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California Legislation to Watch in 2021: Housing Bills

California is in dire need of affordable housing, but lawmakers are making a risky bet by incentivizing market-rate housing without affordability requirements.

An unfinished apartment structure in Los Angeles
(Photo via LA Mayor)

The housing crisis is one of the most pressing issues facing California, and every legislative session, lawmakers introduce bills to address it. This year, over 100 bills were introduced. Many of the bills that are on track to being passed do not uplift the experience of tenants who are immediately in crisis as a result of an underregulated commodified housing market. Tenants are rent-burdened, evicted at high rates, harassed, and funneled into homelessness not simply because there’s a housing shortage, but because there is rampant speculation in the housing market, a lack of regulations, and a vast gap in income equality between low-income tenants and higher-income tenants. Landlords and developers exploit these conditions in malevolent and unethical ways to make a profit. Building more housing alone cannot address this exploitation, but pro-tenant policies can.

California needs policies that are designed to address the imbalance of power between landlords and tenants by giving tenants more rights and resources, disincentivizing predatory real estate behavior, curbing speculation and monopolistic behavior, and regulating the profitability of displacement and harm. A handful of bills introduced this legislative year aim to do that, such as AB 1199, the Homes for Families and Corporate Monopoly Transparency Excise Tax. If passed, it would tax corporate landlords and stop them from hiding their identity behind shell companies. These bills present an alternative solution to the supply-side perspective that views the problem as a housing shortage that will be solved by making it easier and faster for developers to build more housing of any affordability level.

There are already 93,000 vacant homes in Los Angeles and 41,000 unhoused people. In a commodified housing market, building more housing simply means building more housing for capital, not for people, and especially not for people most in need. In 2019, 97% of new housing constructed in downtown Los Angeles was luxury development. Meanwhile, thousands of luxury units were already sitting empty, treated exclusively as investments or second homes. These new units cost far more than a low-income or middle-income person can afford, and are simply new vessels for speculative investment. 

AB 1401, for example, could actually help to fuel speculation. If passed, it would eliminate parking requirements in new developments in neighborhoods with low rates of car use or that are near transit. Parking minimums make building housing costly and should be eliminated in certain situations. However, AB 1401 has zero affordability restrictions or protections from speculation. By making it cheaper to develop valuable properties near public transit, it gives investors with pools of capital somewhere to invest — at the expense of low-income transit riders who may be displaced in the process. The bill has been placed in the suspense file and is unlikely to pass, however, it could be resurrected in next year’s legislative session in a similarly harmful form. 

New development almost always targets land that already contains tenant-occupied buildings. The tenants of the existing structure are evicted to make way for the new market-rate development. Because of a lack of statewide vacancy control, the dwellings in new buildings will be priced at market rate. Low-income people, who earn much less than the population of gentrifiers, can’t afford market-rate rents, so when they’re displaced, they have nowhere to go. Pro-housing bills that spur housing development of all types and don’t keep low-income tenants housed are complicit in their displacement.

California is in dire need of affordable housing, and lawmakers are making a risky bet that incentivizing market-rate housing without affordability requirements will lead to trickle-down benefits for low-income renters. Los Angeles County alone needs 340,295 homes for low-income households by 2029 in order to meet demand. Without affordability restrictions, rents will not be set at affordable rates. The average rent for a two-bedroom apartment in LA County is about $2,182 per month. A working family would need to earn almost $90,000 to afford market-rate rent, but the minimum wage worker makes only $31,200 a year. 

In the past decade, rents in Los Angeles have increased by an obscene amount. Between 2010 and 2019 rents rose 65%, almost twice as much as they did nationally. For low-income families, living here has become impossible. Seventy-three percent are paying more than they can afford on rent. Families are cutting back on other basic needs like food and transportation to pay the rent. Bills like SB 679, which would establish an independent agency that would fund affordable housing production and programs to enforce renter protections for LA County, could be a game changer for housing stability in LA.

Unfortunately, many of the bills that would be critical for tenants in Los Angeles were not acted on with urgency. They have become two-year bills, meaning they will not be voted on before the legislative session ends on September 10. They may be considered at a later time. For now, it looks like we’re getting more upzoning, higher density, and possibly — if the political will is there — AB 1487, which would establish a way to fund eviction defense services across the state. 

Single-family zoning, parking requirements, and the scarcity of available residential land are all conditions that have led to the state’s historic undersupply of housing. Undoing these obstacles is critical. However, the solutions must assert the principle that housing is a human right and preserve affordability for the state’s existing residents, all while simultaneously slowing the pace of gentrification and doing all that it can to make residential real estate unattractive as a store of wealth. 

Nine Housing Bills to Keep on Your Radar: 

AB 1487: Eviction Defense and Tenant Outreach Program 

As rent debt grows and the prospect of mass eviction looms, the fate of many tenants will depend most on whether or not they have legal representation in court. The City of Los Angeles sees about 30,000 eviction filings a year in court, and 85% of tenants do not have legal representation. Landlords almost always do. The disparity in access to resources allows landlords to evict not because they have the legal right, but because they have the power to do so. New York City has a Right to Counsel program and found that 86% of represented tenants won their evictions. Tenants in California deserve counsel. 

