BILL ANALYSIS Ó
AB 1925
Page 1
Date of Hearing: May 1, 2012
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 1925 (Ma) - As Amended: April 26, 2012
PROPOSED CONSENT
SUBJECT : Real Property: Rent Control
KEY ISSUE : Should the compensation given to temporarily
displaced tenants under a San Francisco ordinance be capped at a
daily compensation level, with subsequent increases keyed to the
consumer price index?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
This bill would impose limits on Proposition H, an amendment to
San Francisco's rent control ordinance adopted by voters in
2006. Prior to Proposition H, San Francisco landlords had to
pay $1000 to each tenant who had lived in a unit for more than a
year in the event the tenant had to be relocated from a rent
controlled unit through no fault of his or her own. Proposition
H raised that amount to $4500 per tenant plus an additional
$3000 for each disabled or elderly tenant or for a household
with minor children, and it provided for annual increases in the
relocation benefit. Currently, the relocation benefit is $5153
per tenant with a per-unit maximum of $15,460, plus an
additional $3436 for each disabled or elderly tenant or
household with minor children. This bill would limit relocation
benefits in San Francisco in the event of a temporary
displacement to $275 per day per household plus any moving
expenses, to be adjusted annually based on the Consumer Price
Index. The bill defines a temporary displacement as one that
lasts less than 20 days. This bill is sponsored by the
California Apartment Association. The most recent amendments
clarify that the bill applies only to San Francisco and only to
units that are governed by that city's local rent stabilization
ordinance. The author apparently worked with interested tenant
groups prior to introducing the bill to address their concerns
and to arrive at a mutually agreeable cap. Thus, there is no
known opposition to this bill.
AB 1925
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SUMMARY : Specifies levels of compensation for tenant households
who are temporarily displaced from a rent-controlled unit in San
Francisco. Specifically, this bill :
1)Limits levels of compensation in the City and County of San
Francisco for the temporary displacement of a tenant household
for less than 20 days, notwithstanding any local law to the
contrary, to both of the following:
a) Temporary housing and living expenses not to exceed $275
per day per tenant household; and
b) Actual moving expenses if it is necessary to move the
possessions of the tenant household.
2)Allows the $275 per day limit to be adjusted annually in an
amount equal to the Consumer Price Index, beginning on January
1, 2014.
3)Provides the landlord with the option to provide a comparable
dwelling unit and pay any actual moving expenses in lieu of
daily compensation and requires the unit to be comparable to
the tenant household's existing housing in location, size,
number of bedrooms, accessibility, type, and quality of
construction, and proximity to services and institutions upon
which the displaced tenant household depends.
4)Specifies that these provisions shall not be construed to do
any of the following:
a) Terminate, interrupt, or amend, in any way, a tenancy
subject to the lease provisions, or the rights and
obligations of either party, including, but not limited to,
the payment of rent;
b) Create or affect any grounds for displacement or
requirements of a landlord seeking temporary displacement,
except the payment of relocation fees for displacement not
exceeding 20 days; and
c) Affect the authority of a public entity that may
regulate or monitor the basis for eviction.
5)Provides that if a federal or state law regarding relocation
AB 1925
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compensation is also applicable to the temporary displacement,
the tenant may elect to be compensated under those other
provisions instead.
6)Specifies that these provisions affect only levels of
compensation for a temporary displacement of less than 20 days
and do not affect any other local procedures governing
temporary relocation.
EXISTING LAW provides that cities and counties have within their
police power the authority to enact rent control laws so long as
property owners are assured a fair rate of return ÝBirkenfeld v.
Berkeley (1976) 17 Cal. 3d 129].
COMMENTS : This bill would impose limits on Proposition H, an
amendment to San Francisco's rent control ordinance that was
adopted by voters in 2006. Prior to Proposition H, San
Francisco landlords had to pay $1000 to each tenant who had
lived in a unit for more than a year in the event the tenant had
to be relocated from a rent controlled unit through no fault of
the tenant. Proposition H raised that amount to $4500 per
tenant plus an additional $3000 for each disabled or elderly
tenant or household with minor children and provided for annual
increases in the relocation benefit. Currently, the relocation
benefit is $5153 per tenant with a per-unit maximum of $15,460,
plus an additional $3436 for each disabled or elderly tenant or
household with minor children.
Under San Francisco's rent control ordinance, landlords must pay
the full relocation benefits even if the tenant is only evicted
temporarily to allow for improvements or repairs. This bill
would limit relocation benefits in San Francisco in the event of
a temporary displacement to $275 per day per household plus any
moving expenses, to be adjusted annually based on the Consumer
Price Index. The bill defines a temporary displacement as one
that lasts less than 20 days. Under this bill, landlords would
have the option of providing displaced tenants with a comparable
dwelling unit rather than daily compensation, so long as the
unit is close to the services and institutions upon which the
displaced tenants depend.
ARGUMENTS IN SUPPORT : According to the author, "Proposition H
was intended to provide tenants with additional financial
protections to help cover moving costs and obtain a new
apartment in the event the tenant was evicted." However,
AB 1925
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Proposition H also applies to a landlord who only needs to
temporarily move the tenant in order to make repairs and
improvements. Thus no matter how short the dislocation, the
author contends, under Proposition H the landlord "must pay
$5,101 per tenant, up to $15,304 per unit, event when a tenant
must move out for as little as 24 hours. An additional $3,401
must be paid to the tenant if the tenant is disabled, 60 years
or older, or has a child under the age of 18 living in the unit.
A landlord who owns a property with three separate units must
pay tenants over $45,000 in temporary relocation costs before
one nail can be driven, or one toilet repaired." According to
the author, these "unreasonable standards discourages any
proactive repairs and improvements by property owners to their
housing units, including possible urgent repairs like
retrofitting or seismic upgrades." Additionally, the author
contends, "some landlords who are unable to remain in business
may be forced to pull their rental property out of the market,
reducing the amount of rental properties in the market."
The author and sponsor believe that this will create "a more
reasonable formula in the event a landlord must temporary
relocate a tenant by pro-rating the amount to a daily fee of
$275" while still requiring the landlord "to continue to pay for
moving expenses if it's necessary to move a tenant's
possessions."
REGISTERED SUPPORT / OPPOSITION :
Support
California Apartment Association (sponsor)
Opposition
None on file
Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334