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THANK YOU! This has been a frightfully fast two years as your President. Your Apartment Association began over 86 years ago. Amazing! Imagine that in 1924, Long Beach was going through a housing boom and a group of owners banded together to form your Apartment Association. I praise all of our past and current members for their continuing efforts to support your Association.


Key Issues on 30 Bills in 2005


Over thirty bills were introduced this year in the Legislature directly affecting residential investment property. The volume, diversity and scope of the measures are unparalleled.

The key issues:

AB 781 (Leno) proposes to destroy a landlords right to go out of business became a two year bill last week due to heavy opposition. As amended, it would have required landlords in rent control communities to provide a 5-year notice to go out of business to senior and disabled tenants (currently one year notice is required). It would have also affirmatively stated that only landlords in rent control jurisdictions have the right to go out of business! More than 500 non rent control cities and counties could have enacted extremely punitive requirements for any landlord to go out of business.
AACSC position:

SB 540 (Kehoe) proposes to permit tenants to display non-commercial signs of any size and number on the rented premises and grounds. Landlords would have lost control over the appearance of their property. Due to clear opposition to the bill, the author decided to make it a two-year bill.
AACSC position:

AB 1574 (Jones) proposes to create a demonstration project for the city and county of Sacramento. The governments would be authorized to enact and enforce anti discrimination laws. As proposed to be amended the city and county would have to adopt an identical law to the California Fair Housing and Employment Act and interpret and enforce the laws in the shoes of the Dept. of Fair Employment and Housing. Last Tuesday, the Administration announced it would OPPOSE the bill. Before the author proposed to amend the bill, OPPOSITION from the industry was very clear: persons must file complaints with one local government not two and the laws, interpretation, administration, determinations and enforcement of law must be identical to the state.
AACSC position:
OPPOSE (review of the amendments may change the association's position)

AB 399 (Montanez) proposes to substantially change the manner in which landlords recycle solid waste. The Assembly policy committee clearly heard the opposition: the bill authorizes local government to impose new and substantial fees on all landlords owning 5 units or more to fully pay for the costs of adopting implementing and enforcing recycling solid waste programs;
the proposed new disclosure requirement of landlords would be burdensome, confusing and invite litigation, and the measure did not recognizing the plethora of recycling programs. The Assembly policy committee directed the author to work with the industry to resolve the substantive issues. As of this moment, expect significant amendments.
AACSC position:
OPPOSE (amendments will require the association to re-examine its position)

AB 1078 (Keene) is the most significant and comprehensive bill in the country to address meth labs. The author accepted over two hundred amendments. As amended: it will preempt local government remediation and inspection programs, will require government to evict (NOT landlords) tenants in all of the AFFECTED units, it will not address relocation costs, will only permit a "cost recovery lien" to be placed on the property during the pendency of the hazardous condition, will only permit government action if the property is ACTUALLY contaminated, government is to approve and oversee clean-up efforts (this is an important legal feature).
AACSC position:

SB 735 (Torlakson) was heard last week in the Senate Judiciary Committee. As introduced it would have required all landlords to provide a copy of a deed to tenants indicating a change in ownership. Landlords would have been required to provide a copy of a notarized statement when a change in management occurs. Tenants would not have been liable to pay rent if landlords did not follow the precise requirements of law. The next time the bill was amended, the author dropped the notion of providing tenants with copies of deeds and notarized statements and determined that a minimum notice period of 30-days should be required prior to a change in ownership or management could occur. Significant OPPOSITION mounted on the change. Finally, the sponsors dropped the whole concept of additional notice to tenants. The final amended version of the bill deals with a minor tweak in landlord and tenant law.
AACSC position:
Watch (as amended)

SB 277 (Battin) was just gutted concerning Megan's Law. At one time, the bill would have heavily burdened landlords to determine if any tenant and prospective tenant name appears on the Megan's Law database.
AACSC position:
Watch (as recently amended)

