BILL ANALYSIS
SB 1745
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Date of Hearing: June 20, 2000
ASSEMBLY COMMITTEE ON JUDICIARY
Sheila James Kuehl, Chair
SB 1745 (Burton) - As Amended: June 15, 2000
As Proposed to Be Amended
SUBJECT : LANDLORD-TENANT: NOTICE OF RENT INCREASE
KEY ISSUES :
1)SHOULD TENANTS BE PROVIDED WITH ADDITIONAL NOTICE OF ANNUAL
RENT INCREASES WHICH EXCEED 10% TO HAVE MORE TIME TO RELOCATE
OR MAKE OTHER ARRANGEMENTS?
2)SHOULD A LANDLORD BE PERMITTED TO NOTIFY A TENANT OF A RENT
INCREASE BY EITHER (1) DELIVERING WRITTEN NOTICE TO THE TENANT
PERSONALLY OR (2) SERVING A COPY BY MAIL?
SUMMARY : Seeks to provide tenants with additional notice of
annual rent increases greater than 10 percent. Specifically,
this bill :
1)Provides that a landlord must give 30 days notice before
increasing the rent, if the proposed rent increase is 10
percent or less of the rental amount when combined with all
other rent increases for the 12 months prior to the effective
date of the increase. Also provides that, if the rent
increase is greater than 10 percent, the landlord must provide
an additional 30 days notice.
2)Provides that a landlord may increase the rent provided in the
lease upon written notice to the tenant by either (1)
delivering a copy to the tenant personally or (2) mailing a
copy to the tenant in compliance with existing service
procedures.
3)Provides that the personal service or mailing of the notice
shall be in accordance with any longer period provided for in
a state or federal statute or regulation, recorded regulatory
agreement, or contract.
4)Sunsets on January 1, 2006.
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EXISTING LAW :
1)Generally requires landlords to give 30 days notice before
changing the terms of a month-to-month lease and allows the
parties to agree in writing to a shorter notice period of not
less than 7 days. (Civil Code section 827.)
2)Requires that such notice be given in one of the following
ways:
a) By delivering a copy to the tenant personally;
b) By leaving a copy with another person and mailing a copy
to the tenant; or
c) By posting a copy to a conspicuous place on the
property, leaving a copy with an individual residing at the
residence and mailing a copy to the tenant. (Code of Civil
Procedure section 1162.)
3)Provides for service by mail when such service complies with
specified mailing procedures, including that the notice bear a
notation of the date and place of mailing or be accompanied by
an unsigned copy of an affidavit or certificate of mailing.
(Code of Civil Procedure section 1013.)
FISCAL EFFECT : The bill as currently in print is not keyed
fiscal.
COMMENTS : This bill, sponsored by Western Center on Law and
Poverty and the California Rural Legal Assistance Foundation, is
intended to provide tenants with additional notice of a rent
increase greater than 10 percent of the rental amount and
simplify notification procedures for landlords. In support of
the bill, Western Center on Law and Poverty notes:
This legislation is made necessary by large rent increases
in all major housing markets and vacancy rates that are
dipping below 1% in many areas. The 30-day notice of a
rent increase provided in current law is simply not
adequate to find a new place and move in today's
overheated housing market, or make other arrangements to
pay for the increased rent (such as taking a second job or
finding roommates). Over 120 housing and tenant groups
throughout the state support SB 1745 to assist tenants
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beset by the largest increases. ?
If low income tenants, who are already paying 50-80% of
their income for housing receive a rent increase, they need
more than 30 days to find housing that is more affordable,
or more hours to work, or more roommates to absorb the
additional cost.
The low overall vacancy rates are even lower at the more
affordable end of the scale. Renters can no longer find
new units in 30 days. Subsidized housing is no answer --
waiting lists exceed 10,000 families in most metro counties
in the state. The waiting time for a chance to get a
voucher, which may or may not result in finding housing, is
10 years in Santa Clara County, 8-10 years in San Mateo
County, and 3-6 years in Monterey County, for example. (SJ
Mercury News 4/23/00) ?
SB 1745 represents a consensus solution to notice issues.
The increased notice for large rent increases will allow
more flexibility and time to formulate options for tenants
who are de facto facing the loss of their home. The
streamlined procedure will save time and money for owners.
Simplified Notice Procedures . Under existing law, a landlord
must notify a tenant of a change to the terms of a
month-to-month lease, including a rental increase by: (1)
delivering a copy of the written notice to the tenant
personally; (2) leaving a copy of the written notice with
another person and mailing a copy to the tenant; or (3) posting
a copy to a conspicuous place on the property, leaving a copy
with an individual residing at the residence and mailing a copy
to the tenant.
