A Frontal Assault on Rental Housing

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It seems like yesterday we were all at the Annual Holiday Party/Toy Drive enjoying ourselves and discussing what 2019 might bring and here we are in February already. A lot has taken place in the last month and, yet, there is still a lot to do. Based on my perspective and experience, 2019 is shaping up to be another frontal assault on the rental housing industry, and AACSC intends to meet it head on. The Board of Directors met proactively in January in order to get a head start on the challenges and issues we will be facing. In addition to our regularly scheduled Board meeting, the Board of Directors met at a “special meeting” in early January to establish our committees, committee chairs and members for 2019, and to set out our top priorities for the year ahead of schedule. As you might imagine, legislative activities ranked high on the priority list.

In last month’s issue, I wrote that legislation would be our primary focus in 2019 and, as anticipated, we are already seeing a significant amount of proposed legislation on a state and local level which will directly affect the housing industry. There are several discernable themes throughout the bills. However, if I had to choose one phrase to sum up the emerging trend for 2019 legislation, it would be “tenant protections.” Of particular importance in this area are four statewide topics addressed below which will almost certainly come out as bills.

First, it is widely expected that legislators will sponsor and introduce a “mandatory Section 8” bill prohibiting landlords from denying housing to an applicant based on the applicant’s receipt of Section 8 funds. The basis for the legislation will rest on Section 8 being a “source of income” which, as most of you already know, is a protected category under Fair Housing laws.

The second anticipated bill deals with security deposits. Specifically, the maximum amount a landlord may collect as a security deposit from an active military member. Current law permits landlords to charge tenants up to a maximum of two months’ rent for an unfurnished apartment and three months’ rent for a furnished apartment. The anticipated legislation will cap the allowable security deposit at approximately 50 percent of the current permissible maximums. In other words, the maximum allowable security deposit for an active member of the military will be capped at one month’s rent for an unfurnished apartment and two months’ rent for a furnished unit.

We also anticipate “criminal history” being a significant issue in connection with a landlord’s screening policies and procedures. Sources who are familiar with the legislation indicate that as written, a landlord may be permitted to look at criminal history going back a maximum of seven years, regardless of the crime of which the individual was convicted. In other words, if passed, landlords will be prohibited from denying housing to an individual based on a conviction occurring seven years and one day prior to receipt of the applicant’s application, even if the conviction was for murder, rape, aggravated assault, or any other heinous felony. Furthermore, even if the conviction occurred within the seven year window, landlords will still be required to jump through a litany of analytical hoops before they can deny the applicant housing based on those convictions. While HUD issued a “guidelines” memo on this topic in April 2016, California legislators appear to have taken the guidelines to heart and decided to go even further than HUD by increasing the requirements and making it law.

Finally, we are already receiving information about state legislators’ renewed efforts to pass laws in connection with rent control, rent caps, and “vacancy control” which, of course, means amending Costa Hawkins. While the state bills appear to focus on larger topics, the local level political environment has not changed much from the end of 2018, at which time we saw “rent control” and “Prop 10” as the dominant themes. Currently, there are multiple cities within our geographic boundaries wrestling with the idea of rent control in one form or another, including Inglewood and Long Beach. While Inglewood is moving on the issue at a slower pace, Long Beach is moving at a nimble pace.

In January, Southern Cities representatives met with the Mayor of Long Beach to discuss the City’s thoughts, intentions, and plans on issues ranging from rent stabilization, relocation fees, and just cause evictions. Prior to the meeting, the City hired a consulting firm who drafted a staff report which may be released by the time you are reading this article. It is anticipated that the report will suggest the implementation of the requirements listed above as a means of protecting tenants and affordable housing in the area. However, that does not necessarily mean they will, in fact, be implemented. The meeting with Mayor Garcia went very well and it is my belief that he listened to the concerns of those in attendance and is committed to reaching what he considers to be a balance of the interests of all involved. Due to space constraints, I cannot write about all of the legislation affecting housing providers of which I am currently aware.

We are barely into the legislative session and, in addition to the legislation addressed above, the industry is seeing statewide bills related to “homelessness prevention,” “accessory dwelling units” (land use), and “affordable housing.” The fight is not over! As I stated in last month’s meetings and message, 2019 will see an increased effort by tenants’ rights advocates to diminish the rights of housing providers through increased legislative prohibitions and regulations.

Finally, in addition to the preparation for the legislative battle we anticipate, the Board of Directors has been actively reviewing its internal operations in an effort to bring its members increased value. In addition to developing an increased educational program for our members, we continue the search for an Association Executive with the knowledge, experience, and skill sets required to run the day-to-day operations in an effective and efficient manner, given the politically charged environment we are facing.

In all, the Association’s Board has been proactive in its efforts to address the concerns of our members and we intend to keep the trend going. AACSC’s mission and duty is to promote, protect, and enhance the rental housing industry while preserving your private property rights. As President, I appreciate the opportunity to serve you, our members.

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California Southern Cities
333 W. Broadway St., Suite 101
Long Beach, CA 90802
(562) 426-8341

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