Sacramento Report

Fighting Back

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The residential rental housing industry is under assault. Politically. Economically. Morally. Socially. The wide-spread negative narrative juxtaposed with California's "housing crisis" has put residential rental property owners in the cross-hairs of complaint akin to the Robber Barons of the Old West. From city council chambers to the legislative halls of the Capitol the chorus of claimed avarice and greed follow in the wake of anecdotal examples of a few outlier's excessive rent increases. The aberrant actions of a few have unnecessarily tainted the entire rental housing community. It brings to mind a favorite Pogoism: "We have met the enemy and they are us."

A number of very significant legislative proposals have surfaced in the wake of this industry criticism. We will report on these from time to time as the session heats up with committee hearings and floor votes. And we will look to you for grass roots support through active response to appropriate Red Alerts. While important in and of themselves, they pale in comparison with the most significant challenge facing the industry in the last 20 years: a proposed ballot initiative coined the "Affordable Housing Act" that would gut the Costa-Hawkins Rental Housing Act, thereby paving the way for local enactment of strict forms of rent and price control on all rental properties.

The proponents organized under the banner "Coali­tion for Affordable Housing" have amassed over $1 million and collected the 25 percent signature threshold as of the end of February. It is expected that they will spend whatever it takes to get the ballot initiative qualified for the November 2018 statewide ballot. They have until June 25 to collect the 365,880 signatures needed to qualify for the November General Election.

It is past time for individual rental property owners to be complacent about the events and circum­stances surrounding this industry. Our Association is certainly not taking the important issues of the day lying down. We have and will continue to develop and implement a comprehensive action plan to actively oppose this proposed initiative. Every day we will be initiating or participating in worthwhile activities to inform our members and the public the actual and practical impact of the ballot initiative:

  • On single-family homeowners that could face rent and price control mandates including the neces­sity to argue before rent boards for fair return.
  • On renters who unquestionably will find it extremely difficult to find replacement housing.
  • On property owners and renters when 58 coun­ties and over 482 cities can define and implement a confusing array of rent control ordinances, charter provisions or regulations.
  • On businesses, including the financial markets, and government.

Notice to owners: Get involved. Support your Asso­ciation's political activities and educate yourself about the major issues of the day. Join MCSC's grass roots campaign against the proposed initiative. Talk to your friends and neighbors and local political representatives. Most importantly, talk to your residents. Let them know you are a faithful steward of your property and their well being. Look at their circumstances from their viewpoint. Many, if not most, tenants are there by choice, not circumstance. Also, but not last, contribute financially to MCSC's efforts to derail or defeat the proposed initiative.
Yes, the issue is one of the biggest we have faced in some time. Are you ready to step in with both feet and help us?

All Hands on Deck

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The legislative attention to housing issues over the past year has given rise to an incredible surge in political advocacy of all stripes. If “the meek will inherit the earth,” as some say, one might speculate as to the planet’s condition in the aftermath of scorched-earth-style extremism in this Battle Royale. If there is one constant theme that emerges from all the rhetoric surrounding California’s newly recognized “housing crisis,” there is plenty of blame to be spread around lots of different players.

Tenant advocacy groups have mobilized an imposing force with a single message of hope for relief from spiraling costs of rent, and many point to the rental property owner as being the culprit who caused the condition. Their immediate solution: rent control, repeal the 1995 Costa-Hawkins Act that placed restrictions upon local government’s ability to enact the strictest forms of price controls on rental properties. That proposed solution was embodied in Assembly Bill 1506 (Bloom), which failed passage this past January in the Assembly Committee on Housing and Community Development. And the same effort is embodied in an initiative proposal cleared for circulation by the

Attorney General with the following description:

EXPANDS LOCAL GOVERNMENTS’ AUTHORITY TO ENACT RENT CONTROL ON RESIDENTIAL PROPERTY. INITIATIVE STATUTE.

Repeals state law that currently restricts the scope of rent-control policies that cities and other local jurisdictions may impose. Allows policies that would limit the rental rates that residential-property owners may charge for new tenants, new construction, and single family homes. In accordance with California law, provides that rent-control policies may not violate landlords’ right to a fair financial return on their rental property. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Unknown, but potentially significant, changes in state and local government tax revenues. Net decrease more likely than net increase. Potential increase in local government costs of up to tens of millions of dollars per year in the long term, likely paid by fees on owners of rental housing. [Bold in original.]

