SACRAMENTO REPORT B y R on K ingston
Mid-Year State Legislative Update
L
ast month, several bills in the legislature died. AAOC was opposed to many of the landlord-tenant bills. Some of the bills that were opposed sought to ratchet down on just cause for eviction, establish a statewide rent registry program that would have required rental housing providers to report rent levels, evictions, reasons for evictions, and information about each rental household, and make it totally impractical to purchase rental housing with the intent of improving it, and “Ellis-ing” (is this a word?) a building if a new owner wanted to wait for several years following acquisition. There were other bills that AAOC continued to oppose that passed out of their “house of origin” and over to the other chamber for action. This article will feature one extremely problematic and costly bill. It will also focus on a success story regarding a bill for which the AAOC
was opposed until the author of the bill committed to amend it to address the association’s primary concern. First, the problematic and costly bill. SB 1335 (Eggman) proposes to prohibit the use of any form of a person’s credit history as part of application and screening process for a residential unit if the applicant provides alternatives of financial responsibility in instances where there is any form of government subsidy. The bill was approved by the Democratic majority in the Senate and is now awaiting a hearing in the Assembly Housing and Community Development Committee. Why does AAOC continue to oppose SB 1335? • The use of credit reports by ALL creditors serves a legitimate purpose. Creditors review overall debt load and the performance to repay debt. If the theory behind SB 1335 is to supplant the lawful and purposeful use of credit reports, it should apply to all creditors. • Credit reports demonstrate how a person manages debt and the level risk that an owner can lawfully apply. • Our credit reporting and discrimination laws highly favor and protect consumers. They are not predatory. Our discrimination laws are among, if not the best in the nation. Our credit reporting statutes assure that consumers have every right to access, dispute, and correct inaccurate
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Apartment News
www.aaoc.com
July 2022
credit reports. • Allowing an applicant to provide alternatives of financial responsibility leaves too much to the imagination and therefore leads to litigation. • The bill does not identify lawful and sustainable alternative financial sources. Nor does the bill require the financial alternatives to perform and pay all the tenant’s debt in the event of default. • In the event of the “alternative” financial source’s failure to perform, the bill poses a substantial legal conundrum: can the owner/manager seek an eviction due to the nonpayment of rent? • The California legislature has made substantial progress over the past few years: – Section 8 rent vouchers are considered lawful; – Tenants can bundle their income to lawfully qualify for rentals; – Guarantors that can pay during the entire duration of tenancy are fully recognized, defined, and accepted; – Our discrimination laws protecting tenants have vastly improved; and – The Newsom Administration has identified billions of dollars
