Amended in Senate August 8, 2016

Amended in Senate June 20, 2016

Amended in Assembly May 31, 2016

Amended in Assembly April 25, 2016

Amended in Assembly April 12, 2016

Amended in Assembly April 4, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2282

Introduced by Assembly Member Calderon

February 18, 2016

An act to add Section 65009.5 to the Government Code, relating to begin delete housing. end delete begin insert housing, declaring the urgency thereof, to take effect immediately. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 2282, as amended, Calderon. Rental housing: large-scale buy-to-rent investors: data collection.

Existing law, the Planning and Zoning Law requires cities and counties to prepare and adopt a general plan for their jurisdictions that contains certain mandatory elements, including a housing element. Existing law requires the housing element to include, among other things, an inventory of land suitable for residential development and to make adequate provision for the existing and projected needs of all economic segments of the community. Existing law states legislative findings declaring that the preservation and enhancement of opportunities for homeownership are beneficial to the well-being and prosperity of the people of the state.

This bill would establish the Task Force on Institutional Investors within the Bureau of Real Estate, under the leadership of the Real Estate Commissioner. The bill would require the task force, on or before July 1, 2018, to submit to the Governor and the Legislature a report that includes information regarding how many large-scale buy-to-rent investors own property in the state for the purpose of renting the property, which regions of the state their investment activity is occurring, the number, density, and percentage of single-family homes each large-scale buy-to-rent investor owns, an analysis of the potential impacts of their investments, as specified, begin insert data on how the structure of the investment instruments in which properties in California are held, end insert and recommendations on how to increase homeownership among the residents of begin delete California. end delete begin insert California and the tracking and monitoring of large-scale buy-to-rent investor holdings. end insert The bill would make various findings and declarations in this regard.

begin insert

This bill would declare that it is to take effect immediately as an urgency statute.

end insert

Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 65009.5 is added to the Government
Code, to read:

65009.5.  

(a) (1) It is the intent of the Legislature in enacting
this provision to analyze the impacts on the real estate market in
California of the investment activities of large-scale buy-to-rent
investors that, since October 2013, have involved a mortgage-based
security supported by the revenue from single-family rental
properties.

(2) The emergence of this type of security is likely to grow and
scale institutionally owned single-family rental homes to a level
that is, at this time, unknown. However, with home prices currently
approaching record highs, yet with homeownership at historic
lows, it is important to understand the size and scope of investor
activity of single-family homes and the impacts it has on the real
estate market in California.

(3) It is in the best interest of the State of California to help
ensure, to the extent feasible, that families and individuals are able
to become homeowners.

(4) Large-scale buy-to-rent investors own more single-family
homes than any other population in the United States, a market
once dominated by local, private owners.

begin insert

(5) It is critical to know to what extent these new investors are
crowding out potential owner-occupants or artificially inflating
home prices.

end insert begin insert

(6) Before any meaningful legislative action takes place, more
data needs to be collected and analyzed to ensure the proper
oversight over this new investment activity. There is currently
insufficient data to properly categorize the problem, and while the
impacts are currently unknown, families and other first-time
homebuyers are certainly put at a disadvantage when having to
compete against a large investment firm. This can exacerbate
income inequality issues in the state and must be addressed sooner
rather than later to protect the American Dream of buying and
owning a home.

end insert begin insert

(7) To the extent these investments are geographically clustered,
they could have unintended ripple effects across regions throughout
California and should be examined more closely. Should the
Legislature wait longer to gather and analyze the appropriate
data, thousands more homes could be off the market for purchase
by families and other first-time homebuyers.

end insert

(b) (1) To ensure that the citizens of California preserve the
ability to become homeowners and are not overtly challenged by
institutional investors in the real estate market, the Task Force on
Institutional Investors, hereafter referred to in this section as “the
task force,” is hereby created in the Bureau of Real Estate. Under
the leadership of the Real Estate Commissioner, the task force
shall examine the impacts that large-scale buy-to-rent investors
are having on the real estate market in California.

(2) The membership of the task force shall be as follows:

(A) The Real Estate Commissioner, or his or her designee, who
shall serve as the chair of the task force.

(B) A professor from either the University of California or the
California State University with an extensive background and
knowledge of the real estate market, to be appointed by the
Governor.

(C) A local government official with an extensive background
and knowledge of the real estate market, to be appointed by the
Governor.

(D) A real estate expert, to be appointed by the begin delete President pro
Tempore of the Senate. end delete begin insert Senate Committee on Rules. end insert

(E) A real estate finance expert, to be appointed by the Speaker
of the Assembly.

begin insert

(F) A legal services expert with expertise on homeownership
from northern California, to be appointed by the Speaker of the
Assembly.

end insert begin insert

(G) A legal services expert with expertise on homeownership
from central California, to be appointed by the Governor.

end insert begin insert

(H) A housing counselor certified by the United States
Department of Housing and Urban Development from southern
California, to be appointed by the Senate Committee on Rules.

end insert begin insert

(I) An expert from a county assessor’s office, to be appointed
by the Governor.

end insert

(3) The Bagley-Keene Open Meeting Act (Article 9
(commencing with Section 11120) of Chapter 1 of Part 1 of
Division 3 of Title 2 of the Government Code) shall apply to
meetings of the task force.

(c) On or before July 1, 2018, the task force shall submit to the
Governor and the Legislature a report that includes, but is not
limited to, all of the following:

(1) Information regarding how many large-scale buy-to-rent
investors own property in the state for the purpose of renting the
property, and which regions of the state their investment activity
is occurring.

(2) The number, density, and percentage of single-family homes
each large-scale buy-to-rent investor owns, and an analysis of the
potential impacts their investments are having on the local real
estate market, including the price of homes, the ability of individual
home buyers, specifically those who need financing, to compete
against the large-scale buy-to-rent investors, the length of time
large-scale buy-to-rent investors are holding their property as a
rental, and how many homes they are selling each year.

begin insert

(3) Data on the structure of the investment instruments in which
properties in California are held, including, but not limited to,
factors that could affect the timing and quantity of property
turnover in California by investors and the potential effects of the
investment structure on California’s rental and homeownership
markets.

end insert begin delete

(3)

end delete

begin insert (4) end insert  Recommendations to the Governor and the Legislature on
how to increase homeownership among the residents of California,
begin insert and the tracking and monitoring of large-scale buy-to-rent investor
holdings, end insert including proposed legislative or regulatory actions,
homebuyer assistance programs, and any other recommendations
the task force deems appropriate.

(d) As used in this section, “large-scale buy-to-rent investor”
means a publicly traded company devoted to holding and managing
single-family home rental properties, either on behalf of clients or
for itself, and which owns more than 100 single-family homes
during a calendar year.

(e) (1) The requirement to submit a report imposed under
subdivision (c) is inoperative on January 1, 2022, pursuant to
Section 10231.5 of the Government Code.

(2) A report submitted pursuant to subdivision (c) shall be
submitted in compliance with Section 9795 of the Government
Code.

begin insert

begin insert SEC. 2. end insert   

end insert begin insert

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

end insert begin insert

In order to provide for the expedient collection of data on
large-scale buy-to-rent investors to allow for meaningful legislative
action that will help alleviate the pressing concern of rising home
prices, it is necessary that this act take effect immediately.

end insert