BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 1053 (Leno) - Housing discrimination:  applications
          
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          |Version:  April 4, 2016         |Policy Vote:  JUD. 4 - 2        |
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          |Urgency:  No                    |Mandate:  Yes                   |
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          |Hearing Date:  April 18, 2016   |Consultant:  Jolie Onodera      |
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          This bill meets the criteria for the referral to the Suspense  
          File.







          Bill  
          Summary:  SB 1053 would increase the protections against housing  
          discrimination on the basis of one's source of income under the  
          Fair Employment and Housing Act (FEHA) by revising the  
          definition of "source of income" to include lawful, verifiable  
          income paid to a housing owner or landlord on behalf of a  
          tenant, including federal, state, or local public assistance or  
          housing subsidies, including, but not limited to, federal  
          housing assistance vouchers under Section 8 of the United States  
          Housing Act of 1937, as specified.


          Fiscal  
          Impact:  







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            DFEH workload  :  Potentially significant increase in housing  
            discrimination complaints received under the revised  
            definition of "source of income" required to be reviewed and  
            investigated. The Department of Fair Employment and Housing  
            (DFEH) estimates additional staffing could potentially be  
            required at a cost in excess of $350,000 (General Fund)  
            annually to address the additional workload.  
            Local Public Housing Agencies (PHAs)  :  To the extent higher  
            utilization rates of housing assistance programs result from  
            this measure, local PHA administrative costs could increase  
            significantly. Administrative services provided by PHAs  
            include outreach to tenants and owners, waiting list  
            management, determination of client eligibility, issuance of  
            vouchers, tenant and owner briefings, housing quality  
            standards inspections, annual re-certifications, interim  
            adjustments, and records maintenance.  
            HCD/CalHFA  :  No fiscal information was available from  
            HCD/CalHFA at the time of this analysis. Staff notes the  
            responsibility for acting as the PHA under the Section 8  
            voucher program for 12 rural counties was transferred from the  
            Department of Housing and Community Development (HCD) to local  
            and regional housing authorities in 2012.
            County counsel  :  Potential minor increase in time required to  
            review and approve Restrictive Covenant Modification  
            documents. These costs are potentially state-reimbursable  
            (General Fund) to the extent the Commission on State Mandates  
            determines the revised definition of "source of income"  
            expands upon a formerly mandated higher level of service on  
            county counsel to determine whether there exists an unlawfully  
            restrictive covenant based on source of income, as redefined  
            under the provisions of this bill.
            County recorders  :  Non-reimbursable local costs to county  
            recorders to accept and record additional Restrictive Covenant  
            Modification documents, as county recorders are authorized to  
            charge or waive fees for this service.
            Impact on public social services  :  To the extent the  
            provisions of this bill provide greater opportunities for  
            persons to secure housing, greater utilization of federal  
            vouchers could be realized, as well as potential future cost  
            savings in reduced reliance on other federal, state, and local  
            public social services.  


          Background:  The California Fair Employment and Housing Act (FEHA)  








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          prohibits  employment and housing discrimination against any  
          person on the basis of race, color, religion, sex, gender,  
          gender identity, gender expression, sexual orientation, marital  
          status, national origin, ancestry, familial status, source of  
          income, disability, or genetic information of that person.  
          (Government Code (GC)  12920.) The FEHA additionally provides  
          that the opportunities to seek, obtain, and hold employment and  
          housing without facing discrimination is a civil right. (GC   
          12921.)
          The FEHA protects against housing discrimination on the basis of  
          one's "source of income," which is defined as the "lawful,  
          verifiable income paid directly to a tenant or paid to a  
          representative of a tenant," and states that "a landlord is not  
          considered a representative of a tenant" for purposes of this  
          definition.  (GC  12927(i), 12955(p).)


          Federal housing assistance programs such as the Housing Choice  
          Voucher (HCV) program, more commonly referred to as "Section 8  
          vouchers," provide assistance in the form of vouchers that can  
          be used to acquire housing on the private market to provide  
          decent, safe, and sanitary housing to low-income families, the  
          elderly, and the disabled. At the state level, public assistance  
          programs such as the Housing Opportunity for People with AIDS  
          (HOPWA) and HOME provide tenant-based rental assistance to  
          eligible persons. Additionally, California recently established  
          the Housing Support Program (HSP) pursuant to SB 855 (Chapter  
          29/2014) for eligible CalWORKs families. However, despite the  
          availability of such housing assistance programs, some program  
          participants may face challenges finding landlords willing to  
          accept housing assistance payments in their communities. 


          This bill seeks to ensure that landlords do not deny low-income  
          families and other vulnerable populations the opportunity to  
          apply for available housing by expanding protections against  
          housing discrimination under the FEHA by revising the definition  
          of "source of income" to include income paid to a housing owner  
          or landlord on behalf of a tenant, including federal, state, or  
          local public assistance or subsidies.












