Tag Archives: attorney

NEW LAWS AFFECTING CALIFORNIA LANDLORDS FOR 2013

Published December 19, 2012 , , , , , , , , , , , , , , , , ,

Photo by Justin Brockie

California landlords should be aware of the new real estate and rental housing laws for 2013. Below is a list compiled by the California Apartment Association. 

Security Deposits ‐ AB 1679 (Bonilla)
This CAA sponsored law, allows landlords to deposit – with the tenant’s agreement‐ any remaining portion of a tenant’s security deposit directly to a bank account designated by the tenant. The law also allows landlords to provide a copy of the itemized security deposit statement along with the supporting documents and receipts to an e‐mail account if provided and authorized by the tenant. Note: Landlord and Tenant cannot agree to electronic deposit or emailed itemized statement until after either party has served a notice of termination.

Abandoned Personal Property– AB 2521 (Blumenfield)
The law increases from $300 to $700 the value of a departing tenant’s abandoned personal property that triggers the requirement to hold a public sale before disposing of the personal property. Once the statutory notice period has passed, if the value of the property is less than $700, the landlord may dispose of the property in any manner or retain it for his/her own use.

  • The tenant now has a two day grace period to retrieve the property without storage charges if the property is stored on the premises.
  • Specific notice language must be included in 30/60/90 day notices and certain other forms.

Animals – SB 1229 (Pavley)
This law prohibits a landlord who allows a tenant to have an animal on the premises, from advertising or establishing rental policies that require a tenant or a potential tenant with an animal to have that animal declawed or devocalized as a condition of occupancy.

Rental Payments: Cash and Electronic Funds – SB 1055 (Lieu)
This law prohibits a landlord from requiring tenants to utilize electronic funds transfer (EFT) or cash as the only options for the payment of rent or a security deposit. Other options for payments must be offered.

Note: Owner can still require cash payment for three months after a check has been returned for insufficient funds or stop payment.

Failure to Disclose New Owner – AB 1953 (Ammiano)
The law prohibits a property owner from proceeding with an eviction for non‐payment of rent during the time that the owner is out of compliance with the legal notice provisions. Under existing law, Owner/agent must provide the tenant with the owner/agent’s name and the location where rent is to be paid (within 15 days of taking ownership). AB 1953 does not relieve the tenant from the duty to pay rent based on the new owner/agent’s failure to provide timely notice.

Smoke Detectors – SB 1394 (Lowenthal)
The law requires that on or before January 1, 2016, an owner must ensure that smoke alarms are located in each residential rental bedroom. Those smoke alarms may be battery operated.

Carbon Monoxide Detectors – SB 183 (Lowenthal)
California’s Carbon Monoxide Poisoning Prevention Act of 2010 requires that all residential property be equipped with a carbon monoxide alarm when the property has a “fossil fuel” burning heater or appliance, fireplace, or an attached garage. The law provides that,

  • All single‐family detached homes (owner or tenant occupied) must be equipped with an alarm on or before July 1, 2011.
  • All other residential units must be equipped with an alarm on or before January 1, 2013.

Domestic Violence – SB 1403 (Yee)
California law gives a tenant a number of protections and options when he/she is a victim of domestic violence.

  • Protection against termination if perpetrator is not a tenant in the same dwelling unit as the victim;
  • Right to have locks changed;
  • Right to terminate a lease if specific documentation is provided to the landlord;
  • SB 1403 extends these protections to abused seniors and dependent adults. It also adds permanent restraining orders to the types of documentation that can be used to establish the victim’s rights.

Foreclosures – SB 1191 (Simitian) & AB 2610 (Skinner)
These laws provide protections for tenants in the unit at the time of foreclosure.

  • 90‐day notices for month‐to‐month tenancies.
  • Long‐term lease continues until end of term, with exceptions such as new owner will be moving in; rent is substantially below market; the lease was created between family members, or the lease was not the result of an “arms‐length transaction.” In these cases, a 90‐day notice is required to terminate.

