Amended in Senate August 15, 2016

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 housing, declaring the urgency thereof, to take effect immediately.

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 begin delete Law end delete begin insert Law, end insert 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 begin delete homeownership end delete begin insert home ownership end insert 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, begin insert in end insert 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, data on how the structure of the investment instruments in which properties in California are held, and recommendations on how to increase begin delete homeownership end delete begin insert home ownership end insert among the residents of California and the tracking and monitoring of large-scale buy-to-rent investor holdings. The bill would make various findings and declarations in this regard.

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

Vote: ²⁄₃. 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 begin delete homeownership end delete begin insert home
ownership end insert 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.

(5) It is critical to know begin delete to what extent these new investors are
crowding out potential owner-occupants or artificially inflating
home prices. end delete begin insert the impact these new investors are having on
California’s housing market. end insert

(6) Before any meaningful legislative action takes place, more
data needs to be collected and analyzed to ensure the proper
oversight begin delete over end delete begin insert of end insert this new investment activity. There is currently
insufficient data to properly categorize the begin delete problem, and while the end delete
impacts begin delete are currently unknown, end delete begin insert on end insert families and other first-time

begin delete 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 delete begin insert home buyers. end insert

(7) To the extent begin insert that end insert these investments are geographically
clustered, begin delete they could have unintended ripple end delete begin insert the task force shall
examine the end insert effects across regions throughout begin delete California and end delete
begin insert California, which end insert should be examined more closely. Should the
Legislature begin delete wait longer to gather and analyze end delete begin insert delay in gathering
and analyzing end insert the appropriate data, thousands more homes could
be off the market for begin delete purchase by end delete families and other first-time

begin delete homebuyers. end delete begin insert home buyers to purchase. 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 begin delete expert, end delete begin insert expert with background in the
buy-to-rent industry, end insert to be appointed by the Senate Committee on
Rules.

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

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

(G) A legal services expert with expertise on begin delete homeownership end delete
begin insert home ownership end insert from central California, to be appointed by the
Governor.

(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.

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

(3) The Bagley-Keene Open Meeting Act (Article 9
(commencing with Section 11120) of Chapter 1 of Part 1 of
Division 3 of Title begin delete 2 of the Government Code) end delete begin insert 2) end insert 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 begin insert in end insert 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.

(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 begin delete homeownership end delete
begin insert home ownership end insert markets.

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

begin insert

(d) The task force shall be funded by an appropriation from the
General Fund. No funds appropriated to the Bureau of Real Estate
for purposes other than the task force shall be used to fund the
activities of the task force. Members of the task force shall not be
paid a salary, but may receive a per diem reimbursing them for
expenses associated with the activities of the task force.

end insert begin delete

(d)

end delete

begin insert (e) end insert  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.

begin delete

(e)

end delete

begin insert (f) end insert  (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.

SEC. 2.  

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:

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.