BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: SB 1267 Hearing Date: 4/26/2016
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|Author: |Allen |
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|Version: |4/14/2016 |
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|Urgency: |No |Fiscal: |No |
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|Consultant|Alison Dinmore |
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SUBJECT: Ellis Act
DIGEST: This bill requires a city or county by ordinance, when
the city or county requires notice of intent to withdraw
accommodations pursuant to the Ellis Act, to give one year's
notice to a tenant with a custodial or family relationship with
a pupil enrolled in a primary or secondary school who lives in
an accommodation before terminating a tenancy.
ANALYSIS:
Existing law:
1)Prohibits, under the Ellis Act (Act), a public entity, by
statute, ordinance, or regulation, from compelling an owner of
any residential real property, except for a residential hotel,
to continue to offer the rental units for rental housing. The
Act maintains the authority for a public entity to regulate
the subsequent use of the property and mitigate any adverse
impacts on people who are displaced by the withdrawal of a
property from the rental market. The Act only applies when an
owner seeks to remove all units from rent or lease in a
building, or all units on a property with a building
containing three or fewer units.
2)Establishes procedures in rent-control jurisdictions that
public entities can impose upon owners prior to withdrawing
property from the rental market. If a city or county requires
the owner to give notice before withdrawing the building from
SB 1267 (Allen) Page 2 of ?
the market, the owner must provide 120 days' notice - or one
year's notice in the case of tenants who are disabled or more
than 62 years old - before terminating the tenancy. Owners
who seek to re-rent the units within two years after
withdrawal are liable to displaced tenants for actual and
exemplary damages and required to offer the units to displaced
tenants under the prior rent-controlled lease terms. Public
entities may also require an owner to offer re-rented units to
displaced tenants for up to 10 years. If the owner demolishes
the old units and constructs new rental units on the same
property within five years of withdrawal, a city or county may
subject the new units to its rent-control ordinance.
3)Requires any landlord or party on behalf of the owner entering
into a rental agreement to disclose the name, phone number,
and address of the person or entity to which rental payments
shall be made. If rent payments are to be made personally,
the party shall also disclose the usual days and hours that
the person will be available to receive payments. In lieu of
personal delivery, at the owner's option, the rental agreement
or lease shall disclose either: a) the account, name, and
address of a financial institution into which rent payments
may be made, provided the institution is within five miles of
the rental property, or b) the information necessary to
establish an electronic funds transfer procedure for paying
the rent.
4)Requires any landlord or party on behalf of the owner entering
into a rental agreement to disclose in the rental agreement
the form or forms in which rental payments are to be made.
5)Provides that if the address provided by the owner does not
allow for personal delivery, it shall be conclusively presumed
that when the tenant mails the rent to the name and address
provided, it shall be deemed receivable by the owner on the
date posted, if the tenant can show proof of the mailing.
This bill:
1)Provides that if a city or county requires the owner to give
notice before withdrawing the building from the market, the
owner shall provide one year's notice from the date of
delivery of the notice of intent to withdraw in the case of
tenants who have a custodial or family relationship with a
pupil enrolled in a primary or secondary school who lives in
SB 1267 (Allen) Page 3 of ?
the accommodations before terminating the tenancy.
2)Provides that if rental payments may be made personally, the
rental agreement or lease shall disclose the address for
payment, which shall be within five miles of the rental
property and shall disclose a name and address to which the
rent may be tendered by mail. The rental agreement shall also
disclose a name and address to which the rent may be tendered
by mail. Additionally, the rental agreement may provide one
of the following:
a) The account, name, and address of a financial
institution into which rent payments may be made, provided
the institution is within five miles of the rental
property.
b) The information necessary to establish an electronic
funds transfer procedure for paying the rent.
1)Provides that it shall be conclusively presumed that when the
tenant mails the rent to the name and address provided, it
shall be deemed receivable by the owner on the date posted, if
the tenant can show proof of the mailing.
