BILL ANALYSIS
SENATE RULES COMMITTEE
Office of Senate Floor Analyses
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THIRD READING
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Bill No: AB 1164
Author: Hawkins (R)
Amended: 7/20/95 in Senate
Vote: 21
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SENATE HOUSING & LAND USE COMMITTEE: 6-0, 7/3/95
(Relative to Part 1 only)
AYES: Campbell, Kopp, Marks, Mello, Monteith, Watson
NOT VOTING: Costa
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 74-0, 4/20/95 (Passed on Consent)
(Relative to Part 1 of bill only)
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SUBJECT: Housing: rent control: obsolete programs
SOURCE: Author
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DIGEST: This bill states legislative intent to streamline
and improve state housing policy by repealing obsolete,
outmoded and inoperative programs and statutes.
Senate Floor Amendments of 7/20/95 revise provisions
contained in SB 1257 (Costa) relating to rent control and
the preemption of local vacancy controls on rental of
residential dwellings.
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ANALYSIS:
PART 1
Facing housing problems, the Legislature creates new
programs. As circumstances change, these programs lose
their usefulness but remain on the books. The author says
five programs may have outlived their original purposes:
1. Mobilehome Parks for Senior Citizens Demonstration
Project. (AB 3454, Imbrecht, 1978).
2. Low-Income Home Management Training program. (SB 33,
Petris, 1975).
3. Urban Homestead Program. (SB 427, Dills, 1975).
4. Transitional Housing Rental Deposit Guarantee Program.
(SB 1364, Rosenthal, 1987).
5. Housing For Prison Employees study. (SB 1093, Presley,
1989).
This bill repeals the statutes which created the Mobilehome
Parks for Senior Citizens Demonstration Project, the
Low-Income Home Management Training program, the Urban
Homestead Program, the Transitional Housing Rental Deposit
Guarantee Demonstration Program, and the Housing For Prison
Employees study.
Comment
Some housing programs outlive their usefulness. Others
sunset but the language stays on the books. Still others
ask for studies but remain after officials finish the
study. This bill repeals five obsolete housing statutes
that observers believe are no longer needed.
PART 2:
SB 1257 (Costa), as that measure passed the Senate, would:
1. Exempt newly constructed units from rent control.
Preempt local rent control provisions which impose
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vacancy controls on the rental of apartment-type
dwelling units and allow a rent increase on the rental
unit when it is vacated except where the vacancy occurs
because the tenancy is terminated by the landlord's
service of a termination notice or a change in the terms
of tenancy.
2. Provide a three-year phase-in of the preemption of local
vacancy control provisions. Upon a voluntary vacancy,
the landlord may increase the rent by 25 percent or up
to 80 percent of the prevailing market rent for
comparable units. Up to two rent increases are allowed
during the three-year phase-in. After the phase-in,
there would be no limits.
3. Preempt local rent controls on the rental of "single
family" dwellings, but preserves protections for
existing tenants.
4. Leave intact local authority to regulate or monitor the
grounds for eviction.
The proposed amendments to AB 1164 would incorporate the
provisions of SB 1257 with the following narrowing changes:
1. During the three-year phase-in period, the amended
provisions would allow either a rent increase of 15
percent or to up to 70 percent of the prevailing market
rate for a comparable unit, upon a voluntary vacancy.
As before, two increases would be permitted in that
three-year period. After the phase-in, there would be
no limits on permissible rent increases.
2. Provide that during the three-year phase-in period for
units currently under vacancy control, the landlord may
increase the rent for the unit when the tenant has
voluntarily vacated the unit, abandoned the premises, or
been evicted pursuant to a three day notice to pay or
quit. (According to the parties, this provision narrows
the bases upon which a landlord may increase the rent
upon a vacancy. For example, a termination because of a
breach of a rental agreement condition other than
payment of rent would not be a basis for increasing the
rent.) After the three-year phase-in, rents could
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increase when a rental unit is vacated except where the
vacancy occurs because the tenancy is terminated by the
landlord's service of a termination notice or a change
in the terms of tenancy.
