AB 2364: Rental control: withdraw from accommodation.
- Session Year: 2017-2018
- House: Assembly
- Latest Version Date: 2018-05-09
Existing law, commonly known as the Ellis Act, generally prohibits public entities from adopting any statute, ordinance, or regulation, or taking any administrative action, to compel the owner of residential real property to offer or to continue to offer accommodations, as defined, in the property for rent or lease. Existing law qualifies this prohibition by, among other things, permitting a public entity for which rent control is in effect to require an owner who offers accommodations for rent or lease again within 10 years after they are withdrawn to first offer them to a tenant or lessee displaced by that withdrawal if that tenant or lessee makes a request in writing within 30 days after the owner has notified the public entity of an intention to offer the accommodations again. Existing law, for tenancies commenced during either the 5-year period after any notice of intent to withdraw accommodations is filed or within the 5-year period after the accommodations are withdrawn, requires accommodations to be offered and rented or leased at the lawful rent in effect at the time any notice of intent to withdraw the accommodations is filed, plus annual adjustments, as specified. Existing law sets forth various provisions that govern an owner who offers an accommodation for rent or lease again within 2 years of the date the accommodations were withdrawn from rent or lease. An owner who fails to comply with these requirements is liable for punitive damages not to exceed an amount equal to 6 months of rent.
This bill would revise the circumstances under which an owner may be required to offer accommodations to displaced tenants and lessees to eliminate the requirement that the request be made in writing within 30 days of notification, as described above, and would instead make the offer contingent on the tenant or lessee advising the owner of a desire to consider an offer. The bill also would require that the rental agreement or lease to be offered be the same as that in effect at the time of the displacement. The bill would extend the time period during which the various provisions govern an owner who offers an accommodation for rent or lease again after the accommodations were withdrawn from rent or lease from 2 years to 5 years, and would reduce the time that an action may be brought under these provisions to one year from 3 years of the date when the withdrawn accommodations are offered again for rent or lease. The bill would eliminate the limit on punitive damages.
Existing law declares the intent of the Legislature, in enacting the Ellis Act, to supersede any holding or portion of any holding in Nash v. City of Santa Monica (37 Cal.3d 97) to the extent that the holding, or a portion of the holding, conflicts with the act by permitting landlords to go out of business, but provides specified instances where its provisions are not intended to apply, including not allowing an owner to withdraw from rent or lease less than all of the accommodations, as specified.
This bill would additionally include permitting an owner to return less than all of the accommodations to the rental market within the items these provisions are not intended to allow.
Existing law, commonly known as the Ellis Act, generally prohibits public entities from adopting any statute, ordinance, or regulation, or taking any administrative action, to compel the owner of residential real property to offer or to continue to offer accommodations, as defined, in the property for rent or lease. Existing law qualifies this prohibition by, among other things, permitting a public entity for which rent control is in effect to require an owner who offers accommodations for rent or lease again within 10 years after they are withdrawn to first offer them to a tenant or lessee displaced by that withdrawal if that tenant or lessee makes a request in writing within 30 days after the owner has notified the public entity of an intention to offer the accommodations again. Existing law, for tenancies commenced during either the 5-year period after any notice of intent to withdraw accommodations is filed or within the 5-year period after the accommodations are withdrawn, requires accommodations to be offered and rented or leased at the lawful rent in effect at the time any notice of intent to withdraw the accommodations is filed, plus annual adjustments, as specified. Existing law sets forth various provisions that govern an owner who offers an accommodation for rent or lease again within 2 years of the date the accommodations were withdrawn from rent or lease. An owner who fails to comply with these requirements is liable for punitive damages not to exceed an amount equal to 6 months of rent.
This bill would extend the requirement that accommodations be offered and rented or leased at the lawful rent in effect at the time any notice of withdraw is filed to the 10-year period after any notice of intent to withdraw accommodations is filed or within the 10-year period after the accommodations are withdrawn. This bill would revise the circumstances under which an owner may be required to offer accommodations to displaced tenants and lessees to eliminate the requirement that the request be made in writing within 30 days of notification, as described above, and would instead make the offer contingent on the tenant or lessee advising the owner of a desire to consider an offer. The bill also would require that the rental agreement or lease to be offered be the same as that in effect at the time of the displacement. The bill would extend the time period during which the various provisions govern an owner who offers an accommodation for rent or lease again after the accommodations were withdrawn from rent or lease from 2 years to 5 years, and would reduce the time that an action may be brought under these provisions to one year from 3 years of the date when the withdrawn accommodations are offered again for rent or lease. The bill would eliminate the limit on punitive damages.
Existing law declares the intent of the Legislature, in enacting the Ellis Act, to supersede any holding or portion of any holding in Nash v. City of Santa Monica (37 Cal.3d 97) to the extent that the holding, or a portion of the holding, conflicts with the act by permitting landlords to go out of business, but provides specified instances where its provisions are not intended to apply, including not allowing an owner to withdraw from rent or lease less than all of the accommodations, as specified.
This bill would additionally include permitting an owner to return less than all of the accommodations to the rental market within the items these provisions are not intended to allow.
Existing law, commonly known as the Ellis Act, generally prohibits public entities from adopting any statute, ordinance, or regulation, or taking any administrative action, to compel the owner of residential real property to offer or to continue to offer accommodations, as defined, in the property for rent or lease. Existing law qualifies this prohibition by, among other things, permitting a public entity for which rent control is in effect to require an owner who offers accommodations for rent or lease again within 10 years after they are withdrawn to first offer them to a tenant or lessee displaced by that withdrawal if that tenant or lessee makes a request in writing within 30 days after the owner has notified the public entity of an intention to offer the accommodations again. Existing law, for tenancies commenced during either the 5-year period after any notice of intent to withdraw accommodations is filed or within the 5-year period after the accommodations are withdrawn, requires accommodations to be offered and rented or leased at the lawful rent in effect at the time any notice of intent to withdraw the accommodations is filed, plus annual adjustments, as specified. Existing law sets forth various provisions that govern an owner who offers an accommodation for rent or lease again within 2 years of the date the accommodations were withdrawn from rent or lease. An owner who fails to comply with these requirements is liable for punitive damages not to exceed an amount equal to 6 months of rent.
This bill would extend the requirement that accommodations be offered and rented or leased at the lawful rent in effect at the time any notice of withdraw is filed to the 10-year period after any notice of intent to withdraw accommodations is filed or within the 10-year period after the accommodations are withdrawn. This bill would also prescribe a meaning for the term lawful rent that would apply if a unit is vacant when a notice to withdraw is filed. This bill would revise the circumstances under which an owner may be required to offer accommodations to displaced tenants and lessees to eliminate the requirement that the request be made in writing within 30 days of notification, as described above, and would instead make the offer contingent on the tenant or lessee advising the owner of a desire to consider an offer. The bill also would require that the rental agreement or lease to be offered be the same as that in effect at the time of the displacement. The bill would extend the time period during which the various provisions that govern an owner who offers an accommodation for rent or lease again after the accommodations were withdrawn from rent or lease from 2 years to 5 years. years, and would reduce the time that an action may be brought under these provisions to one year from 3 years of the date when the withdrawn accommodations are offered again for rent or lease. The bill would eliminate the limit on punitive damages.
Existing law also authorizes a public entity for which rent control is in effect to require an owner to provide notice that he or she has initiated actions to terminate tenancies and, in this situation, the date of withdrawal of accommodations would be 120 days from the delivery of the notice. Existing law extends the term for the withdrawal of accommodations, in this context, to one year if the tenant or lessee is 62 years of age or older, or disabled, and other conditions are met.This bill would instead apply these provisions to each unit. This bill would provide that the tenancy of the tenant is extended to one year if the tenant or lessee is 62 years of age or older, or disabled, and other conditions are met. The bill would specify that the date of withdraw for the accommodations as a whole is the date of withdraw of any extended tenancy, as specified.Existing law declares the intent of the Legislature, in enacting the Ellis Act, to supersede any holding or portion of any holding in Nash v. City of Santa Monica (37 Cal.3d 97) to the extent that the holding, or a portion of the holding, conflicts with the act by permitting landlords to go out of business, but provides specified instances where its provisions are not intended to apply, including not allowing an owner to withdraw from rent or lease less than all of the accommodations, as specified.
This bill would additionally include permitting an owner to return less than all of the accommodations to the rental market within the items these provisions are not intended to allow.
Existing law, commonly known as the Ellis Act, generally prohibits public entities from adopting any statute, ordinance, or regulation, or taking any administrative action, to compel the owner of residential real property to offer or to continue to offer accommodations, as defined, in the property for rent or lease. Existing law qualifies this prohibition by, among other things, permitting a public entity for which rent control is in effect to require an owner who offers accommodations for rent or lease again within 10 years after they are withdrawn to first offer them to a tenant or lessee displaced by that withdrawal if that tenant or lessee makes a request in writing within 30 days after the owner has notified the public entity of an intention to offer the accommodations again. Existing law, for tenancies commenced during either the 5-year period after any notice of intent to withdraw accommodations is filed or within the 5-year period after the accommodations are withdrawn, requires accommodations to be offered and rented or leased at the lawful rent in effect at the time any notice of intent to withdraw the accommodations is filed, plus annual adjustments, as specified. Existing law sets forth various provisions that govern an owner who offers an accommodation for rent or lease again within 2 years of the date the accommodations were withdrawn from rent or lease. An owner who fails to comply with these requirements is liable for punitive damages not to exceed an amount equal to 6 months of rent.
This bill would extend the requirement that accommodations be offered and rented or leased at the lawful rent in effect at the time any notice of withdraw is filed to the 10-year period after any notice of intent to withdraw accommodations is filed or within the 10-year period after the accommodations are withdrawn. This bill would also prescribe a meaning for the term lawful rent that would apply if a unit is vacant when a notice to withdraw is filed. This bill would revise the circumstances under which an owner may be required to offer accommodations to displaced tenants and lessees to eliminate the requirement that the request be made in writing within 30 days of notification, as described above, and would instead make the offer contingent on the tenant or lessee advising the owner of a desire to consider an offer. The bill also would require that the rental agreement or lease to be offered be the same as that in effect at the time of the displacement. The bill would extend the time period during which the various provisions that govern an owner who offers an accommodation for rent or lease again after the accommodations were withdrawn from rent or lease from 2 years to 5 years. The bill would eliminate the limit on punitive damages.
Existing law also authorizes a public entity for which rent control is in effect to require an owner to provide notice that he or she has initiated actions to terminate tenancies and, in this situation, the date of withdrawal of accommodations would be 120 days from the delivery of the notice. Existing law extends the term for the withdrawal of accommodations, in this context, to one year if the tenant or lessee is 62 years of age or older, or disabled, and other conditions are met.
This bill would instead apply these provisions to each unit. This bill would provide that the tenancy of the tenant is extended to one year if the tenant or lessee is 62 years of age or older, or disabled, and other conditions are met. The bill would specify that the date of withdraw for the accommodations as a whole is the date of withdraw of any extended tenancy, as specified.
Existing law declares the intent of the Legislature, in enacting the Ellis Act, to supersede any holding or portion of any holding in Nash v. City of Santa Monica (37 Cal.3d 97) to the extent that the holding, or a portion of the holding, conflicts with the act by permitting landlords to go out of business, but provides specified instances where its provisions are not intended to apply, including not allowing an owner to withdraw from rent or lease less than all of the accommodations, as specified.
This bill would additionally include permitting an owner to return less than all of the accommodations to the rental market within the items these provisions are not intended to allow.
Existing law, known as the Density Bonus Law, requires a city or county to provide a developer that proposes a housing development within the jurisdictional boundaries of that city or county with a density bonus and other incentives or concessions for the production of lower income housing units, or for the donation of land within the development, if the developer agrees to construct a specified percentage of units for very low income, low-income, or moderate-income households or qualifying residents and meets other requirements.This bill would make nonsubstantive changes to that provision.Existing law, known as the Density Bonus Law, requires a city or county to provide a developer that proposes a housing development within the jurisdictional boundaries of that city or county with a density bonus and other incentives or concessions for the production of lower income housing units, or for the donation of land within the development, if the developer agrees to construct a specified percentage of units for very low income, low-income, or moderate-income households or qualifying residents and meets other requirements.
