CalRHA Public Policy Update - June 2024

Budget Update

The May Revise was released by the Governor last month and then Legislative Leaders announced their own Budget Proposal in response to the May Revise to address the $45 billion shortfall in 2024-25 and the $30 billion shortfall projected for 2025-26.

With regard to housing, the Legislative Leaders’ plan provides $1 billion to HHAP Round 6 to provide local governments continued funding to combat the homelessness crisis, approves $500 million for Low Income Housing Tax Credit program, as proposed by the Governor, and rejects proposed cuts to Multifamily Housing, Regional Early Action Planning (REAP) 2.0, and Housing Navigation and Maintenance Program. Budget negotiations are in the final stages, as the Legislature needs to pass the budget bill by June 15th and the Governor signs the budget by July 1st. 

Legislative Update

When the Assembly Appropriations Committee took up bills in mid-May, one bill that we were opposing, AB 2187 (Bryan), which would have created the Office of Tenants’ Rights and Protections, was held so it is dead for the year.  In another win, AB 2785 (Wilson), which would have required a landlord to, within 30 days of receiving a tenant’s security, deposit the sum into an account of a bank or other financial institution regulated by the state or federal government, was shelved by the author for the year. Bills are now being heard in the second house. 

A priority bill, AB 2216 (Haney, D-San Francisco), dealing with pets, will be significantly amended. In order for AB 2216 to garner the votes to pass the Assembly Floor, Assembly member Haney committed to taking the following amendments in the Senate:

• 15 or less exempt

• 16 or more required to take 1 pet

• Beginning with a second pet, you can charge $50 per month.

• Landlords can collect an additional security deposit 50% more up to $1000 cap.

• Delayed implementation until April 1, 2025. Allow pet deposit for carpet cleaning.

• Allow the landlord to demand proof of liability insurance and the landlord can be added as an additional insured.

• Tenants can’t have restricted pets.

• Clarify it doesn’t impact existing or renewal of leases. 

CalRHA has met with the Chair of the Senate Judiciary Committee, Tom Umberg, in order to discuss these and other amendments.

The CalRHA sponsored bill, AB 2278 (Carillo, D-Los Angeles) - Publishing Rental Rates, is set for a hearing in the Senate Judiciary Committee on July 11th, where it is slated to pass on consent.  This bill would have the Attorney General publish the maximum allowable annual rent by July 1st of each year.

Other updates on key legislation are as follows:

• AB 2347 (Kalra) - Evictions - Would make various procedural changes to landlord-tenant law, including specified extensions of time for tenants to respond to notices and eviction papers.  AB 2347 extends the time for the defendant's response to be filed from five court days to 10 court days after the unlawful detainer complaint and summons is served on the defendant.  It also prohibits the clerk from entering default in an unlawful detainer action less than three court days after the plaintiff files the proof of service of the summons and complaint.  AB 2347 is pending a hearing in the Senate Judiciary Committee - OPPOSE

• AB 2498 (Zbur) - Rent Relief - Establishes the California Housing Security Program (the Program) to provide counties with funding to administer a housing subsidy to eligible persons to reduce housing insecurity and help Californians meet their basic housing needs, subject to an appropriation.  The bill would create a 2-year pilot in eight counties, including Los Angeles, Orange, and San Diego.  The bill is pending a hearing in the Senate Housing Committee. - SUPPORT

• AB 2584 (Lee, D-Milpitas) - Corporate Owned Single-Family Homes - Would prohibit owners of more than 1,000 homes from buying more single-family properties. This bill is pending a hearing in the Senate Judiciary committee and CalRHA is part of a coalition that is opposing the bill.  - OPPOSE

• AB 2747 (Haney) - Credit Reporting - Requires specified landlords to offer each tenant obligated on a lease the option of having the tenant's positive rental payment information reported to at least one nationwide consumer reporting agency.  This bill is set for a hearing in the Senate Judiciary on June 18th. - OPPOSE

• AB 2801 (Friedman) - Security Deposits - As introduced, the bill would have prevented using security deposits for professional carpet cleaning.  However, the bill has been significantly amended and is less onerous.  CalRHA has met with the author’s office and Chair of the Senate Judiciary Committee about a possible carve-out for small operators/opt-in.  AB 2801 is set for a hearing in the Senate Judiciary Committee on June 11th.

• SB 1201 (Durazo) - Beneficial Owners - SB 1201 requires corporations, limited liability companies (LLCs), and real estate investment trusts to report information about their beneficial owners, as specified, on periodic reports that those business entities are required to file with the Secretary of State (SOS) and that are made available to the public.  This bill is set for a hearing in Assembly Banking Committee on June 17th - OPPOSE

The legislative calendar for 2024 is as follows:

• June 15 - Budget bill must be passed by midnight
• June 27 - Last day for legislative measure to qualify for the November 5th General Election ballot
• July 3 - Last day for policy committees to meet and pass bills
• July 4 - August 4 - Summer Recess
• August 16 - Last day for fiscal committees to meet and pass bills
• August 23 - Last day to amend bills on the Floor
• August 31 - Last day for each house to pass bills
• September 30 - Last day for the Governor to sign or veto bills