3. Provides a three-year phase-in for "single family"
exemption from local rent controls. If the unit is
vacated during the phase-in, the rents could be
increased by 15 percent or to up to 70 percent of the
prevailing market rate. At the end of the three-year
phase-in, the landlord could raise the rent on that
tenant without restriction. Protections for existing
tenants are preserved so that a tenant staying in place
past the three-year phase-in period would still be
covered by the local rent control ordinance.
4. Clarify the rights of the parties when a rental unit is
subleased or assigned. If the rental agreement
prohibits subletting or assignment or prohibits it
without the owner's consent, the owner may increase the
rent to the sublessee or the assignee when the original
occupant or occupants no longer permanently reside in
the unit. If one or more of the occupants of the
premises remains an occupant in lawful possession, the
rent may not be increased.
5. Exempts local enforcement programs.
Prior Legislation
SB 1257 (Costa), currently on the Assembly Third Reading
File, passed the Senate 22-14:
AYES: Beverly, Boatwright, Calderon, Campbell, Costa,
Greene, Haynes, Hurtt, Johannessen, Johnson, Johnston,
Kelley, Leonard, Leslie, Lewis, Maddy, Monteith,
Mountjoy, Peace, Russell, Thompson, Wright
NOES: Alquist, Ayala, Dills, Hayden, Hughes, Killea, Kopp,
Marks, Mello, O'Connell, Petris, Rosenthal, Solis, Watson
NOT VOTING: Craven, Lockyer, Polanco, Rogers
FISCAL EFFECT: Appropriation: No Fiscal Com.: No
Local: No
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SUPPORT: (Verified 7/23/95)
Coalition for Fair Rental Policy
Black Property Owners Association of Berkeley
Minority Property Owners Association
ACTION Apartment Association
Apartment Association of Greater Fresno
Apartment Association of Monterey County
Apartment Association of Orange County
Apartment Association of San Fernando Valley/Ventura County
Apartment Association of Northern Alameda County, Inc.
Berkeley Property Owners Association
Central Coast Rental Housing Association
Foothill Apartment Association
Kern County Apartment Association
Marin Income Property Association
North Coast Rental Housing Association
North Valley Property Association
Rental Housing Association, Contra Costa County
Rental Housing Owners Association of Southern Alameda
County
Rental Property Association of Central California
Rental Property Association of Merced County
Sacramento Valley Apartment Association
San Diego County Apartment Association
San Francisco Apartment Association
San Joaquin County Rental Property Association
Santa Barbara Rental Property Association
Solano-Napa Rental Housing Association
Tri-County Apartment Association
Apartment Association of Greater Los Angeles
California League of Savings Institutions
California Building Industry Association
California Land Title Association
California Mortgage Bankers Association
Taube Investments, Inc.
Pacific Plaza Venture
California Bankers Association
California Chamber of Commerce
Santa Monica Chamber of Commerce
Woodmont Companies
Real Estate Marketing and Management
California Business Property Association
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OPPOSITION: (Unknown at time of writing)
ARGUMENTS IN SUPPORT: The Coalition for Fair Rental
Policy states, "This bill will make several changes to SB
1257 (Costa) relating to rent control limitations approved
by the Senate earlier this tear. These changes improve the
operation of the proposed SB 1257 from the perspective of
both the proponents and tenant advocates.
"Since SB 1257 passed the Senate, the author and the
proponents have been working with legislators and tenant
advocates to develop a consensus package. This set of
amendments ameliorates some of the major concerns of tenant
advocates and improves the operation of the proposed law
from the perspective of the proponents. For the first time
in 12 years, the Legislature has the opportunity to remove
some of the controversy surrounding the administration of
local rent control ordinances."
CONTINUED
RJG:ctl 7/23/95 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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