CalRHA Public Policy Update - August 2024

Political Update

With three weeks left in the legislative session, Senator Marie Alvarado-Gil announced switching political parties from Democrat to Republican.  She has indicated that this will be more reflective of her district of Central and Northeastern California.  As a result of switching, the Pro Tem of the Senate removed her from her Chairmanship of the Human Services Committee, as well as the other committees that she served on: Agriculture, Business & Professions, Government Organization, Insurance, and Military & Veterans committees. We will see how this switch impacts her reelection in 2026.

Legislative Update

The Legislature has reconvened from summer recess and will be finalizing their work by August 31st.  The Governor then has until September 30th to sign or veto legislation.  The Appropriations committees in both houses will be taking up their Suspense files this Thursday, August 15th, which is the time when they act on hundreds of bills that have been deemed to have a fiscal impact. At that time, we will know if the bills pass, pass with amendments, or are held in committee.  Below, please find several key pieces of legislation that are awaiting their fate in the Appropriations Committee:

• AB 2239 (Bonta) - Broadband - AB2239 could result in significant costs to upgrade broadband infrastructure to meet the new standards and avoid claims of digital discrimination. This could be particularly burdensome for older buildings or properties in areas with less developed broadband infrastructure. Ensuring compliance with the bill’s requirements may require changes in property management practices, including continuous monitoring and documentation of broadband access. Properties that do not meet the new broadband standards could become less attractive to potential tenants, leading to decreased occupancy rates and lower rental income. This could also affect property values, making it harder to sell or refinance properties.

• AB 2278 (Carillo, D-Los Angeles) - Publishing Rental Rates - Would have the Attorney General publish the maximum allowable annual rent by July 1st of each year.   AB 2278 has no opposition.  - SPONSOR

• AB 2930 (Bauer-Kahan) - Automated Decision Systems - AB 2930 would prohibit the use of automated decision tools (ADT) to make consequential decisions, if the deployer has identified a “reasonable risk” of “algorithmic discrimination,” unless the risk has been mitigated. 

• 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. - SUPPORT

• AB 2996 (Alvarez) - FAIR Plan - Sponsored by CBIA, AB 2996 authorizes the California Infrastructure and Economic Development Bank (IBank) to issue bonds to finance the costs of claims, to increase liquidity, and claims-paying capacity of the FAIR Plan.   AB 2996 also requires the FAIR Plan, with the approval of the Insurance Commissioner, to assess all members to pay all loan payments and the costs and expenses relating to a loan agreement with IBank, as well as to assess all members to repay a line of credit and its related costs and expenses.

• SB 440 (Skinner) - Regional Housing Authorities - This bill authorizes two or more local governments to establish a regional housing finance authority (RHFA) to raise, administer, and allocate funding (increase taxes) for affordable housing and provide technical assistance at a regional level for affordable housing development. - OPPOSE

• SB 1077 (Blakespear) - Coastal ADUs - This bill requires the California Coastal Commission (Coastal Commission), in coordination with the Department of Housing and Community Development (HCD), to develop and provide guidance to local governments on preparing amendments to a local coastal program (LCP) to clarify and simplify the permitting process for accessory dwelling units (ADUs). - SUPPORT

• SB 1212 (Skinner) - Ministerial Approval of ADUs - Increases the number of detached ADUs eligible for ministerial approval on a lot with an existing multifamily dwelling from no more than two detached ADUs to no more than eight detached ADUs.  Prohibits a local agency from requiring replacement of uncovered parking spaces demolished to allow for the construction of an ADU. - SUPPORT

Several more key pieces of legislation are already pending on the Floor, including:

• AB 2347 (Kalra) - Eviction Delay - 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.  - OPPOSE

• AB 2493 (Pellerin) - Rental Application Fees - If enacted, a landlord would only be able to charge a lease applicant for a residential property an application screening fee if the landlord offers an application screening process that considers applications in the order in which they are received, or provides any applicant who is not selected for tenancy with a refund or credit for the application screening fee. - OPPOSE

• AB 2579 (Quirk-Silva) - Balcony Bill - Extends the deadline for performing inspections of exterior elevated element (balcony) in all buildings containing three or more multifamily dwelling units, thereby delaying the inspection deadline from January 1, 2025, to January 1,2026. - SUPPORT

• AB 2747 (Haney) - Positive Rental 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. - OPPOSE

• AB 2801 (Friedman) - Security Deposits - Specifies that claims by the landlord against a tenant or the deposit for materials or supplies, and for work performed by a contractor, must be limited to a reasonable amount necessary to restore the premises back to the condition it was in before the tenancy, except for ordinary wear and tear.  Requires that, beginning April 1, 2025, a landlord must take photographs of the unit within a reasonable time after the possession of the unit is returned to the landlord, but before any repairs or cleanings for which the landlord will deduct from the deposit are completed, and that the landlord take photographs of the unit within a reasonable time after the repairs or cleanings are completed. For tenancies beginning on or after July 1, 2025, a landlord must take photographs of the leased unit immediately before, or at the inception of the tenancy.  - OPPOSE

• SB 1103 (Menjivar) - Commercial Tenancies - Requires commercial landlords to provide "qualified commercial tenants," as defined, to provide contract translation and notice for month-to-month rent increases or termination, and places transparency and proportionality requirements on the fees a landlord may impose to recover building operating costs from qualified tenants. - OPPOSE

Finally, AB 3057 (Wilson) - CEQA Exemption for ADU and JADU, which CalRHA supports, has been sent to the Governor for his action. AB 3057 expands an existing California Environmental Quality Act (CEQA) exemption for city or county adoption of an ordinance to facilitate accessory dwelling units (ADUs) to also include adoption of an ordinance facilitating junior ADUs (JADUs).

Insurance Reform Update

As part of various insurance regulatory reforms, Insurance Commissioner Ricardo Lara has announced new rate review policies to expedite the process.  Currently, it takes an average of seven months to receive decisions on their rate applications.  In order to stabilize the home insurance market, his new policy would require the Department of Insurance (DOI) to make a decision on rate applications within 60 days. Should the regulators not be able to make a decision by then, they would have various 30-day extensions.