AB 438 (Parra) became a two-year bill a few weeks ago. CAA is the sponsor of the measure. It attempts to address how landlords and property managers may refuse to rent and/or evict a tenant that is a registered sex offender. While the language of the bill needs work, it is highly problematic if the Legislature is poised to do anything this year to more precisely define how landlords may reasonably deny tenancy to registered sex offenders.
AACSC position:
AMEND (due to amendments that are needed in the bill that will not add additional civil liability)

AB 304 (Hancock) would have permitted local governments to mandate all "soft sided" buildings to be retrofitted for seismic safety. The bill was opposed in the Assembly policy committee and as a consequence the author agreed to work the bill to the satisfaction of the OPPOSITION. The amendments that were agreed to: it will make minor modifications to the long standing law allowing local government to only require buildings to be subject to seismic safety retrofit requirements ONLY if the condition of the building poses a significant life safety issue. Perhaps the most important amendment to the bill which should be considered a WIN in any circle, is that the bill will prohibit locals from requiring any additional retrofit requirements for at least 15 years once a property owner completes the necessary safety upgrades. The policy will read: LEAVE MY BUILDING ALONE.
AACSC position:

AB 1259 (Daucher) was a bill that would have provided significant incentives for local governments to enact inclusionary zoning and rent control ordinances became a two-year bill due to OPPOSITION.
AACSC position:

AB 1367 (Evans) would have encouraged ballot box planning at the expense of the housing needs for ALL low and moderate-income households. Due to OPPOSITION, the measure became a two-year bill.
AACSC position:

AB 1528 (Jones) is a bill that relates to agency relationships that landlords have with their management is now a two-year bill.
AACSC position:
Not rated due to the sponsors (Western Center on Law and Poverty) statement that the bill is undergo massive change later this year.

SB 51 (Kuehl) is a bill that would remove the sunset clause in law that requires landlords to give a 30-day notice to terminate a tenancy of less than 1 year in duration and a 60-day notice to terminate for tenancies that are one year or more in duration is pending in the Assembly Judiciary Committee. AACSC position: OPPOSE

AB 1400 (Laird). The Unruh Civil Rights Act prohibits landlords and other businesses from discriminating on the basis of sex, race, color, religion, ancestry, national origin, disability, or medical condition, sexual orientation, marital status, thus mirroring the CA Fair Housing and Employment Act. At one time the bill proposed to state that the particular bases of discrimination as herein enumerated, would have been illustrative;. The result for landlords would be chaotic. Felons, registered sex offenders, households with limited income would have been encouraged to file discrimination complaints against landlords. Due to heavy opposition the bill was amended to delete the objectionable provision.
AACSC position:
NOT FAVOR (the bill still contains legislative findings that encourages most anyone to file a discrimination complaint against landlords)

AB 769 (Horton) is a bill sponsored by CAA. As amended it requires slumlords to attend a "slumlordology" class. In other words, slumlords would be taught how to be responsible owners of property, in a similar or identical manner such as programs offered in LA and Long Beach. Amendments are being considered that would require the State Consumer Affairs Agency to post on their website a list of all landlord and tenant laws. Of great concern would be: the Agency could not include interpretation or advice for tenants such as rent withholding, tenant strikes etc.
AACSC position:

The Attorney General solicited comments from interested parties on the following matter: Are persons who are required to register as sex offenders considered a protected class under the California Fair Employment and Housing Act based upon the language of Penal Code section 290.46, subdivision (j) (2)? The conclusion of the industry is that registrants are not a protected class under CalFEHA and that the Penal Code does not create a protected class for sex offender registrants under any other federal or state law. An opinion of the Attorney Genera may be released late this year.
This article is copyrighted and cannot be republished without the consent of the author.

Bills in 2005 Legistlative Session


A myriad of bills regarding landlord/tenant issues have hit the docket for this 2005 legislative session. In this article we will first outline only the Tier I issues to be addressed – these are the highest priority bills for our consideration.

