Weekly Update - May 11, 2012

May is do-or-die month for controversial bills – large and small.  Either sponsors gear up for major battle on the Senate or Assembly floors or the measures undergo significant change to either mollify or evade their opposition.  In our case, we’re seeing a little bit of both: 

• As previously reported, AB 1953 (Ammiano), a bill strongly opposed by AAGLA which would  penalize property owners who fail to provide timely notice to residents of rental housing regarding where to send rent payments after changes in ownership occur, underwent substantial change in the Assembly Judiciary Committee and ultimately passed.
• AB 1726 (Allen), a bill to establish new state requirements for the operation of swimming pools in rental housing communities, was finally amended after AAGLA and other apartment groups registered their strong opposition.  The recently adopted amendments mean the bill now exempts rental housing from its provisions.
• AB 2014 (Ammiano), a step in the direction of establishing a split roll for collection of property taxes – making commercial properties pay a higher rate – appears to have been abandoned by its author in the face of strong opposition from a large group of business interests, including AAGLA. 

Some authors and sponsors appear to be unfazed by substantial opposition to their measures:

• While opposition to AB 1740 (M Perez) has grown, the author continues to advance the measure and recent amendments make it worse for employers.  AB 1740 would mandate certain treatment of employees who claim to be victims of domestic violence and is opposed by AAGLA and numerous business interests.
• Despite mounting concerns over the provisions and implications of AB 2610 (Skinner), SB 1743 (Hancock),  two identical bills to conform state noticing requirements to those in federal law in situations where rental properties are sold through foreclosure, sponsors of the measures (tenant groups and the CA Attorney General) don’t yet appear to be willing to amend the bills.  AB 2610 and SB 1473 are opposed by AAGLA and other apartment groups as well as by the REALTORS® and CA bankers.
• After consulting with reliable Senate Democrats, it appears SB 1191 (Simitian), a bill opposed by AAGLA which would require that rental property owners notify prospective renters when they are in receipt of a Notice of Default or suffer severe penalties, will pass the Senate.  Accordingly, under separate cover, we are consulting with the State Committee about possible amendments.

Meanwhile, SB 1055 (Lieu), a bill to prohibit property owners from demanding that residents remit rent payments only by electronic means, passed the Senate Judiciary Committee on Tuesday.  AAGLA, which has been working with the bill’s author to help improve it, was in Committee to report its progress.

Weekly Update - April 20, 2012

Tempo at the Capitol picked up last week and committees were busy considering hundreds of bills, including many of interest to AAGLA: 

• AB 1627(Dickinson), a bill to condition the issuance of residential building permits on the guarantee by builders and developers that their proposed projects would reduce automobile use, failed on Tuesday to pass the Assembly Committee on Business, Professions and Consumer Protection.  AAGLA was opposed to AB 1627.
• AB 1740 (M Perez), a bill to grant civil rights protection to employees who are also victims of domestic violence, passed the Assembly Judiciary Committee on a party-line vote.  AAGLA opposes AB 1740.
• AB 1726 (Allen), a bill to promote greater swimming pool safety by imposing new state requirements on rental property owners, was amended and set for hearing on Tuesday, April 24.  Despite the amendments, AAGLA continues to oppose this costly and unnecessary bill. 
• AB 1925 (Ma), a bill to fix a limit on how much property owners pay tenants who are temporarily displaced, was amended to apply the bill only to the County of San Francisco.  AAGLA is considering supporting this bill, sponsored by the CA Apartment Association.
• AB 2557 (Feuer), a bill to grant to private third parties the authority to pursue injunctive relief against owners of vacant property, passed the Assembly Judiciary Committee on a party-line vote.  AAGLA opposes AB 2557.
• SB 1394 (Lowenthal), a recently amended bill to require 10-year batteries be installed in smoke detectors in all rental housing, passed the Senate Committee on Transportation and Housing.  AAGLA opposes SB 1394.

In addition, AAGLA was part of a large meeting of stakeholders to discuss possible amendments to AB 2521 (Blumenfield), the apartment-owner- sponsored bill to amend the disposition rules in law involving personal property abandoned by tenants.  AAGLA, SDCAA, SBRPA and AACSC lobbyists are working on several options for amendments.

Lastly, final preparations are being made for AAGLA’s visit to Sacramento next week for Leg Day, which includes a meeting of GSHP Tuesday afternoon, followed by dinner with several state senators, culminating in dozens of visits with state legislators on Wednesday, April 25.

Weekly Update - April 13, 2012

Activity at the Capitol increased considerably as lawmakers returned this week from their 10-day Spring break.  Notable for AAGLA interests were the discussions held mid-week regarding the bill, sponsored by AAGLA and other apartment industry interests, amending the disposition rules involving personal property abandoned by tenants – AB 2521 (Blumenfield).  The week also saw developments on SB 1220 (DeSaulnier), which proposes to assess property owners $75 for every real estate action that must be recorded by the county. 

Apartment industry representatives met Wednesday to discuss with Assembly Member Blumenfield’s staff amendments to AB 2521 being proposed by the Western Center on Law and Poverty (WCLP), a tenant advocacy organization.  WCLP is requesting a two-day grace period to allow for tenants to retrieve property they want to keep but were unable to move out of the vacated unit on their last day of occupancy.  Assembly Member Blumenfield is sympathetic with the concerns raised by WCLP – having mostly to do with notification and storage costs – but doesn’t want to create an unintended hardship on rental property owners by accepting the WCLP’s amendments.  The bill was to be heard in the Assembly Committee on the Judiciary next Tuesday but the hearing was moved back a week to allow for discussions between apartment industry lobbyists and WCLP lobbyists.

The other significant legislative news involved SB 1220, which had been strongly opposed by the California Association of REALTORS® (CAR).  AAGLA had taken an OPPOSE position on SB 1220, largely as a show of support for CAR.  CAR’s opposition derived from a fiercely and long-held policy of the organization that government should never interfere with a real estate transfer, particularly with a fee like the one proposed in SB 1220.   Sponsors of SB 1220 want to use the proceeds of the so-called document-recording fee to capitalize a state trust fund that would be used to finance affordable housing.  Late in the week, we received word that CAR was on the verge of striking a deal on the bill.  If true – and if CAR’s opposition disappears – SB 1220 will pass.  We should have more information on Monday.