A property owner who has received a Notice of Default from the bank must disclose this fact to any new tenants.

Disability Access – SB 1186 (Steinberg & Dutton)
Among other things, this law prohibits an attorney or any person from issuing a pre-litigation demand for money to a building owner and reduces potential damages for owners who are bringing the property into compliance with ADA requirements and meet certain other conditions.

By Debra Carlton, CAA Senior Vice President, Public Affairs & Heidi Palutke, CAA Research Counsel
For more info, visit www.caanet.org 

 

 

RETAIN YOUR RELIABLE TENANTS!

Published November 10, 2011 , , , , , , , , , , , ,

While the number of renters in the market has increased in the last few years, retaining good tenants can still pose a problem for property managers. Maintaining a current resident is much less expensive than locating, approving, and moving in a new tenant. Of course the nature of renting itself is often transient; many people rent while looking for a home to buy, others only in the community for a short period of time.

But there are a select group of tenants that would be more than happy to stay in the community where they rent; provided that they’re happy.

So how do you make…and keep your tenants happy? Perhaps most important is good customer service. Most people, by nature, do not really enjoy moving frequently and will likely find reasons to stay where they are, providing that they receive the following:

  • Good staff responsiveness – Do you always respond promptly to tenant requests? Are maintenance issues resolved quickly and professionally? Are complaints or other issues handled properly, or are they just put aside? These are all important issues and tenants will remember how they are handled (or not handled) at renewal time.
  • Maintaining the look and quality of the property – Obviously, your properties should be maintained anyway, but many tenants that do become dissatisfied with their apartment home cite issues such as “the property went downhill.” While not very descriptive, this can mean anything from neglected landscaping, trash scattered throughout the property, or becoming careless about whom you rent to. Tenants think of their apartment as their home, and coming home to suspicious characters hanging out in the parking lot, or trash blowing around in the wind will make a tenant seriously consider moving come renewal time.
  • Keep them informed and involved – What’s going on in the community that you can share with your tenants? A monthly newsletter, holiday wine & cheese parties, an annual property yard sale, all of these things help to create a feeling of community, and that can be potent.
  • Consistency in Staffing – While a change of staff cannot always be prevented, it’s important to maintain some consistency in the rental office. Tenants often become very attached to office personnel, and frequent staff turnover may not only affect property performance, but tenant turnover as well.

While there will always be tenant turnover, building and maintaining a solid community will help you maintain more of your tenants come renewal time.

Article from PropertyManager.com

NEW LAW OK’S POLITICAL SIGNS ON APARTMENTS

Published October 4, 2011 , , , , , , , , , , , , , , , , ,

September 30th, Governor Jerry Brown signed legislation that will allow Californian apartment dwellers to display political signs on their windows and balconies.

Current legislation, however, still specifies that residents of condominiums and mobile home parks may post signs only under the authorization of the landlord.

To read more, click here

POTENTIAL TENANT’S BOUNCED CHECK HISTORY

Published September 25, 2011 , , , , , , , , , , , , , , , , , , , , , , , ,
Wouldn’t you like to find out if an applicant has written bad checks before you hand over the keys to your property?

 

It’s easy to find out, because the TeleCheck® Check Verification Service is available to AAOA members.

 

TeleCheck is well-known for assisting merchants in separating good check writers from bad ones, allowing them to adopt a liberal check acceptance policy that will benefit both the merchants and their customers.

 

These same national databases are available to landlords through AAOA and contain real-time information from more than 306,000 businesses and financial institutions.

 

TeleCheck offers the most accurate check verification service in the industry. These databases provide merchants with continually updated information including bad check activity as it occurs, automated inquiries using the consumer’s identification (Driver’s License or State ID) as well as checking account data.

An applicant’s check writing history can indicate what type of renter they will be.

The basic Verification service quickly separates good and bad check risks using TeleCheck’s negative database. This database comprises more than 51 million bad check records and can help detect a poor rental prospect, as well as a fraudulent application.