Our new lobbying firm Norwood & Mattock will be working hand-in-hand with the landlord’s rights coalition in Sacramento to preserve our property rights. You will – during the course of this session – be asked to assist us the red alerts from time to time. By joining together, we can protect our industry – that’s what an association is all about!

Oppose: SB 51 (Kuehl) Current law requires a 60-day notice to terminate a residential tenancy if the tenant has resided in the dwelling for more than one year. The 60-day notice provision sunsets on January 1, 2006. The bill would delete the sunset. The Senate Judiciary approved the measure on a party line vote. The author claims, amongst other things: low income tenants have a difficult time to locate replacement units and certain working class cities like Long Beach have a severe shortage of rental housing and rents are continuing to rise. She nor the proponents believe good tenants are adversely affected by the bill.

Oppose: AB 1400 (Laird, and most of the members of the progressive caucus) The Unruh Civil Rights Act prohibits landlords (and other businesses) from discriminating on the basis of sex, race, color, religion, ancestry, national origin, disability, or medical condition. The bill would further prohibit discrimination on the basis of familial status, marital status, or sexual orientation, thereby mirroring the provisions of California Fair Housing and Discrimination Act.

However, it would also state that the identification of particular bases of discrimination is ILLUSTRATIVE rather than restrictive. The result for landlords would be chaotic. Would felons, registered sex offenders, persons on limited income assert discriminatory actions? Would minimum income qualification requirements be subject to challenge? Would landlords be required to rent to Section 8 tenants?

Oppose unless amended: Methamphetamine Properties. Two bills have been introduced on this subject matter that is of great concern to the real estate community. The most important measure is AB 1078 (Keene). It is a comprehensive bill that would create a methamphetamine cleanup act. CAR has written over two hundred amendments and is working with the apartment industry and title company interests. Amendments include: assuring remediation, inspection and eviction are uniform state standards and are not left to the locals for interpretation or different requirements; properties can only be cited if they ACTUALLY contain specified hazardous chemicals; properties will not be permanently stigmatized by recording a notice of contamination on the property; requiring locals to immediately inspect and determine if the property is contaminated; locals must evict the occupants as opposed to landlords seeking the eviction; etc.

The other bill is SB 566 (Bowen) which would simply require the state to develop remediation standards (this is also addressed in the Keene bill).

Oppose: AB 781 (Leno) would amend the Ellis Act, a 20-year old law that permits landlords to legitimately go out of business (the law is used in all rent control and just cause communities). The bill would prohibit landlords from going out of business for the first five years of ownership.
On March 15th the Assembly member proposed the following: gut the bill and in its stead, absolutely permit a condominium conversion, provide for a right of first refusal to existing tenants, tenants that did not purchase their unit to be given a life tenancy, cities could not impose new zoning code requirements such as changing the parking space minimums nor could locals require building code upgrades etc.

The significant point is that remaining tenants would be given a life tenancy and property owners could not occupy their properties where the original tenant remains in the property. The bill would be heard in the Assembly Housing and Community Development Committee in several weeks.
Oppose unless amended: AB 399 (Montenez) Recycling in Multifamily Units. Amongst other things the bill would:

1) require the CA Integrated Waste Management Board to develop a model ordinance for recycling:
2) require cities and counties to provide information of recycling to owners of multifamily dwellings when the city or county issues a building permit;
3) require owners to notice existing tenants and new tenants about methods of recycling;
4) MOST IMPORTANTLY, require owners to arrange for recycling if they pull a “new permit” (this term is not defined) and
5) REQUIRE recyclers to meet with owners once a year to discuss solid waste reduction.