Finally, work continues on setting up appointments for April 25 – Leg Day – with Los Angeles-area legislators.  Dinner the night before with key legislators, including Senator Bob Huff (R-Diamond Bar), is likewise coming together.  Also, we should have completed Leg Day bill summaries and talking points next week.

 

Weekly Update - March 30, 2012

The highlight of this past week was a meeting organized by the sponsors of AB 1­­­726 (Allen), the so-called swimming pool bill, to purportedly discuss the purpose for and merits of the measure.  Author Assembly Member Allen (D-Santa Rosa) and the bill sponsors, the CA Association of Environmental Health Administrators, had called the meeting after hearing complaints and concerns registered by stakeholders.  Few of those stakeholders, including AAGLA lobbyists, came away from the meeting with a better understanding of the bill or why it’s being advanced.

In its present form, AB 1726 requires rental property owners with swimming pools to hire a “certified pool operator” to manage a new “aquatic health code” for California.  However, it remains unclear as to what that new code would look like and why it’s needed.  Bill sponsors did recite various reports by organizations such as the Center for Disease Control regarding unhealthy conditions in public pools as well as anecdotes about uneven levels of knowledge about local requirements for pool safety.  And, while the sponsors said they would amend out of the bill, which is not yet set for hearing, the operator-hiring requirement, they persisted in arguing for mandatory training and certification of those who manage and operate swimming pools.

Following the meeting, several stakeholders – including AAGLA – discussed a plan to exempt from the bill private pools which are not accessible to the general public.  Those discussions will continue. 

AAGLA lobbyists continue to work on setting up appointments on April 25 – Leg Day – with Los Angeles area legislators.  To date, most meetings requested have been nailed down, including several joint meetings of AAGLA and AACSC w/ lawmakers. 

Weekly Update - March 16, 2012

The Legislature normally pauses in March as, pursuant to the institution’s rules, the session’s new bills sit (for public review) for 30 days following their introduction.  Action on these bills, with few exceptions, then, won’t begin until the week of March 26.  (Regarding AAGLA’s sponsored bill, AB 2521 (Blumenfield), the measure hasn’t yet been set for hearing although there will be a meeting next week between apartment interests supporting the bill and tenant groups which have raised concerns.)

In addition to beginning to work introduced bills – including ones like AB 2521 which we suppor, and ones we strongly oppose, like AB 1726 (Allen), the so-called swimming pool bill – AAGLA lobbyists have over the past three weeks, been tracking a variety of so-called “informational hearings” covering issues like redevelopment, financing affordable housing and what to do about property taxes.  (Informational hearings are just that – informational – and rarely produce specific action.)

Previous reports have covered the redevelopment and affordable housing meetings but this past Monday, the Assembly Committee on Revenue and Taxation held a hearing on Proposition 13 entitled, “Defining ‘Change in Ownership’ – Is it Time to Reassess?”  The purpose of the hearing was to examine the issue of whether the rules governing Prop 13, the landmark ballot measure approved by voters in 1978 which capped property taxes on residential, commercial and industrial real estate, should be changed to purportedly capture more revenues from commercial property owners.  It’s alleged by those who support this change – and conversion to a so-called “split roll” whereby residential properties pay one rate and commercial pays another – that commercial owners skirt the law by not recording bona fide changes in ownership and paying taxes on consequent reassessments. 

AAGLA is concerned about the split roll proposal since its advocates want to include rental housing in the definition of “commercial property”.  Unfortunately, Monday’s hearing kept that threat alive as various witnesses, including Christopher Thornberg of Beacon Economics, called for not only reform of Prop 13 but its complete elimination – proposing instead that commercial properties be re-assessed once a year and, accordingly, be taxed on the new value.   The hearing reminds us lobbyists who have defeated a dozen or so efforts to adopt split roll legislation that we must remain ever-vigilant.

Weekly Update - March 9, 2012

AAGLA lobbyists continue their review of and reconnaissance on the dozens of recently introduced bills that have the potential of directly or indirectly affecting the ownership and operation of rental housing in California.  As noted during this week’s meeting of the State Committee, bills ranging from mandating new requirements for the operation of swimming pools to several promoting greater protections for individuals renting foreclosed properties, are being proposed this year and may have serious implications for rental property owners. 

The concerns about these and other bills notwithstanding, the number of bills hostile to rental housing appears to be less than last year.  So far, it doesn’t appear that measures like last year’s SB 184 (Leno), which would have permitted local rent control, and AB 934 (Feuer), which would have stripped property owners of basic protections against retaliatory lawsuits, will be pursued this year.  That said, there are dozens of so-called “spot” bills which now only contain benign language but will be later amended with substantive provisions – empty vessels now into which potentially toxic contents may go.  AAGLA will remember that the offensive provisions of SB 184 weren’t amended into the bill last year until nearly three months after it was introduced.   Accordingly, we remain ever-watchful of several bills.

Finally, as previewed last week, the Assembly Committee on Housing and Community Development held a hearing this past week to discuss how to replace redevelopment and, correspondingly, capitalize a reliable source of state funding for affordable housing.  On the same day, the Committee’s Senate counterpart – the Senate Committee on Transportation and Housing – held a second hearing in as many weeks to cover both the issue of funding for affordable housing as well as to more generally gather testimony on the state of housing markets in California.   Like last week’s Senate hearing, however, neither of this week’s committee reviews yielded any specific proposals for either replacing redevelopment or creating a reliable funding stream for affordable housing.

Weekly Update - March 2, 2012

The February 24 deadline for introducing bills to be considered during the Legislature’s 2012 session produced roughly 2,000 pieces of legislation over the course of the last two weeks, most of which were filed on the very last day.  Consequently, AAGLA lobbyists spent the better part of this past week beginning to analyze those measures which appear to directly or indirectly impact rental housing.  At first glance it appears there are 74 measures that fall into that category but the review continues.

One of last week’s introduced bills is sponsored by AAGLA and several other Southern California apartment associations.  The introduction of AB 2521, a bill to raise the threshold in law that triggers a requirement for rental property owners to initiate a public sale of personal property abandoned by a previous tenant, became official when Assembly Member Bob Blumenfield (D-Los Angeles) advised AAGLA lobbyists that he would author the bill.  AAGLA and its fellow Southern California associations are seeking a change in law simply because the current threshold, $300 – which was last adjusted in 1982 – is unreasonably low and out of date.  Assembly Member Blumenfield, a leader in the Legislature and the Chairman of the Assembly Committee on the Budget, reached out immediately to his colleagues in the Senate and won a commitment from Senator Curren Price (D-Los Angeles) to co-author the bill with him.