 

The Verification with Risk Management service uses both TeleCheck’s check writer activity and negative databases along with its risk management system to identify not only bad check writing risks, but also good ones.

 

The risk management service utilizes TeleCheck’s risk and predictive-modeling systems to analyze over 30 variables to predict the probability of a check being good. These assessment tools include regression modeling, neural networks, & decision tree analysis.

 

To learn more go to www.joinaaoa.org

Original Article from American Apartment Owners Association

5 PRE-EVICTION MISTAKES TO AVOID

Published September 21, 2011 , , , , , , , , , , , , , , , , , , , , , ,

Time is money when it comes to evictions, and mistakes made along the way can cost a landlord both.

Are you sabotaging your own eviction cases?

What you do in the days and weeks leading up to an eviction can make or break the case when it goes to court.  Here are 5 common pre-eviction mistakes that you can avoid:

1. Thinking You Have the Upper Hand

Believing that your rights as a property owners will somehow trump the rights of the tenant is a costly mistake, especially if you develop a false sense of confidence when dealing with tenant problems.

Once the tenant is in the property, you are going to need very specific legal grounds to kick them out– like unpaid rent, a serious breach of the lease, an obvious nuisance or certain types of illegal behavior, or termination of a lease with proper notice.

Research the rules or seek legal advice to determine if you can rightfully bring an eviction in your situation, and find out how long your eviction might take–contested cases can take months. That may cause you to re-think your strategy with tenants.

2. Believing the Eviction Will Be a Slam-Dunk

It’s the landlord who has to justify the case to the court. Unfortunately, not all eviction laws–and not all judges, are landlord-friendly.

Your case will only be as good as your lease, and the supporting documentation that you collected during the lease term. If you are not in the habit of keeping meticulous records, now is a good time to start.

Many evictions are contested. That means the condition of the property or a claim of uninhabitability may be fair game to fight the order for possession, or to reduce damages owed by the tenant. Has the unit been treated for bedbugs? Did the air go out over the summer? Did you charge one tenant late fees but not another? All will be revealed when the case goes to court.

3. My Lease Will Save the Day!

True–if it’s a good lease. Often leases fall short by not providing clear language regarding key elements. Examples may include having no provision defining when your tenant is in default in rent payments, late rent based on rolling late fees that can be construed as illegal, or not restricting the behavior you are trying to evict over.

Some provisions that are ’standard’ in packaged leases may be illegal in your situation. Have an experienced attorney in your area review your lease agreements.

4. Little Mistakes Won’t Matter

The entire eviction case hinges on proper notice to the tenants. All tenants must be notified in whatever fashion the local laws require.

The notice must be flawless–no misspelled names, timelines must be exact.

Trying to draft and serve eviction notices yourself if you are not familiar with the law can set the stage for failure–get ready to have the case dismissed, and start the whole process over again.

If you don’t know how to complete the notice forms and have them served, get help before you waste time and money.

5. I’d Never Pay a Tenant to Move Out

‘Cash for keys’ settlements–paying the bad tenants to leave, aren’t palatable to some landlords on principle. But considering the time span of the ‘average’ eviction along with the additional costs of a sheriff’s officer, a moving company, storage or possible sale of tenant’s property, cleaning, and repairing any ‘hard-feelings’ damage to the unit, it may make sense from a financial prospective.

If you can compromise with your nightmare tenant for a quicker move-out time, without leaving their mark on your unit, it could save you hardship down the road.

Original Article from AAOA-Find out more at www.joinaaoa.org.

 

A PERFECT BALANCE: PROPERTY MANAGER, ATTORNEY, AND OWNER

Published July 21, 2011 , , , , , , , , , , , , , , , , , , , ,

Landlord attorney, Daniel Bornstein, was interviewed and reviewed in The East Bay Rental Housing Association Magazine. Read the article here: Daniel Bornstein: Perfect Balance

IS YOUR POTENTIAL TENANT AN EX-CONVICT?