Oppose unless amended: AB 769 (Horton) As introduced it will require slumlords to attend a class how not to be a slumlord. The class may only be approved by the Dept. of Real Estate. In conversations with the sponsors they are will to have the classes approved by cities and counties. The author will propose the bill to be amended to require that all rental agreements contain the actual wording from several pertinent statutes about landlord and tenant law. This may include: security deposit law, retaliatory eviction, right to enter property, notices to tenants, anti harassment etc.
Watch: Megan’s Law. There are approximately 13 bills that have been introduced this year on this subject. Of great interest: AB 438 (Parra) will be amended to address: changing the disclosure notice to include the internet web site of the Attorney General; in some fashion or another rights of landlords to refuse tenancy to sex offenders, etc. AB 1323 (Vargas) is a comprehensive measure that would make changes to the disclosure notice in real estate sales and rental contracts, change the definition of the crime, require persons to pay a fee that make a public inquiry (this will be very controversial for business and public interest groups). Another bill, SB 43 (Battin) would add persons who have been convicted of spousal rape accomplished by use of force of violence to the list of violent sex offenders.

Watch: AB 1574 (Jones) Housing Discrimination. The bill is intended to be used to permit locals from adopting and enforcing the federal Fair Housing Act. Non uniform interpretation could result.
Oppose unless amended: SB 735 (Torlakson) This is another Western Center on Law and Poverty sponsored bill. It proposes to amend existing law concerning tenant organizers to state that if a landlord prevents or attempts to prevent an entry on to the property by a tenant organizer that has been invited by a tenant that he or she shall be liable for actual and punitive damages. It does not address: what if the organizer disturbs the quiet enjoyment of the property, how many times may an organizer be on the property per day per week per hours, organizers do not have to follow the rules of landlords.

The second provision of the bill is the worst: it provides that not later than five days after a change in ownership (not defined) that the owner shall notify all tenants of that fact and shall provide a copy of the deed to the statement to tenants that a change in ownership has occurred. This is not only impossible to meet, but is ludicrous on its face. Additionally, if there is a change in management, that the landlord must execute a notarized certificate of agency and must notice all tenants of the change in management and attach a copy of the notarized certificate to the written statement. Is there a problem that tenants are not being apprised of a change in ownership or management? Is this widespread?

Oppose: AB 304 (Hancock) Building Standards. This bill would permit all cities and counties to order reconstruction standards to all buildings that have existing wood-frame buildings where the ground floor portion of the structure has parking or other “similar open floor space that causes soft, weak or open-front wall lines”. The theory of the bill is to protect the buildings from falling down. This type of construction is particularly popular in older style and small unit buildings, possibly affecting the 8 to 10 unit buildings in Long Beach. Major engineering and reconstruction would result. In rent control communities, landlords may not be able to pass through the costs of construction.

Governor Throws Down The Gauntlet


You may not believe in global warning theories, but, believe this: There will be no winter
in Sacramento this year. It is hot, hot, hot!

Governor Schwarzenegger has thrown down the gauntlet. He plans to balance the budget
by "starving the monster;" the state's bloated bureaucracy, that is. He has taken on the
unions that represent public employees, teachers, and others that he calls special interest
groups. He called the Attorney General, the Treasurer, and the State Superintendent of
Public Instruction the "Three Stooges" for their biting attacks on his budget plans. And,
he has made it loud and clear that if the Legislature does not go along with his plans, he
will take the fight directly to the voters.

The one thing that everyone agrees upon is that California is in a financial crisis and that
strong action is necessary to fix our many woes. However, there is little agreement on
solutions. Some Democrats look to new tax increases on the "rich." To that, the
Governor says, no, no, no! Taxing the private sector, he says, will discourage the
investment that is needed to bring jobs and new revenues to the state. The Governor's
vision is to control spending and attract new money by promoting a pro-business agenda.

So nasty has it become, that in recent news articles, several liberal legislators have said
that the Governor does not keep his word and that they will not be able to trust him in
negotiations. The Governor responded that his commitment is to the people of
California, not a few special interest groups that want to maintain the status quo of
spending more money than the state takes in.

Some pundits think the state is headed for tough times and counsel both sides to tone
down the rhetoric. Others say this is just what we need. Bring on the fight. Hold no
punches. It is time to get to the root of our problems and if we need to have a war lets
have it and get it over with.