This bill would make nonsubstantive changes to that provision.
If a public entity, by valid exercise of its police power, has in effect any control or system of control on the price at which accommodations may be offered for rent or lease, that entity may, notwithstanding any provision of this chapter, provide by statute or ordinance, or by regulation as specified in Section 7060.5, that any accommodations which have been offered for rent or lease and which were subject to that control or system of control at the time the accommodations were withdrawn from rent or lease, shall be subject to the following:
(a)(1)For all tenancies commenced during the time periods described in paragraph (2), the accommodations shall be offered and rented or leased at the lawful rent in effect at the time any notice of intent to withdraw the accommodations is filed with the public entity, plus annual adjustments available under the system of control.
(2)The provisions of paragraph (1) shall apply to all tenancies commenced during either of the following time periods:
(A)The five-year period after any notice of intent to withdraw the accommodations is filed with the public entity, whether or not the notice of intent is rescinded or the withdrawal of the accommodations is completed pursuant to the notice of intent.
(B)The five-year period after the accommodations are withdrawn.
(3)This subdivision shall prevail over any conflicting provision of law authorizing the landlord to establish the rental rate upon the initial hiring of the accommodations.
(b)If the accommodations are offered again for rent or lease for residential purposes within five years of the date the accommodations were withdrawn from rent or lease, the following provisions shall govern:
(1)The owner of the accommodations shall be liable to any tenant or lessee who was displaced from the property by that action for actual and exemplary damages. Any action by a tenant or lessee pursuant to this paragraph shall be brought within one year of the date when the withdrawn accommodations are offered again for rent or lease.
(2)A public entity which has acted pursuant to this section may institute a civil proceeding against any owner who has again offered accommodations for rent or lease subject to this subdivision, for exemplary damages for displacement of tenants or lessees. Any action by a public entity pursuant to this paragraph shall be brought within three years of the withdrawal of the accommodations from rent or lease.
(3)Any owner who offers accommodations again for rent or lease shall first offer the unit for rent or lease to the tenant or lessee displaced from that unit by the withdrawal pursuant to this chapter, if the tenant has advised the owner in writing within 30 days of the displacement of his or her desire to consider an offer to renew the tenancy and has furnished the owner with an address to which that offer is to be directed. That tenant, lessee, or former tenant or lessee may advise the owner at any time during the eligibility of a change of address to which an offer is to be directed.
If the owner again offers the accommodations for rent or lease pursuant to this subdivision, and the tenant or lessee has advised the owner pursuant to this subdivision of a desire to consider an offer to renew the tenancy, then the owner shall offer to reinstitute a rental agreement or lease on terms permitted by law to that displaced tenant or lessee.
This offer shall be deposited in the United States mail, by registered or certified mail with postage prepaid, addressed to the displaced tenant or lessee at the address furnished to the owner as provided in this subdivision, and shall describe the terms of the offer. The displaced tenant or lessee shall have 30 days from the deposit of the offer in the mail to accept the offer by personal delivery of that acceptance or by deposit of the acceptance in the United States mail by registered or certified mail with postage prepaid.
(4)Nothing in this section precludes a tenant or public entity from pursuing any alternative remedy available under the law.(c)A public entity which has acted pursuant to this section, may require by statute or ordinance, or by regulation as specified in Section 7060.5, that an owner who offers accommodations again for rent or lease within a period not exceeding 10 years from the date on which they are withdrawn, and which are subject to this subdivision, shall first offer the unit to the tenant or lessee displaced from that unit by the withdrawal, if that tenant or lessee has advised the owner pursuant to paragraph (3) of subdivision (b) of a desire to consider an offer to renew the tenancy. The owner shall offer to reinstitute the agreement or lease on the same terms and at the same rent in effect at the time of displacement to that displaced tenant or lessee. The owner of the accommodations shall be liable to any tenant or lessee who was displaced by that action for failure to comply with this paragraph, for punitive damages. Nothing in this subdivision precludes a tenant or public entity from pursuing any alternative remedy available under the law.
(d)If the accommodations are demolished, and new accommodations are constructed on the same property, and offered for rent or lease within five years of the date the accommodations were withdrawn from rent or lease, the newly constructed accommodations shall be subject to any system of controls on the price at which they would be offered on the basis of a fair and reasonable return on the newly constructed accommodations, notwithstanding any exemption from the system of controls for newly constructed accommodations.
(e)The amendments to this section enacted by the act adding this subdivision shall apply to all new tenancies created after December 31, 2002. If a new tenancy was lawfully created prior to January 1, 2003, after a lawful withdrawal of the unit under this chapter, the amendments to this section enacted by the act adding this subdivision may not apply to new tenancies created after that date.
(f)Any amended local ordinances, regulations, or rules implementing this chapter shall be prospective only and shall have no effect on a withdrawal for which the notice of intent to withdraw the accommodation has been filed with the public entity prior to July 1, 2018. January 1, 2019.
(g)Nothing in this section precludes a tenant or public entity from pursuing any alternative remedy available under law.
SEC. 2.Section 7060.4 of the Government Code is amended to read:7060.4.(a)Any public entity which, by a valid exercise of its police power, has in effect any control or system of control on the price at which accommodations are offered for rent or lease, may require by statute or ordinance, or by regulation as specified in Section 7060.5, that the owner notify the entity of an intention to withdraw those accommodations from rent or lease and may require that the notice contain statements, under penalty of perjury, providing information on the number of accommodations, the address or location of those accommodations, the name or names of the tenants or lessees of the accommodations, and the rent applicable to each residential rental unit.
Information respecting the name or names of the tenants, the rent applicable to any residential rental unit, or the total number of accommodations, is confidential information and for purposes of this chapter shall be treated as confidential information by any public entity for purposes of the Information Practices Act of 1977 (Chapter 1 (commencing with Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code). A public entity shall, to the extent required by the preceding sentence, be considered an agency, as defined by subdivision (d) of Section 1798.3 of the Civil Code.
(b)The statute, ordinance, or regulation of the public entity may require that the owner record with the county recorder a memorandum summarizing the provisions, other than the confidential provisions, of the notice in a form which shall be prescribed by the statute, ordinance, or regulation, and require a certification with that notice that actions have been initiated as required by law to terminate any existing tenancies. In that situation, the date on which the accommodations are withdrawn from rent or lease for purposes of this chapter is 120 days from the delivery in person or by first-class mail of that notice to the public entity. However, if the tenant or lessee is at least 62 years of age or disabled, and has lived in his or her rental unit for at least one year prior to the date of delivery to the public entity of the notice of intent to withdraw pursuant to subdivision (a), then the tenancy of that tenant or lessee shall be extended to one year after the date of delivery of that notice to the public entity, provided that the tenant or lessee gives written notice of his or her entitlement to an extension to the owner within 60 days of the date of delivery to the public entity of the notice of intent to withdraw. In that situation, the following provisions shall apply:
(1)The tenancy shall be continued on the same terms and conditions as existed on the date of delivery to the public entity of the notice of intent to withdraw, subject to any adjustments otherwise available under the system of control.
(2)No party shall be relieved of the duty to perform any obligation under the lease or rental agreement.
(3)The owner may elect to extend the tenancy on any other rental unit up to one year after date of delivery to the public entity of the notice of intent to withdraw, subject to paragraphs (1) and (2).
(4)Within 30 days of the notification by the tenant or lessee to the owner of his or her entitlement to an extension, the owner shall give written notice to the public entity of the claim that the tenant or lessee is entitled to stay in their rental unit for one year after date of delivery to the public entity of the notice of intent to withdraw.
(5)Within 90 days of date of delivery to the public entity of the notice of intent to withdraw, the owner shall give written notice to the public entity and the affected tenant or lessee of the owners election to extend the tenancy and the new date of withdrawal under paragraph (3).
(6)The date of withdrawal for the accommodations as a whole for the purposes of calculating the time periods in Section 7060.2 shall be the last date of withdrawal of any extended tenancy.
(c)The statute, ordinance, or regulation of the public entity adopted pursuant to subdivision (a) may also require the owner to notify any tenant or lessee displaced pursuant to this chapter of the following:
(1)That the public entity has been notified pursuant to subdivision (a).
(2)That the notice to the public entity specified the name and the amount of rent paid by the tenant or lessee as an occupant of the accommodations.
(3)The amount of rent the owner specified in the notice to the public entity.
(4)Notice to the tenant or lessee of his or her rights under paragraph (3) of subdivision (b) of Section 7060.2.
(5)Notice to the tenant or lessee of the following:
(A)If the tenant or lessee is at least 62 years of age or disabled, and has lived in his or her accommodations for at least one year prior to the date of delivery to the public entity of the notice of intent to withdraw, then tenancy shall be extended to one year after date of delivery to the public entity of the notice of intent to withdraw, provided that the tenant or lessee gives written notice of his or her entitlement to the owner within 60 days of date of delivery to the public entity of the notice of intent to withdraw.
(B)The extended tenancy shall be continued on the same terms and conditions as existed on date of delivery to the public entity of the notice of intent to withdraw, subject to any adjustments otherwise available under the system of control.
(C)No party shall be relieved of the duty to perform any obligation under the lease or rental agreement during the extended tenancy.
(d)The statute, ordinance, or regulation of the public entity adopted pursuant to subdivision (a) may also require the owner to notify the public entity in writing of an intention to again offer the accommodations for rent or lease.
SEC. 3.Section 7060.7 of the Government Code is amended to read:7060.7.It is the intent of the Legislature in enacting this chapter to supersede any holding or portion of any holding in Nash v. City of Santa Monica, 37 Cal.3d 97 to the extent that the holding, or portion of the holding, conflicts with this chapter, so as to permit landlords to go out of business. However, this act is not otherwise intended to do any of the following:
(a)Interfere with local governmental authority over land use, including regulation of the conversion of existing housing to condominiums or other subdivided interests or to other nonresidential use following its withdrawal from rent or lease under this chapter.
(b)Preempt local or municipal environmental or land use regulations, procedures, or controls that govern the demolition and redevelopment of residential property.
(c)Override procedural protections designed to prevent abuse of the right to evict tenants.
(d)Permit an owner to withdraw from rent or lease, or a return to the rental market, less than all of the accommodations, as defined by paragraph (1) or (2) of subdivision (b) of Section 7060.
(e)Grant to any public entity any power which it does not possess independent of this chapter to control or establish a system of control on the price at which accommodations may be offered for rent or lease, or to diminish any such power which that public entity may possess, except as specifically provided in this chapter.
(f)Alter in any way either Section 65863.7 relating to the withdrawal of accommodations which comprise a mobilehome park from rent or lease or subdivision (f) of Section 798.56 of the Civil Code relating to a change of use of a mobilehome park.
If a public entity, by valid exercise of its police power, has in effect any control or system of control on the price at which accommodations may be offered for rent or lease, that entity may, notwithstanding any provision of this chapter, provide by statute or ordinance, or by regulation as specified in Section 7060.5, that any accommodations which have been offered for rent or lease and which were subject to that control or system of control at the time the accommodations were withdrawn from rent or lease, shall be subject to the following:
(a)(1)For all tenancies commenced during the time periods described in paragraph (2), the accommodations shall be offered and rented or leased at the lawful rent in effect at the time any notice of intent to withdraw the accommodations is filed with the public entity, plus annual adjustments available under the system of control.
(2)The provisions of paragraph (1) shall apply to all tenancies commenced during either of the following time periods:
(A)The 10-year five-year period after any notice of intent to withdraw the accommodations is filed with the public entity, whether or not the notice of intent is rescinded or the withdrawal of the accommodations is completed pursuant to the notice of intent.
(B)The 10-year five-year period after the accommodations are withdrawn.