Published July 16, 2011 , , , , , , , , , , , , , , , , , ,

Ex-convicts may soon become a “protected class” in San Francisco – joining African Americans, Latinos, gays, transgender people, pregnant women and the disabled.

A proposal being circulated at City Hall would make it illegal for landlords and employers to discriminate against applicants solely because they were “previously incarcerated.”

Sex offenders and perpetrators of some violent crimes would not be covered.

It would also be illegal to ask anyone about their criminal past on an initial job or housing application.

“The mechanics still need to be worked out,” said Supervisor and sheriff candidate Ross Mirkarimi.

“This is a very important discussion on the eve of an immense state prisoner realignment that’s going to return hundreds of prisoners back to San Francisco,” Mirkarimi said.

Ex-cons already are a protected class when it comes to applying for a city job or seeking to live in housing run by the San Francisco Housing Authority.

Recently, however, the Reentry Council of San Francisco – made up of representatives of the mayor’s office, the Police Department, the district attorney’s office, the Sheriff’s Department, the Adult Probation Department and ex-convicts – adopted a resolution urging the city to apply the special status to the private sector as well.

Janan New of the San Francisco Apartment Association condemned the idea, saying state and federal law already prohibits landlords from “arbitrarily discriminating” against applicants.

“When somebody comes to rent housing, we have the ability … to screen someone based only on the ability to pay rent,” New said.

Now, by creating a newly protected class of citizens, New fears the city will unfairly open the door to “where people can litigate because they say, ‘You’re discriminating because I’m an ex-felon.’ ”

“Trust me – I recognize the concern,” said District Attorney and former Police ChiefGeorge Gascón, who backs the plan. “But if we want to reduce the likelihood of people going back to prison, then we have to provide them with an opportunity to reintegrate themselves.”

The city’s Human Rights Commission is preparing to hold hearings on the proposal next week.

Last chance: After a last-ditch meeting that went nowhere, it’s game on for the big pension reform fight.

“We’re going to take it all the way to the finish line,” Public Defender Jeff Adachi said after his Monday afternoon sit-down with Supervisor Sean Elsbernd and union leaders went south.

Adachi’s price for keeping his plan off the ballot was a “safety valve” that he wanted inserted into City Hall’s proposal. Under it, city workers would contribute more to their pensions than they have already agreed to if the stock market fails to perform to projections.

The idea was pretty much a nonstarter.

With that, Adachi went over to City Hall and submitted 72,640 signatures to qualify his measure for the November ballot.

Headed east: A delegation of state and regional transit officials jetted over to Shanghai for a $200,000 celebration of the final fabrication of the new Bay Bridge eastern span.

Workers at Shanghai Zhenhua Heavy Industries Co. were still putting some final touches this week on sections of the $6.3 billion span, wrapping up five years of outsourced – and sometimes troubled – bridge production.

Over the weekend, bridge contractors led by American Bridge-Fluor hosted a giant hamburger and hot dog barbecue for hundreds of Chinese workers at the main plant.

Contractors picked up a $150,000 tab for this and other parties – thanks, no doubt, to your toll bridge dollars.

The Bay Area Toll Authority footed a $50,000 party bill, plus an estimated $22,500 for flights and hotels for seven of its commission and staff members – plus two California Transportation Commission reps – to attend.

Caltrans, which has had as many as 65 workers in China for the past five years, insists nobody made a special trip from Sacramento just for the celebration.

In the grove: Retired U.S. District Judge Vaughn Walker, who struck down the state’s voter-approved same-sex marriage ban, will join San Francisco Giants CEOWilliam Neukom, filmmaker Ken Burns, former U.S. Sen. Alan Simpson and ex-Secretaries of State James Baker and George Shultz as speakers at the annual Bohemian Grove bash this month.

On a lighter note, Peter Sagal, host of NPR’s “Wait, Wait … Don’t Tell Me,” is speaking on “Lord Rochester’s Joke and the Flaw in Bohemia.”