Regarding the other bills, AAGLA will hold a meeting of its State Committee next week to begin the process of sifting through the measures and recommending positions for the association to take on those affecting the businesses of its members. 

Finally, like its Senate counterpoint, the Assembly Committee on Housing and Community Development will stage a hearing next week to discuss how to capitalize a reliable source of state funding for affordable housing.  Both committees are concerned that with last year’s termination of the state’s redevelopment program, which generated more than $500 million each year for affordable housing, the future funding situation looks grim.  AAGLA lobbyists will monitor next week’s hearing in the Assembly and report back.

 

Weekly Update - February 24, 2012

This past, holiday-shortened week included an informational hearing on housing and redevelopment; a flood of new bills as Friday’s bill-introduction deadline approached; and an agreement by Assembly Member Bob Blumenfield to carry the AAGLA-backed bill to increase the threshold in law that triggers the public sale or disposition of personal property abandoned by a previous tenant.

On Wednesday, the Senate Committee on Governance and Finance joined the Senate Committee on Transportation and Housing to hear testimony about how last year’s termination of redevelopment affects the provision of affordable housing.  However, while the hearing was advertised as a session for discussing specific proposals for capitalizing a permanent source of funding for low-income housing, it yielded few.  As with hearings of this kind – where big issues are to be discussed – some occasional windmill-tilting was dwarfed by report after report from the dozen or so witnesses about how bad things are.  There was scant testimony offering legitimate solutions.   The surprises were that a) only one witness mentioned the recent defeat of SB 184 (as a problem for affordable housing, of course); and b) the seeming acceptance that something has to be done about state and local regulations that hamstring housing production. 
While short on real solutions, the hearing did signal that the Legislature is under pressure to do something about affordable housing soon – maybe this year – and that there are few answers right now.  Which means business stakeholders – like the homebuilders, the REALTORS®, AAGLA and the entire rental housing industry are on alert for the almost-certain hostile ideas and corresponding bills.

Meanwhile, hundreds of bills were introduced which, by the end of the week, will help bring the total to roughly 3,000 for the 2-year session.  AAGLA lobbyists are on the lookout for those that may affect rental housing.

We were pleased that Assembly Member Blumenfield (D-Van Nuys) agreed to carry the industry-backed bill to increase the statutory trigger for abandoned property to a current, more realistic figure.  Blumenfield, who for the third year is Chairman of the Committee on the Budget, appeared pleased that the apartment industry sought him out as an author for the bill.  We are optimistic about getting this reform adopted with Blumenfield as our author.

 

Weekly Update - February 17, 2012

AAGLA lobbyists spent a good part of the week shopping the abandoned property legislative proposal.  You will recall that AAGLA is seeking a change in state law that adjusts the value of the statutory trigger that determines whether rental property owners must notify previous tenants of their intent to sell or otherwise dispose of personal property left behind by the tenants.  Today, that trigger is $300 – an amount that hasn’t changed in 30 years and which in current dollars is unreasonably low given the extensive and arduous process that property owners must follow to satisfy the notification process set forth in law.  The subject legislative proposal seeks to increase the trigger amount to $700, the rough equivalent to the present value of 300 1982 dollars, according to the federal consumer price index.

Now that the bill concept is in its official “Legislative Counsel Draft” form, AAGLA lobbyists have been discussing it with prospective authors, concentrating for the moment on Los Angeles-area lawmakers.  Additional conversations are being held with various other rental housing organizations, including the California Apartment Association (CAA) as well as the Apartment Association of California Southern Cities (AACSC) and the Apartment Association of Orange County (AAOC).   Previous discussions were held with the San Diego County Apartment Association (SDCAA), which appears to be in support of the idea.

AAGLA lobbyists have also been meeting with housing industry allies regarding the likelihood that the Legislature will pursue an affordable housing mandate of some kind this year, given the recent defeat of SB 184 (Leno) and last year’s termination of the state’s redevelopment program.  Indeed, during the most recent fight against SB 184, the bill that would reinstitute rent control by calling it inclusionary zoning, there was a great deal of chatter from affordable housing advocates and representatives of local government about how the elimination of redevelopment had greatly diminished the ability to systematically develop affordable housing – and argument for an SB 184-like mandate.

Even though SB 184 was resounding rejected last month – and while there remains among housing industry organizations a firmness supporting their opposition to affordable-housing mandates – the chatter continues and will be the subject of a joint hearing next week of the Senate Committees on Governance and Finance and on Transportation and Housing.  We will be monitoring the hearing and will report back next Friday.

 

Weekly Update - February 10, 2012

In the wake of the defeat of SB 184 (Leno), AAGLA lobbyists have detected some chatter about still another effort to overturn Palmer v. City of Los Angeles, the recent court case which affirmed the state-law prohibition against rent control on new housing construction.  Of course, that’s exactly what SB 184, which failed to pass the Senate a second time after having fallen short in June of last year, would do.  By overturning Palmer, bill proponents sought to revise the interpretation of the precedent-setting law that banned rent control (Costa-Hawkins) and correspondingly give local jurisdictions exceptional authority to impose inflexible inclusionary zoning on new housing.

What is helping to give the renewed rent control/inclusionary zoning discussion political ballast is the growing preoccupation of lawmakers with what to do about redevelopment, which the Legislature all but ended last year.  The two issues are connected because 1) redevelopment projects, designed to eliminate slums and blight, almost always have an affordable housing component; and 2) redevelopment law required that at least 20% of the property tax proceeds earned from the project flow to a special fund for the development of low and moderate-income households.   Last year’s action to terminate redevelopment means roughly half a billion dollars in annual funding for affordable housing production is gone, leaving local governments to turn to mandates on the private sector to achieve their affordable housing goals.

With many discussions being held in Sacramento on what to do about redevelopment, AAGLA lobbyists believe it may be time to get involved.  Like the old saying goes, “If you’re not at the table, it’s likely you’re on the menu.”