(3)This subdivision shall prevail over any conflicting provision of law authorizing the landlord to establish the rental rate upon the initial hiring of the accommodations.
(b)If the accommodations are offered again for rent or lease for residential purposes within five years of the date the accommodations were withdrawn from rent or lease, the following provisions shall govern:
(1)The owner of the accommodations shall be liable to any tenant or lessee who was displaced from the property by that action for actual and exemplary damages. Any action by a tenant or lessee pursuant to this paragraph shall be brought within one year of the date when the withdrawn accommodations are offered again for rent or lease.
(2)A public entity which has acted pursuant to this section may institute a civil proceeding against any owner who has again offered accommodations for rent or lease subject to this subdivision, for exemplary damages for displacement of tenants or lessees. Any action by a public entity pursuant to this paragraph shall be brought within three years of the withdrawal of the accommodations from rent or lease.
(3)Any owner who offers accommodations again for rent or lease shall first offer the unit for rent or lease to the tenant or lessee displaced from that unit by the withdrawal pursuant to this chapter, if the tenant has advised the owner in writing within 30 days of the displacement of his or her desire to consider an offer to renew the tenancy and has furnished the owner with an address to which that offer is to be directed. That tenant, lessee, or former tenant or lessee may advise the owner at any time during the eligibility of a change of address to which an offer is to be directed.
If the owner again offers the accommodations for rent or lease pursuant to this subdivision, and the tenant or lessee has advised the owner pursuant to this subdivision of a desire to consider an offer to renew the tenancy, then the owner shall offer to reinstitute a rental agreement or lease on terms permitted by law to that displaced tenant or lessee.
This offer shall be deposited in the United States mail, by registered or certified mail with postage prepaid, addressed to the displaced tenant or lessee at the address furnished to the owner as provided in this subdivision, and shall describe the terms of the offer. The displaced tenant or lessee shall have 30 days from the deposit of the offer in the mail to accept the offer by personal delivery of that acceptance or by deposit of the acceptance in the United States mail by registered or certified mail with postage prepaid.
(4)Nothing in this section precludes a tenant or public entity from pursuing any alternative remedy available under the law.
(c)A public entity which has acted pursuant to this section, may require by statute or ordinance, or by regulation as specified in Section 7060.5, that an owner who offers accommodations again for rent or lease within a period not exceeding 10 years from the date on which they are withdrawn, and which are subject to this subdivision, shall first offer the unit to the tenant or lessee displaced from that unit by the withdrawal, if that tenant or lessee has advised the owner pursuant to paragraph (3) of subdivision (b) of a desire to consider an offer to renew the tenancy. The owner shall offer to reinstitute the agreement or lease on the same terms and at the same rent in effect at the time of displacement to that displaced tenant or lessee. The owner of the accommodations shall be liable to any tenant or lessee who was displaced by that action for failure to comply with this paragraph, for punitive damages. Nothing in this subdivision precludes a tenant or public entity from pursuing any alternative remedy available under the law.
(d)If the accommodations are demolished, and new accommodations are constructed on the same property, and offered for rent or lease within five years of the date the accommodations were withdrawn from rent or lease, the newly constructed accommodations shall be subject to any system of controls on the price at which they would be offered on the basis of a fair and reasonable return on the newly constructed accommodations, notwithstanding any exemption from the system of controls for newly constructed accommodations.
(e)The amendments to this section enacted by the act adding this subdivision shall apply to all new tenancies created after December 31, 2002. If a new tenancy was lawfully created prior to January 1, 2003, after a lawful withdrawal of the unit under this chapter, the amendments to this section enacted by the act adding this subdivision may not apply to new tenancies created after that date.
(f)Any amended local ordinances, regulations, or rules implementing this chapter shall be prospective only and shall have no effect on a withdrawal for which the notice of intent to withdraw the accommodation has been filed with the public entity prior to July 1, 2018.
SEC. 2.Section 7060.4 of the Government Code is amended to read:7060.4.(a)Any public entity which, by a valid exercise of its police power, has in effect any control or system of control on the price at which accommodations are offered for rent or lease, may require by statute or ordinance, or by regulation as specified in Section 7060.5, that the owner notify the entity of an intention to withdraw those accommodations from rent or lease and may require that the notice contain statements, under penalty of perjury, providing information on the number of accommodations, the address or location of those accommodations, the name or names of the tenants or lessees of the accommodations, and the rent applicable to each residential rental unit.
Information respecting the name or names of the tenants, the rent applicable to any residential rental unit, or the total number of accommodations, is confidential information and for purposes of this chapter shall be treated as confidential information by any public entity for purposes of the Information Practices Act of 1977 (Chapter 1 (commencing with Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code). A public entity shall, to the extent required by the preceding sentence, be considered an agency, as defined by subdivision (d) of Section 1798.3 of the Civil Code.
(b)The statute, ordinance, or regulation of the public entity may require that the owner record with the county recorder a memorandum summarizing the provisions, other than the confidential provisions, of the notice in a form which shall be prescribed by the statute, ordinance, or regulation, and require a certification with that notice that actions have been initiated as required by law to terminate any existing tenancies. In that situation, the date on which the accommodations are withdrawn from rent or lease for purposes of this chapter is 120 days from the delivery in person or by first-class mail of that notice to the public entity. However, if the tenant or lessee is at least 62 years of age or disabled, and has lived in his or her rental unit for at least one year prior to the date of delivery to the public entity of the notice of intent to withdraw pursuant to subdivision (a), then the tenancy of that tenant or lessee shall be extended to one year after the date of delivery of that notice to the public entity, provided that the tenant or lessee gives written notice of his or her entitlement to an extension to the owner within 60 days of the date of delivery to the public entity of the notice of intent to withdraw. In that situation, the following provisions shall apply:
(1)The tenancy shall be continued on the same terms and conditions as existed on the date of delivery to the public entity of the notice of intent to withdraw, subject to any adjustments otherwise available under the system of control.
(2)No party shall be relieved of the duty to perform any obligation under the lease or rental agreement.
(3)The owner may elect to extend the tenancy on any other rental unit up to one year after date of delivery to the public entity of the notice of intent to withdraw, subject to paragraphs (1) and (2).
(4)Within 30 days of the notification by the tenant or lessee to the owner of his or her entitlement to an extension, the owner shall give written notice to the public entity of the claim that the tenant or lessee is entitled to stay in their rental unit for one year after date of delivery to the public entity of the notice of intent to withdraw.
(5)Within 90 days of date of delivery to the public entity of the notice of intent to withdraw, the owner shall give written notice to the public entity and the affected tenant or lessee of the owners election to extend the tenancy and the new date of withdrawal under paragraph (3).
(6)The date of withdrawal for the accommodations as a whole for the purposes of calculating the time periods in Section 7060.2 shall be the last date of withdrawal of any extended tenancy.
(c)The statute, ordinance, or regulation of the public entity adopted pursuant to subdivision (a) may also require the owner to notify any tenant or lessee displaced pursuant to this chapter of the following:
(1)That the public entity has been notified pursuant to subdivision (a).
(2)That the notice to the public entity specified the name and the amount of rent paid by the tenant or lessee as an occupant of the accommodations.
(3)The amount of rent the owner specified in the notice to the public entity.
(4)Notice to the tenant or lessee of his or her rights under paragraph (3) of subdivision (b) of Section 7060.2.
(5)Notice to the tenant or lessee of the following:
(A)If the tenant or lessee is at least 62 years of age or disabled, and has lived in his or her accommodations for at least one year prior to the date of delivery to the public entity of the notice of intent to withdraw, then tenancy shall be extended to one year after date of delivery to the public entity of the notice of intent to withdraw, provided that the tenant or lessee gives written notice of his or her entitlement to the owner within 60 days of date of delivery to the public entity of the notice of intent to withdraw.
(B)The extended tenancy shall be continued on the same terms and conditions as existed on date of delivery to the public entity of the notice of intent to withdraw, subject to any adjustments otherwise available under the system of control.
(C)No party shall be relieved of the duty to perform any obligation under the lease or rental agreement during the extended tenancy.
(d)The statute, ordinance, or regulation of the public entity adopted pursuant to subdivision (a) may also require the owner to notify the public entity in writing of an intention to again offer the accommodations for rent or lease.
SEC. 3.Section 7060.7 of the Government Code is amended to read:7060.7.It is the intent of the Legislature in enacting this chapter to supersede any holding or portion of any holding in Nash v. City of Santa Monica, 37 Cal.3d 97 to the extent that the holding, or portion of the holding, conflicts with this chapter, so as to permit landlords to go out of business. However, this act is not otherwise intended to do any of the following:
(a)Interfere with local governmental authority over land use, including regulation of the conversion of existing housing to condominiums or other subdivided interests or to other nonresidential use following its withdrawal from rent or lease under this chapter.
(b)Preempt local or municipal environmental or land use regulations, procedures, or controls that govern the demolition and redevelopment of residential property.
(c)Override procedural protections designed to prevent abuse of the right to evict tenants.
(d)Permit an owner to withdraw from rent or lease, or a return to the rental market, less than all of the accommodations, as defined by paragraph (1) or (2) of subdivision (b) of Section 7060.
(e)Grant to any public entity any power which it does not possess independent of this chapter to control or establish a system of control on the price at which accommodations may be offered for rent or lease, or to diminish any such power which that public entity may possess, except as specifically provided in this chapter.
(f)Alter in any way either Section 65863.7 relating to the withdrawal of accommodations which comprise a mobilehome park from rent or lease or subdivision (f) of Section 798.56 of the Civil Code relating to a change of use of a mobilehome park.
If a public entity, by valid exercise of its police power, has in effect any control or system of control on the price at which accommodations may be offered for rent or lease, that entity may, notwithstanding any provision of this chapter, provide by statute or ordinance, or by regulation as specified in Section 7060.5, that any accommodations which have been offered for rent or lease and which were subject to that control or system of control at the time the accommodations were withdrawn from rent or lease, shall be subject to the following:
(a)(1)For all tenancies commenced during the time periods described in paragraph (2), the accommodations shall be offered and rented or leased at the lawful rent in effect at the time any notice of intent to withdraw the accommodations is filed with the public entity, plus annual adjustments available under the system of control. The term lawful rent includes the last rent paid by the most recent bonafide tenant if the unit is vacant at the time the notice to withdraw is filed.
(2)The provisions of paragraph (1) shall apply to all tenancies commenced during either of the following time periods:
(A)The 10-year period after any notice of intent to withdraw the accommodations is filed with the public entity, whether or not the notice of intent is rescinded or the withdrawal of the accommodations is completed pursuant to the notice of intent.
(B)The 10-year period after the accommodations are withdrawn.10
(3)This subdivision shall prevail over any conflicting provision of law authorizing the landlord to establish the rental rate upon the initial hiring of the accommodations.
(b)If the accommodations are offered again for rent or lease for residential purposes within five years of the date the accommodations were withdrawn from rent or lease, the following provisions shall govern:
(1)The owner of the accommodations shall be liable to any tenant or lessee who was displaced from the property by that action for actual and exemplary damages. Any action by a tenant or lessee pursuant to this paragraph shall be brought within three years of the withdrawal of the accommodations from one year of the date when the withdrawn accommodations are offered again for rent or lease.
(2)A public entity which has acted pursuant to this section may institute a civil proceeding against any owner who has again offered accommodations for rent or lease subject to this subdivision, for exemplary damages for displacement of tenants or lessees. Any action by a public entity pursuant to this paragraph shall be brought within three years of the withdrawal of the accommodations from rent or lease.
(3)Any owner who offers accommodations again for rent or lease shall first offer the unit for rent or lease to the tenant or lessee displaced from that unit by the withdrawal pursuant to this chapter, if the tenant has advised the owner in writing within 30 days of the displacement of his or her desire to consider an offer to renew the tenancy and has furnished the owner with an address to which that offer is to be directed. That tenant, lessee, or former tenant or lessee may advise the owner at any time during the eligibility of a change of address to which an offer is to be directed.
