New California Laws - September 2019
- New laws or proposed legislation in September 2019
- Ballot Measures
- Impact on you investments
- AB 1482 – statewide rent control
- AB 101 – Housing for homeless
- 2020 Ballot Measure – Rent Control Initiative
- 2020 Ballot Measure – Partial Proposition 13 repeal
AB 1482 - Statewide Rent Control
Per multiple news outlets, the Governor will sign into law AB 1482 after votes in the California Legislature approved the final version of the bill. As we reported previously, the new laws is focused on rent hike caps, but essentially will operate to a statewide rent control measure due to elimination of no-fault evictions for buildings older than 15 years. Housing right advocates and real estate groups reached a compromise where. Yearly rent caps will be 5% plus CPI, and tenants will have the option to stay in their units for as long as they like as long as no lease violations occur. In other words, landlords can only evict tenants for-cause – either lease violations or failure to pay rent (a staple feature in every rent control jurisdiction).
This is a victory for housing right advocates – especially the elimination of no-fault evictions. While most rent increases are not above the cap stated in AB 1482 – it will prevent landlords in very low rent areas to spike the rent dramatically.
AB 101 - Housing for Homeless
The Legislature passed several laws to eliminate ‘local community resistance’ to shelters, recovery homes, and low income housing built by the state. One of them is AB 101 – it directly targets “NIMBYs” (Not In My Back Yard) – a term used to describe local residents who oppose further development or low-income housing in their own neighborhood, but support those measures elsewhere.
It removes certain challenges previously held by local residents, to oppose local shelters and centers that gives services to the homeless. One popular way locals were able to stonewall those developments – environmental impact challenges, which cannot be used any more. AB 3194, and SB 765 are similar anti-NIMBY measures to help build similar projects.
2020 California Ballot Measure - Repeal of Costa-Hawkins/Rent Control
We previously talked about the efforts lead by the AIDS foundation to remove Costa-Hawkins from California housing and give cities the power to impose rent control on any residential structure. Proposition 10 failed to do so in 2018 by a wide margin, and now the AIDS foundation is brining a revised proposal that will repeal Costa-Hawkins. Unlike proposition 10, it will not include single family homes, condos, and new construction.
There are many reasons why proposition 10 failed: it was outspent by developers and landlords, homeowners did not want to give cities the power to pass new rent control laws, and developers rightfully argued it will hurt new housing supply. The new proposition takes care of most of those concerns, and a presidential election cycle will help drive more voters to the ballot, compared to a lower turnout in a mid-term election.
With the passage of AB 1482 – statewide rent control, it is unclear what is the goal of this new proposition. Of course, a rent control measure is much more strict than AB 1482, but the question remains – will voters care?
Per BallotPedia, the organizers have reached the 25% of the signatures required in order to appear on the ballot.
2020 California Ballot Measure - Partial Repeal of Proposition 13 for Commercial Properties
A new ballot measure surfaced for the 2020 election, set to remove proposition 13 restrictions on commercial properties in order to raise money for education and local government. If passed the California constitution will be changed, and allow counties to reassess commercial property tax every year, instead of reassessment every property transfer. Currently, all properties in California are exempt from property tax reassessment yearly – with only small yearly increases. This resulted in many long-time property owners with very small property tax base.
Historic opponents of Proposition 13 argued for years that it limits the revenue of the state/county, and provides an unnecessary windfall for property owners. Since a large portion of property tax go directly to local schools, there is a direct correlation between school funding and the property tax collected around it.
The proposed proposition will exempt residential properties from tax reassessment (home, condos, and small apartment buildings). It will also exempt agricultural commercial properties, owner-user properties, and all properties with a value under $3 Million and occupied by majority small businesses.
The measure now is in signature gathering stage, and if it will qualify, it will need a 2/3 vote from voters in order to pass. You can read about this proposal here.
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