For political junkies, this is great sport. However, the question that truly emerges is how
the Democratic controlled Legislature and the Republican Governor will work together
on any major issues in this climate. We will watch and report.

Sixty-Day Notices
As I reported last month, we were confident that the tenant lobby would introduce
legislation to make the 60-day notice for termination of tenancy a permanent fixture in
California. State Senator Sheila Kuehl did not let us down. On January 10, she
introduced SB 51. The bill is sponsored by The Western Center for Law and Poverty.

When the 60-day notice was introduced on trial basis a few years ago, the tenant lobby
argued that in the heated markets of Northern California, 30 days notice did not give
tenants adequate time to find replacement housing. Since that time, those markets have
melted down. In fact, many owners who responded to my last report stated that they are
not evicting tenants. To the contrary, under threat that they would move out, tenants are
taking advantage of the high vacancy rates and increased competition by demanding and
getting rent reductions. The point here is that the extended notice was created to deal
with market conditions that no longer exist. So, why extend the life of the law?

One interesting feature of SB 51 is that while owners would be required to give tenants a
60-day notice, tenants would only be required to give a 30-day notice. How is that fair?

We will oppose SB 51.

Revisions to the Ellis Act

In cities that have rent and eviction controls, owners find themselves in the double
whammy of being prevented from adjusting rents to market and being forced to continue
renting to tenants as long as they choose to remain. Some relief was provided when the
Legislature passed the Ellis Act and granted owners the right to evict all of the tenants in
a building if they wanted to get out of the rental business.

In recent years, a growing number of renters have approached owners about selling their
small buildings to them for Tenant in Common ownership or potential conversion to
Condominiums. The buyers purchase the buildings and then use the Ellis Act to evict the

With the rising cost of single-family homes, the Ellis option has become increasingly
attractive to owners who no longer wish to do business in an excessive regulatory climate
and to moderate-income people who want to own their own homes. The tenant lobby
sees it otherwise.

The proposed legislation would prevent Ellis Act evictions unless the owner has owned
the property for at least five years. Therefore, a group of moderate income people,
usually renters, who want to purchase a small building for their occupancy would not be
able to evict the tenants for five years from the purchase date. The effect of this would be
to bring the process of acquiring small properties for ownership occupancy to a halt.

It should be noted that the Ellis Act has strong protections for tenants. They get
expanded notice, relocation benefits, and there are strong sanctions against owners who
evict and then try to re-rent. Disabled and elderly tenants have even greater rights.

We will have to wait to see the actual bill; as of this writing it has not been introduced.
But one question that we already have is this: What public policy position makes it a
better idea to give tenants the right to live in rent-restricted apartments forever, than to
allow tenants to purchase and occupy their own homes?

Homeownership has historically been viewed as a good thing. Here in California, we
seem to have gotten this all twisted.

We will report on more tenant bills next month.

Greg McConnell is a rental housing consultant and legislative advocate. He represents and advises apartment associations, property management companies, and individual owners throughout California.
For more information please visit
( This article is copyrighted and cannot be republished without the consent of the author.)

Debunking the Myths about Multifamily Housing


The other day I attended a meeting with Sunne McPeak, California's Secretary of Business, Transportation and Housing. The meeting was packed with virtually every stakeholder on housing development including leading housing advocates, builders, developers, bankers, insurers and other interested parties.

Many in the audience wanted to make the case for more homeownership. However, my purpose for attending was to promote more multifamily rental housing. As I readied myself for the meeting, I looked at various studies that have been made to show the desperate need for quality rental housing.

Here are a few examples of the arguments that I prepared:

Workforce Housing - Teachers, police, firefighters, librarians, nurses, and other community resource people must be able to live in the communities they serve. We can talk about these people buying homes all day long, but the reality is that they are priced out of the single-family home market in most of California's desirable areas. If we don't build quality rental housing that these people can afford, they will opt to work in other locals where they can find housing.

