Everything About Rent Control

[aalj]

@BAGB

Does 1482 prohibit cities to pass new rent control measures that’s more restrictive than 1482? This is very important. If no new city rent control measures are allowed, I can understand CAA’s compromise.

If not, we need to ask CAR to add an amendment to prohibit new local rent control measures.

Yes. 1482 as written as of 2019-9-5 prohibits cities from passing more restrictive laws on housing regulated by the legislation. However, AB1482 does not apply to housing ALREADY REGULATED by local RC ordinances and housing regulated by Costa-Hawkins ()

[Jil]

@aalj

A bill that would cap annual rent increases for much of California’s multifamily housing stock now includes significant amendments secured by the California Apartment Association.

The amendments to AB 1482, among other things, would prevent local governments from making the bill’s rent cap any more restrictive. Moreover, the revisions would improve the legislation’s vacancy decontrol and “just cause” for eviction provisions, while shielding new buildings from the cap for five additional years.

If this bill is not signed in next 9 months, I think we are safe as we are likely get into recessionary phase soon.

I do not want to be political or discuss why and when recession…etc, but yield curve never fails including this time.

Many will sell homes, move away real estate investments, including big corporations as the ROI may not be attractive, from rent control states like CA.

In my opinion, CA representatives are sitting at the branch cutting their tree root. They will realize the revenue drop when real estate in California is going down aftermath of impending recession.

[hanera]

@Jil

…yield curve never fails including this time.

My thought too.

@Jil

Many will sell homes, move away real estate investments,

Already started since mid 2018.

[Jil]

@hanera

@Jil

…yield curve never fails including this time.

My thought too.

I do not want to make this controversial discussion, but just some true data from fact set.

• Earnings Growth: For Q3 2019, the estimated earnings decline for the S&P 500 is -3.6%. If -3.6% is the actual decline for the quarter, it will mark the first time the index has reported three straight quarters of year-over-year earnings declines since Q4 2015 through Q2 2016.

• Earnings Revisions: On June 30, the estimated earnings decline for Q3 2019 was -0.7%. All eleven sectors have lower growth rates today (compared to June 30) due to downward revisions to EPS estimates.

• Earnings Guidance: For Q3 2019, 80 S&P 500 companies have issued negative EPS guidance and 30 S&P 500 companies have issued positive EPS guidance.

• Valuation: The forward 12-month P/E ratio for the S&P 500 is 16.8. This P/E ratio is above the 5-year average (16.5) and above the 10-year average (14.8).

• Earnings Scorecard: For Q2 2019 (with 99.6% of the companies in the S&P 500 reporting actual results), 75% of S&P 500 companies have reported a positive EPS surprise and 56% of companies have reported a positive revenue surprise.

[BAGB]

What does this mean? Can a city such as Daly City have a new stricter RC over multi-family built before 1996?

@aalj

housing regulated by Costa-Hawkins ()

[aalj]

It means if your housing unit is already regulated under Costa Hawkins, a city cannot pass stricter laws on it. Meaning since Costa Hawkins protects SFH/townhomes/condos, a city cannot pass stricter laws against them.

It also means that if a city does not have preexisting rules on MFH that are more strict than AB1482 (like SF does), then after the implementation of AB1482, a city cannot make new rules against that MFH that are stricter than AB1482.

[maluka]

@aalj

The legislation would exempt single-family homes, townhouses and condos, except when owned by corporations or Real Estate Investment Trusts

Does Costa-Hawkins have such a condition that it does not apply to these single-unit housing when owned by corporations or REITs so that the new bill can cover them?

[caiguycaiguy]

California Assembly passes statewide rent control bill—governor will sign

[BA_lurker]

So it will now cause one month rent to move a tenant out with out cause. If I had to see a silver lining in this bill, I am glad that change survived
`
see below

[aalj]

@BA_lurker

So it will now cause one month rent to move a tenant out with out cause. If I had to see a silver lining in this bill, I am glad that change survived

This is not correct, sorry. If the tenant is not at fault, then you must have a “no fault just cause” in addition to one months rent in order to move a tenant out.

[aalj]

@maluka

Does Costa-Hawkins have such a condition that it does not apply to these single-unit housing when owned by corporations or REITs so that the new bill can cover them?

I applaud your approach, but I think AB1482 “slightly repeals” Costa Hawkins when these housing types are owned by corps/REITS.

[Roy321]

@aalj

then you must have a “no fault just cause”

what is the definition of a “no fault just cause”?

[BA_lurker]

Yah I am confused as well

[BA_lurker]

here’s the relevant text:

(2) No-fault just cause, which includes any of the following:

(A) (i) Intent to occupy the residential real property by the owner or their spouse, domestic partner, children, grandchildren, parents, or grandparents.

