BILL ANALYSIS �
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
AB 1925 (Ma)
As Amended April 26, 2012
Hearing Date: July 3, 2012
Fiscal: No
Urgency: No
BCP
SUBJECT
Real Property: Rent Control
DESCRIPTION
This bill would limit the level of compensation for the
temporary displacement of a tenant household for less than 20
days to both of the following: (1) temporary housing and living
expenses not to exceed $275 per day, as specified; and (2)
actual moving expenses if it is necessary to move the
possessions of the tenant household.
This bill would apply the above provision only to units governed
by the local rent stabilization ordinance in the City and County
of San Francisco and apply those limits notwithstanding any
local law to the contrary.
BACKGROUND
On November 6, 2006, voters in the City and County of San
Francisco approved Proposition H, Relocation Assistance for No
Fault Tenant Removal, by a vote of 52.93 percent (120,916) to
47.07 percent (107,541). That proposition required landlords to
provide additional relocation payment to tenants that have
resided in a residence for more than 12 months when a landlord
evicts tenants to: (1) use the property for at least three years
of the landlord's principal residence, as specified; (2)
demolish the rental unit; (3) permanently remove the rental unit
from use as housing; (4) temporarily regain possession of the
unit to make improvements; or (5) rehabilitate the building.
Under the proposition, eligible tenants can receive a relocation
payment of $4,500, and tenants who are disabled, over age 60, or
(more)
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have a child under 18 living in the unit receive additional
relocation payment of $3,000. Those amounts are increased
annually to account for inflation. Regarding the passage of
Proposition H, the San Francisco Chronicle reported:
With almost two-thirds of San Franciscans living in rental
units, the odds were heavily stacked from the start in favor
of passage of Proposition H, a ballot measure that will
significantly boost relocation payments for evicted tenants.
The measure passed easily Tuesday with 54 percent of the
vote.
Authored by the San Francisco Tenants Union, the measure
immediately increases the minimum payment for no-fault
evictions to $4,500 from $1,000. No-fault evictions occur
most often when landlords want to move themselves or a
family member into a unit or when an owner needs to
undertake major repairs.
"There are a significant number of evictions happening in
San Francisco," said Ted Gullicksen, manager of the Tenants
Union. "Tenants recognize that if they are evicted, they
are going to face difficult times."
The Small Property Owners of San Francisco spent $80,000 on
a campaign to defeat the measure, passing out flyers and
winning the support of Mayor Gavin Newsom. The group argued
that the measure will actually harm tenants because the
large relocation payments will discourage owners from making
building repairs. (Kottle, S.F. Renters Stand behind Prop.
H, S.F. Chronicle (Nov. 9, 2006) p. D3.)
This bill, sponsored by the California Apartment Association,
would preempt that Proposition by limiting the levels of
compensation in the City and County of San Francisco for the
temporary displacement of a tenant household for less than 20
days.
CHANGES TO EXISTING LAW
Existing law provides that cities and counties have within their
police power the authority to enact rent control laws so long as
property owners are assured a fair rate of return. (Birkenfeld
v. Berkeley (1976) 17 Cal.3d 129.)
This bill would, notwithstanding any local law to the contrary,
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limit levels of compensation in the City and County of San
Francisco for the temporary displacement of a tenant household
for less than 20 days to both of the following:
temporary housing and living expenses not to exceed $275 per
day per tenant household; and
actual moving expenses if it is necessary to move the
possessions of the tenant household.
This bill would allow the $275 per day limit to be adjusted
annually by the City and County of San Francisco in an amount
equal to the Consumer Price Index, beginning on January 1, 2014.
This bill would provide the landlord with the option to provide
a comparable dwelling unit and pay any actual moving expenses in
lieu of daily compensation and requires the unit to be
comparable to the tenant household's existing housing in
location, size, number of bedrooms, accessibility, type, and
quality of construction, and proximity to services and
institutions upon which the displaced tenant household depends.
This bill would provide that these provisions shall not be
construed to do any of the following:
terminate, interrupt, or amend, in any way, a tenancy subject
to the lease provisions, or the rights and obligations of
either party, including, but not limited to, the payment of
rent;
create or affect any grounds for displacement or requirements
of a landlord seeking temporary displacement, except the
payment of relocation fees for displacement not exceeding 20
days; and
affect the authority of a public entity that may regulate or
monitor the basis for eviction.