One tell-tale sign of the secretive July 14-31 gathering will be the stream of private jets landing at Santa Rosa Airport, and the procession of black limousines shuttling big-shot CEOs to the 2,700-acre redwood forest encampment along the Russian River.

(SFgate.com- Philip Matier & Andrew Ross)

INSTALL CARBON MONOXIDE DETECTORS – IT’S THE LAW!

Published June 23, 2011 , , , , , , , , , , , , , , , , ,

Don’t forget that according to SB 183, as of July 1, 2011, carbon monoxide detectors should be installed in dwellings intended for human residence.

“SB 183 (Lowenthal)—Carbon Monoxide Detectors

SB 183 enacts the Carbon Monoxide Poisoning Prevention Act of 2010 that requires an owner of a dwelling unit intended for human occupancy to install an approved carbon monoxide (CO) device in each existing dwelling unit with fossil fuel burning heater or appliance, fireplace, or an attached garage, within the earliest applicable time period as follows.

  1. For all existing single-family dwelling units intended for human occupancy on or before July 1, 2011; and,
  2. For all other dwellings intended for human occupancy on or before January 1, 2013

SB 183 also (i) requires landlords to maintain these CO devices within must be operable when the tenant takes possession, (ii) allows the landlord, upon specified notice, to enter a rental unit to test and maintain the CO device; (iii) makes the tenant responsible for notifying the owner of inoperable or defective devices in their unit, and (iv) imposes a monetary fine on violations of these provisions. SB 183 also revises the statutory transfer disclosure statement that a seller of a manufactured home or a one-to-four unit residential property must provide to a buyer to add specified disclosure statements regarding CO devices including that their installation is not a precondition of sale or transfer.”

(California Real Property Journal- Vol. 29 num. 1)

OWNER’S RIGHT TO SERVE AND ENFORCE REASONABLE HOUSE RULES FOR MONTH-TO-MONTH TENANCIES WITHOUT A WRITTEN LEASE AGREEMENT, OR WITH AN OUTDATED LEASE AGREEMENT ABSENT HOUSE RULES

Published June 17, 2011 , , , , , , , , , , , , , , , , , , , ,

Marino v. Hernandez: In this case the plaintiff, A. Paul Marino, filed a complaint for unlawful detainer against the defendant, Ernest Hernandez. Marino’s action for unlawful detainer against Hernandez stemmed from Hernandez’s violation of a covenant prohibiting subleasing without written consent from the owner.

Hernandez contended that the no-sublease covenant originated when Marino instituted House Rules during Hernandez’ month-to month tenancy in June 2009. Marino maintained that the no-sublease covenant existed in the oral lease that Hernandez had with the previous landlord, and that the clause was in effect before he purchased the building.

Marino further argued that violation of the no-sublease covenant was a ground for eviction under the SF Rent Ordinance and the Civil Code. Hernandez argued that the no-sublease covenant cannot be the bases of eviction because the covenant came from House Rules imposed by Marino during the tenancy.

Marino maintained that a tenant in a month-to-month tenancy is impliedly agreeing to the landlord’s change in lease terms when the tenant continues to stay and pay rent, if the change in terms is properly enacted pursuant to Civil Code section 827. The trial court agreed with Marino, stating that the tenant’s consent to new covenants “is implied by his continued residence.”

This decision is very important in that it gives owners the ability to serve and enforce reasonable House Rules for month-to-month tenancies without a written lease agreement, or with an outdated lease agreement absent House Rules. Should the tenant consent to the House Rules explicitly or impliedly, violation of the House Rules would be considered grounds for a just cause eviction.

Paul Marino vs. Ernest R. Hernandez…In this case the tenant argued that the no-sublease covenant cannot be the basis of eviction under the Rent Ordinance because the covenant emanates from House rules unilaterally imposed by the landlord. This decision now makes it possible for landlords to serve and enforce House Rules whenever there is no written rental agreement in existence, and/or to create House Rules for tenancies with leases lacking basic rules.

