In the month of February, the Legislature has concluded with bill introductions for the second half of the 2019-2020 legislative session.
AB 1484 (Grayson), C.A.R.’s sponsored legislation on the mitigation of development fees, is pending committee assignment in the Senate. This bill would, among other provisions, require the establishment of a stronger nexus between the impact and development fees being charged to a developer, and the actual impact of the specific development. The bill also prohibits local agencies charging new developments to subsidize improvements to existing infrastructure deficiencies and requires the formal adoption of nexus studies. Lastly the bill closes legal loopholes that allow local agencies to avoid nexus requirements or the establishment of a reasonable relationship for fees and taxes.
AB 1551 (Daly), C.A.R.’s sponsored legislation to enhance Property Assessed Clean Energy (PACE) assessment disclosures, is pending committee assignment in the Senate. In recent years, the Legislature has sought to enhance consumer protections for PACE financing programs. However, there is still a need for more protection for a product which creates a “super lien” on a person’s home. AB 1551 will mandate a paper copy of the PACE disclosure be given to potential customers. Also, the bill seeks to prohibit prepayment penalties for those who wish to pay off their assessment (commonly done at the time of the transaction) and prohibits PACE assessments when a reverse mortgage is in place.
SB 592 (Wiener), C.A.R.’s sponsored legislation which expands the application of the Housing Accountability Act to Accessory Dwelling Units (AUDs), is pending in the Assembly Rules Committee. Existing law prohibits local agencies from disapproving housing projects that are consistent with local planning and zoning requirements, unless the project adversely impacts public health or safety. Local governments failing to comply with the Housing Accountability Act are also subject to monetary fines. SB 592 seeks to encourage the development of vitally needed housing units throughout California by expanding the Housing Accountability Act to among other things, protect the development of an ADUs.
SCA 1 (Allen & Wiener), C.A.R.’s co-sponsored bill on public housing projects, is pending committee assignment in the Assembly. Enacted by voters in 1950, Article 34 of the California Constitution requires that any development comprised of “low-rent” dwellings, financed in whole or in part by federal, state or local government be approved by a vote of the people in the jurisdiction where the project is located. Article 34 does not just apply to “public housing”, but also affects mixed income developments which often contain units partially “subsidized” by local government. Since 1992, C.A.R. has had policy supporting affordable workforce housing and has sought to advance policies seeking to increase the state’s housing supply. C.A.R. is co- sponsoring SCA 1 which seeks to repeal Article 34 in its entirety.
SCA 4 (Galgiani), C.A.R.’s sponsored legislation on property tax portability, is pending in the Senate Governance and Finance Committee. This is a re-introduction of SCA 24 (Galgiani, 2018), which was introduced in the closing days of the 2017- 18 Legislative Session. This measure includes the property tax basis portability provisions of Proposition 5 (generally, allowing senior homeowners to transfer their property tax basis to a new home regardless of location, price, or the number of previous transfers). The measure offsets that tax expenditure through reforms to the intergenerational transfer laws; namely, eliminating the transfer of real property without reassessment other than for the primary residence, requiring the heir to reside in the inherited residence, and capping the value of the exclusion on the inherited residence at $1 million.
AB 2662 (Blanca Rubio), C.A.R.’s sponsored legislation to update California’s Affordable Housing Cost Study Housing, is pending committee assignment. Production cost increases are often passed along to buyers in the form of higher home prices or can increase the amount of subsidy needed to build affordable housing units. REALTORS® and policy makers need to have a clear view on the costs associated with housing production for both affordable and market rate construction if we are going to solve the state’s housing supply crisis. This bill will require that the California Affordable Housing Cost Study, which was released in October 2014, be updated in order to better understand the cost difference between constructing affordable and market rate housing.
AB 2139 (Petrie-Norris), C.A.R.’s sponsored legislation on the use of a former surname in business dealings, is pending committee assignment. Currently, a real estate licensee cannot transact business using a former legal name (including a “maiden” name). AB 2139 seeks to clarify that a real estate licensee may use their former surname to conduct business so long as both names are filed with the Department of Real Estate. This will ensure that Realtors® can continue to benefit from their name brand, recognition and community status despite a legal surname change.
SB 981 (Archuleta), C.A.R.’s sponsored legislation which mandates HOA’s to maintain a website and update email communications, is pending committee assignment. Existing law permits homeowners to opt-into electronic delivery for HOA communications and reports. C.A.R. is sponsoring legislation to require homeowner associations with 50 or more units to deliver documents by electronic delivery, unless the recipient has revoked their consent to electronic documents in writing or by email. SB 981 will also require an HOA to maintain a website where general information such as a newsletter is provided.
AB 2506 (Irwin), C.A.R.’s sponsored legislation which creates a state Housing Agency with a cabinet-level Secretary, is pending committee assignment. A new Housing Agency would help to focus the state’s efforts to solve the state’s housing supply crisis, while the Secretary of Housing would provide the Governor with a resource to oversee and to interact with professional entities, both governmental and non-governmental, that play a role in the housing market.
An as yet unnumbered bill, that C.A.R. will be sponsoring legislation to reduce impact and development fees imposed on affordable housing units, is pending introduction. This bill would require cities and counties to reduce impact and pre-development fees imposed on affordable housing units, proportional to the affordability of the unit included in the density bonus application. This fee reduction seeks to encourage the construction of more affordable units by reducing costs to produce units. If enacted, above market rate units will no longer have to absorb 100% of the below market rate unit’s predevelopment costs, which will likely lead to lower housing costs for all income levels purchasing in that development.
An as yet unnumbered bill, that C.A.R. will be sponsoring legislation to create a new bond for the construction of Accessory Dwelling Units (ADUs), is pending introduction. ADUs provide for an additional solution to increasing the supply of affordable housing especially in tight real estate markets within the state. Unfortunately, there have been problems with funding sources for ADU construction. This legislation seeks to create a new bond (similar to CalVet) that would allow homeowners to finance the construct of an ADU by applying for this loan.