AB 1487, co-sponsored by Housing Now!, would create a fund to provide funding to local jurisdictions to help stop evictions through tenant education and outreach and eviction defense services, which could include right-to-counsel programs in jurisdictions where they’re codified. 

Status: Will be voted on by the Senate before September 10. It is critical that lawmakers and the governor’s office hear public support.

AB 1199 and AB 889: Tax on Corporate Landlords and Beneficial Disclosure Requirement 

In Los Angeles, 67% of all rental housing is owned by corporate landlords, whose business model relies on tenant mistreatment to maximize profit. Research shows they evict, charge higher rents, and perpetuate slum housing more than smaller landlords. By hiding behind shell companies, it’s hard to hold them accountable for wrongdoings.

AB 1199, The Homes for Families and Corporate Monopoly Transparency Excise Tax, if passed, would tax corporate landlords that own more than 25 properties. It would also require that owners of property disclose the beneficial owner of a property rather than hide behind LLCs. 

Status: Was not voted out of committee. Now designated a two-year bill that may be considered at a later time, but not before September 10. 

AB 889 is a beneficial disclosure requirement that is a component of AB 1199. It was also introduced by Assemblymember Gipson. 

Status: It failed in the Senate. Now designated a two-year bill that may be considered at a later time, but not before September 10. 

AB 854: Ellis Act Reform / Anti-Speculation 

The Ellis Act is a state law that was passed in 1985 that allows landlords to exit the rental business and evict tenants. The intent was to give small landlords who couldn’t afford to maintain their properties the option to get out of the market. However, the Ellis Act can be used by speculative investors who buy rent-controlled buildings, use the Ellis Act to evict the tenants, then sell the building for a markup. Over 25,000 no-fault Ellis evictions have taken place in Los Angeles since 2001. Since 2007, over half of those evictions have been initiated by corporate landlords, not small landlords. 

AB 854 is an anti-speculation bill that, if passed, would prohibit owners from filing Ellis Act evictions if they have not owned the property for at least five continuous years, or from subsequently filing another Ellis Act application on another property if said property was purchased within 10 years of the other Ellis Act filing. 

Status: Was not voted out of committee. Now designated a two-year bill that may be considered at a later time, but not before September 10. 

AB 387: Social Housing Act of 2021

AB 387 acknowledges that the private market has failed to address the state’s shortfall of affordable housing and would establish the California Social Housing Council to make policy recommendations on how to create social housing as a solution. The author of the bill defines social housing as owned and operated by a public entity, a local housing authority, or a mission-based nonprofit. The vision, as imagined by the bill’s author, Assemblymember Alex Lee, is a model based on Vienna’s model of public social housing and would include mixed-income homes that are deed restricted. The bill does not yet include more specific details. 

Status: Designated a two-year bill and may be considered at a later time, but not before September 10. 

AB 1425:  Broadband Public Housing Account

AB 1425 would, if passed, bring internet and broadband to publicly subsidized apartment complexes and other low-income communities using funding from the Broadband Public Housing Account, which is available to finance projects to connect communities to broadband networks. 

Status: “Held under submission” meaning it’s a two-year bill and may be considered at a later time, but not before September 10. 

AB 500: Affordable Housing in Coastal California 

AB500 aims to streamline affordable housing in coastal communities that are highly desirable and unaffordable places to live for the average person. If passed, AB 500 would direct the California Coastal Commission to conduct a study and identify policy recommendations for how to advance affordable housing in the coastal zone by 2023.

Status: Will be voted on before September 10

SB 679: The Los Angeles County Regional Housing Finance Act 

SB 679 would establish the Los Angeles County Affordable Housing Solutions Agency, an independent agency whose purpose would be to increase affordable housing and resources for housing stability in Los Angeles County, including all incorporated and unincorporated areas. The agency would be able to raise and allocate funds in order to build 100% affordable housing for low income tenants, preserve existing housing, and fund renter protection programs. 

By securing unprecedented permanent funding for tenant protections like Right to Counsel and anti-harassment protections and for affordable housing production and preservation that prioritizes deep affordability, SB 679 could be a game changer for housing stability in LA.

Status: Was not given a hearing date. Likely to be designated as a two year bill and may be considered at a later time, but not before September 10. 

SCA 2: Repeal of Public Housing Ban / Article 34 

Article 34 of the California Constitution requires voter approval before a low-income housing development (in which at least 49% of units are low-income) is built in a community. 

SCA 2, if passed, would place an initiative on the state ballot to repeal Article 34. The repeal of Article 34 is essential to expanding public housing, social housing, and some affordable housing developments. 

Status: Still in the Senate, now designated a two-year bill that may be considered at a later time, but not before September 10.

Chelsea Kirk is a research and policy analyst at Strategic Actions for a Just Economy in Los Angeles. You can find her on Twitter @bad_tenant.