The new House Rules become effective after 30 days and when the tenant pays his next month’s rent in a month to month tenancy.

 

For more interesting cases visit http://www.sfaa.org/court_cases.html

 

CALIFORNIA ANTI LANDLORD BILLS, LEGISLATION AB265, SUE YOUR LANDLORD BILL

Published May 17, 2011 , , , , , , , , , , , , , , , ,
CAA’s Legislative Briefing is an exclusive member benefit provided to keep you informed of legislation and other regulatory issues that could or will have a direct impact on California’s rental housing industry.
Two Anti-Landlord Bills Await a Vote on the Assembly FloorPay Rent as Late As you Want Legislation – AB 265 (Ammiano)Earlier in the year, we reported to you that Assembly Member Ammiano (D-San Francisco) had introduced legislation – AB 265 – that proposed to change California’s 3 Day Notice to Pay Rent or Quit law to a 14 Day Notice to Pay Rent or Quit. With this bill, tenants would have had until the middle of the month to pay the rent. As a result of extensive opposition from CAA members, Assembly Member Ammiano deleted these provisions from the bill. While his decision to not move forward with the 14 day provisions is a great victory for CAA members, he has now decided to include new language in the bill that still presents problems for the rental housing industry if signed into law. 

The new provisions would allow a tenant to stay in the unit if they come up with the rent and the owner’s attorney’s fees, capped at $350, any time during the eviction process – even after months of delay in the courts.
Most property owners know that these types of court eviction delays can last an average of three to four months. On-line tenant delay services brag about delaying rent payments for as long as 14 months. This greatly increases the tenant’s bargaining power with respect to exacting a settlement from the landlord, which may, at the end of the day, involve the payment of less rent than is actually due in exchange for the tenant moving out. For the tenant who chooses to stay and is able to make the payment, the $350 cap is essentially a “pay as late as you want fee.”
The bottom line is that if something unexpectedly happens in a tenant’s life, such as loss of a job, rental property owners report that they do not proceed immediately to evict the tenant. Because of expensive court costs, property owners prefer to work with tenants to allow them to stay in the home. CAA will continue to oppose the legislation and will keep you posted on the votes on the Assembly Floor.
Sue Your Landlord Bill – AB 934 (Feuer)
Assembly Bill 934 (D-Feuer, Los Angeles), is legislation that would allow a tenant to sue a rental property owner based on the statements the owner makes in an unlawful detainer action. The bill is currently sitting on the Assembly Floor awaiting a vote. To date, CAA members have sent in over 1,500 letters of opposition, making it difficult for the bill to gain the necessary votes for passage.
CAA has successfully argued that AB 934 unfairly targets the rental housing industry, removing it from important legal protections. No other industry or group has been so unjustly targeted.
AB 934 would discourage property owners and managers (out of fear of being sued) from protecting their other residents and property by promptly serving notices to tenants who violate their leases, disturb or threaten other tenants, damage the property, or violate the law.
The fight to keep the bill from moving forward is certainly not over. Watch for updates and additional calls to action.
Legislation Allows Tenant to Post Anything They Want at the Property – SB 337 (Kehoe)
SB 337 requires a rental property owner to allow tenants to post any type of sign or banner at the rental property.
Because rental property owners have a legally imposed duty to ensure the peaceful and quiet enjoyment for all residents at the property, SB 337 interferes with their ability to fulfill this obligation. It denies property owners the ability to prevent the posting of signs and banners that are offensive to other residents and the surrounding community.
While the bill is intended to give to tenants freedom of expression, it takes from rental property owners their right to set standards for their property, hindering their ability to control visual blight and disputes between tenants.
California’s Supreme Court has ruled that California’s free speech clause only applies to private property if the property is freely open and accessible to the public. Private rental homes and apartment buildings are not. They have also ruled that the fundamental nature of our constitution is to govern the relationship between the people and their government, not to control the rights of the people vis-à-vis each other. CAA lobbyists will continue to work on your behalf to stop this legislation.
