California Capitol Watch: Introduction and Proposed Housing Bills

By Eric Gelber

This is the first of periodic articles (tentatively titled California Capitol Watch) I intend to write for the Vanguard that will focus on the California Legislature. The articles will primarily spotlight pending bills that may be of local interest or that address subjects that are likely to be of interest to Vanguard readers (e.g., homelessness, mental health services, affordable housing, criminal justice reform).

Each two-year session, thousands of bills are introduced in the Legislature, most of which are not enacted. In the recently completed 2019-2021 session, for example, there were 4,848 bills introduced, of which 1,242 passed out of the Legislature and were signed by the Governor.

The final bill count is lower than usual in part because the second year of the last session was atypical and interrupted due to the pandemic. Nonetheless, of course, the bills discussed here will be a tiny sampling, even on a specific subject matter. From time to time the articles may also discuss other legislative activities, such as informational or oversight hearings. My intent is to provide neutral summaries and analyses of bills, including, as available, arguments made by both proponents and opponents.

While a small number of bills for the current two-year session have already been introduced, starting in early December, most bills aren’t introduced until close to the bill introduction deadline. Except for urgency bills, which may be introduced at any time, this year’s deadline is February 19^th, after which policy committee hearings will begin in earnest. Until then, I intend to discuss a few of the bills that were enacted and took effect on January 1^st.

I hope these articles will be of interest and lead to further discussion of important issues. I am always open to suggestions on bills or topics to cover, and welcome questions on legislative process and procedures.

Until this year’s bills are ripe for analysis I’ll begin by sampling a few of last session’s significant bills, starting today with a couple of housing bills. The first bill (Assembly Bill (AB) 1482) has been addressed previously by the Vanguard. But it is appropriate to revisit now that it’s in effect. And it’s a bill that directly impacts a significant number of Davis residents. I included the second bill (Senate Bill (SB) 1120) even though it didn’t pass because the author has stated her intent to re-introduce the bill in the current session:

AB 1482 (Chiu): Tenancy: rent caps. The author’s intent for this bill was to prevent “rent gouging.” The enacted bill places an upper limit on annual rent increases of 5% plus inflation. It applies to all rent increases occurring on or after March 15, 2019. It also requires that a landlord have a just cause, as defined, in order to evict tenants who have occupied the premises for a year. These provisions don’t apply to, among other things, housing built in the past 15 years, deed restricted affordable housing, housing subject to local rent control that restricts increases to lower amounts, duplexes in which the owner occupies one of the units, or single family residences unless they’re owned by a real estate trust or corporation. If just cause for the eviction is not the fault of the tenant (e.g., the owner or close family member intends to occupy the property) the new law provides for relocation assistance to the displaced tenant, essentially in an amount equal to one month’s rent. The law has a sunset date, meaning it becomes ineffective as of January 1, 2030.

Opponents of the bill (comprised largely of local municipalities, property owners, realtors’ associations, and developers) argued that limiting rent increases means developers and property owners will be less willing to spend on constructing or upgrading housing if their potential return on investment is diminished. As a result, opponents argued, limiting rent increases is the wrong response to California’s housing affordability crisis. Proponents countered that existing state law places no limitations on rent increases and yet the state still faces an extreme shortage in housing supply. Even if unrestricted rent facilitates housing construction, they argued, it takes years to bring new housing online. In the meantime, people are being displaced from their homes. Some opposed the bill because it didn’t go far enough, asserting that, while it addresses the drastic spiking issue, it fails to correct the far more ubiquitous problem of landlords who raise rents beyond getting a fair return on their investment. The bill creates a new floor for landlords, these opponents argue, who will now have the state’s permission to increase rents by 8-10% every year. These landlords will continue to price more and more low-income tenants out of their homes.

The enacted bill was something of a compromise. In response to the concerns about discouraging new construction, the new law exempts new construction (buildings up to 15 years old). The limitations in the bill were drafted to be far less restrictive than the types of rent control implemented in cities such as Oakland, Santa Monica, and San Francisco. Instead, the new law permits significant annual increases but outlaws major rent spikes of over 10%. In addition, anticipating that there will actually be promised expansions in the housing supply, the enacted bill sunsets after 10 years.

SB 1120 (Atkins et al.): Residential uses: duplexes. According to the author, the purpose of this bill was to promote small-scale neighborhood residential development by streamlining the process for a homeowner to create a duplex or subdivide an existing lot in all residential areas. The bill would have allowed duplexes to be built in many single-family zones, even if local officials and residents have said they don’t want them, and it would have allowed for the creation of smaller parcels than local governments would allow on their own. The bill arguably would have built off existing prior successful housing policies, such as the Accessory Dwelling (ADU) law, which led to a 63% increase in ADU permit requests statewide in the first two years alone. It was further argued that the bill respected the priorities of local governments in local land use decisions in that such applications must meet a specific list of qualifications that ensure protection of local zoning and design standards, historic districts, environmental quality, and existing tenants vulnerable to displacement.

Proponents of the bill also noted that our structure of single-family zoning has historically been used to reinforce segregation by effectively keeping people of color out of affluent, white neighborhoods. Opponents were concerned that the bill would eliminate single-family zoning and noted that the bill has no affordable housing requirement despite an egregious increase in density.

SB 1120 passed in both the Senate and then the Assembly; but, on the final day of the session, it needed one last vote in the Senate on minor amendments that had been made in the Assembly. The Assembly vote on the bill didn’t happen until 11:56 p.m. at which point it was rushed back to the Senate. However, the clock literally ran out as the Senate didn’t have time to vote on the amendments before the constitutionally mandated midnight deadline to vote and send legislation to the Governor. This apparent SNAFU received considerable media attention when, as the clocked ticked toward midnight, and the bill was three votes short of a needed majority, Speaker Anthony Rendon denied a request from Assembly Member Buffy Wicks, a strong supporter of the bill, to vote from her Oakland home by proxy as a COVID-19 accommodation, arguing she was at risk because she had recently given birth by C-section. She raced to the Assembly floor with her infant under a blanket. She was the recipient of considerable empathic reactions; Speaker Rendon received significant scorn and later publicly apologized. More on the last minute failure to pass SB 1120: https://www.nytimes.com/2020/09/03/us/politics/buffy-wicks-baby-california-assembly.html

Eric Gelber, now retired, is a 1980 graduate of UC Davis School of Law (King Hall). He has nearly four decades of experience monitoring, analyzing, and crafting legislation through positions as a disability rights attorney, Chief Consultant with the Assembly Human Services Committee, and Legislative Director of the California Department of Developmental Services.

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