The prospect of continuing legislative battles in the shadow of a looming ballot fight gives rise to determined groups of rental property owners to mobilize a resistance to the challenges ahead. This is an All Hands on Deck moment for owners everywhere to understand exactly what is at stake in the coming months as the dialogue heats up.

Years and years of inadequate housing supply has matched deficiencies in roads and highway maintenance, water and sewer needs, and a host of other infrastructure needs that have simply failed to match a burgeoning 21st Century society.

Moving away from the Number One priority on every rental owner’s list of issues that merit attention, we turn to tackle another leftover challenge that has gained traction this year. Senate Bill 721 (Hill) passed the Senate in late January, meeting the constitutional deadline for passage of bills in its house of origin. The bill would require property owners of three (3) units or more to hire a qualified inspector every six years to inspect 15 percent of all exterior wood supported or stabilized walking surfaces above six feet from the ground, including decks, balconies, porches, stairways, walkways, entry structures, and their supports and railings. There are a number of shortcomings in this proposal and they are cause for real concern. We outline here only a few of the many reasons why the measure requires additional attention to its detail.

Owners are already subject to rigorous inspection and maintenance standards. Existing statute, regulation, and case law provide a whole spectrum of inspection and maintenance requirements that developers and owners must abide by to properly construct and operate ownership and rental property. Additional inspections are redundant and unnecessarily costly. Instead of requiring regular state-mandated inspections, the Legislature should focus on strengthening inspections that are already in existence, and amending the building code to ensure better materials are used.

Balcony and deck tragedies are preventable without regular state-mandated inspections. One of the central culprits in the recent Berkeley and Folsom balcony and stairway collapses was dry rot. Experts agree that certain changes to the building code and to inspection standards during the construction and permitting process are necessary. Proposals include using better, stronger and more durable material, and better weatherproofing technologies and techniques. The State has since implemented new emergency building code regulations to address some of these issues. We support these approaches, because they provide concrete prevention tactics that can easily be incorporated into the building design and permitting process. SB 721, on the other hand, requiring regular and costly inspections is extreme, redundant and unwarranted.

Many local inspection programs already exist. Many cities and counties have already adopted residential rental inspection programs requiring regular inspections of rental property. To the extent these inspections include or are amended to include inspecting decks and balconies, they should be exempt.

Inconclusive inspection reports will be problematic and are not addressed in the bill. SB 721 requires owners to fix any decks or balconies that are in need of repair or replacement, hazardous, structurally deficient or noncompliant as determined by the inspector. In many cases, however, the need for repair will be inconclusive because the structure is hidden behind a wall. Inspectors will likely report their determinations as inconclusive followed by a statement indicating that further testing, including destructive testing, is required to make a determination. Destructive testing is incredibly expensive and intrusive because it literally requires destroying and tearing down walls. The bill does not address inconclusive inspections and reports. If owners will be required to conduct destructive testing every time a report is inconclusive, the time and expense will be extraordinary. We oppose such intrusive testing based on inconclusiveness.

Mandatory retention of records is unnecessary. SB 721 requires owners to keep records of all inspection reports indefinitely. Indefinite retention of records appears by all counts to be unprecedented. Property owners are required to make disclosures of material defects and repairs made within a reasonable amount of time, but records of such repairs do not need to be kept by the owner. Any significant repair that requires pulling a permit will be documented at the local recorder’s office. Similarly here, any major repair to a deck or balcony will likely require pulling a permit, and as such will be recorded. A mandate to keep all inspection reports for all eternity creates unnecessary liability, and is itself unnecessary to achieve the goal of the bill.

No appeal process. The bill is silent on how owners can object to, oppose, or appeal a decision of an inspector or local government about the need for a repair, and with regard to fines, penalties, and liens. Due process commands that owners have a fair process to contest determinations made by state and local governments.

Incentives. The bill creates new inspection mandates without providing any incentives or cost offsets to help owners manage the high cost of inspections and repairs. We urge the author to consider ways the state and local governments can help owners achieve structurally safe decks and balconies by offering incentives, rebates, tax writeoffs, and other cost offsets. One approach would be to ensure owners are protected from liability after going through the inspection process and making repairs to comply with the law. A process for indemnification, immunity or a liability shield would help incentivize owners to be proactive to make sure their decks and balconies are up to date and well maintained.