Also, as reported last week, AAGLA lobbyists are continuing efforts to build support for the legislative proposal to reform the process property owners must follow in order to lawfully dispose personal property abandoned by tenants.  In meetings last week with representatives of the California Apartment Association and this week with lobbyists for the Apartment Association of California Southern Cities and the Apartment Association of Orange County, AAGLA lobbyists won support the concept.  It was also agreed that these associations would discuss the concept amongst its members to see what additional improvements could be made to the basic concept of increasing the property-value threshold of $300, which triggers today’s cumbersome process, to a higher, more reasonable amount.

 

Weekly Update - February 3, 2012

Highlighting this week (and the past couple of months) was the defeat of SB 184 (Leno), a bill to effectively reinstate rent control by overturning the Palmer v. City of Los Angeles court case and embedding in state law authority for local jurisdictions to impose inflexible inclusionary zoning on new housing.   AAGLA and its allies spent the better part of December and January convincing state Senators that despite what proponents of SB 184 were saying, there is no prohibition against inclusionary zoning and that the bill would do major injury to Costa-Hawkins – the long-standing, landmark law to restrict rent control in California – and would have a destructive impact on the development of new rental housing.)

In the end, San Francisco Democrat Senator Mark Leno, author of the bill, didn’t have enough support to even have the bill heard in the Senate on the last day for bills carried over from the previous year to be passed.  According to the rules, then, the bill died.

AAGLA lobbyists targeted 8 senators who, last time the bill was heard – in June, 2011, when it failed to pass the Senate – refused to support the bill.  Those senators had also been the target of affordable housing activists over the past two months and some were beginning to reconsider their positions.  However, the arguments being made by the SB 184 proponents were easily shot down since, again, the Palmer decision did no injury to the much-revered inclusionary zoning program.  Indeed, Palmer said with rent control on new housing banned in California, locals must negotiate concessions if they were to impose inclusionary zoning.

Of course, AAGLA lobbyists are grateful for all the faxes and phone calls from Association members, urging lawmakers to vote no on SB 184.

In addition, AAGLA lobbyists began building support for a possible AAGLA-sponsored legislative proposal – increasing the threshold that triggers a notification regarding the plan disposition of personal property abandoned by tenants.  The threshold hasn’t been increased from $300 since 1982.  AAGLA is prospecting a change in law that would raise the threshold considerably.

 

Weekly Update - January 27, 2012

Working to defeat SB 184 (Leno) dominated this week’s activities in Sacramento.  As you know, SB 184 would effectively reinstate rent control on a portion of newly constructed rental housing units.   AAGLA and other rental-owner organizations see that as a violation of Costa-Hawkins, the long-standing, landmark law to restrict rent control in California, and have been actively opposed to the measure since early last year.  (Attached are some of the materials AAGLA is using to defeat SB 184.)

Blaming a court decision (Palmer v. City of Los Angeles), SB 184 is being sold by affordable housing activists as necessary to restore the authority of local governments to adopt inclusionary zoning, the local policy which typically conditions approval of new housing on a commitment to reserve a portion of units with discounted rents – affordable to low-income households.  In truth, the decision in Palmer (2009) cited Costa-Hawkins in saying the Los Angeles inclusionary zoning ordinance was defective because City officials failed to negotiate the lower rents with the project sponsor. 

As you will recall, on the bill’s first go-around, it fell four votes short of passage in the Senate – that was last June.  As the Senate’s rules allow, however, Mr. Leno is able to bring the bill in the Senate for a vote one more time.  Those rules say he has until January 31 to do so and, according to our information, he plans to do so on the last day – next Tuesday.   The sponsors of SB 184 – low-income housing advocates – are working hard to get the bill passed.  To do so, they must get at least four senators to switch their votes of last June.  Correspondingly, it’s AAGLA’s aim to hold those same senators – seeking their no vote or abstention one last time.  

Mobilized to help AAGLA fight the bill is the San Diego County Apartment Association and the Santa Barbara Rental Properties Association as well as representatives of the REALTORS, homebuilders, business property owners and lobbyists for the Apartment Association of California Southern Cities and the Apartment Association of Orange County.  As you recall, the California Apartment Association chose last year not to get involved in the effort to defeat SB 184 and continues to maintain its neutrality. 

AAGLA lobbyists are grateful for all the faxes and phone calls from Association members, urging lawmakers to vote no.

 

Weekly Update - January 13, 2012

The political influence of AAGLA and the wider apartment industry continues to be felt at the state Capitol as staff for Assembly Member Tom Ammiano (D-San Francisco) reported early this week that the Assembly Member has no plans to move forward with AB 265, a bill introduced last year which would grant forbearance to residents who fail to pay rent so long as they ultimately reimburse property owners.  AAGLA is strongly opposed to the measure which would effectively encourage uniform delays in rent payments.

AB 265 passed the Assembly Committee on the Judiciary last year but, in the face of strong opposition, Mr. Ammiano withdrew the measure from further consideration.  Under the rules, Mr. Ammiano has until January 31st of 2012 to bring the bill up for a vote in the Assembly.  Despite what appears to be good news, AAGLA lobbyists are on alert in the event that Mr. Ammiano changes his mind and decides to move the bill. 

Meanwhile, a similar visit this week to the office of Senator Mark Leno (D-San Francisco) confirmed as expected that the Senator will, once again, bring SB 184 to the Senate floor for a final vote.  SB 184 would contravene state housing policy by reinstating rent control on a portion of newly constructed rental housing.  

The bill was last heard in June of 2011 when it failed to get the requisite 21 votes to pass the Senate.  As they did last year, AAGLA lobbyists will ask Association members to weigh in with phone calls and faxes to the four state senators representing the Southland, asking them to vote no on SB 184.  Senator Leno can bring the bill up at any time so AAGLA lobbyists will seek a quick turnaround on the request for member faxes.

Finally, legislators have until February 24 to introduce new bills in the 2012 session and AAGLA lobbyists have already reviewed several dozen.  Hundreds more are expected before the deadline and AAGLA lobbyists will soon begin seeking positions on selected measures from AAGLA’s State Committee.  (Please note that, as an example, AB 317 (Calderon), a measure dealing with limiting rent control in mobile home parks, has been added to the tracking list as a measure to watch until AAGLA decides whether or not it wants to take a position on the bill.)

 

Weekly Update - January 6, 2012

It’s been a busy first week of the 2012 legislative session.  Governor Brown continues to surprise:  yesterday he presented his budget proposal a week early.  Among other things, the proposal calls for:

• State workforce reduction of 3,000 employees;
• A $7 billion tax increase (on statewide November ballot); and
• Several agency and board consolidations and eliminations including the merger of two state housing agencies.