If the owner again offers the accommodations for rent or lease pursuant to this subdivision, and the tenant or lessee has advised the owner pursuant to this subdivision of a desire to consider an offer to renew the tenancy, then the owner shall offer to reinstitute a rental agreement or lease on terms permitted by law to that displaced tenant or lessee.
This offer shall be deposited in the United States mail, by registered or certified mail with postage prepaid, addressed to the displaced tenant or lessee at the address furnished to the owner as provided in this subdivision, and shall describe the terms of the offer. The displaced tenant or lessee shall have 30 days from the deposit of the offer in the mail to accept the offer by personal delivery of that acceptance or by deposit of the acceptance in the United States mail by registered or certified mail with postage prepaid.
(4)Nothing in this section precludes a tenant or public entity from pursuing any alternative remedy available under the law.
(c)A public entity which has acted pursuant to this section, may require by statute or ordinance, or by regulation as specified in Section 7060.5, that an owner who offers accommodations again for rent or lease within a period not exceeding 10 years from the date on which they are withdrawn, and which are subject to this subdivision, shall first offer the unit to the tenant or lessee displaced from that unit by the withdrawal, if that tenant or lessee has advised the owner pursuant to paragraph (3) of subdivision (b) of a desire to consider an offer to renew the tenancy. The owner shall offer to reinstitute the agreement or lease on the same terms and at the same rent in effect at the time of displacement to that displaced tenant or lessee. The owner of the accommodations shall be liable to any tenant or lessee who was displaced by that action for failure to comply with this paragraph, for punitive damages. Nothing in this subdivision precludes a tenant or public entity from pursuing any alternative remedy available under the law.
(d)If the accommodations are demolished, and new accommodations are constructed on the same property, and offered for rent or lease within five years of the date the accommodations were withdrawn from rent or lease, the newly constructed accommodations shall be subject to any system of controls on the price at which they would be offered on the basis of a fair and reasonable return on the newly constructed accommodations, notwithstanding any exemption from the system of controls for newly constructed accommodations.
(e)The amendments to this section enacted by the act adding this subdivision shall apply to all new tenancies created after December 31, 2002. If a new tenancy was lawfully created prior to January 1, 2003, after a lawful withdrawal of the unit under this chapter, the amendments to this section enacted by the act adding this subdivision may not apply to new tenancies created after that date.
(f)Any amended local ordinances, regulations, or rules implementing this chapter shall be prospective only and shall have no effect on a withdrawal for which the notice of intent to withdraw the accommodation has been filed with the public entity prior to July 1, 2018.
SEC. 2.Section 7060.4 of the Government Code is amended to read:7060.4.(a)Any public entity which, by a valid exercise of its police power, has in effect any control or system of control on the price at which accommodations are offered for rent or lease, may require by statute or ordinance, or by regulation as specified in Section 7060.5, that the owner notify the entity of an intention to withdraw those accommodations from rent or lease and may require that the notice contain statements, under penalty of perjury, providing information on the number of accommodations, the address or location of those accommodations, the name or names of the tenants or lessees of the accommodations, and the rent applicable to each residential rental unit.
Information respecting the name or names of the tenants, the rent applicable to any residential rental unit, or the total number of accommodations, is confidential information and for purposes of this chapter shall be treated as confidential information by any public entity for purposes of the Information Practices Act of 1977 (Chapter 1 (commencing with Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code). A public entity shall, to the extent required by the preceding sentence, be considered an agency, as defined by subdivision (d) of Section 1798.3 of the Civil Code.
(b)The statute, ordinance, or regulation of the public entity may require that the owner record with the county recorder a memorandum summarizing the provisions, other than the confidential provisions, of the notice in a form which shall be prescribed by the statute, ordinance, or regulation, and require a certification with that notice that actions have been initiated as required by law to terminate any existing tenancies. In that situation, the date on which the accommodations are withdrawn from rent or lease for purposes of this chapter is 120 days from the delivery in person or by first-class mail of that notice to the public entity. However, if the tenant or lessee is at least 62 years of age or disabled, and has lived in his or her rental unit for at least one year prior to the date of delivery to the public entity of the notice of intent to withdraw pursuant to subdivision (a), then the tenancy of that tenant or lessee shall be extended to one year after the date of delivery of that notice to the public entity, provided that the tenant or lessee gives written notice of his or her entitlement to an extension to the owner within 60 days of the date of delivery to the public entity of the notice of intent to withdraw. In that situation, the following provisions shall apply:
(1)The tenancy shall be continued on the same terms and conditions as existed on the date of delivery to the public entity of the notice of intent to withdraw, subject to any adjustments otherwise available under the system of control.
(2)No party shall be relieved of the duty to perform any obligation under the lease or rental agreement.
(3)The owner may elect to extend the tenancy on any other rental unit up to one year after date of delivery to the public entity of the notice of intent to withdraw, subject to paragraphs (1) and (2).
(4)Within 30 days of the notification by the tenant or lessee to the owner of his or her entitlement to an extension, the owner shall give written notice to the public entity of the claim that the tenant or lessee is entitled to stay in their unit for one year after date of delivery to the public entity of the notice of intent to withdraw.
(5)Within 90 days of date of delivery to the public entity of the notice of intent to withdraw, the owner shall give written notice to the public entity and the affected tenant or lessee of the owners election to extend the tenancy and the new date of withdrawal under paragraph (3).
(6)The date of withdraw withdrawal for the accommodations as a whole for the purposes of calculating the time periods in Section 7060.2 shall be the last date of withdrawal of any extended tenancy.
(c)The statute, ordinance, or regulation of the public entity adopted pursuant to subdivision (a) may also require the owner to notify any tenant or lessee displaced pursuant to this chapter of the following:
(1)That the public entity has been notified pursuant to subdivision (a).
(2)That the notice to the public entity specified the name and the amount of rent paid by the tenant or lessee as an occupant of the accommodations.
(3)The amount of rent the owner specified in the notice to the public entity.
(4)Notice to the tenant or lessee of his or her rights under paragraph (3) of subdivision (b) of Section 7060.2.
(5)Notice to the tenant or lessee of the following:
(A)If the tenant or lessee is at least 62 years of age or disabled, and has lived in his or her accommodations for at least one year prior to the date of delivery to the public entity of the notice of intent to withdraw, then tenancy shall be extended to one year after date of delivery to the public entity of the notice of intent to withdraw, provided that the tenant or lessee gives written notice of his or her entitlement to the owner within 60 days of date of delivery to the public entity of the notice of intent to withdraw.
(B)The extended tenancy shall be continued on the same terms and conditions as existed on date of delivery to the public entity of the notice of intent to withdraw, subject to any adjustments otherwise available under the system of control.
(C)No party shall be relieved of the duty to perform any obligation under the lease or rental agreement during the extended tenancy.
(d)The statute, ordinance, or regulation of the public entity adopted pursuant to subdivision (a) may also require the owner to notify the public entity in writing of an intention to again offer the accommodations for rent or lease.
SEC. 3.Section 7060.7 of the Government Code is amended to read:7060.7.It is the intent of the Legislature in enacting this chapter to supersede any holding or portion of any holding in Nash v. City of Santa Monica, 37 Cal.3d 97 to the extent that the holding, or portion of the holding, conflicts with this chapter, so as to permit landlords to go out of business. However, this act is not otherwise intended to do any of the following:
(a)Interfere with local governmental authority over land use, including regulation of the conversion of existing housing to condominiums or other subdivided interests or to other nonresidential use following its withdrawal from rent or lease under this chapter.
(b)Preempt local or municipal environmental or land use regulations, procedures, or controls that govern the demolition and redevelopment of residential property.
(c)Override procedural protections designed to prevent abuse of the right to evict tenants.
(d)Permit an owner to withdraw from rent or lease, or a return to the rental market, less than all of the accommodations, as defined by paragraph (1) or (2) of subdivision (b) of Section 7060.
(e)Grant to any public entity any power which it does not possess independent of this chapter to control or establish a system of control on the price at which accommodations may be offered for rent or lease, or to diminish any such power which that public entity may possess, except as specifically provided in this chapter.
(f)Alter in any way either Section 65863.7 relating to the withdrawal of accommodations which comprise a mobilehome park from rent or lease or subdivision (f) of Section 798.56 of the Civil Code relating to a change of use of a mobilehome park.
If a public entity, by valid exercise of its police power, has in effect any control or system of control on the price at which accommodations may be offered for rent or lease, that entity may, notwithstanding any provision of this chapter, provide by statute or ordinance, or by regulation as specified in Section 7060.5, that any accommodations which have been offered for rent or lease and which were subject to that control or system of control at the time the accommodations were withdrawn from rent or lease, shall be subject to the following:
(a)(1)For all tenancies commenced during the time periods described in paragraph (2), the accommodations shall be offered and rented or leased at the lawful rent in effect at the time any notice of intent to withdraw the accommodations is filed with the public entity, plus annual adjustments available under the system of control. The term lawful rent includes the last rent paid by the most recent bonafide tenant if the unit is vacant at the time the notice to withdraw is filed.
(2)The provisions of paragraph (1) shall apply to all tenancies commenced during either of the following time periods:
(A)The five-year 10-year period after any notice of intent to withdraw the accommodations is filed with the public entity, whether or not the notice of intent is rescinded or the withdrawal of the accommodations is completed pursuant to the notice of intent.
(B)The five-year 10-year period after the accommodations are withdrawn.10
(3)This subdivision shall prevail over any conflicting provision of law authorizing the landlord to establish the rental rate upon the initial hiring of the accommodations.
(b)If the accommodations are offered again for rent or lease for residential purposes within two five years of the date the accommodations were withdrawn from rent or lease, the following provisions shall govern:
(1)The owner of the accommodations shall be liable to any tenant or lessee who was displaced from the property by that action for actual and exemplary damages. Any action by a tenant or lessee pursuant to this paragraph shall be brought within three years of the withdrawal of the accommodations from rent or lease. However, nothing in this paragraph precludes a tenant from pursuing any alternative remedy available under the law.
(2)A public entity which has acted pursuant to this section may institute a civil proceeding against any owner who has again offered accommodations for rent or lease subject to this subdivision, for exemplary damages for displacement of tenants or lessees. Any action by a public entity pursuant to this paragraph shall be brought within three years of the withdrawal of the accommodations from rent or lease.
(3)Any owner who offers accommodations again for rent or lease shall first offer the unit for rent or lease to the tenant or lessee displaced from that unit by the withdrawal pursuant to this chapter, if the tenant has advised the owner in writing within 30 days of the displacement of his or her desire to consider an offer to renew the tenancy and has furnished the owner with an address to which that offer is to be directed. That tenant, lessee, or former tenant or lessee may advise the owner at any time during the eligibility of a change of address to which an offer is to be directed.
If the owner again offers the accommodations for rent or lease pursuant to this subdivision, and the tenant or lessee has advised the owner pursuant to this subdivision of a desire to consider an offer to renew the tenancy, then the owner shall offer to reinstitute a rental agreement or lease on terms permitted by law to that displaced tenant or lessee.
This offer shall be deposited in the United States mail, by registered or certified mail with postage prepaid, addressed to the displaced tenant or lessee at the address furnished to the owner as provided in this subdivision, and shall describe the terms of the offer. The displaced tenant or lessee shall have 30 days from the deposit of the offer in the mail to accept the offer by personal delivery of that acceptance or by deposit of the acceptance in the United States mail by registered or certified mail with postage prepaid.
(4)Nothing in this section precludes a tenant or public entity from pursuing any alternative remedy available under the law.