COMMENTS:
1)Purpose. According to the author, California's Ellis Act
gives landlords a statutory right to exit the rental housing
market, but places conditions and restrictions - including
mandatory notice requirements - on a landlord that must be
followed when evicting tenants under the law. An "Ellised"
tenant who is at least 62 years old or who is living with
disabilities must receive at least a year's notice under the
act. This bill extends an identical year-long notice to
families who have children enrolled in primary or secondary
school. It is reasonable, just, and humane to provide
families with children enough time to finish out the school
year, find a new place to live, and potentially find a new
school where parents can enroll their children.
As has been thoroughly documented in the media, Ellis Act
evictions are on the rise across the state. According to a
recent Los Angeles Times analysis, more than a thousand
affordable, rent-controlled apartments were taken off the
market within the City of Los Angeles in 2015, almost three
times the amount removed in 2013. According to the Los Angeles
SB 1267 (Allen) Page 4 of ?
Daily News, 2,287 units were Ellised in L.A. over the past two
years, a six-fold increase in the number that were Ellised
from 2010 through 2011. Data show Ellis Act evictions in Santa
Monica are also on a precipitous upswing. This bill gives
families with children more time to prepare in the unfortunate
event that they are evicted under the Ellis Act and provides
reasonable protections that make it easier for a tenant to pay
his or her rent.
2)Effects of the bill. The Ellis Act presently permits a city
or county, by ordinance or regulation, to provide notice of
the date in which accommodations are to be withdrawn from rent
or lease. If a city or county requires the owner to give
notice before withdrawing the building from the market, the
owner must provide one year's notice in the case of tenants
who are disabled or more than 62 years before terminating the
tenancy. This bill would also provide one year's notice to
tenants who have a custodial or family relationship with a
pupil enrolled in primary or secondary school who lives in the
accommodation.
The author points to examples in his district in which
buildings with school-aged children have been Ellised. The
additional time proposed in this bill would permit these
children to complete the school year at one school instead of
relocating to a new school.
3)Opposition. According to a coalition of apartment
associations, there is only one way for property owners of
rent controlled buildings to exit the business: the Ellis Act.
The elderly and disabled must be provided one year's notice
because their rental housing options are far more limited than
other tenants'. The provision expanding the one-year notice
to people living with children is vague and unreasonable.
Additionally, the California Association of Realtors notes
that these kinds of limitations discourage investment in
rental housing, negatively impact property values, and cause
substantial financial losses to rental property owners.
4)Double-referral. This bill has been double-referred to this
committee and the Senate Rules Committee. This committee has
jurisdiction over the Ellis Act and shall limit its review
only to those provisions in the bill.
SB 1267 (Allen) Page 5 of ?
Related Legislation:
SB 364 (Leno, 2015) - would have allowed the city and county of
San Francisco to prohibit, by ordinance or ballot measure, a
rental housing owner from removing a building from the market
pursuant to the Ellis Act unless all owners in the property have
held their ownership interest for at least five years. This
bill failed in the Senate Transportation and Housing Committee.
SB 1439 (Leno, 2014) - would have allowed the city and county of
San Francisco to prohibit, by ordinance or ballot measure, a
rental housing owner from removing a building from the market
pursuant to the Act unless all owners in the property have held
their ownership interest for at least five years. This bill
failed passage in the Assembly Housing and Community Development
Committee.
SB 464 (Kuehl, 2007) - would have limited the ability of a
rental property owner to exercise their Ellis Act rights to
cases where the owner has owned the property for at least three
years and acquired ownership of the property on or after March
27, 2007. This bill died on the Senate Floor.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local:
No
POSITIONS: (Communicated to the committee before noon on
Wednesday,
April 20, 2016.)
SUPPORT:
California Rural Legal Assistance Foundation
City of Santa Monica
Eric Garcetti, Mayor, City of Los Angeles
Western Center on Law and Poverty
OPPOSITION:
Apartment Association, California Southern Cities
Apartment Association of Orange County
Apartment Association of Greater Los Angeles
California Apartment Association
California Association of Realtors
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East Bay Rental Housing Association
North Valley Property Owners Association
San Diego County Apartment Association
Santa Barbara Rental Property Association
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