Under this bill, a landlord of a residential dwelling would be
required to notify a tenant of a rental increase in one of two
ways, either by: (1) delivering a copy to the tenant personally
or (2) mailing a copy to the tenant in compliance with existing
service procedures under Code of Civil Procedure section 1013
which requires specified mailing procedures, including that the
notice bear a notation of the date and place of mailing or be
accompanied by an unsigned copy of an affidavit or certificate
of mailing.
ARGUMENTS IN SUPPORT : Western Center on Law and Poverty, one of
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the sponsors of the bill, notes that the booming economy has led
to higher rents and lower vacancy rates. The organization notes
recent newspaper accounts providing examples of rent increases
and decreasing vacancy rates:
Average Rent Increases:
? 30% for Oakland studios, 15-20% for 1- and
2-bedrooms (San Francisco Examiner, September 27, 1999)
? 18% in Alameda-Contra Costa Counties (Contra Costa
Times, April 16, 2000)
? 16% to 30% in the San Fernando Valley in 1999 (Los
Angeles Times, December 7, 1999)
? 20% in Berkeley in 1999 (San Francisco Examiner,
September 27, 1999)
? 12 % in Glendale (Los Angeles Times, February 17,
2000)
? 7.9 % in Los Angeles in 1999 (Los Angeles Times,
November 16, 1999)
? 7% in Orange County (Los Angeles Times, April 13,
2000)
? 5% in Sacramento (Marcus & Millichap 1999 Report)
Average Rents:
? $ 1,960/mo. in San Francisco (San Francisco
Examiner, August 15, 1999)
? $ 1,700/mo. in Santa Clara County (New York Times,
January 20, 2000)
? $ 1,184 in Sonoma (Santa Rosa Press Democrat, April
17, 2000)
? $ 1,100/mo. in Ventura County (Ventura County Star,
April 20, 2000)
? $ 1,100/mo. in Orange County (Los Angeles Times,
April 13, 2000)
? Passed $1,000/mo. in Los Angeles in October (Los
Angeles Times, November 16, 1999)
Vacancy Rates:
? at an all-time low in Oakland (San Francisco
Examiner, September 27, 1999)
? at an all-time low in Davis (Woodland Daily
Democrat, December 30, 1999)
? 1/3rd of 1 percent in Oceanside (San Diego
Union-Tribune, August 25, 1999)
? 0.8 percent in Escondido (San Diego Union-Tribune,
January 20, 2000)
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? less than 1% in Simi Valley (Ventura County Star,
February 17, 2000)
? 1% in Foster City (San Jose Mercury News, March 7,
2000)
? 2.8% in Santa Clara County (Orange County Register,
February 15, 2000)
? 3.1% overall in Orange County, less than 2% in many
cities (Orange County Register, January 15, 2000)
In support of the bill, the sponsor also cites several news
articles noting examples of high rent increases that have caused
extreme hardship to tenants and their families:
? A Walnut Creek tenant saw her rent increase from
$665 to $740 to $1,040, all within one year. (Contra
Costa Times, April 16, 2000.)
? A San Diego family lived in a $550-a-month,
two-bedroom apartment until the rent was increased to
$700; they could not afford the rent hike on the
father's minimum-wage pay. ... "We tried to find a place
for 30 days," the father said, as he lugged mattresses
and other furniture into a moving truck. "We're
refugees. We don't know the people who can help us."
(San Diego Union Tribune, December 20, 1999.)
? An 86-year old asthmatic was paying $535/month for
a 1-bedroom apartment in Hollister. The rent was
increased to $1,200/month. (San Jose Mercury News,
March 21, 2000.)
ARGUMENTS IN OPPOSITION : The California Apartment Association
opposes the bill, stating that:
The Association members' concerns are directed at the
provision of the bill that places a subjective 10 percent
rental standard into California statute. It makes an
inappropriate public statement that there is a point at
which a rental increase is extraordinary. You should
know, however, that it is a common practice in the rental
housing industry today for owners to provide tenants a
60-day notice whenever the rent is increased - no matter
the percentage.
Prior Related Legislation .
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SB 682 (Sher, 1997), which extended from 30 to 60 days the time
for providing notice of a change in the terms of, or termination
of, a month-to-month tenancy so that a tenant may have
sufficient time to relocate upon notification of a rent
increase, was vetoed by former Governor Wilson.
SB 1944 (Sher, 1998), which, among other things, allowed local
governments, in jurisdictions with a rental vacancy rate of less
than 5%, to enact local ordinances requiring landlords to
provide tenants 60 days notice of rent increases, died in the
Assembly.