Economic Development - Surveys around the nation point to unaffordable housing as the number one impediment to getting businesses to relocate. This is especially true in California where more and more businesses are considering relocating out of the state because their employees do not have enough gold to live in the golden state.

Gridlock - The reason it takes two hours to make a 30-mile drive is because too many people are commuting long distances to get to work. When I drive from Hercules to Berkeley, a short fifteen-mile drive, I am not competing with local residents for highway space. Increasingly, the cars on the road come from distant locations like Fairfield, Vacaville, Sacramento and points east. Oakland's Interstate 580 drivers compete with riders from Tracey, Stockton and Modesto. The situation in Southern California is worse.

The list of good reasons for more multifamily development goes on and on. By now only the most information resistant people don't know that we have a housing crisis and that we are millions of housing units short.

Armed with these arguments, I was confident that I could persuade people to do the obvious and agree to make development of multi-family housing a priority. Who could resist?

That is when the truth unfolded. Opposition to multifamily development is rampant. Visceral anti-apartmentism is based upon biases and prejudices that are completely unwarranted. People hear of apartment construction and immediately think of crime, overcrowding, demands on social services, and most important, reduced property values.

Debunking the Myths

Even though housing development is a hot button issues in Sacramento this year and the focus of sweeping reforms for consideration by the legislature. The challenge continues to be how to get policy makers to agree that it is California's best interest to allow smart, responsible, multifamily development. One answer is to debunk the myths.

The National Multi Housing Council put out a very good report in 2002 that makes the case for multifamily development. In Creating Successful Communities: A New Housing Paradigm.1 NMHC goes right to the heart of the opposition and gets to the core of the bias and prejudice against multifamily housing. Here are ten myths that are debunked in the report.

Myth #1: The Dream of Homeownership Is Universal
Reality: Apartment Living is Gaining in Popularity, Particularly Among Higher-Income Households

Myth #2: Apartment Residents Do Not Pay For The Services They Use
Reality: Apartment Residents Pay Property Taxes Via Rent, And Often At A Higher Rate

Myth #3: Apartments Disproportionately Burden School Systems
Reality: Single-Family Owners Have Three Times as Many School Children

Myth #4: Apartments Bring Traffic Congestion
Reality: Apartment Residents Own Fewer Cars and Are More Likely to Use Public Transportation

Myth #5: Apartments Bring Down Property Values
Reality: Homes Near Apartments Maintain Their Values

Myth #6: Apartments Increase Crime Rates
Reality: Apartments Help Create Safe and Secure Neighborhoods

Myth #7: Homeowners Make Better Citizens
Reality: Homeownership is Not Required for Good Citizenship and Strong Neighborhoods

Myth #8: Apartments Increase Local Infrastructure Costs
Reality: Apartments Use Municipal Infrastructure More Efficiently

Myth #9: Americans Oppose Higher Density Development
Reality: Consumer Acceptance of Higher Density Development is Understated

Myth #10: Homeownership Should Be Our Top Housing Policy Priority
Reality: Apartments Are Uniquely Qualified to Address Many of Our Most Pressing Needs

Why Housing Providers Should Support More Housing

Some existing rental property owners may ask: "why should I support more development, doesn't that create competition for my properties?" Of course it does. But consider this, the policy makers who don't allow adequate development, use this as an excuse to develop regulatory policies to "protect tenants." Every rent and eviction control law is justified on the theory of a housing crisis spurred by an inadequate supply of affordable housing.

The only way to solve the problem is to create more housing. So, to those who rant against development as though they are protecting their interests, I offer the following options: maintain the status quo and increase regulatory intervention. Or, help develop sufficient housing and eliminate the need for regulation.

Greg McConnell heads The McConnell Group, a California Advocacy and Consulting firm. The McConnell Group represents and advises apartment associations, property management companies, and individual owners throughout California.
For more information please visit
( This article is copyrighted and cannot be republished without the consent of the author.)

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