Pet Policy Gone Wild

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New “assistance animals” regulations proposed by the Fair Employment and Housing Council (FEHC) will likely cause heartburn in the rental housing community. The attempt to bring clarity in the murky area of service and support animal needs versus fraud is fraught with ambiguity. It is understandable why rental property owners are confused about the law, existing and proposed. Unless you’re a lawyer who regularly studies these issues, it is hard to know where one assistance animal law begins and another one ends. When does “reasonable accommodation” become unreasonable? Ultimately, rental property owners are scared of being sued and, therefore, often choose to allow support animals onto their property, even when they suspect fraud is being perpetrated on them.

But owners have very important, reasonable and necessary reasons for having a no-pets policy. Animals can be dangerous, spread disease, interfere with the quiet enjoyment of others, and damage property. An owner’s right to keep animals off a property, unless to accommodate a person with a real need, therefore, must be protected. Unfortunately, current laws, including future laws under this Proposal, fail to protect owners from those fraudulently gaining access for their animals to rental properties.

Rental housing owners and managers support and understand the need for providing reasonable accommodations to those who legitimately need an emotional support animal, as these animals (or “comfort animals”) can provide a therapeutic benefit to those with a mental or psychiatric disability.

We also recognize that service and support animal fraud is rampant and easily perpetrated under our current laws and regulations. More and more individuals are pretending their pets are legitimate service or emotional support animals when, in fact, the person has no legitimate need for the animal or the animal itself is not legitimately a service or support animal. Ultimately, that is the main concern we have expressed in regard to FEHC’s Proposal: the proposed regulations do little to protect rental property owners from fraudulent requests for support animals.

Support and service animal fraud is widespread in our society. Fake assistance animals are everywhere. Multiple news reports suggest that it is more than a few bad apples that are perpetrating the fraud. Rental property owners should not be forced to accommodate people who are perpetrating fraud on them, nor should laws and regulations facilitate such fraud. Unfortunately, this Proposal does just that, because it contains few, if any, effective anti-abuse mechanisms to prevent people from gaming the system.

People requesting a reasonable accommodation for a support animal should have a legitimate disability that requires them to have a support animal. They should have a real diagnosis and prescription for a support animal by a real medical or mental health professional with expertise to give an opinion about the disability at issue and the need for a service or support animal. The disability diagnosis and need for a support animal should also be current. Any one with a real disability and a real need for a sup port animal should have this kind of documentation. Without these standards, there are no standards. Anyone could self-diagnose, tell their friends or “peer support group” they have a disability and a need for a support animal, and then use that friend or group as a source to verify their disability. Alternatively, a person who was diagnosed with a disability five years ago, and who might not currently have a disability or need for an accommodation, could use that stale prescription to game the system. We are sure that this is not the way the law is supposed to work.
We submitted, on behalf of the Association, detailed comments on the FEHC’s Assistance Animal Proposal, including a number of ways the Proposal is deficient in preventing fraud and subject to abusive conduct:

  • Diagnosis or assessment by a licensed medical or mental health professional is not required.
  • The need for a support animal is not required to be a current need.
  • The person verifying a person’s disability or need for an accommodation does not need to be a medical or mental health professional or need to have specific training or education about support animals.
  • When an owner knows about a disability but not the need for an accommodation, the owners should still be able to request reliable information describing the needed accommodation and the nexus between disability and accommodation.

A meaningful review of a requested accommodation should allow rental property owners to make reasonable requests for certain reliable documents from reliable sources that are specifically defined. The following is a list of provisions that should be contained within the regulation to prevent fraud and abuse, and to ensure that reasonable accommodations are provided to those with legitimate needs:

  • Owners should be able to require disability and need for accommodation verification documents to come from a licensed medical or mental health professional.
  • The documentation should describe the nature, severity and duration of the disability.
  • The disability, need for the accommodation, and verifying documentation should be current (i.e., not more than one year old), and on letterhead from a mental health professional.
  • The medical or mental health professionals must have expertise to give an opinion about the person’s medical condition and the need for the accommodation.
  • Owners should be able to request new verification documents if the previous “doctor’s note” was not described as permanent.
  • The person seeking the accommodation must be under the current care of the prescribing medical or mental health professional.
  • Verification from a “letter mill” should be prohibited entirely.

Our comment letter to FEHC on assistive animals high lighted all the ways in which the Proposal represents an unbalanced approach to addressing the issue of assistive animals in rental housing. We discussed the failure of the Proposal to consider the quiet enjoyment of other tenants, nuisance issues, the safety and health of other tenants, pet fraud, and the need for rental housing providers to be able to establish reasonable rules for tenants who are provided a reasonable accommodation. In short, the needs of property owners and other tenants are not properly accounted for or taken into consideration, and the Proposal should be amended to better reflect the realities of landlord tenant relationships and the respective needs of each group.

