Rent Control and Relocation Fees: September Rental Housing Legislation Threatens Industry
The time has come for our quarterly legislation update! With this September’s rental housing legislation carrying bills that threaten rent control, relocation fees, and game changers regarding eviction records, there are quite a few bills you should be following. As we’ve seen with rent control and ban-the-box legislation this past year, it is easy for a bill in one state to become a popular trend for other states. Take a look below at what September has in store for rental housing legislation.
Overtime Rule Invalidated by Texas Federal Court (learn more)
A Texas federal judge issued an order officially invalidating the U.S. Department of Labor’s 2016 overtime rule. While there is a possibility of appeal (or the current administration may choose to revise the existing overtime rules), currently this rule will not go into effect.
PENDING: Tenant Protection Act (S. 1758)
The Tenant Protection Act, introduced on August 3, 2017, will amend the Fair Credit Reporting Act (FCRA) with further requirements for landlords and consumer reporting agencies (your tenant screening provider). The use of eviction records, or “housing court records”, will become more limited under this bill. Tenant screening providers will be prohibited from using eviction records (or any other court records pertaining to housing) in their resident screening report unless 1) the record resulted in a judgment of possession; 2) the decision of the court in the record’s case is not being appealed; and 3) the record is no more than 3 years old.
Presently, eviction records are allowed to date back up to 7 years, and may include both judgments and filings so as to inform properties about applicants who demonstrate a trend of poor residency.
PENDING: FCRA Liability Harmonization Act (H.R. 2359)
Introduced in the House on May 4, 2017, this bill aims to amend the civil liability requirements under the FCRA, specifically the requirements with class actions. As currently proposed, this act would prohibit courts from applying a minimum amount of damages for each member of the class, with fees (excluding attorney’s fees) not exceeding $500,000.
PENDING: The Development of Micro-Apartments (AB 352)
Under the existing law, cities and counties can permit the construction and occupancy of efficiency units that have minimum of 150 square feet meeting specified criteria. AB 352 would prohibit cities and counties from establishing a higher square footage requirement and from limiting the number of efficiency units in certain locations near public transit, car-share vehicles or a University of California (UC) or California State University (CSU) college campus. Introduced by Assemblymember Miguel Santiago (D-Los Angeles), the bill aims to provide affordable housing in the form of micro-units. This bill passed the Senate on September 5, 2017 and now awaits the governor’s signature.
Read our in-depth article about micro-apartments.
PENDING: Disclosing Immigration Status in Housing (AB 291)
Assembly Bill 291 would prohibit landlords and properties from disclosing the tenant’s immigration or citizenship status to any immigration authority, law enforcement agency, or local, state, or federal agency. They are also prohibited from making inquiries into the immigration or citizenship status of a rental applicant or tenant. As currently amended, the landlord would have to pay statutory damages (per person whose information was disclosed) of 12 times the monthly rent charged. This bill passed the Senate yesterday, on September 12, 2017, and now awaits the governor’s signature.
PENDING: Housing Accountability Act (AB 678)
The Housing Accountability Act “prohibits a local agency from disapproving, or conditionally approving in a manner that renders infeasible, a housing development project for ‘very low’, ‘low’, or ‘moderate income’ households or an emergency shelter unless the local agency makes specified written findings based upon substantial evidence in the record.” AB 678 would require local governments to follow certain guidelines before denying housing projects and would impose penalties (including fines) for failing to comply with the act. Money gained through fines would be later used to construct affordable housing.
PENDING: San Jose Rent Control Ordinance (view ordinance draft)
Apartments with three or more units (that were built and occupied prior to September 7, 1979) will be covered by San Jose’s rent ordinance and be restricted to one rent increase in a 12-month period with a maximum annual increase of 5%. San Jose’s ordinance is available for public review and comment until September 15, 2017.
PENDING: Income Tax for Low-Income and Farmworker Housing(AB 71)
Introduced by Assemblyman David Chiu (D-San Francisco), this bill would end a California tax break that allows homeowners to deduct the interest from their mortgage on their second home. AB 71 would then direct a percentage of those funds towards the development of qualified low-income housing.
PENDING: Zoning Regulations (AB 1505)
AB 1505 authorizes cities and/or counties to adopt ordinances that require (as a condition of development of residential rental units) that the development include a percentage of residential rental units be dedicated to affordable housing (for moderate, lower, and extremely low-income households).