AAGLA lobbyists are in the process of scrubbing the Governor’s budget plan more carefully.

More importantly, however, were the reports yesterday of authors of 3 bills strongly opposed by AAGLA that they are being withdrawn from consideration at this time:

• AB 19 (Fong), the defective state mandate that all new multifamily housing install water submeters – scheduled for a hearing on January 11 in the Assembly Committee on Housing and Community Development ;
• AB 448 (Ammiano), the bill to undo Proposition 13 by formulating a new process for assessing value (for purposes of property tax collections) on commercial properties, including rental housing; and
• AB 934 (Feuer), an effort to eliminate legal protections of rental property owners against retaliatory lawsuits.

More detail on these bills is below.

This news wasn’t a real surprise to AAGLA lobbyists who has been in regular communication with bill sponsors and authors to urge reconsideration or significant changes to these bills.  In addition, it was AAGLA members who traveled to Assembly Member Feuer’s district office last month to discourage him from moving forward with AB 934. 

Moreover, with the exception of AB 934, it’s likely that the issues of a submetering mandate and a circumvention of Proposition 13 will continue to threaten rental property owners this year.  Finally, as reported last month, there remain several pieces of legislation about which AAGLA is very concerned which remains on track this year.

• AB 19 (Fong); OPPOSE – Defeated in Assembly.  This bill is the Sierra Club’s second version of a measure to mandate the installation of water submeters in all new multi-family construction in California.  Unlike the City of San Diego ordinance, however, AB 19 prohibited property owners from recovering the monthly costs of reading the submeters and billing tenants and imposed new, unreasonable tenant protections.  After two defeats (AB 1975 failed in the Senate in 2010 and AB 19 was defeated in the Assembly Committee on Housing and Community Development (“the Committee”) last April). 

• AB 448 (Ammiano); OPPOSE – Withdrawn from consideration.  Egged on by a history of pushing bills to circumvent Proposition 13, which caps property taxes in California, and by somewhat sympathetic comments coming from the new Governor, Assembly Member Ammiano of San Francisco introduced AB 448, to revise Prop 13’s definition of a change in ownership in “commercial property” in an attempt to produce a “split roll”, where those property owners were paying more in property taxes than individual residential property owners.  Facing stiff opposition, the bill was never heard. 

• AB 934 (Feuer); OPPOSE – Defeated in Assembly.  Introduced by the powerful chairman of the Assembly Judiciary Committee, AB 934 sought to remove protections for property owners against retaliatory lawsuits.  These protections arise from what’s called the “litigation privilege” which prevents defendants from using sealed court records to file subsequent complaints.  The litigation privilege is something that all citizens enjoy but, with AB 934, the bill’s author, Assembly Member Mike Feuer (D-Los Angeles) sought to take it away from only apartment owners.  Although AB 934 went down to a stunning defeat in the Assembly, with over 60% of its members voting against it Assembly Member Feuer recently advised apartment industry representatives that he was going to try again – until, of course, he met in December with members of AAGLA who apparently convinced him to not move forward with the bill.

 

Weekly Update - December 23, 2011

Not surprisingly, public policy’s center stage in Sacramento belongs to the state budget as 2011 comes to a close.   AAGLA lobbyists have come to expect that the chronic mismatch of spending and revenues – as it commonly exists in the budget year and as is projected for the subsequent fiscal year – dominates the headlines every holiday season and tends to distract attention away from other state concerns and related goings-on.  

But, this is also the time of year when the campaigns to advance all kinds of adversarial legislation begin and, in the case of AAGLA and the rental housing industry, the battles will begin in early January. 

Top priorities
There’s an old saying at the Capitol that nothing every really dies in Sacramento.  As evidence, AAGLA lobbyists expect no fewer than four previously opposed and defeated bills are, thanks to the various rules of forbearance in the Legislature, scheduled to return next month for a second try at passing.  A concerted effort must be mounted early to defeat these bills:

• SB 184 (Leno); OPPOSE – Defeated in Senate.  This bill, backed by tenant advocates, sought to essentially rewrite the state’s landmark law limiting rent control – known as “Costa-Hawkins” – by legislatively overturning an important appellate court decision and allowing localities to reinstitute a form of rent control on newly constructed units through inclusionary zoning programs.  AAGLA lobbyists expect SB 184, which fell four votes short of passing the Senate last June, will be heard again as early as the second week of January.   Substantial pressure will again need to be applied to Senators from the Los Angeles area.

• AB 19 (Fong); OPPOSE – Defeated in Assembly.  This bill is the Sierra Club’s second version of a measure to mandate the installation of water submeters in all new multi-family construction in California.  Unlike local ordinances, such as the one adopted by the City of San Diego, however, AB 19 prohibited property owners from recovering the monthly costs of reading the submeters and billing tenants and imposed new, unreasonable tenant protections.  After two defeats (AB 1975 failed in the Senate in 2010 and AB 19 was defeated in the Assembly Committee on Housing and Community Development (“the Committee”) last April).  The bill has been set for a hearing in the Committee on January 11, 2012.

 

• AB 448 (Ammiano); OPPOSE – Withdrawn from consideration.  Egged on by a history of pushing bills to circumvent Proposition 13, which caps property taxes in California, and by somewhat sympathetic comments coming from the new Governor, Assembly Member Ammiano of San Francisco introduced AB 448, to revise Prop 13’s definition of a change in ownership in “commercial property” in an attempt to produce a “split roll”, where those property owners were paying more in property taxes than individual residential property owners.  Facing stiff opposition, the bill was never heard.  It’s back, however, set for hearing in the Assembly Committee on Revenue and Taxation on January 9, 2012.

• AB 934 (Feuer); OPPOSE – Defeated in Assembly.  Introduced by the powerful chairman of the Assembly Judiciary Committee, AB 934 sought to remove protections for property owners against retaliatory lawsuits.  These protections arise from what’s called the “litigation privilege” which prevents defendants from using sealed court records to file subsequent complaints.  The litigation privilege is something that all citizens enjoy but, with AB 934, the bill’s author, Assembly Member Mike Feuer (D-Los Angeles) sought to take it away from only apartment owners.  Although AB 934 went down to a stunning defeat in the Assembly, with over 60% of its members voting against it – including most of LA’s delegation – Assembly Member Feuer recently advised AAGLA representatives that he will likely try again in 2012.

