of Representatives

SAR's Commentary: SAR previously discussed support for this bill, California includes sex, sexual orientation, and gender identity as a protected class. But not every state includes sexual orientation and gender identity as protected classes due to those clauses not being part of the Housing Act yet. NAR has been an active advocate for the passing of HR 5.

HR 2157 (Lowey): Disaster Relief Act [SUPPORT]

This bill provided supplemental appropriations to several federal departments and agencies for expenses related to recent natural disasters. It also provided an extension of the National Flood Insurance Program (NFIP) through September 30, 2019.

Current Status: 6/06/19 Enacted- Signed by the President

SAR's Commentary: Flood insurance is critical to the Sacramento Region, and when NFIP coverage lapses, escrows on flood prone properties cannot close escrow. We thank Congresswoman Matsui for years of collaborative work securing money to improve flood protection throughout our region. Representative Maxine Waters, Chair of the House Financial Services Committee, is focused on crafting a long-term extension that prioritizes maintaining affordable premiums.

We will continue to keep up with the goings on in the legislature. Please contact our Government Affairs team with any questions or if you would like more information on the above bills or other legislation, we are happy to help.