(c)A public entity which has acted pursuant to this section, may require by statute or ordinance, or by regulation as specified in Section 7060.5, that an owner who offers accommodations again for rent or lease within a period not exceeding 10 years from the date on which they are withdrawn, and which are subject to this subdivision, shall first offer the unit to the tenant or lessee displaced from that unit by the withdrawal, if that tenant or lessee requests the offer in writing within 30 days after the owner has notified the public entity of an intention to offer the accommodations again for residential rent or lease pursuant to a requirement adopted by the public entity under subdivision (c) of Section 7060.4. has advised the owner pursuant to paragraph (3) of subdivision (b) of a desire to consider an offer to renew the tenancy. The owner shall offer to reinstitute the agreement or lease on the same terms and at the same rent in effect at the time of displacement to that displaced tenant or lessee. The owner of the accommodations shall be liable to any tenant or lessee who was displaced by that action for failure to comply with this paragraph, for punitive damages in an amount which does not exceed the contract rent for six months. damages. Nothing in this subdivision precludes a tenant or public entity from pursuing any alternative remedy available under the law.
(d)If the accommodations are demolished, and new accommodations are constructed on the same property, and offered for rent or lease within five years of the date the accommodations were withdrawn from rent or lease, the newly constructed accommodations shall be subject to any system of controls on the price at which they would be offered on the basis of a fair and reasonable return on the newly constructed accommodations, notwithstanding any exemption from the system of controls for newly constructed accommodations.
(e)The amendments to this section enacted by the act adding this subdivision shall apply to all new tenancies created after December 31, 2002. If a new tenancy was lawfully created prior to January 1, 2003, after a lawful withdrawal of the unit under this chapter, the amendments to this section enacted by the act adding this subdivision may not apply to new tenancies created after that date.
SEC. 2.Section 7060.4 of the Government Code is amended to read:7060.4.(a)Any public entity which, by a valid exercise of its police power, has in effect any control or system of control on the price at which accommodations are offered for rent or lease, may require by statute or ordinance, or by regulation as specified in Section 7060.5, that the owner notify the entity of an intention to withdraw those accommodations from rent or lease and may require that the notice contain statements, under penalty of perjury, providing information on the number of accommodations, the address or location of those accommodations, the name or names of the tenants or lessees of the accommodations, and the rent applicable to each residential rental unit.
Information respecting the name or names of the tenants, the rent applicable to any residential rental unit, or the total number of accommodations, is confidential information and for purposes of this chapter shall be treated as confidential information by any public entity for purposes of the Information Practices Act of 1977 (Chapter 1 (commencing with Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code). A public entity shall, to the extent required by the preceding sentence, be considered an agency, as defined by subdivision (d) of Section 1798.3 of the Civil Code.
(b)The statute, ordinance, or regulation of the public entity may require that the owner record with the county recorder a memorandum summarizing the provisions, other than the confidential provisions, of the notice in a form which shall be prescribed by the statute, ordinance, or regulation, and require a certification with that notice that actions have been initiated as required by law to terminate any existing tenancies. In that situation, the date on which the accommodations are withdrawn from rent or lease for purposes of this chapter is 120 days from the delivery in person or by first-class mail of that notice to the public entity. However, if the tenant or lessee is at least 62 years of age or disabled, and has lived in his or her accommodations unit for at least one year prior to the date of delivery to the public entity of the notice of intent to withdraw pursuant to subdivision (a), then the date of withdrawal of the accommodations tenancy of that tenant or lessee shall be extended to one year after the date of delivery of that notice to the public entity, provided that the tenant or lessee gives written notice of his or her entitlement to an extension to the owner within 60 days of the date of delivery to the public entity of the notice of intent to withdraw. In that situation, the following provisions shall apply:
(1)The tenancy shall be continued on the same terms and conditions as existed on the date of delivery to the public entity of the notice of intent to withdraw, subject to any adjustments otherwise available under the system of control.
(2)No party shall be relieved of the duty to perform any obligation under the lease or rental agreement.
(3)The owner may elect to extend the date of withdrawal tenancy on any other accommodations unit up to one year after date of delivery to the public entity of the notice of intent to withdraw, subject to paragraphs (1) and (2).
(4)Within 30 days of the notification by the tenant or lessee to the owner of his or her entitlement to an extension, the owner shall give written notice to the public entity of the claim that the tenant or lessee is entitled to stay in their accommodations unit for one year after date of delivery to the public entity of the notice of intent to withdraw.
(5)Within 90 days of date of delivery to the public entity of the notice of intent to withdraw, the owner shall give written notice to the public entity and the affected tenant or lessee of the owners election to extend the date of withdrawal tenancy and the new date of withdrawal under paragraph (3).
(6)The date of withdraw for the accommodations as a whole for the purposes of calculating the time periods in Section 7060.2 shall be the last date of withdrawal of any extended tenancy.
(c)The statute, ordinance, or regulation of the public entity adopted pursuant to subdivision (a) may also require the owner to notify any tenant or lessee displaced pursuant to this chapter of the following:
(1)That the public entity has been notified pursuant to subdivision (a).
(2)That the notice to the public entity specified the name and the amount of rent paid by the tenant or lessee as an occupant of the accommodations.
(3)The amount of rent the owner specified in the notice to the public entity.
(4)Notice to the tenant or lessee of his or her rights under paragraph (3) of subdivision (b) of Section 7060.2.
(5)Notice to the tenant or lessee of the following:
(A)If the tenant or lessee is at least 62 years of age or disabled, and has lived in his or her accommodations for at least one year prior to the date of delivery to the public entity of the notice of intent to withdraw, then tenancy shall be extended to one year after date of delivery to the public entity of the notice of intent to withdraw, provided that the tenant or lessee gives written notice of his or her entitlement to the owner within 60 days of date of delivery to the public entity of the notice of intent to withdraw.
(B)The extended tenancy shall be continued on the same terms and conditions as existed on date of delivery to the public entity of the notice of intent to withdraw, subject to any adjustments otherwise available under the system of control.
(C)No party shall be relieved of the duty to perform any obligation under the lease or rental agreement during the extended tenancy.
(d)The statute, ordinance, or regulation of the public entity adopted pursuant to subdivision (a) may also require the owner to notify the public entity in writing of an intention to again offer the accommodations for rent or lease.
SEC. 3.Section 7060.7 of the Government Code is amended to read:7060.7.It is the intent of the Legislature in enacting this chapter to supersede any holding or portion of any holding in Nash v. City of Santa Monica, 37 Cal.3d 97 to the extent that the holding, or portion of the holding, conflicts with this chapter, so as to permit landlords to go out of business. However, this act is not otherwise intended to do any of the following:
(a)Interfere with local governmental authority over land use, including regulation of the conversion of existing housing to condominiums or other subdivided interests or to other nonresidential use following its withdrawal from rent or lease under this chapter.
(b)Preempt local or municipal environmental or land use regulations, procedures, or controls that govern the demolition and redevelopment of residential property.
(c)Override procedural protections designed to prevent abuse of the right to evict tenants.
(d)Permit an owner to withdraw from rent or lease lease, or a return to the rental market, less than all of the accommodations, as defined by paragraph (1) or (2) of subdivision (b) of Section 7060.
(e)Grant to any public entity any power which it does not possess independent of this chapter to control or establish a system of control on the price at which accommodations may be offered for rent or lease, or to diminish any such power which that public entity may possess, except as specifically provided in this chapter.
(f)Alter in any way either Section 65863.7 relating to the withdrawal of accommodations which comprise a mobilehome park from rent or lease or subdivision (f) of Section 798.56 of the Civil Code relating to a change of use of a mobilehome park.
SECTION 1.Section 65915 of the Government Code is amended to read:65915.(a)(1)When an applicant seeks a density bonus for a housing development within, or for the donation of land for housing within, the jurisdiction of a city, county, or city and county, that local government shall comply with this section. A city, county, or city and county shall adopt an ordinance that specifies how compliance with this section will be implemented. Failure to adopt an ordinance shall not relieve a city, county, or city and county from complying with this section.(2)A local government shall not condition the submission, review, or approval of an application pursuant to this chapter on the preparation of an additional report or study that is not otherwise required by state law, including this section. This subdivision does not prohibit a local government from requiring an applicant to provide reasonable documentation to establish eligibility for a requested density bonus, incentives or concessions, as described in subdivision (d), waivers or reductions of development standards, as described in subdivision (e), and parking ratios, as described in subdivision (p).(3)In order to provide for the expeditious processing of a density bonus application, the local government shall do all of the following:(A)Adopt procedures and timelines for processing a density bonus application.(B)Provide a list of all documents and information required to be submitted with the density bonus application in order for the density bonus application to be deemed complete. This list shall be consistent with this chapter.(C)Notify the applicant for a density bonus whether the application is complete in a manner consistent with Section 65943.(b)(1)A city, county, or city and county shall grant one density bonus, the amount that shall be as specified in subdivision (f), and, if requested by the applicant and consistent with the applicable requirements of this section, incentives or concessions, as described in subdivision (d), waivers or reductions of development standards, as described in subdivision (e), and parking ratios, as described in subdivision (p), when an applicant for a housing development seeks and agrees to construct a housing development, excluding any units permitted by the density bonus awarded pursuant to this section, that will contain at least any one of the following:(A)Ten percent of the total units of a housing development for lower income households, as defined in Section 50079.5 of the Health and Safety Code.(B)Five percent of the total units of a housing development for very low income households, as defined in Section 50105 of the Health and Safety Code.(C)A senior citizen housing development, as defined in Sections 51.3 and 51.12 of the Civil Code, or a mobilehome park that limits residency based on age requirements for housing for older persons pursuant to Section 798.76 or 799.5 of the Civil Code.(D)Ten percent of the total dwelling units in a common interest development, as defined in Section 4100 of the Civil Code, for persons and families of moderate income, as defined in Section 50093 of the Health and Safety Code, provided that all units in the development are offered to the public for purchase.(E)Ten percent of the total units of a housing development for transitional foster youth, as defined in Section 66025.9 of the Education Code, disabled veterans, as defined in Section 18541, or homeless persons, as defined in the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11301 et seq.). The units described in this subparagraph shall be subject to a recorded affordability restriction of 55 years and shall be provided at the same affordability level as very low income units.(2)For purposes of calculating the amount of the density bonus pursuant to subdivision (f), an applicant who requests a density bonus pursuant to this subdivision shall elect whether the bonus shall be awarded on the basis of subparagraph (A), (B), (C), (D), or (E) of paragraph (1).(3)For the purposes of this section, total units or total dwelling units does not include units added by a density bonus awarded pursuant to this section or any local law granting a greater density bonus.(c)(1)An applicant shall agree to, and the city, county, or city and county shall ensure, the continued affordability of all very low and low-income rental units that qualified the applicant for the award of the density bonus for 55 years or a longer period of time if required by the construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program. Rents for the lower income density bonus units shall be set at an affordable rent as defined in Section 50053 of the Health and Safety Code.(2)An applicant shall agree to, and the city, county, or city and county shall ensure that, the initial occupant of all for-sale units that qualified the applicant for the award of the density bonus are persons and families of very low, low, or moderate income, as required, and that the units are offered at an affordable housing cost, as that cost is defined in Section 50052.5 of the Health and Safety Code. The local government shall enforce an equity sharing agreement, unless it is in conflict with the requirements of another public funding source or law. The following apply to the equity sharing agreement:(A)Upon resale, the seller of the unit shall retain the value of any improvements, the downpayment, and the sellers proportionate share of appreciation. The local government shall recapture any initial subsidy, as defined in subparagraph (B), and its proportionate share of appreciation, as defined in subparagraph (C), which amount shall be used within five years for any of the purposes described in subdivision (e) of Section 33334.2 of the Health and Safety Code that promote home ownership.(B)For purposes of this subdivision, the local governments initial subsidy shall be equal to the fair market value of the home at the time of initial sale minus the initial sale price to the moderate-income household, plus the amount of any downpayment assistance or mortgage assistance. If upon resale the market value is lower than the initial market value, then the value at the time of the resale shall be used as the initial market value.(C)For purposes of this subdivision, the local governments proportionate share of appreciation shall be equal to the ratio of the local governments initial subsidy to the fair market value of the home at the time of initial sale.