Year in Review: The biggest stories of 2017 for California’s rental housing industry
The rent control movement established a foothold in Southern California. Lawmakers passed a historic package of bills to address the state’s ongoing housing crisis. And one of the state’s most important rental housing laws came under attack.
2017 certainly generated some big headlines for California’s rental housing industry.
In the top-10 list below, we summarize the most significant of those stories. To delve deeper into the issues and explore related content, follow the links embedded in each summary.
Costa-Hawkins Act comes under attack with legislation, possible ballot measure
2017 saw the beginning of two campaigns to repeal the Costa-Hawkins Rental Housing Act, legislation that protects property owners from radical forms of rent control.
The first effort emerged in the state Legislature with the introduction of Assembly Bill 1506. Although opposition from CAA helped stall the bill, lawmakers and tenant groups are attempting to pass it again this year. The bill will get its first hearing on Wednesday, Jan. 11, before the Assembly Housing & Community Development Committee.
A separate effort to repeal Costa-Hawkins – through the initiative process – launched in October. To qualify for the November 2018 ballot, proponents must gather 366,000 valid signatures no later than April 24. Alternatively, the proponents could turn in the same number of signatures by June 27 to qualify for the 2020 ballot. CAA is working to defeat both AB 1506 and the potential ballot measure.
Governor signs CAA pro-supply bills, housing package
Along with the governor and state Legislature, the California Apartment Association made addressing the state’s ongoing housing crisis a top priority in 2017.
To that end, CAA sponsored a package of bills to increase the state’s housing supply. Gov. Brown signed CAA-sponsored AB 678, along with companion bill SB 167, adding much-needed teeth to California’s Housing Accountability Act. These bills were part of Brown’s highly anticipated housing package.
Brown also signed CAA-sponsored AB 352, which aims to increase the state’s stock of efficiency dwelling units, or “micro apartments.”
Wildfires ravage Northern, Southern California, prompt rent-gouging bans
Wildfires in both Northern and Southern California this fall prompted bans on price gouging that will affect the rental housing industry well into 2018.\
Bans on price-gouging initially took effect in October after Gov. Jerry Brown declared a state of emergency in response to the Northern California wildfires. Fires that sparked in Southern California prompted more emergency declarations in several counties.
When activated, the state’s anti-price gouging law prohibits raising the price of many consumer goods and services, including that of rental housing, by more than 10 percent after states of emergency have been declared.
The law, however, lacks clear parameters for determining where the price controls apply, so rent increases exceeding 10 percent — anywhere in California — may constitute price gouging while emergency declarations are in place.
San Jose approves eviction controls but sticks with 5 percent rent cap
The San Jose City Council in 2017 approved eviction controls but steered clear of San Francisco-style, inflation based rent control.
The vote for eviction controls came in May, as the council decided to immediately implement “just cause” eviction policies, making it more difficult and time-consuming to evict problem tenants.
In the months that followed, the city considered adopting inflation-based rent control, using the consumer-price index to cap rent increases. Ultimately, however, the council decided to stick with its 5 percent annual rent cap. The council also extended the existing policy on utility cost sharing (also known as Ratio Utility Billing Systems or RUBs) until March of 2018, when it can be further studied.
Voters reject rent control ballot measures in Santa Rosa, Pacifica
Rent control measures returned to the ballot in two cities in 2017. In both elections, the California Apartment Association emerged victorious.
The first win came June 6 in Santa Rosa, where the electorate rejected rent control with 52.5 percent of the vote.
The second rent control victory at the ballot box came Nov. 7 in Pacifica. Voters in Pacifica rejected the rent control measure there with 62.03 percent of the vote.
Tenant groups seek rent control initiatives in Southern California cities
Over the past two years, rent control measures have appeared on ballots in a half-dozen Northern California cities. Now, the rent control movement has turned its attention to Southern California.
The Glendale effort got the furthest, with petitioners submitting 11,186 signatures in October. The Glendale City Clerk’s Office, however, rejected the petition, calling it “deficient and invalid.”
Tenant activists are still pursuing clearance to begin collecting signatures in the other cities, although the effort in Long Beach hit a snag early in the process.
Local government bodies back away from rent control
Thanks largely to the advocacy efforts of CAA, several local governments rebuffed calls for rent control in 2017.
Cities steering clear of rent control policies in 2017 included Santa Barbara, South Pasadena, Fremont, Daly City, Anaheim, Santa Ana and Palo Alto. At the county level, San Mateo also rejected rent control.
L.A. City Council considers expanded just-cause policies; county eyes tenant protections
In June, the Los Angeles City Council directed city staff to study possibly applying “just cause” eviction policies to non-rent-controlled housing.
This came one month after the L.A. County Board of Supervisors in May voted to examine tenant protection policies, including the identification of best practices for tenant safeguards in California and elsewhere.
A push for tenant protections will likely remain an issue this year at both the city and county level in L.A.
Fresno adopts CAA-backed ordinance to address substandard housing
In February, the Fresno City Council approved a CAA-supported ordinance to address substandard housing.
The ordinance incorporates a free rental registry and a percentage-based sample interior inspection program to ensure compliance with state housing law. Properties that pass inspection would then be allowed to self-certify.
The ordinance was written by Fresno Mayor Lee Brand, who took into account the concerns of CAA.
Fresno began inspections in December and the program will be fully operational at the start of the new year. Also, in conjunction with CAA, the city has been beta-testing its tablet-based inspection process and forms at member properties.
L.A. waste-hauling system generates complaints, CAA responds
Thanks in part to CAA, the city of Los Angeles in December vowed to improve its beleaguered waste-hauling program.
Dubbed recycleLA, the program has generated a flood of complaints since it was unveiled last summer.
Based on testimony from CAA and its members at a hearing in December, the Board of Public Works directed the Bureau of Sanitation to improve its response rate to missed pick-up requests, with plans to hold a follow-up hearing in February to measure progress. The city also has implemented a billing-dispute program, which owners can access online.
More hearings on recycleLA are expected in 2018.