This bill would provide that if a federal or state law regarding
relocation compensation is also applicable to the temporary
displacement, the tenant may elect to be compensated under those
other provisions instead.
This bill would specify that these provisions affect only levels
of compensation for a temporary displacement of less than 20
days and do not affect any other local procedures governing
temporary relocation.
COMMENT
1. Stated need for the bill
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According to the author:
Most rent control communities have local laws that require
some form of compensation that landlords must pay if they
permanently evict a tenant out of the rent controlled unit.
In 2006, San Francisco voters passed Proposition H, which
required landlords to provide relocation payments when
tenants were evicted through no fault of their own. While
the intent of Proposition H was intended to provide tenants
with additional financial protections to help cover moving
costs and obtain a new apartment in the event the tenant was
evicted, Proposition H also required landlords to pay
relocation benefits even when tenants were temporarily
displaced.
The author further notes that this bill would create a "more
reasonable formula in the event a landlord must temporarily
locate a tenant . . . ."
2. Changing voter approved formula
This bill seeks to override the relocation payment that a
landlord is required to pay under Proposition H when
"temporarily displacing" a tenant for less than 20 days. (Staff
notes that since state law preempts local laws, this bill would
override the voter approved relocation benefits of Proposition
H.) The California Apartment Association, sponsor, asserts that:
The objective of AB 1925 is to establish a "reasonable"
standard and to thwart egregious payments that discourage
landlords from making repairs and improvements to their
property. In San Francisco, the law implies that rental
property owners must pay $5,101 per tenant in each unit when
the landlord need�s] to temporarily move them out to make
repairs to the unit. An additional $3,401 must be paid to
each tenant who is disabled, 60 years of age or older, or
has a child under the age of 18 living in the unit. These
amounts may apply even when a tenant must be moved out for
as little as 24 hours in order to make necessary repairs.
While this standard may be an acceptable policy for
permanent relocation�, it] threatens the health and safety
of tenants by discouraging any proactive repairs and
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improvements by property owners to their housing units. A
landlord who owns a Victorian rental home with three
separate units in San Francisco must agree to pay tenants
over $45,000 in temporary relocation costs before one nail
can be driven.
As opposed to the $5,101 (essentially $4,500 adjusted for
inflation) required by Proposition H, this bill would require
the landlord to pay a tenant household the amount of $275 per
day, in addition to actual moving expenses if it is necessary to
move the possessions of the tenant household. This bill would
only apply if the tenant household is temporarily displaced for
less than 20 days, thus, not impacting the application of
Proposition H to evictions that result in permanent relocation.
The landlord would also have the option (in lieu of paying the
above compensation) of moving the tenant into a comparable
dwelling unit and paying any actual moving expenses.
From a policy standpoint, the amount of the relocation payment
is a balance that should arguably both ensure that it covers
reasonable tenant costs while not creating a situation where
landlords are unable to perform upgrades to their property that,
in the end, benefit tenants. Regarding the costs of hotel rooms
in San Francisco, the Wall Street Journal recently reported: "In
a sign of the improving San Francisco economy, the average cost
of staying in a hotel in the city rose to $194 a night, not
including taxes and fees, this year through April, up
12�percent] from the same period in 2011, according to PKF
Consulting USA." (Taves, Vital Signs, Wall Street Journal (June
20, 2012).) As a result, it is unclear given the cost of hotels
in San Francisco whether the proposed amounts would completely
cover the costs for a family that is displaced during
renovations. Despite that potential, it should be noted that
this bill has no opposition and is the result of discussions
with tenant groups in the area.
3. Clarifying amendment
The amendment is suggested to strike language ("not to exceed")
that could be interpreted to allow a landlord to pay less than
$275 per day per household.
Amendment:
On page 2, line 9 strike "not to exceed" and insert: of
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Support : California Association of Realtors
Opposition : None Known
HISTORY
Source : California Apartment Association
Related Pending Legislation : None Known
Prior Legislation : None Known
Prior Vote :
Assembly Housing & Community Development Committee (Ayes 7, Noes
0)
Assembly Judiciary Committee (Ayes 10, Noes 0)
Assembly Floor (Ayes 74, Noes 1)
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