(3)(A)An applicant shall be ineligible for a density bonus or any other incentives or concessions under this section if the housing development is proposed on any property that includes a parcel or parcels on which rental dwelling units are or, if the dwelling units have been vacated or demolished in the five-year period preceding the application, have been subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of lower or very low income; subject to any other form of rent or price control through a public entitys valid exercise of its police power; or occupied by lower or very low income households, unless the proposed housing development replaces those units, and either of the following applies:(i)The proposed housing development, inclusive of the units replaced pursuant to this paragraph, contains affordable units at the percentages set forth in subdivision (b).(ii)Each unit in the development, exclusive of a managers unit or units, is affordable to, and occupied by, either a lower or very low income household.(B)For the purposes of this paragraph, replace shall mean either of the following:(i)If any dwelling units described in subparagraph (A) are occupied on the date of application, the proposed housing development shall provide at least the same number of units of equivalent size to be made available at affordable rent or affordable housing cost to, and occupied by, persons and families in the same or lower income category as those households in occupancy. If the income category of the household in occupancy is not known, it shall be rebuttably presumed that lower income renter households occupied these units in the same proportion of lower income renter households to all renter households within the jurisdiction, as determined by the most recently available data from the United States Department of Housing and Urban Developments Comprehensive Housing Affordability Strategy database. For unoccupied dwelling units described in subparagraph (A) in a development with occupied units, the proposed housing development shall provide units of equivalent size to be made available at affordable rent or affordable housing cost to, and occupied by, persons and families in the same or lower income category as the last household in occupancy. If the income category of the last household in occupancy is not known, it shall be rebuttably presumed that lower income renter households occupied these units in the same proportion of lower income renter households to all renter households within the jurisdiction, as determined by the most recently available data from the United States Department of Housing and Urban Developments Comprehensive Housing Affordability Strategy database. All replacement calculations resulting in fractional units shall be rounded up to the next whole number. If the replacement units will be rental dwelling units, these units shall be subject to a recorded affordability restriction for at least 55 years. If the proposed development is for-sale units, the units replaced shall be subject to paragraph (2).(ii)If all dwelling units described in subparagraph (A) have been vacated or demolished within the five-year period preceding the application, the proposed housing development shall provide at least the same number of units of equivalent size as existed at the highpoint of those units in the five-year period preceding the application to be made available at affordable rent or affordable housing cost to, and occupied by, persons and families in the same or lower income category as those persons and families in occupancy at that time, if known. If the incomes of the persons and families in occupancy at the highpoint is not known, it shall be rebuttably presumed that low-income and very low income renter households occupied these units in the same proportion of low-income and very low income renter households to all renter households within the jurisdiction, as determined by the most recently available data from the United States Department of Housing and Urban Developments Comprehensive Housing Affordability Strategy database. All replacement calculations resulting in fractional units shall be rounded up to the next whole number. If the replacement units will be rental dwelling units, these units shall be subject to a recorded affordability restriction for at least 55 years. If the proposed development is for-sale units, the units replaced shall be subject to paragraph (2).(C)Notwithstanding subparagraph (B), for any dwelling unit described in subparagraph (A) that is or was, within the five-year period preceding the application, subject to a form of rent or price control through a local governments valid exercise of its police power and that is or was occupied by persons or families above lower income, the city, county, or city and county may do either of the following:(i)Require that the replacement units be made available at affordable rent or affordable housing cost to, and occupied by, low-income persons or families. If the replacement units will be rental dwelling units, these units shall be subject to a recorded affordability restriction for at least 55 years. If the proposed development is for-sale units, the units replaced shall be subject to paragraph (2).(ii)Require that the units be replaced in compliance with the jurisdictions rent or price control ordinance, provided that each unit described in subparagraph (A) is replaced. Unless otherwise required by the jurisdictions rent or price control ordinance, these units shall not be subject to a recorded affordability restriction.(D)For purposes of this paragraph, equivalent size means that the replacement units contain at least the same total number of bedrooms as the units being replaced.(E)Subparagraph (A) does not apply to an applicant seeking a density bonus for a proposed housing development if his or her application was submitted to, or processed by, a city, county, or city and county before January 1, 2015.(d)(1)An applicant for a density bonus pursuant to subdivision (b) may submit to a city, county, or city and county a proposal for the specific incentives or concessions that the applicant requests pursuant to this section, and may request a meeting with the city, county, or city and county. The city, county, or city and county shall grant the concession or incentive requested by the applicant unless the city, county, or city and county makes a written finding, based upon substantial evidence, of any of the following:(A)The concession or incentive does not result in identifiable and actual cost reductions, consistent with subdivision (k), to provide for affordable housing costs, as defined in Section 50052.5 of the Health and Safety Code, or for rents for the targeted units to be set as specified in subdivision (c).(B)The concession or incentive would have a specific, adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65589.5, upon public health and safety or the physical environment or on any real property that is listed in the California Register of Historical Resources and for which there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact without rendering the development unaffordable to low-income and moderate-income households.(C)The concession or incentive would be contrary to state or federal law.(2)The applicant shall receive the following number of incentives or concessions:(A)One incentive or concession for projects that include at least 10 percent of the total units for lower income households, at least 5 percent for very low income households, or at least 10 percent for persons and families of moderate income in a common interest development.(B)Two incentives or concessions for projects that include at least 20 percent of the total units for lower income households, at least 10 percent for very low income households, or at least 20 percent for persons and families of moderate income in a common interest development.(C)Three incentives or concessions for projects that include at least 30 percent of the total units for lower income households, at least 15 percent for very low income households, or at least 30 percent for persons and families of moderate income in a common interest development.(3)The applicant may initiate judicial proceedings if the city, county, or city and county refuses to grant a requested density bonus, incentive, or concession. If a court finds that the refusal to grant a requested density bonus, incentive, or concession is in violation of this section, the court shall award the plaintiff reasonable attorneys fees and costs of suit. Nothing in this subdivision shall be interpreted to require a local government to grant an incentive or concession that has a specific, adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65589.5, upon health, safety, or the physical environment, and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact. Nothing in this subdivision shall be interpreted to require a local government to grant an incentive or concession that would have an adverse impact on any real property that is listed in the California Register of Historical Resources. The city, county, or city and county shall establish procedures for carrying out this section, that shall include legislative body approval of the means of compliance with this section.(4)The city, county, or city and county shall bear the burden of proof for the denial of a requested concession or incentive.(e)(1)In no case may a city, county, or city and county apply any development standard that will have the effect of physically precluding the construction of a development meeting the criteria of subdivision (b) at the densities or with the concessions or incentives permitted by this section. An applicant may submit to a city, county, or city and county a proposal for the waiver or reduction of development standards that will have the effect of physically precluding the construction of a development meeting the criteria of subdivision (b) at the densities or with the concessions or incentives permitted under this section, and may request a meeting with the city, county, or city and county. If a court finds that the refusal to grant a waiver or reduction of development standards is in violation of this section, the court shall award the plaintiff reasonable attorneys fees and costs of suit. Nothing in this subdivision shall be interpreted to require a local government to waive or reduce development standards if the waiver or reduction would have a specific, adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65589.5, upon health, safety, or the physical environment, and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact. Nothing in this subdivision shall be interpreted to require a local government to waive or reduce development standards that would have an adverse impact on any real property that is listed in the California Register of Historical Resources, or to grant any waiver or reduction that would be contrary to state or federal law.(2)A proposal for the waiver or reduction of development standards pursuant to this subdivision shall neither reduce nor increase the number of incentives or concessions to which the applicant is entitled pursuant to subdivision (d).(f)For the purposes of this chapter, density bonus means a density increase over the otherwise maximum allowable gross residential density as of the date of application by the applicant to the city, county, or city and county, or, if elected by the applicant, a lesser percentage of density increase, including, but not limited to, no increase in density. The amount of density increase to which the applicant is entitled shall vary according to the amount by which the percentage of affordable housing units exceeds the percentage established in subdivision (b).(1)For housing developments meeting the criteria of subparagraph (A) of paragraph (1) of subdivision (b), the density bonus shall be calculated as follows:Percentage Low-Income UnitsPercentage Density Bonus10201121.512231324.514261527.51730.518321933.52035(2)For housing developments meeting the criteria of subparagraph (B) of paragraph (1) of subdivision (b), the density bonus shall be calculated as follows:Percentage Very Low Income UnitsPercentage Density Bonus520622.5725827.59301032.51135(3)(A)For housing developments meeting the criteria of subparagraph (C) of paragraph (1) of subdivision (b), the density bonus shall be 20 percent of the number of senior housing units.(B)For housing developments meeting the criteria of subparagraph (E) of paragraph (1) of subdivision (b), the density bonus shall be 20 percent of the number of the type of units giving rise to a density bonus under that subparagraph.(4)For housing developments meeting the criteria of subparagraph (D) of paragraph (1) of subdivision (b), the density bonus shall be calculated as follows:Percentage Moderate-Income UnitsPercentage Density Bonus10511612713814915101611171218131914201521162217231824192520262127222823292430253126322733283429353036313732383339344035(5)All density calculations resulting in fractional units shall be rounded up to the next whole number. The granting of a density bonus shall not require, or be interpreted, in and of itself, to require a general plan amendment, local coastal plan amendment, zoning change, or other discretionary approval.(g)(1)When an applicant for a tentative subdivision map, parcel map, or other residential development approval donates land to a city, county, or city and county in accordance with this subdivision, the applicant shall be entitled to a 15-percent increase above the otherwise maximum allowable residential density for the entire development, as follows:Percentage Very Low IncomePercentage Density Bonus101511161217131814191520162117221823192420252126222723282429253026312732283329343035(2)This increase shall be in addition to any increase in density mandated by subdivision (b), up to a maximum combined mandated density increase of 35 percent if an applicant seeks an increase pursuant to both this subdivision and subdivision (b). All density calculations resulting in fractional units shall be rounded up to the next whole number. Nothing in this subdivision shall be construed to enlarge or diminish the authority of a city, county, or city and county to require a developer to donate land as a condition of development. An applicant shall be eligible for the increased density bonus described in this subdivision if all of the following conditions are met:(A)The applicant donates and transfers the land no later than the date of approval of the final subdivision map, parcel map, or residential development application.(B)The developable acreage and zoning classification of the land being transferred are sufficient to permit construction of units affordable to very low income households in an amount not less than 10 percent of the number of residential units of the proposed development.(C)The transferred land is at least one acre in size or of sufficient size to permit development of at least 40 units, has the appropriate general plan designation, is appropriately zoned with appropriate development standards for development at the density described in paragraph (3) of subdivision (c) of Section 65583.2, and is or will be served by adequate public facilities and infrastructure.(D)The transferred land shall have all of the permits and approvals, other than building permits, necessary for the development of the very low income housing units on the transferred land, not later than the date of approval of the final subdivision map, parcel map, or residential development application, except that the local government may subject the proposed development to subsequent design review to the extent authorized by subdivision (i) of Section 65583.2 if the design is not reviewed by the local government before the time of transfer.(E)The transferred land and the affordable units shall be subject to a deed restriction ensuring continued affordability of the units consistent with paragraphs (1) and (2) of subdivision (c), which shall be recorded on the property at the time of the transfer.(F)The land is transferred to the local agency or to a housing developer approved by the local agency. The local agency may require the applicant to identify and transfer the land to the developer.(G)The transferred land shall be within the boundary of the proposed development or, if the local agency agrees, within one-quarter mile of the boundary of the proposed development.(H)A proposed source of funding for the very low income units shall be identified not later than the date of approval of the final subdivision map, parcel map, or residential development application.