 

Additional concerns
Other hostile bills defeated or withdrawn last year but likely to return in 2012 are:

• AB 265 (Ammiano); OPPOSE – Withdrawn from consideration.  Initially, AB 265 would have changed the century-old standard of three days notice for alerting tenants to pay rent or vacate to an inexplicable two weeks.  Little justification was given for the introduction of such a radical change to landlord-tenant law, other than several other states had similar laws, sort of.  After apartment groups, including AAGLA, mobilized considerable opposition – stopping AB 265 before it could be heard by the unfriendly (apartment owners) Assembly Judiciary Committee – the bill was withdrawn then re-emerged as a measure to hold tenants harmless for rent payments until just before an unlawful-detainer action was handed down.  AAGLA and other apartment groups succeeded in stopping the bill’s progress and, again, it was withdrawn.

 

• AB 350 (Solorio); OPPOSE – Defeated in Senate.  AB 350 said that if a business owner of any kind, including rental housing owners, terminated a service contract – say, with a building security company – the employees of that company had to be retained by the business owner for at least 60 days.  Despite the dismay of many lawmakers (the public relations campaign that accompanied the campaign to defeat the bill asked “are you kidding?”) AB 350, backed by several powerful unions, made its way easily through the Legislature before it was ultimately defeated in the Senate.

Action pending
AAGLA would still like to see reform of the state’s approval process for the use of water submeters in rental housing.  SB 744 is designed to accomplish such reform and after moving well through both houses of the Legislature, the bill awaits action on the Assembly floor:

• SB 744 (Wyland); SUPPORT – Awaiting action in Assembly.  A bill to promote greater water conservation in multifamily housing, SB 744 became a measure which AAGLA and other apartment groups supported early on.  The bill is aimed at untangling an extremely complicated state process for approving the use of water submeters in rental housing and making the devices readily available.  The bill is broadly supported – by other rental housing associations and state homebuilders – and is awaiting action sometime early next year in the Assembly.

Given the urgency and likely intensity of these early battles, we here in Sacramento will be calling on members of AAGLA soon for their help.

 

Weekly Update - December 9, 2011

As our previous report indicated, continuing revenue shortfalls are dominating the news at the Capitol and already some legislators are gearing up for a fight over tax increases.  The Governor is promoting his plan, scheduled to be considered by California voters next November, which would increase the state’s sales tax by a half cent and impose income tax increases from 1 to 2 percent, starting with taxpayers earning more than $250,000 per year.  Senate leader Darrell Steinberg (D-Sacramento), also an advocate for new taxes, appears to be drawing a political line in the sand over how next year’s budget will be balanced.  

In reaching a budget deal this past July, Democrat lawmakers and the Governor agreed to spending-cut “triggers” to be pulled if roughly $4 billion in additional revenues failed to materialize before June, 2012.  A recent report by the state’s Legislative Analyst – confirmed by the state controller and by the Governor’s own Office of Finance – says both revenues are lower than forecast and spending is occurring at a quicker pace than originally projected. 

Corresponding with the tax-increase rhetoric in Sacramento is chatter about additional tax and fee schemes, including a property tax hike.  AAGLA members will recall last year’s AB 448 (Ammiano), which sought to change the Proposition 13 formula for determining how much commercial properties should pay in property taxes.  While the bill failed to even muster the votes to clear its first policy hurdle – in the Assembly Committee on Revenue and Tax (“the Committee”) – it was officially revived this week when the Committee agreed to a second hearing (January 9, 2012) for the bill.   AAGLA lobbyists will appear at the hearing and along with several other business groups, testify in opposition to AB 448.

AAGLA lobbyists testified at a hearing of the Assembly Committee on Housing and Community Development (“the Housing Committee”) on Monday, December 5.  Housing Committee Chair Norma Torres (D-Pomona) called the hearing to gather information from various organizations about conditions in California’s housing markets.  Among the witnesses at the hearing was Jerry Nickelsburg of UCLA’s Anderson School of Economics as well as representatives of state housing agencies, affordable housing developers and the homebuilding industry.  In their testimony, AAGLA lobbyists spoke about the immense economic benefits produced by rental housing and the need for the Legislature to avoid doing any more harm to the industry.

 

Weekly Update - November 17, 2011

While most of California was preparing for the upcoming Thanksgiving holiday, legislative leaders spent this week reacting to the news that the $4 billion in additional revenues for this fiscal year – some say a phantom projection made in July to allow lawmakers and the Governor to close on the 2011-2012 state budget – was not expected to materialize, meaning automatic spending cuts could soon be triggered.  

The Legislature’s chief fiscal and policy analyst reported earlier in the week that based on a sluggish rate of revenues received during the first quarter of the current fiscal year that the state would by June 30 of 2012 fall $3.7 billion short of the projection.  Based on the budget deal of early summer, cuts in education and child care as well as other state programs could be triggered as early as January of next year.  The official forecast and report on likely cuts will be made by December 15, 2011 by the Department of Finance. 

Despite the July, 2011 agreement, Senate and Assembly leaders are now calling for measures to increase revenues in lieu of allowing the cuts to take effect.  This means AAGLA and other business groups in California can expect a flurry of legislative proposals in 2012 to increase taxes and fees.  One likely target will be commercial properties which, according to several lawmakers, don’t pay as much in property taxes as they should. 

AAGLA will recall at least one bill last session – AB 448 (Ammiano) – sought to change the Proposition 13 formula for determining how much commercial properties should pay in property taxes.  While the legislation was unclear, many want rental housing to be included in the definition of “commercial property”.  

AAGLA lobbyists in Sacramento are watching and listening carefully and report on any meaningful developments, should they occur.

Finally, last Friday AAGLA lobbyists met in Los Angeles with members of the State Committee and other leaders to discuss the Association’s 2012 legislative program and political affairs activities.  Plans were set and a report to the AAGLA Board of Directors is forthcoming.

 

Weekly Update - November 4, 2011

This week, AAGLA continued its discussions with fellow opponents of AB 341 (Chesbro), the recently enacted bill which establishes new solid waste recycling requirements for commercial and residential properties.   AAGLA has met with the California Association of REALTORS® (CAR), the San Diego County Apartment Association (SDCAA), the California Apartment Association (CAA) and the California Business Properties Association (CBPA).

