Two California Chamber of Commerce-opposed bills that would have worsened the state’s housing shortage have failed to move.
Both bills missed the January 31 deadline for all 2019 bills to pass the house in which they were introduced.
AB 36 (Bloom; D-Santa Monica), a CalChamber job killer bill, would have worsened California’s housing shortage by modifying the Costa-Hawkins Rental Housing Act to allow cities to enact or expand rent control to residential properties only 10 years old.
Moreover, the bill conflicted with California voters’ overwhelming rejection of the rent control initiative on the November 2018 ballot, Proposition 10.
Economic research and a report by the nonpartisan Legislative Analyst’s Office concludes that rent control depresses new residential construction, decreases affordability of most units, encourages gentrification and creates spillover effects into surrounding neighborhoods.
AB 36 purported to make housing more affordable without actually increasing the overall supply of housing. The bill does not address the underlying cause of California’s high housing costs—a severe housing shortage—and exacerbates an already-constrained housing market that desperately needs policies that incentivize more home building, not less.
The CalChamber also opposed AB 36 because it would have hurt employers already facing increasing shortages of workers as more and more skilled labor leaves California in search of more affordable housing.
The second bill, SB 529 (Durazo; D-Los Angeles), would have had a negative impact on landlords and deterred new housing development. The bill also would have increased litigation by allowing tenants to form tenant associations and then withhold rent based on any alleged undefined grievances that the tenant has with the landlord, thereby forcing landlords to litigate even the most minor of grievances.
State and local laws already have adopted penalties and processes through which tenants can lodge a complaint and seek corrections to their housing situations, including through local housing departments, local housing inspectors, local mediation programs, local rent boards and the courts, rendering this bill unnecessary.
California law has some of the strongest protections in place for tenants who face retaliatory or discriminatory evictions. Failure to abide by these laws carries significant penalties, including actual damages, injunctive relief, and punitive damages.
Still, SB 529 would have required property owners to list a specific cause if they wish to evict a tenant who is a member of a tenants’ association. This requirement would lead to significantly higher rents and would place good tenants in danger by making it much more difficult for landlords to remove bad tenants engaged in illegal or nuisance activity.
California’s housing crisis is driving many residents and businesses out of state and discouraging new investments from coming in. The CalChamber supports comprehensive reform of environmental and zoning laws, which is necessary to remove obstacles that hamper housing construction and increase new home prices.