(h)(1)When an applicant proposes to construct a housing development that conforms to the requirements of subdivision (b) and includes a child care facility that will be located on the premises of, as part of, or adjacent to, the project, the city, county, or city and county shall grant either of the following:(A)An additional density bonus that is an amount of square feet of residential space that is equal to or greater than the amount of square feet in the child care facility.(B)An additional concession or incentive that contributes significantly to the economic feasibility of the construction of the child care facility.(2)The city, county, or city and county shall require, as a condition of approving the housing development, that the following occur:(A)The child care facility shall remain in operation for a period of time that is as long as or longer than the period of time during which the density bonus units are required to remain affordable pursuant to subdivision (c).(B)Of the children who attend the child care facility, the children of very low income households, lower income households, or families of moderate income shall equal a percentage that is equal to or greater than the percentage of dwelling units that are required for very low income households, lower income households, or families of moderate income pursuant to subdivision (b).(3)Notwithstanding any requirement of this subdivision, a city, county, or city and county shall not be required to provide a density bonus or concession for a child care facility if it finds, based upon substantial evidence, that the community has adequate child care facilities.(4)Child care facility, as used in this section, means a child day care facility other than a family day care home, including, but not limited to, infant centers, preschools, extended day care facilities, and schoolage child care centers.(i)Housing development, as used in this section, means a development project for five or more residential units, including mixed-use developments. For the purposes of this section, housing development also includes a subdivision or common interest development, as defined in Section 4100 of the Civil Code, approved by a city, county, or city and county and consists of residential units or unimproved residential lots and either a project to substantially rehabilitate and convert an existing commercial building to residential use or the substantial rehabilitation of an existing multifamily dwelling, as defined in subdivision (d) of Section 65863.4, where the result of the rehabilitation would be a net increase in available residential units. For the purpose of calculating a density bonus, the residential units shall be on contiguous sites that are the subject of one development application, but do not have to be based upon individual subdivision maps or parcels. The density bonus shall be permitted in geographic areas of the housing development other than the areas where the units for the lower income households are located.(j)(1)The granting of a concession or incentive shall not require or be interpreted, in and of itself, to require a general plan amendment, local coastal plan amendment, zoning change, study, or other discretionary approval. For purposes of this subdivision, study does not include reasonable documentation to establish eligibility for the concession or incentive or to demonstrate that the incentive or concession meets the definition set forth in subdivision (k). This provision is declaratory of existing law.(2)Except as provided in subdivisions (d) and (e), the granting of a density bonus shall not require or be interpreted to require the waiver of a local ordinance or provisions of a local ordinance unrelated to development standards.(k)For the purposes of this chapter, concession or incentive means any of the following:(1)A reduction in site development standards or a modification of zoning code requirements or architectural design requirements that exceed the minimum building standards approved by the California Building Standards Commission as provided in Part 2.5 (commencing with Section 18901) of Division 13 of the Health and Safety Code, including, but not limited to, a reduction in setback and square footage requirements and in the ratio of vehicular parking spaces that would otherwise be required that results in identifiable and actual cost reductions, to provide for affordable housing costs, as defined in Section 50052.5 of the Health and Safety Code, or for rents for the targeted units to be set as specified in subdivision (c).(2)Approval of mixed-use zoning in conjunction with the housing project if commercial, office, industrial, or other land uses will reduce the cost of the housing development and if the commercial, office, industrial, or other land uses are compatible with the housing project and the existing or planned development in the area where the proposed housing project will be located.(3)Other regulatory incentives or concessions proposed by the developer or the city, county, or city and county that result in identifiable and actual cost reductions to provide for affordable housing costs, as defined in Section 50052.5 of the Health and Safety Code, or for rents for the targeted units to be set as specified in subdivision (c).(l)Subdivision (k) does not limit or require the provision of direct financial incentives for the housing development, including the provision of publicly owned land, by the city, county, or city and county, or the waiver of fees or dedication requirements.(m)This section does not supersede or in any way alter or lessen the effect or application of the California Coastal Act of 1976 (Division 20 (commencing with Section 30000) of the Public Resources Code).(n)If permitted by local ordinance, nothing in this section shall be construed to prohibit a city, county, or city and county from granting a density bonus greater than what is described in this section for a development that meets the requirements of this section or from granting a proportionately lower density bonus than what is required by this section for developments that do not meet the requirements of this section.(o)For purposes of this section, the following definitions shall apply:(1)Development standard includes a site or construction condition, including, but not limited to, a height limitation, a setback requirement, a floor area ratio, an onsite open-space requirement, or a parking ratio that applies to a residential development pursuant to any ordinance, general plan element, specific plan, charter, or other local condition, law, policy, resolution, or regulation.(2)Maximum allowable residential density means the density allowed under the zoning ordinance and land use element of the general plan, or, if a range of density is permitted, means the maximum allowable density for the specific zoning range and land use element of the general plan applicable to the project. If the density allowed under the zoning ordinance is inconsistent with the density allowed under the land use element of the general plan, the general plan density shall prevail.(p)(1) Except as provided in paragraphs (2) and (3), upon the request of the developer, a city, county, or city and county shall not require a vehicular parking ratio, inclusive of handicapped and guest parking, of a development meeting the criteria of subdivisions (b) and (c), that exceeds the following ratios:(A)Zero to one bedroom: one onsite parking space.(B)Two to three bedrooms: two onsite parking spaces.(C)Four and more bedrooms: two and one-half parking spaces.(2)Notwithstanding paragraph (1), if a development includes the maximum percentage of low-income or very low income units provided for in paragraphs (1) and (2) of subdivision (f) and is located within one-half mile of a major transit stop, as defined in subdivision (b) of Section 21155 of the Public Resources Code, and there is unobstructed access to the major transit stop from the development, then, upon the request of the developer, a city, county, or city and county shall not impose a vehicular parking ratio, inclusive of handicapped and guest parking, that exceeds 0.5 spaces per bedroom. For purposes of this subdivision, a development shall have unobstructed access to a major transit stop if a resident is able to access the major transit stop without encountering natural or constructed impediments.(3)Notwithstanding paragraph (1), if a development consists solely of rental units, exclusive of a managers unit or units, with an affordable housing cost to lower income families, as provided in Section 50052.5 of the Health and Safety Code, then, upon the request of the developer, a city, county, or city and county shall not impose a vehicular parking ratio, inclusive of handicapped and guest parking, that exceeds the following ratios:(A)If the development is located within one-half mile of a major transit stop, as defined in subdivision (b) of Section 21155 of the Public Resources Code, and there is unobstructed access to the major transit stop from the development, the ratio shall not exceed 0.5 spaces per unit.(B)If the development is a for-rent housing development for individuals who are 62 years of age or older that complies with Sections 51.2 and 51.3 of the Civil Code, the ratio shall not exceed 0.5 spaces per unit. The development shall have either paratransit service or unobstructed access, within one-half mile, to fixed bus route service that operates at least eight times per day.(C)If the development is a special needs housing development, as defined in Section 51312 of the Health and Safety Code, the ratio shall not exceed 0.3 spaces per unit. The development shall have either paratransit service or unobstructed access, within one-half mile, to fixed bus route service that operates at least eight times per day.(4)If the total number of parking spaces required for a development is other than a whole number, the number shall be rounded up to the next whole number. For purposes of this subdivision, a development may provide onsite parking through tandem parking or uncovered parking, but not through onstreet parking.(5)This subdivision shall apply to a development that meets the requirements of subdivisions (b) and (c), but only at the request of the applicant. An applicant may request parking incentives or concessions beyond those provided in this subdivision pursuant to subdivision (d).(6)This subdivision does not preclude a city, county, or city and county from reducing or eliminating a parking requirement for development projects of any type in any location.(7)Notwithstanding paragraphs (2) and (3), if a city, county, city and county, or an independent consultant has conducted an areawide or jurisdictionwide parking study in the last seven years, then the city, county, or city and county may impose a higher vehicular parking ratio not to exceed the ratio described in paragraph (1), based upon substantial evidence found in the parking study, that includes, but is not limited to, an analysis of parking availability, differing levels of transit access, walkability access to transit services, the potential for shared parking, the effect of parking requirements on the cost of market-rate and subsidized developments, and the lower rates of car ownership for low-income and very low income individuals, including seniors and special needs individuals. The city, county, or city and county shall pay the costs of any new study. The city, county, or city and county shall make findings, based on a parking study completed in conformity with this paragraph, supporting the need for the higher parking ratio.(8)A request pursuant to this subdivision shall neither reduce nor increase the number of incentives or concessions to which the applicant is entitled pursuant to subdivision (d).(q)Each component of any density calculation, including base density and bonus density, resulting in fractional units shall be separately rounded up to the next whole number. The Legislature finds and declares that this provision is declaratory of existing law.(r)This chapter shall be interpreted liberally in favor of producing the maximum number of total housing units.(a)(1)When an applicant seeks a density bonus for a housing development within, or for the donation of land for housing within, the jurisdiction of a city, county, or city and county, that local government shall comply with this section. A city, county, or city and county shall adopt an ordinance that specifies how compliance with this section will be implemented. Failure to adopt an ordinance shall not relieve a city, county, or city and county from complying with this section.
(2)A local government shall not condition the submission, review, or approval of an application pursuant to this chapter on the preparation of an additional report or study that is not otherwise required by state law, including this section. This subdivision does not prohibit a local government from requiring an applicant to provide reasonable documentation to establish eligibility for a requested density bonus, incentives or concessions, as described in subdivision (d), waivers or reductions of development standards, as described in subdivision (e), and parking ratios, as described in subdivision (p).
(3)In order to provide for the expeditious processing of a density bonus application, the local government shall do all of the following:
(A)Adopt procedures and timelines for processing a density bonus application.
(B)Provide a list of all documents and information required to be submitted with the density bonus application in order for the density bonus application to be deemed complete. This list shall be consistent with this chapter.
(C)Notify the applicant for a density bonus whether the application is complete in a manner consistent with Section 65943.
(b)(1)A city, county, or city and county shall grant one density bonus, the amount of which that shall be as specified in subdivision (f), and, if requested by the applicant and consistent with the applicable requirements of this section, incentives or concessions, as described in subdivision (d), waivers or reductions of development standards, as described in subdivision (e), and parking ratios, as described in subdivision (p), when an applicant for a housing development seeks and agrees to construct a housing development, excluding any units permitted by the density bonus awarded pursuant to this section, that will contain at least any one of the following:
(A)Ten percent of the total units of a housing development for lower income households, as defined in Section 50079.5 of the Health and Safety Code.
(B)Five percent of the total units of a housing development for very low income households, as defined in Section 50105 of the Health and Safety Code.
(C)A senior citizen housing development, as defined in Sections 51.3 and 51.12 of the Civil Code, or a mobilehome park that limits residency based on age requirements for housing for older persons pursuant to Section 798.76 or 799.5 of the Civil Code.
(D)Ten percent of the total dwelling units in a common interest development, as defined in Section 4100 of the Civil Code, for persons and families of moderate income, as defined in Section 50093 of the Health and Safety Code, provided that all units in the development are offered to the public for purchase.
(E)Ten percent of the total units of a housing development for transitional foster youth, as defined in Section 66025.9 of the Education Code, disabled veterans, as defined in Section 18541, or homeless persons, as defined in the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11301 et seq.). The units described in this subparagraph shall be subject to a recorded affordability restriction of 55 years and shall be provided at the same affordability level as very low income units.
(2)For purposes of calculating the amount of the density bonus pursuant to subdivision (f), an applicant who requests a density bonus pursuant to this subdivision shall elect whether the bonus shall be awarded on the basis of subparagraph (A), (B), (C), (D), or (E) of paragraph (1).
(3)For the purposes of this section, total units or total dwelling units does not include units added by a density bonus awarded pursuant to this section or any local law granting a greater density bonus.
(c)(1)An applicant shall agree to, and the city, county, or city and county shall ensure, the continued affordability of all very low and low-income rental units that qualified the applicant for the award of the density bonus for 55 years or a longer period of time if required by the construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program. Rents for the lower income density bonus units shall be set at an affordable rent as defined in Section 50053 of the Health and Safety Code.
