CalRHA Legislative Update For May 8, 2023

HERE IS OUR MOST RECENT LEGISLATIVE UPDATE AND HAPPENINGS IN THE CALIFORNIA STATE LEGISLATURE.
 

BUDGET NEWS

The Senate Democrats released their budget plan late last month. Fortunately, it includes a Renters’ Tax Credit, which CalRHA has been supporting. In particular, their plan provides $700 million to increase the Renters’ Tax Credit and to reform the program to benefit taxpayers with children, making the credit refundable beginning with the 2023 tax year. The improvements will cut taxes for 3,250,000 taxpayers, with the following details:

• For Joint Filers and Heads of Households with no dependents, increases the credit from $120 to $250, a 108% increase.
• For Joint Filers and Heads of Households with dependents, increases the credit from $120 to $500, a 316% increase.
• For Single Filers with no dependents, increases the credit from $60 to $250, a 316% increase.
• For Single Filers with dependents, increases the credit from $60 to $500, a 733% increase.
• Makes the Renters Tax Credit refundable, recognizing that lower-income Californians often do not have an income tax liability, but still certainly pay other state and local taxes and should benefit from the credit.

The Legislature is working in earnest on the budget and will be passing the budget bill by June 15, 2023.

LEGISLATIVE NEWS

CalRHA and its affiliates had a very productive Legislative Day at the Capitol last month. In fact, we were there during the hearing to oppose our top priority bill, SB 567 (Durazo). SB 567 would have undone a heavily negotiated agreement on just cause eviction rules and rent caps under AB 1482. SB 567 bill eliminates the provision under State law (Assembly Bill 1482) related to termination of tenancy without just cause and requires that just cause to be stated in the written notice to terminate tenancy only after a tenant has continuously and lawfully occupied a residential real property for 12 months. Fortunately, that bill was gutted in Judiciary committee of all of the rent control provisions. We are now in negotiations on the just cause provisions of the bill and have met with the Chair of the Judiciary and Appropriations Committee Chair, etc.

Another top priority bill, SB 466 (Wahab), which would repeal major protections afforded to the state’s rental housing providers under the Costa-Hawkins Rental Act of 1995 and expand local rent regulations, was also amended. Recent amendments agreed upon in the Senate Judiciary Committee will put into effect a 28-year rolling process. That means that in 2024, the 95 date would become 96 and move forward one year each year. The 79 date would become 81 and roll forward two years each year. This would make buildings built between 1978 and 1995 that are protected under AB 1482 now subject to local rent control of 3% or less, which will have a very negative impact on smaller rental property providers.

Additional Legislation CalRHA is Opposing:

• AB 12 (Haney, D-San Francisco) – Tenancy: Security Deposits – Would prohibit a landlord from receiving a security deposit for a rental agreement in an amount in excess of one month’s rent, regardless of whether the residential property is unfurnished or furnished. AB 12 has passed the Assembly Judiciary Committee on a party-line vote and is pending on the Assembly Floor.
  
• AB 309 (Lee, D-Milpitas) – Social Housing – This bill would define “social housing” for purposes of the Zenovich-Moscone-Chacon Housing and Home Finance Act, and make findings and declarations relating to social housing and would state the intent of the Legislature is to further the Social Housing Act to address the shortage of affordable homes by developing housing for people of all income levels, prioritizing low-income households. CalRHA is opposing AB 309 along with the California Association of Realtors. It is scheduled for a hearing on May 10th in Assembly Appropriations Committee.
  
• AB 919 (Kalra, D – San Jose) Sale of Rental Properties: First Right of Offer – Would require an owner of residential real property, defined to include a single-family residential property that is occupied by a tenant or a multifamily residential property to take various actions before offering the residential real property for sale to any purchaser, soliciting any offer to purchase the residential real property, or otherwise entering into a contract for sale of the residential real property. This is now a two-year bill, which means it is not moving this year and, therefore, a win for the industry.
  
• AB 1035 (Muratsuchi, D-Torrance) – Mobile Home Parks Rent Caps – Would prohibit the management of a mobilehome park from increasing the gross rental rate for a tenancy for a mobile home space more than 3% plus the percentage change in the cost of living, as defined, over the course of any 12-month period, as specified. This is now a two-year bill, which means it is not moving this year and, therefore, a win for the industry.
  
• AB 1317 (Carillo, D-LA) – Unbundled Parking – Would require the owner of residential real property that provides parking with a residential unit to unbundle parking from the price of rent (“unbundled parking” is the selling or leasing of parking spaces separate from the lease of the residential use). AB 1317 is pending on the Assembly Floor.
  
• SB 267 (Eggman, D-Stockton) – Credit History of Persons Receiving Government Rent Subsidies – Would prohibit the use of a person’s credit history as part of the application process for a rental housing accommodation without offering the applicant the option of providing alternative evidence of financial responsibility and ability to pay in instances in which there is a government rent subsidy and would require that the housing provider consider that alternative evidence in lieu of the person’s credit history. SB 267 is now on the Suspense File in Senate Appropriations, awaiting action by May19th.
  
• SB 395 (Wahab, D-Fremont) – Statewide eviction database – Would state the intent of the Legislature to enact subsequent legislation that would require landlords to report all evictions to a new statewide eviction reporting database. SB 395 is now on the Suspense File in Senate Appropriations, awaiting action by May 19th.
  
• SB 460 (Wahab, D-Fremont) – Hiring of real property: Criminal History – This is now a two-year bill, which means it is not moving this year and, therefore, a win for the industry.
   

As always, CalRHA will keep you informed as these bills make their way through the Legislature. We will be sure to send out Calls to Action when we are at a pivotal juncture and your involvement could help determine the outcome.

HOUSING IS KEY UPDATE

This month, the Business Consumer Services and Housing Agency reported on welcome news from the Department of Finance, which reported strong gains in housing growth in 2022. California added 123,350 net housing units, including more than 20,000 Accessory Dwelling Units and new construction of 116,683 units. These are the largest increases since 2008.