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          Proposed  
          Law:  This bill would expand the definition of "source of  
          income" under the FEHA to include lawful, verifiable income paid  
          to a housing owner or landlord on behalf of a tenant, including  
          federal, state, or local public assistance and federal, state,  
          or local housing subsidies, including, but not limited to,  
          federal housing assistance vouchers under Section 8 of the  
          United States Housing Act of 1937, as specified.


          Prior  
          Legislation:  AB 447 (Maienschein) Chapter 432/2015 prohibited  
          real property insurers from, among other things, failing or  
          refusing to accept an application, issue, or cancel a policy  
          based on the level or source of income of individuals residing  
          or intending to reside on the real property, or based on the  
          receipt of assistance intended for housing from government  
          agencies or other specified persons. 

          SB 1252 (Corbett) Chapter 524/2010 made technical revisions to  
          several provisions of the FEHA, including consistently listing  
          "source of income" as a characteristic that is protected from  
          housing discrimination in various sections of the FEHA.

          SB 1145 (Burton) Chapter 568/2004, among its provisions, removed  
          the sunset date and thereby extended indefinitely the provision  
          adopted in SB 1098 which prohibited discrimination under the  
          FEHA on the basis of a person's source of income, as specified.

          SB 1098 (Burton) Chapter 590/1999 prohibited, until January 1,  
          2005, discrimination under the FEHA on the basis of a person's  
          source of income, the failure to account for the aggregate  
          income of co-residents, or the failure to exclude a government  
          rent subsidy from that portion of the rent to be paid by the  
          tenant in assessing his or her eligibility for rental housing.

          SB 1148 (Burton) Chapter 589/1999 required title insurance  
          companies, real estate brokers, county recorders and others to  
          include in a copy of a declaration, governing document, or deed  
          a cover page (or to stamp the first page of the document) that  
          states that any discriminatory restriction contained in the  
          document is a violation of state and federal fair housing laws  
          and is void. SB 1148 also required county recorders to remove  
          "blatant racial restrictions" when requested to do so by anyone  








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          having an interest in the property. 


          Staff  
          Comments:  By expanding the definition of "source of income"  
          under the FEHA, the DFEH has indicated the potential for  
          additional housing discrimination complaints to be filed. Based  
          on data from 10 other jurisdictions (including 8 other states  
          and the District of Columbia) that prohibit housing  
          discrimination based on source of income and include  
          tenant-based rental assistance in that definition, the DFEH has  
          estimated the number of complaints could increase by 175  
          complaints per year (which would result in a 120 percent  
          increase over the number of complaints received based on source  
          of income in 2014), resulting in a potential need for additional  
          staffing in excess of $350,000 annually to review and  
          investigate the additional complaints. 
          Staff notes there are timeframes within which specified housing  
          complaints must be reviewed and investigated. As indicated in  
          its March 2015, "Report to the Joint Legislative Budget  
          Committee," the DFEH states that the federal Department of  
          Housing and Urban Development (HUD) requires DFEH to complete 50  
          percent of its investigations of housing complaints within 100  
          days of the filing of the complaints which are "dual-filed,"  
          which are complaints over which both the DFEH and HUD have  
          jurisdiction and are filed with both entities. 

          Local public housing agencies (PHAs) are the primary  
          administrators of the federal Section 8 voucher program. In  
          California, over 100 PHAs administer housing assistance programs  
          and receive federal funds from HUD to administer the voucher  
          program. Prior to 2012, the Department of Housing and Community  
          Development (HCD) acted as the PHA in the administration of the  
          Section 8 voucher program in 12 rural counties, however, this  
          responsibility was transferred from HCD to local and regional  
          housing authorities effective January 1, 2012. To the extent the  
          provisions of this bill result in a significant increase in  
          utilization rates of housing assistance programs such as the  
          federal Section 8 voucher program, administrative costs to local  
          PHAs could increase significantly. Administrative services  
          provided by PHAs include outreach to tenants and owners, waiting  
          list management, determination of client eligibility, issuance  
          of vouchers, tenant and owner briefings, housing quality  
          standards inspections, annual re-certifications, interim  








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          adjustments, and records maintenance. 

          Under the FEHA, responsibility for the procedure by which  
          unlawful restrictive covenants may be removed was transferred  
          from the DFEH to local county recorders in 2006. By expanding  
          the definition of "source of income" under the FEHA, this bill  
          could result in additional restrictive covenant modification  
          forms being submitted to county recorders which would require  
          review and approval by the county counsel prior to recordation  
          by the county recorder. To the extent the time required to  
          review and approve of Restrictive Covenant Modification  
          documents increases due to the provisions of this bill, these  
          costs are potentially state-reimbursable (General Fund) to the  
          extent the Commission on State Mandates determines the revised  
          definition of "source of income" expands upon a formerly  
          mandated higher level of service on county counsel to determine  
          whether there exists an unlawfully restrictive covenant based on  
          source of income.



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