The time has come for our quarterly legislation update! With this September’s multifamily 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 multifamily 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.
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).
PASSED: Seattle’s Fair Chance Housing Ordinance (CB 119015)
Signed by the mayor on August 23, 2017, the City of Seattle’s new housing ordinance restricts the use of background information for resident screening. Seattle property owners and management companies are prohibited from requiring an applicant to provide (or go and obtain) criminal record information on any rental applicant. The sex offender registry is the only exception, and the grounds to deny an applicant who is on the registry are limited. Unless there is a “legitimate business reason”, property owners are prohibited from denying an adult applicant on the sex offender list (who was an adult at the time of conviction).
PENDING: The Disposition of Tenant Property (SB 5013)
Upon the execution of a writ of restitution by the sheriff, property owners may take possession of any property left behind on their premises. Landlords must store the property if the tenant serves a written request to do so. If the tenant objects to the storage of the property, or the landlord elects not to store the property because the tenant did not produce a written request, the tenant’s property must be deposited upon the nearest public property. SB 5013 will also enable landlords to dispose of an evicted tenant’s property (placed upon the nearest public property) after 5 days.
PENDING: New State Capital Gains Tax (SB 5929)
Effective on January 1, 2018, SB 5929 will impose a tax increase of 7% (as well as other tax increases) to apartments, commercial buildings, self-storage buildings, shopping centers, and other real-estate. This bill also applies to the sale of stocks and bonds.
PASSED: Manufactured Dwelling Tenant Relocation Fees (HB 2008)
Effective on June 6, 2017, HB 2008 requires landlords of manufactured dwelling parks (or residential trailer parks) to pay tenants necessary relocation fees upon closure or conversion. These are the following tenant payment amounts: $6,000 for a single-wide dwelling, $8,000 for a double-wide dwelling, and $10,000 for a triple-wide or larger dwelling. Property owners are prohibited from terminating without cause and must give the tenant no less than 180 days’ notice.
PASSED: Changed Lease Termination Notice Requirements (SB 17-245)
Landlords and property management companies are now required to provide short-term tenants 21 days’ notice before raising rent or terminating the lease. Prior to the new law, month-to-month or 6-month tenancies could be terminated (or rent could be raised by the landlord) with 7 days’ notice from either party.
PASSED: South Miami City Solar Panels (see ordinance)
On June 18, 2017, the City of South Miami passed an ordinance that requires developers and operators to install solar panels in new apartment constructions and in existing apartment buildings (after expanding the building size by 75% or more).
PENDING: Milwaukee County Rent Abatement Ordinance (Bill Number 17-530 – opens in Word Doc)
Proposed on July 5, 2017, this Milwaukee County ordinance would enable residents to abate an amount off their rent for maintenance issues. Property owners will have to produce a written notice indicating the time frame to remedy the property defect within 24 hours after a tenant has sent an email or SMS text message, or 72 hours after a physical notice or mail. Oral and voicemail notification is also permitted. An abatement provided in this bill is $100 for a not provided, missing or broken kitchen or lavatory sink basin drain or faucet. Tenants will also be able to abate $25 from the rent for a non-functioning light switch (for 24-48 hours).
PENDING: Philadelphia’s Mandatory Inclusionary Zoning Ordinance (Bill Number 170678)
Introduced on June 22, 2017, this ordinance would require developers to set aside 10% of the new units to be maintained as affordable units for at least 99 years.
While a lot of these bills will certainly not be reviewed in September alone, the multifamily legislation you see here (and new bills that will be proposed throughout the year) may wrap up throughout the Fall. As tempting as it is to settle into the holiday spirit as Halloween and Thanksgiving approaches, keep your eyes peeled.
Which multifamily legislation do you agree or disagree with the most? Did we miss something? Let us know in the comment section below and be sure to subscribe for additional updates!
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