Limited Housing Supply and Costs

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Overview

Rental property owners and developers are easy targets to blame for California’s newest round of housing affordability issues and shortages. It is unfortunate because the misguided blame may lead to significantly harsher regulations over the industry in the coming years—regulations that will likely serve to perpetuate and exacerbate the problem in the long run.

California’s Housing Shortage and Affordability Problems

The problem is well documented. California does not have enough housing to meet demand. In fact, according to a recent independent report by the State’s Legislative Analyst’s Office, the State produces 100,000 fewer housing units than is needed to meet demand.1 Supply and demand economics are therefore in full force here in the State. When everyone is competing for the same limited supply of housing, costs are going to go up.

But supply and demand is not the only driving force creating affordability and shortage problems. Community resistance to housing, stringent environmental policies, lack of fiscal incentives for local governments to approve housing, limited land, lack of incentives for developers to build, burden some government regulations, long and difficult permitting process, and the high cost of building all serve to constrain new housing construction.2

And it is not just the popular and dense coastal urban areas of California that are impacted by the current shortage. As people get priced out of major cities, they begin to migrate inland; ultimately creating a supply and demand problem that in creases housing costs, rents, and prices in sub urban and other inland areas.

The shortage and affordability issues create widespread problems for all Californians, and those seeking to move here. Rents become unaffordable for more and more people. People are forced to move further away from where they work, or move out of state completely. It discourages people from living in California, which not only impacts the State’s economy, it keeps California businesses from attracting the most qualified people to work for them. Rental property owners also feel the squeeze because local governments and State lawmakers begin passing laws aimed at regulating the rental and construction industries.

What the Experts Recommend

In 2015, the Legislative Analyst Office (LAO) provided recommendations to the California Legislature about how to begin addressing California’s housing issues. In sum, it told the Legislature that it needed to pass laws to help facilitate the development of market rate housing in coastal areas. The LAO followed up with a report in 2016 after certain tenant advocacy groups expressed concerns that building market rate housing will not help low-income tenants, and that the Legislature should focus on regulations that help low-income tenants, such as stronger rent controls. The LAO’s response was swift and clear:

“Many housing programs—vouchers, rent control, and inclusionary housing—attempt to make housing more affordable without increasing the overall supply of housing. This approach does very little to address the underlying cause of California’s high housing costs: a housing shortage. Any approach that does not address the state’s housing shortage faces the following problems.”3

The LOA went on to state voucher programs, rent control and inclusionary housing programs only help select few, while doing nothing in terms of addressing the real problems. Forcing rental property owners to provide below market rate does not reduce or eliminate competition, the driv ing force of supply and demand economics. More over, forcing owners and developers to provide below market rate rentals ultimately discourages development and improvement of rental property.

Government’s Reaction to the Housing Problems

So how have the State and local governments responded to the housing shortage? To begin with, in 2017, the Legislature introduced over 130 housing related bills, nearly 50 percent more than typical legislative years. Among the bills are ones that help generate funding to build affordable housing and remove obstacles to development. Then there are the ones that seek to regulate the rental property ownership and development industry.

On the supply side, a few bills are aimed at increasing funding to build affordable housing. ACA 11 (Caballero) imposes a quarter per cent sales tax to generate yearly funding for middle-income earner housing. SB 3 (Beall) is a 3-billion-dollar one-time State general obligation bond to build and rehabilitate low-income housing. SB 2 (Atkins) would impose a $75 fee on all real estate recordings (with the notable exception that the fee would not apply to a single-family home sale), which in turn would generate a regular stream of funding for affordable housing. While these bills promote development of housing, none of them increase market rate housing.

On the regulation side, there appears to be a target on the backs of rental property owners, managers and developers. Both on the State and local level, rent control is on the agenda. Despite consensus among experts that rent control does nothing to solve the State’s housing supply problems, and actually leads to the development of fewer homes, and homes remaining off the market, lawmakers continue to target rental property owners for regulation. AB 1506 (Bloom) is probably the worst bill in years.

It essentially allows all cities and counties in the State to adopt the strictest forms of rent control on all types of housing. Currently, under the Costa-Hawkins Act of 1995, newly constructed units and single-family homes are protected from rent control. Moreover, owners of controlled units are able to raise rents to market rate when a vacancy occurs.