The purpose of the discussions is to determine if the provisions and implications of AB 341, which added troublesome amendments late in this year’s legislative session, warrant seeking corrective legislation in 2012.  In particular, apartment groups are concerned that AB 341, and the corresponding regulations being developed by the CalRecycle agency, may impose a financial hardship on smaller property owners and doesn’t adequately account for physical limitations of certain properties or the lack of cooperation of tenants. 

Neither the REALTORS® nor CAA is at the moment disposed to initiate a recycling bill next year.  At this time it’s uncertain whether SDCAA and CBPA are interested in pursuing any changes to the new law.

Finally, AAGLA lobbyists are looking forward to next week’s planning meeting in Los Angeles.  The meeting, set for Friday, November 11 with AAGLA leadership, will involve discussions about legislative goals and related issues for the upcoming 2012 legislative session. 

 

Weekly Update - October 28, 2011

As reported last week, AAGLA has been part of a coalition raising concerns about the adoption by the California Air Resources Board (CARB) of a solid-waste recycling regulation that would obligate rental housing owners to institute systematic recycling even if it is economically and physically infeasible.  As also reported, the development of the recycling regulation was overtaken by the passage of AB 341 (Chesbro), which AAGLA had opposed.  AB 341, which passed the Legislature and was signed into law by the Governor, would establish new solid waste recycling requirements for commercial and residential properties.  

AAGLA expressed its concerns with both the regulation and the bill in the attached letters.  The letter of October 20, 2011 was sent in accordance with the 45-day comment period provided following the issuance of draft state regulations.  As you can see, the other letter, sent on September 21, 2011, requested Governor Brown to veto AB 341 so that the author could try again. 

This week, AAGLA began discussions with fellow opponents of the regulation and AB 341, starting with the California Association of REALTORS® (CAR), regarding possible legislative action in 2012 to improve AB 341.   Following discussions with allies – which will also include the San Diego County Apartment Association (SDCAA), the California Apartment Association (CAA) and the Santa Barbara Rental Properties Association (SBRPA) – we will report back to AAGLA.

AAGLA also participated in a conference call with the National Apartment Association (NAA) earlier in the week regarding recently changed federal policy over the installation of pool drains, promulgated recently by the Consumer Products Safety Commission (CPSC).  NAA reported that it will soon send out sample letters for comments on the CPSC regarding the new policy and is encouraging all state and local apartment associations to send letters expressing concerns about this new policy.

Finally, AAGLA’s lobbyists are preparing for the State Committee’s 2012 planning session for Friday, November 11, 2011.

 

Weekly Update - October 21, 2011

AAGLA is part of a coalition objecting to the adoption by the California Air Resources Board (CARB) of a solid-waste recycling regulation that would obligate rental housing owners to institute systematic recycling even if it is economically and physically infeasible.  The position on the regulation is consistent with the AAGLA’s opposition to AB 341 (Chesbro), a bill to establish new solid waste recycling requirements for commercial and residential properties.   AB 341 passed the Legislature and was signed by the Governor.

This week AAGLA joined its coalition partners – the California Association of REALTORS® (CAR), the San Diego County Apartment Association (SDCAA) and the Santa Barbara Rental Properties Association (SBRPA) – in a letter to CARB to express its specific objections to the regulation (see attached).   AAGLA lobbyists were also on hand to testify at CARB’s public hearing on the regulation, held today, Friday, October 21.

However, CARB decided to drop any further work on its regulation in light of the enactment of AB 341 and the impending commencement by the Department of Resources Recycling and Recovery (CalRecycle) to develop separate regulations to implement the new law.  The coalition, which has indicated its support for expanding existing recycling policies and programs – both state and local – is particularly concerned about the potential expense of meeting the new state requirements, the potential compliance problems (if, for example, tenants chose not to participate in recycling) and the need to get credit if good-faith efforts to implement the new program are made by rental property owners.

Today’s action by CARB – to defer to AB 341 – once again raises the question of whether AAGLA and its allies want to pursue curative legislation next year.  This issue will be among those discussed at AAGLA’s State Committee planning meeting next month.

 

Weekly Update - October 14, 2011

On Sunday, October 9, 2011, Governor Brown signed AB 22 (Mendoza), a bill which would restrict employers, including property owners, from using an individual’s credit history when considering the individual for employment.    As you know, AAGLA along with a great number of business groups was opposed to AB 22.  Members of that business coalition have indicated their interest in pursuing legislation next year which would adopt many of the provisions sought through amendments this year which were rejected by AB 22’s author.  We will keep you informed.

As previously reported, despite a requested veto from AAGLA and other rental housing and commercial property interests, the Governor signed AB 341 (Chesbro), a bill to establish new solid waste recycling requirements for commercial and residential properties.  AAGLA had negotiated more reasonable standards earlier in the year which were amended into another bill, AB 818 (Blumenfield) and ended up with a neutral position on the bill.   Discussions have begun with fellow opponents of AB 341 regarding whether or not legislative improvements to this new recycling law should be pursued next year. 

For your information, attached is a summary of the 2011 legislative year, which highlights AAGLA’s successes and setbacks on priority state legislation.

 

Weekly Update - October 07, 2011

Yesterday, Governor Brown signed AB 341 (Chesbro), a bill opposed by AAGLA which establishes new solid waste recycling requirements for commercial and residential properties.  AAGLA had negotiated less rigid and more reasonable standards earlier in the year which were amended into another bill, AB 818 (Blumenfield).   AAGLA ended up with a neutral position on AB 818.   The objectionable provisions of AB 341 were added to the bill at the last minute and are at best unclear.  We will soon be talking to the REALTORS®, which also opposed the bill, to determine how serious the bill is for respective members and whether or not improvements to the measure should be pursued next year. 

Meanwhile, as of this writing, the Governor had not acted on another bill opposed by AAGLA.  AB 22 (Mendoza) would restrict employers, including property owners, from using an individual’s credit history when considering the individual for employment.    The Governor has until October 9 to sign or veto bills, including AB 22.