REGISTERED SUPPORT / OPPOSITION :
Support
Western Center on Law & Poverty (co-sponsor)
California Rural Legal Assistance Foundation (co-sponsor)
Affordable Homes, Avila Beach
Affordable Housing Foundation, San Francisco
Agora Group, Goleta
Archdiocese of Los Angeles Peace & Justice Commission
Asian Law Alliance, San Jose
Bakersfield Homeless Center
Berkeley Gray Panthers
Burbank Housing Development Corp., Santa Rosa
California Affordable Housing Law Project, Oakland
Calif. Community Reinvestment Committee, Glendale
California Labor Federation, AFL-CIO
California Legislative Council for Older Americans
Charter House Home Ownership Program
Chicano Federation of San Diego County
City of Concord, Housing Department
City of Modesto, Housing Department
City of Salinas, Planning Department
City of Santa Barbara, Housing Authority
Coachella Valley Housing Coalition, Indio
Common Ground Communities, Nevada City
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Community Economics, Oakland
Community Housing Opportunities Corporation, Davis
Community Resource Associates, Clayton
Conference of Social Justice Coordinators of So. Calif., L.A.
Congress of California Seniors
Corporation for Supportive Housing, Oakland
Council of Churches of Santa Clara County
Council of Community Housing Organizations, San Fran.
County of Kings, Housing Authority
County of San Joaquin, Housing Authority
East L.A. Community Corporation (ELACC)
East Palo Alto Council of Tenants
Eden Housing, Inc., Hayward
Emergency Housing Consortium, San Jose
Enterprise Foundation, Los Angeles
Fair Housing Council of Riverside County
Fair Housing Council of San Diego
Fair Housing of Marin
Family Assistance Program, Los Angeles
Filipino American Service Group, Inc., Los Angeles
Foundation for Quality Housing Opportunities, No. Hollywood
Friends Committee on Legislation
Gubb & Barshay LLP, San Francisco
H & L Properties, Long Beach
Herman and Coliver Architecture, San Francisco
Homes for Life Foundation, Los Angeles
Inquilinos Unidos, Los Angeles
Interpersonal Developmental Facilitators, Pasadena
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Jericho: A Voice for Justice
Lake County Alliance for the Mentally Ill
LINC Housing, Long Beach
Loaves and Fishes, Sacramento
Local Initiatives Support Corporation, San Francisco
Long Beach Housing Development Corporation
Los Angeles Community Design Center
Los Angeles Council of Society of St Vincent de Paul
Los Angeles County Mental Health Association
Los Angeles Housing Law Project
Los Angeles Housing Partnership, Inc.
Low-Income Housing Fund, Los Angeles
Marin City Community Development Corporation
Marin Continuum of Housing and Services, San Rafael
Mercy Charities Housing California, Orange
Metropolitan Area Advisory Committee, National City
Mid-Peninsula Housing Coalition, Redwood City
Mission Housing Development Corporation, San Francisco
Nancy Lewis and Associates, Los Angeles
Napa Valley Community Housing, Napa
Neighborhood Housing Services of Orange County
Nevada Co. Housing and Community Services, Grass Valley
New Directions, Inc., Los Angeles
Orange County Community Housing Corp., Santa Ana
Palo Alto First Presbyterian Church Society Committee
Penny Lane, North Hills
People's Self-Help Housing Corporation, San Luis Obispo
Planning for Elders in the Central City, San Francisco
Protection and Advocacy
Public Law Center, Santa Ana
Related Companies of California, Irvine
Renee Franken and Associates
Resources for Community Development, Berkeley
Rural Communities Housing Corporation, Ukiah
Rural Community Assistance Corporation, Sacramento
Saben Investments, Inc., North Hills
Sacramento Housing and Redevelopment Agency
Sacramento Mutual Housing Association
Sacramento Neighborhood Housing Services
Saint Joseph Health System, Orange
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SAMCO, San Jose
San Franciscans for Reasonable Growth
San Leandro Shelter for Women and Children
Santa Barbara County Legal Aid Foundation
Santa Monica Commission on Older Americans
Santa Monica Rent Control Board
Sentinel Fair Housing, Oakland
Shelter for the Homeless, Midway City
Shelter Partnership, Inc., Los Angeles
Shelter, Inc., Concord
Sisters of St. Joseph, Los Angeles
Sisters of the Holy Names California Province, Los Gatos
Skid Row Housing Trust, Los Angeles
Sober Living Network, Santa Monica
Sonoma County Housing Advocacy Group
Sonoma County Mobilehome Owners Association
Southern California Association of Non-Profit Housing
St Mary's Center, Oakland
St. Francis Center, Los Angeles
Thai Community Development Center, Los Angeles
Thomas Lauderbach Development Consultants, El Cerrito
Thomas Safron and Associates, Los Angeles
Union City Seniors Association
Urban Futures, Orange
Venice Community Housing Corporation, Venice
Vision Los Angeles
West Contra Costa Conservation League, El Cerrito
West Hollywood Community Housing Corporation
WNC, Inc., Costa Mesa
Opposition
California Apartment Association
Analysis Prepared by : Saskia I. Kim / JUD. / (916) 319-2334