Bloom’s bill would remove all of those protections, allowing local governments to control even vacant units (a form of rent control called “vacancy control”). Owners would be required to keep their rents artificially below markets forever.

Rent control, especially the most severe kind like vacancy control, makes building rental units cost prohibitive. Owners cannot make money off of them, so investors stop investing. Owners of current rental units eventually get out of the rental business because renting property be comes unprofitable. Ultimately, rent control increases the housing shortage problem, which then in creases competition and costs, and makes housing even more unaffordable. It also encourages legislative bodies to adopt additional restrictions on rental properties.

Assembly Member Bloom has since pulled his bill back for this year, but promised to bring it back next year with some amendments.

Several members of the Legislature that seek to repeal the Costa-Hawkins Act or amend the Act to severely injure the important aspects of the Act join Assembly Member Bloom. Tenant groups are using AB 1506 as a plat form to organize and demand changes in several laws.

Inclusionary housing mandates are also back on the table. Inclusionary housing mandates force developers to build affordable housing units as part of a larger market rate development without the requirement of the government providing density bonuses or sufficient cost offsets. Without offsets, the costs associated with the “affordable units” are borne by the property owner and possibly the other tenants.

Again, the more burdensome development is, the less investors are inclined to develop. These kinds of mandates, as noted by the LAO, do nothing to address the housing shortage.

Locally, there are several communities considering adopting rent control regulations to address affordability issues. Rent control is a hot topic, promoted by well-organized tenant advocacy groups. It will continue to be discussed, and ultimately, some communities will cave. Communities that ordinarily would not have given a second thought to regulation a few years ago have recently considered rent control. Concord and Burlingame are just two of many examples that considered rent control. Other cities are “strengthening” rent control laws.

This past April, the City of Long Beach considered adopting an ordinance that would permit every tenant to use the same credit report for 90 days. One significant explanation to adopt the ordinance is the cost of credit reports is simply too expensive.

If rent control and inclusionary housing mandates have not captured your interest, the State administration, notably the Department of Fair Employment and Housing Council (DFEHC) has proposed three significant regulations that should affect every property owner and manager.

Occupancy limits have not changed in decades. If the DFEH draft regulation becomes law, owners and managers could not discriminate against tenants that want 15 occupants in a three-bedroom, nine occupants in a two-bedroom, and six occupants in a one-bedroom rental unit. Owners would no longer be permitted to advertise that a rental unit has a living room, dining room, and kitchenette because those rooms could be used as a bedroom.

The second draft regulation would sharply limit an owner’s/manager’s ability to refuse to rent to previously convicted felons. Our concerns are legitimate.

We are liable and subject to forfeiture and nuisance abatement laws for criminal activity on our property; we have the “unequivocal” right to deny registered sex offenders to “protect a person at risk or for some other reason.” We have the legal duty and moral obligation to keep tenants and property safe. And on top of all of this we would be required to understand how to consider a new legal standard… we would have to establish a legally-sufficient justification relating to criminal history information by proving that our screening standards are substantial and legitimate and nondiscriminatory without any guidance as to what those terms mean. We would even be required to understand the “nature and severity” and the appropriate amount of time that has passed since conviction and we are not given any specific guidance as to what those factors mean.

Finally, one very topical issue DFEHC is considering is adopting a regulation concerning emotional support animals. Unfortunately, the proposed regulation does not curb rampant support animal fraud. It does not adequately address verification requirements including: 1) assessment by a licensed medical or mental health professional; a prescription by a licensed professional; the need for the animal does not need to be current; and 2) the verification process does not discuss what additional information an owner can ask for and from what sources. The vagueness is concerning because of risk of asking the wrong question and the potential for a discrimination lawsuit. We are also very concerned that the draft regulations do not adequately consider the quiet enjoyment of other tenants, nuisance issues, and the safety and health of other tenants.

Rent control, price control, affordable housing mandates for new housing, tenant screening, use (or abuse) of credit reports, and occupancy limits represent just some of the major issues we are confronted with today. We hope you will join us in supporting the industry.

As one notable industry leader has said: join us at the table or you will be on the table.