Finally, AAGLA lobbyists were pleased by the turnout of state legislators to the Association’s annual trade show, held yesterday in Studio City.   A total of seven lawmakers visited the show and AAGLA’s booth dedicated to ongoing efforts to encourage greater member participation in political action, at both City Hall and the state Capitol.   Among those attending was Assembly Speaker John Perez (D-Los Angeles) who visited with AAGLA members and toured the entire show floor.  Others attending were Assembly Members Gil Cedillo (D-Los Angeles), Mike Eng (D-Monterey Park), Felipe Fuentes (D-Los Angeles), Mike Gatto (D-Burbank), Ricardo Lara (D-South Gate) and Housing Committee Chair Norma Torres (D-Pomona).

 

Weekly Update - September 16, 2011

After concluding their 2011 session, state legislators have, for the most part, left Sacramento and will not return until January of next year.  Meantime, Governor Brown is sifting through over 600 pieces of legislation, most of which were sent to him during the last week of the legislative session, September 6th through the 9th.   The state constitution requires that the Governor act on those bills within 30 days, meaning business in Sacramento for the next three weeks will be focused on gubernatorial signatures and vetoes.

Thanks to its hard work earlier in the year, AAGLA is concerned only about two bills now before the Governor.  First, AB 22 (Mendoza) would restrict employers, including property owners, from using an individual’s credit history when considering the individual for employment.   AAGLA, part of a broad coalition of business groups in California, opposed AB 22 and will with its allies request the Governor to veto the measure.

Likewise, AAGLA is seeking a veto of  AB 341 (Chesbro), a bill aimed at increasing solid-waste recycling in California but unnecessarily and unfairly singles out rental property owners (of five or more units) to comply with rigid recycling standards.  AAGLA is working with the California Association of REALTORS® to develop a strategy for requesting a veto of AB 341.

Meanwhile, AAGLA has begun looking forward and will soon be convening a session in Los Angeles to plan for 2012. 

Weekly Update - September 2, 2011

Final agreement was reached on SB 377 (Kehoe), the so-called sign bill. Amendments were taken by the bill's author that would limit the size and duration of posting of signs in rental housing. In addition, the bill was amended to ensure the new sign policy did not trigger unintended consequences for property owners operating rental housing in rent-controlled jurisdictions. As a result of the changes to SB 377, AAGLA removed its opposition to the measure. Yesterday, the Assembly passed the bill and sent it back to the Senate for concurrence in the Assembly amendments.

Meanwhile , further action on SB 744 (Wyland), the submetering reform bill, has been deferred to next year after the California Department of Food and Agriculture (CDFA) refused to back off its opposition to the bill despite significant amendments proposed to deal directly with its concerns. The Utility Conservation Coalition (UCC), sponsors of SB 744, was willing to strip the bill down to remove the reforms to submetering testing and retain the troublesome statutory definition of "placed in service."

But, without specifying its continued objections, CDFA notified UCC it remained opposed to the bill, signaling a likely veto. UCC determined that too much progress had been made in moving this precedent-setting legislation – including the strong bi-partisan support it had achieved – that a veto would set that progress back significantly. Instead, UCC will work over the fall to expand support for the measure with the hope of bringing the bill up for a vote early next year.

Still no sight of mischief on bills like SB 184 (Leno) and AB 265 (Ammiano) and legislative deadlines are making it unlikely either bill will be brought up this year. The 2011 legislative session ends next Friday, September 9.




Weekly Update - August 26, 2011

Fresh from their month-long summer recess, state lawmakers are focusing on whether Republicans will vote for a couple of tax law changes being proposed by the Governor and Democrat leaders. (It's not likely.) However, AAGLA lobbyists remain vigilant in watching for shenanigans that could involve resurrecting previously defeated or stalled legislation affecting rental housing. So far, nothing has materialized.

AAGLA lobbyists are particularly concerned about SB 184 (Leno), essentially authorizing a resumption of local rent control, and AB 265 (Ammiano), the bill to establish statutory forbearance for rent scofflaws . While there has so far no indication of either of these two bills being brought back to life in these waning days of the 2011 legislative session, there are rarely advance warnings about these things.

Meanwhile, two measures AAGLA lobbyists were working on over the summer break – SB 337 (Kehoe) and SB 744 (Wyland) – are in different stages of resolution. You will recall that SB 337 is the bill that initially would have placed severe limits on the ability of property owners to establish policies governing the posting of signs by renters. After several negotiating sessions, that bill is now limited to allowing signs connected to political campaigns and of limited size, and may only be posted temporarily. Its lobbyists are recommending that AAGLA now remove its opposition to the bill.

Things regarding SB 744, the industry-supported bill to increase access by property owners to water submeters, are a little less settled. After resolving concerns among some GSHP members about possible property-owner liability – and the bill unanimously clearing the Assembly Committee on Appropriations on Wednesday, August 17 – there is growing concern about the opposition to the bill, particularly coming from within the Brown Administration. Discussions about how to navigate around the opposition are underway.

All business of the Legislature – at least for the 2011 regular session – must be completed by September 9.




Weekly Update - August 19, 2011

The Legislature reconvened on Monday, August 15, returning from a rare month-long summer recess and setting the last stage for the final days of the 2011 legislative session. Lawmakers are scheduled to adjourn for the year on Friday, September 9.

Fireworks affecting the rental housing industry during these last few weeks of the session are expected, including the resurrection of bills hostile to AAGLA, including SB 184 (Leno) and AB 265 (Ammiano). Meanwhile, AAGLA has settled differences with the sponsors of SB 337 (Kehoe), the bill that initially would have placed severed limits on the ability of property owners to establish policies governing the posting of signs by renters.

AAGLA lobbyists, who enjoy a good working relationship with the bill's author, Senator Christine Kehoe (D-San Diego), have been since March of this year negotiating changes to the measure which would make what the Senator initially wanted more compatible with existing sign policies in rental communities and consistent with locally enacted sign ordinances, enforced by local governments. The bill now limits the type of signs renters can post and for how long. Accordingly, AAGLA has moved from a position of "oppose" to "neutral" on the bill.

Agreement among various apartment groups was also recently reached regarding provisions of SB 744 (Wyland), the industry-supported bill to increase access by property owners to water submeters. Submeters, installed in individual rental units to measure and bill for monthly water use, are increasing in their popularity and demand among rental housing owners and developers. In July, concern was raised by some apartment groups that the bill may inadvertently impose liability on rental property owners.

Amendments to resolve those concerns were drafted and have been presented to and approved by Senator Wyland. The bill, which was approved by the Assembly Committee on Appropriations on Wednesday, August 17, will be amended before subsequently being taken up for a vote on the Assembly floor.