(ii) For leases entered into on or after January July 1, 2020, clause (i) shall apply only if the tenant agrees, in writing, to the termination, or if a provision of the lease allows the owner to terminate the lease if the owner, or their spouse, domestic partner, children, grandchildren, parents, or grandparents, unilaterally decides to occupy the residential real property. Addition of a provision allowing the owner to terminate the lease as described in this clause to a new or renewed rental agreement or fixed-term lease constitutes a similar provision for the purposes of subparagraph (E) of paragraph (1).

(B) Withdrawal of the residential real property from the rental market.

(C)Unsafe habitation, as determined by a government agency that has issued an order to vacate, order to comply, or other order that necessitates vacating the residential property.

(C) (i) The owner complying with any of the following:

(I) An order issued by a government agency or court relating to habitability that necessitates vacating the residential real property.

(II) An order issued by a government agency or court to vacate the residential real property.

(III) A local ordinance that necessitates vacating the residential real property.

(ii) If it is determined by any government agency or court that the tenant is at fault for the condition or conditions triggering the order or need to vacate under clause (i), the tenant shall not be entitled to relocation assistance as outlined in paragraph (3) of subdivision (d).

(D) (i) Intent to demolish or to substantially remodel. remodel the residential real property.

(ii) For purposes of this subparagraph, “substantially remodel” means the replacement or substantial modification of any structural, electrical, plumbing, or mechanical system that requires a permit from a governmental agency, or the abatement of hazardous materials, including lead-based paint, mold, or asbestos, in accordance with applicable federal, state, and local laws, that cannot be reasonably accomplished in a safe manner with the tenant in place and that requires the tenant to vacate the residential real property for at least 30 days. Cosmetic improvements alone, including painting, decorating, and minor repairs, or other work that can be performed safely without having the residential real property vacated, do not qualify as substantial rehabilitation.

so the most relevant one would be to do a remodel with permits

[Whoami]

@aalj

It means if your housing unit is already regulated under Costa Hawkins, a city cannot pass stricter laws on it. Meaning since Costa Hawkins protects SFH/townhomes/condos, a city cannot pass stricter laws against them.

It also means that if a city does not have preexisting rules on MFH that are more strict than AB1482 (like SF does), then after the implementation of AB1482, a city cannot make new rules against that MFH that are stricter than AB1482.

It appears local ordinances can make stricter amendments that would prevail over AB1482. Is this right?

The bill would not apply to residential real property subject to a local ordinance requiring just cause for termination adopted on or before September 1, 2019, or to residential real property subject to a local ordinance requiring just cause for termination adopted or amended after September 1, 2019, that is more protective than these provisions, as defined.

[aalj]

@Whoami

@aalj

It means if your housing unit is already regulated under Costa Hawkins, a city cannot pass stricter laws on it. Meaning since Costa Hawkins protects SFH/townhomes/condos, a city cannot pass stricter laws against them.

It also means that if a city does not have preexisting rules on MFH that are more strict than AB1482 (like SF does), then after the implementation of AB1482, a city cannot make new rules against that MFH that are stricter than AB1482.

It appears local ordinances can make stricter amendments that would prevail over AB1482. Is this right?

The bill would not apply to residential real property subject to a local ordinance requiring just cause for termination adopted on or before September 1, 2019, or to residential real property subject to a local ordinance requiring just cause for termination adopted or amended after September 1, 2019, that is more protective than these provisions, as defined.

I think so. When I typed this:

@aalj

It also means that if a city does not have preexisting rules on MFH that are more strict than AB1482 (like SF does), then after the implementation of AB1482, a city cannot make new rules against that MFH that are stricter than AB1482.

What I meant is …

if a city does not have preexisting rules regarding rent caps on MFH that are more strict than AB1482 (like SF does), then after the implementation of AB1482, a city cannot make new rules against that MFH that are stricter (with tighter rent caps) than AB1482.

As you point out, it appears that local municipalities can still create tighter just-cause eviction amendments that would prevail over the “Tenant Protection Act of 2019”. (another name for AB1482).

[Whoami]

That is good news wrt no further tightening of rent caps for MFR (and SFR), and I think 5%+CPI is generous. Unfortunately it doesn’t help if the local rules limit rent increases to 65% of CPI.

[aalj]

@Whoami

That is good news wrt no further tightening of rent caps for MFR (and SFR), and I think 5%+CPI is generous. Unfortunately it doesn’t help if the local rules limit rent increases to 65% of CPI.

Agreed. (reference above is to SF’s rent cap against MFH to 65% of CPI) Much like @manch — I avoid MFH. Once you have property that isn’t protected by Costa Hawkins, its easy to be targeted by the liberals and progressive.

[manch]

What is the exact definition of being “owned by corps”? If mom and pop own, say, 10 properties under their personal names, is that exempt? How about LLC?

[aalj]

@manch

What is the exact definition of being “owned by corps”? If mom and pop own, say, 10 properties under their personal names, is that exempt? How about LLC?