Regulatory Bills Affecting New and Existing Housing

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On April 5 your Association leadership joined with leaders of other independent California NAA affiliates to meet with their legislators in Sacramento to discuss several important bills of special interest to owners and managers of residential rental housing. The largely unspoken underlying theme, of course, is what legislative action may be taken to address the obvious and growing California “housing crisis”—too few homes for too many people with too few private or public resources to address current needs as well as a gigantic backlog of unmet need. The repeal of the redevelopment law—both cursed and praised—left a huge billion dollar hole in tax pro ceeds dedicated to construct and improve low and moderate income housing. The disappearance of that sustainable source of funding has fostered a number of proposals for replacement, some modest and others bold. It also has generated a call from some quarters for more and severe regulation of ren tal housing. It is with that backdrop that your leader ship approached this year’s Lobby Day in Sacramento.

Legislators and their staff members were very cordial in making limited time available to address these important issues both in generality and specificity. We grouped to oppose several regulatory bills affecting both new and existing housing in juxtaposition with funding measures deserving of support notwithstanding their effect on taxes—a tough sell! As one might expect, we received mixed signals on the tax issue but largely favorable reactions on bills that we opposed.

At the top of bills to oppose was AB 1506 (Bloom), which would repeal the Costa-Hawkins Act, a significant 22-year old housing measure that excluded from rent control single-family homes and all developments built after 1995 (or earlier if a rent control ordinance exempted new construction from a specific point in time), while giving owners of existing housing stock in rent controlled communities the right to establish initial and subsequent rental rates. That 1995 Act was approved by the Legislature to put the brakes on local governments’ overreaching and strict rent control ordinances that were spreading throughout the State and negatively impacting the economy and the housing industry. Its repeal would usher in a new wave of local ordinances adopting the strictest forms of price and rent controls. The result would be catastrophic.

Following a similar regulatory trend are measures that would require inclusionary housing for moderate, low and very low income levels in all new develop ments. These include in varying degrees of specificity and detail: AB 1505 (Bloom), AB 915 (Ting) and SB 277 (Bradford). In many respects, the in clusionary housing requirements imposed on new construction are more onerous than a typical rent control ordinance because they require deed restricted occupancies based on income for up to 55 years or more.

In total, the regulatory approach to the housing shortage by keeping rental rates artificially below market necessarily reduces the income stream for improvements, maintenance and repair of existing units while, at the same time, negatively affecting the investment and development of much needed rental housing.

Money, money, money. Where to get the funds necessary to address all of California’s many needs? State funding priorities are like shifting sands in the desert.

Thanks to Proposition 98 and the education community, K-12 education funding takes the lion’s share right off the top of each year’s state budget. Everything else scrambles for second- or third-fiddle with barely more than a half of a loaf left. At this writing, the Senate is poised to vote and send to the Assembly a multi-billion dollar transportation mea sure to “fix” degraded highways and roadways through out the State. It constitutes a huge funding boost on top of an already very expensive State Department of Transportation. Where does housing fit in?

Without question, California needs more housing.

According to a recent report from the Assembly Housing and Community Development Committee, California has a housing shortage—we simply are not building enough homes to keep up with the high demand. This is particularly true for low-income rental units while middle-income households are priced out of buying homes. Over regulation, high development and permitting costs and a lack of consistent public funding have contributed to California’s housing shortage.

SB 3 and ACA 11 will help address California’s housing problems.

SB 3 (Beall) would authorize issuance of bonds in the amount of $3 billion to finance various existing housing programs. Bonds add more debt and are costly one-time affairs, not long-term sustainable, but certainly satisfy a near-term need.

ACA 11 (Caballero) would impose a 0.25 percent tax on all retailers to be placed in a newly created “California Middle Class Affordable Housing and Homeless Shelter Account” in the State General Fund for the support of local and state programs that assist in the development or acquisition of housing.

We support these bills not only because their passage will lead to a much needed boon in housing development, but also because these bills focus on building homes through bond and sales tax money instead of targeting the rental housing industry for regulation such as rent control and just cause for tenancy.

The State must continue to address the housing shortage problem through investing in affordable home development and rehabilitation, rental and homeownership assistance and community development. Targeting our industry with more regulations and eliminating rental property owner rights and protections such as under the Costa-Hawkins Act and Ellis Act will serve to drive up costs, force rental property owners out of business and reduce incentives to build, maintain and invest in more badly needed housing.

Our industry representatives did an outstanding job presenting compelling reasons to oppose AB 1506 and AB 1505 (Bloom), AB 915 (Ting) and SB 277 (Bradford) and support SB 3 (Beall) and ACA 11 (Caballero).

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