Split Roll Tax Proposal Back on Legislative Agenda
A new Split Roll tax proposal has surfaced in the form of a bill by Assemblyman Tom Ammiano (D-San Francisco). He has introduced AB 448 that would redefine change in ownership as it relates to publically-traded companies, LLCs, partnerships and joint ventures—including real estate companies and potentially any property held by a legal entity. It is more or less identical to legislation that the Assemblyman proposed last year, but that bill never received enough votes to get off the Assembly floor.
AB 448 proposes to enact a program to identify those commercial properties (including residential rental property) that undergo a change in ownership, and then reassess those properties at the current fair market value. In most cases that will dramatically increase property taxes on property owners and adversely impact small businesses that rent their shop space or own just a few residential rental units. Small businesses would be less able to absorb a sudden increase in rent due to reassessment and would likely move away leaving vacant store fronts. Rental property owners would be likely to pass on the increased cost of taxes to residents, and if they did so, many renters would simply move leaving vacant units. The impact to rental property owners in rent controlled communities would be even more profound.
Since its passage by voters in 1978, California’s Proposition 13 has kept property tax rates low by limiting growth to 1 percent of the property’s initial assessed value and allowing the assessed value to increase by a maximum of 2 percent per year until the property is sold.
Specifically, AB 448 does several things to dismantle Proposition 13 protections:
• The bill redefines change in ownership, so that reassessment of property occurs at fair market value when, cumulatively, 100% of ownership interests transfer in a rolling three year period.
• Even if no ownership change has taken place it would still force companies and rental property owners to prove that there was no sale of the property. This requirement puts a huge administrative burden on companies and on county tax assessors.
• AB 448 increases the penalties for failure to file a change in ownership statement from 10% to 20% of the taxes applicable to the new base year value.
In the midst of a down state economy and more than a 15 billion dollar budget crisis yet to be solved, businesses – including rental property owners and managers – in California are once again being targeted for billions in higher taxes.
CAA, along with a large coalition of business groups, is working to defeat the bill which will be heard in committee on May 16.
Are Local Inclusionary Zoning Laws Illegal?  California Legislation Intends to Make Clear They are Not
SB 184 is legislation that intends to clarify a city and county’s continued ability to impose, as a condition of development, inclusionary housing requirements. Over 170 jurisdictions in California have some form of inclusionary zoning law, and some local laws have been in place for more than 20 years. Those local laws require a housing developer to make a percentage of their new units – usually 10 to 15 percent – available for low-income tenants or homeowners.
In 2009, a case cited as Palmer vs. City of Los Angeles brought into question all local jurisdictions’ ability to continue these types of local laws. The court ruled that the City of Los Angeles’ ordinance conflicted with the State’s Costa-Hawkins Rental Housing Act, a state law sponsored by CAA that passed in 1995, which prohibits rent control on newly constructed units, among other things.
CAA’s Legislative Steering Committee – with input from the organization’s developer members who have constructed housing under local inclusionary housing programs since the passage of Costa-Hawkins – are analyzing SB 184 and the impacts its passage or non-passage will have on their ability to develop housing in California. The sponsors of the bill argue that SB 184 simply adds clarity to the law and allows inclusionary zoning laws to continue as they have since the passage of Costa-Hawkins 11 years ago.
Opponents claim that the Palmer court decision solidifies the intent of the Costa-Hawkins Rental Housing Act. They argue that a property owner should not be required to set aside a percentage of new units for low-income tenants. At this point, although early in the process, lawmakers have sided with cities and counties, agreeing that they should have the ability to continue their programs. They see inclusionary housing programs, redevelopment programs, and other similar affordable housing programs as necessary and appropriate for their local communities. We will keep you posted on the work of CAA’s Legislative Steering Committee and their work on this bill.