(2)An applicant shall agree to, and the city, county, or city and county shall ensure that, the initial occupant of all for-sale units that qualified the applicant for the award of the density bonus are persons and families of very low, low, or moderate income, as required, and that the units are offered at an affordable housing cost, as that cost is defined in Section 50052.5 of the Health and Safety Code. The local government shall enforce an equity sharing agreement, unless it is in conflict with the requirements of another public funding source or law. The following apply to the equity sharing agreement:
(A)Upon resale, the seller of the unit shall retain the value of any improvements, the downpayment, and the sellers proportionate share of appreciation. The local government shall recapture any initial subsidy, as defined in subparagraph (B), and its proportionate share of appreciation, as defined in subparagraph (C), which amount shall be used within five years for any of the purposes described in subdivision (e) of Section 33334.2 of the Health and Safety Code that promote home ownership.
(B)For purposes of this subdivision, the local governments initial subsidy shall be equal to the fair market value of the home at the time of initial sale minus the initial sale price to the moderate-income household, plus the amount of any downpayment assistance or mortgage assistance. If upon resale the market value is lower than the initial market value, then the value at the time of the resale shall be used as the initial market value.
(C)For purposes of this subdivision, the local governments proportionate share of appreciation shall be equal to the ratio of the local governments initial subsidy to the fair market value of the home at the time of initial sale.
(3)(A)An applicant shall be ineligible for a density bonus or any other incentives or concessions under this section if the housing development is proposed on any property that includes a parcel or parcels on which rental dwelling units are or, if the dwelling units have been vacated or demolished in the five-year period preceding the application, have been subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of lower or very low income; subject to any other form of rent or price control through a public entitys valid exercise of its police power; or occupied by lower or very low income households, unless the proposed housing development replaces those units, and either of the following applies:
(i)The proposed housing development, inclusive of the units replaced pursuant to this paragraph, contains affordable units at the percentages set forth in subdivision (b).
(ii)Each unit in the development, exclusive of a managers unit or units, is affordable to, and occupied by, either a lower or very low income household.
(B)For the purposes of this paragraph, replace shall mean either of the following:
(i)If any dwelling units described in subparagraph (A) are occupied on the date of application, the proposed housing development shall provide at least the same number of units of equivalent size to be made available at affordable rent or affordable housing cost to, and occupied by, persons and families in the same or lower income category as those households in occupancy. If the income category of the household in occupancy is not known, it shall be rebuttably presumed that lower income renter households occupied these units in the same proportion of lower income renter households to all renter households within the jurisdiction, as determined by the most recently available data from the United States Department of Housing and Urban Developments Comprehensive Housing Affordability Strategy database. For unoccupied dwelling units described in subparagraph (A) in a development with occupied units, the proposed housing development shall provide units of equivalent size to be made available at affordable rent or affordable housing cost to, and occupied by, persons and families in the same or lower income category as the last household in occupancy. If the income category of the last household in occupancy is not known, it shall be rebuttably presumed that lower income renter households occupied these units in the same proportion of lower income renter households to all renter households within the jurisdiction, as determined by the most recently available data from the United States Department of Housing and Urban Developments Comprehensive Housing Affordability Strategy database. All replacement calculations resulting in fractional units shall be rounded up to the next whole number. If the replacement units will be rental dwelling units, these units shall be subject to a recorded affordability restriction for at least 55 years. If the proposed development is for-sale units, the units replaced shall be subject to paragraph (2).
(ii)If all dwelling units described in subparagraph (A) have been vacated or demolished within the five-year period preceding the application, the proposed housing development shall provide at least the same number of units of equivalent size as existed at the highpoint of those units in the five-year period preceding the application to be made available at affordable rent or affordable housing cost to, and occupied by, persons and families in the same or lower income category as those persons and families in occupancy at that time, if known. If the incomes of the persons and families in occupancy at the highpoint is not known, it shall be rebuttably presumed that low-income and very low income renter households occupied these units in the same proportion of low-income and very low income renter households to all renter households within the jurisdiction, as determined by the most recently available data from the United States Department of Housing and Urban Developments Comprehensive Housing Affordability Strategy database. All replacement calculations resulting in fractional units shall be rounded up to the next whole number. If the replacement units will be rental dwelling units, these units shall be subject to a recorded affordability restriction for at least 55 years. If the proposed development is for-sale units, the units replaced shall be subject to paragraph (2).
(C)Notwithstanding subparagraph (B), for any dwelling unit described in subparagraph (A) that is or was, within the five-year period preceding the application, subject to a form of rent or price control through a local governments valid exercise of its police power and that is or was occupied by persons or families above lower income, the city, county, or city and county may do either of the following:
(i)Require that the replacement units be made available at affordable rent or affordable housing cost to, and occupied by, low-income persons or families. If the replacement units will be rental dwelling units, these units shall be subject to a recorded affordability restriction for at least 55 years. If the proposed development is for-sale units, the units replaced shall be subject to paragraph (2).
(ii)Require that the units be replaced in compliance with the jurisdictions rent or price control ordinance, provided that each unit described in subparagraph (A) is replaced. Unless otherwise required by the jurisdictions rent or price control ordinance, these units shall not be subject to a recorded affordability restriction.
(D)For purposes of this paragraph, equivalent size means that the replacement units contain at least the same total number of bedrooms as the units being replaced.
(E)Subparagraph (A) does not apply to an applicant seeking a density bonus for a proposed housing development if his or her application was submitted to, or processed by, a city, county, or city and county before January 1, 2015.
(d)(1)An applicant for a density bonus pursuant to subdivision (b) may submit to a city, county, or city and county a proposal for the specific incentives or concessions that the applicant requests pursuant to this section, and may request a meeting with the city, county, or city and county. The city, county, or city and county shall grant the concession or incentive requested by the applicant unless the city, county, or city and county makes a written finding, based upon substantial evidence, of any of the following:
(A)The concession or incentive does not result in identifiable and actual cost reductions, consistent with subdivision (k), to provide for affordable housing costs, as defined in Section 50052.5 of the Health and Safety Code, or for rents for the targeted units to be set as specified in subdivision (c).
(B)The concession or incentive would have a specific, adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65589.5, upon public health and safety or the physical environment or on any real property that is listed in the California Register of Historical Resources and for which there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact without rendering the development unaffordable to low-income and moderate-income households.
(C)The concession or incentive would be contrary to state or federal law.
(2)The applicant shall receive the following number of incentives or concessions:
(A)One incentive or concession for projects that include at least 10 percent of the total units for lower income households, at least 5 percent for very low income households, or at least 10 percent for persons and families of moderate income in a common interest development.
(B)Two incentives or concessions for projects that include at least 20 percent of the total units for lower income households, at least 10 percent for very low income households, or at least 20 percent for persons and families of moderate income in a common interest development.
(C)Three incentives or concessions for projects that include at least 30 percent of the total units for lower income households, at least 15 percent for very low income households, or at least 30 percent for persons and families of moderate income in a common interest development.
(3)The applicant may initiate judicial proceedings if the city, county, or city and county refuses to grant a requested density bonus, incentive, or concession. If a court finds that the refusal to grant a requested density bonus, incentive, or concession is in violation of this section, the court shall award the plaintiff reasonable attorneys fees and costs of suit. Nothing in this subdivision shall be interpreted to require a local government to grant an incentive or concession that has a specific, adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65589.5, upon health, safety, or the physical environment, and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact. Nothing in this subdivision shall be interpreted to require a local government to grant an incentive or concession that would have an adverse impact on any real property that is listed in the California Register of Historical Resources. The city, county, or city and county shall establish procedures for carrying out this section, that shall include legislative body approval of the means of compliance with this section.
(4)The city, county, or city and county shall bear the burden of proof for the denial of a requested concession or incentive.
(e)(1)In no case may a city, county, or city and county apply any development standard that will have the effect of physically precluding the construction of a development meeting the criteria of subdivision (b) at the densities or with the concessions or incentives permitted by this section. An applicant may submit to a city, county, or city and county a proposal for the waiver or reduction of development standards that will have the effect of physically precluding the construction of a development meeting the criteria of subdivision (b) at the densities or with the concessions or incentives permitted under this section, and may request a meeting with the city, county, or city and county. If a court finds that the refusal to grant a waiver or reduction of development standards is in violation of this section, the court shall award the plaintiff reasonable attorneys fees and costs of suit. Nothing in this subdivision shall be interpreted to require a local government to waive or reduce development standards if the waiver or reduction would have a specific, adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65589.5, upon health, safety, or the physical environment, and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact. Nothing in this subdivision shall be interpreted to require a local government to waive or reduce development standards that would have an adverse impact on any real property that is listed in the California Register of Historical Resources, or to grant any waiver or reduction that would be contrary to state or federal law.
(2)A proposal for the waiver or reduction of development standards pursuant to this subdivision shall neither reduce nor increase the number of incentives or concessions to which the applicant is entitled pursuant to subdivision (d).
(f)For the purposes of this chapter, density bonus means a density increase over the otherwise maximum allowable gross residential density as of the date of application by the applicant to the city, county, or city and county, or, if elected by the applicant, a lesser percentage of density increase, including, but not limited to, no increase in density. The amount of density increase to which the applicant is entitled shall vary according to the amount by which the percentage of affordable housing units exceeds the percentage established in subdivision (b).
(1)For housing developments meeting the criteria of subparagraph (A) of paragraph (1) of subdivision (b), the density bonus shall be calculated as follows:
| Percentage Low-Income Units | Percentage Density Bonus |
| 10 | 20 |
| 11 | 21.5 |
| 12 | 23 |
| 13 | 24.5 |
| 14 | 26 |
| 15 | 27.5 |
| 17 | 30.5 |
| 18 | 32 |
| 19 | 33.5 |
| 20 | 35 |
(2)For housing developments meeting the criteria of subparagraph (B) of paragraph (1) of subdivision (b), the density bonus shall be calculated as follows:
| Percentage Very Low Income Units | Percentage Density Bonus |
| 5 | 20 |
| 6 | 22.5 |
| 7 | 25 |
| 8 | 27.5 |
| 9 | 30 |
| 10 | 32.5 |
| 11 | 35 |
(3)(A)For housing developments meeting the criteria of subparagraph (C) of paragraph (1) of subdivision (b), the density bonus shall be 20 percent of the number of senior housing units.
(B)For housing developments meeting the criteria of subparagraph (E) of paragraph (1) of subdivision (b), the density bonus shall be 20 percent of the number of the type of units giving rise to a density bonus under that subparagraph.
(4)For housing developments meeting the criteria of subparagraph (D) of paragraph (1) of subdivision (b), the density bonus shall be calculated as follows:
| Percentage Moderate-Income Units | Percentage Density Bonus |
| 10 | 5 |
| 11 | 6 |
| 12 | 7 |
| 13 | 8 |
| 14 | 9 |
| 15 | 10 |
| 16 | 11 |
| 17 | 12 |
| 18 | 13 |
| 19 | 14 |
| 20 | 15 |
| 21 | 16 |
| 22 | 17 |
| 23 | 18 |
| 24 | 19 |
| 25 | 20 |
| 26 | 21 |
| 27 | 22 |
| 28 | 23 |
| 29 | 24 |
| 30 | 25 |
| 31 | 26 |
| 32 | 27 |
| 33 | 28 |
| 34 | 29 |
| 35 | 30 |
| 36 | 31 |
| 37 | 32 |
| 38 | 33 |
| 39 | 34 |
| 40 | 35 |
(5)All density calculations resulting in fractional units shall be rounded up to the next whole number. The granting of a density bonus shall not require, or be interpreted, in and of itself, to require a general plan amendment, local coastal plan amendment, zoning change, or other discretionary approval.
(g)(1)When an applicant for a tentative subdivision map, parcel map, or other residential development approval donates land to a city, county, or city and county in accordance with this subdivision, the applicant shall be entitled to a 15-percent increase above the otherwise maximum allowable residential density for the entire development, as follows:
| Percentage Very Low Income | Percentage Density Bonus |
| 10 | 15 |
| 11 | 16 |
| 12 | 17 |
| 13 | 18 |
| 14 | 19 |
| 15 | 20 |
| 16 | 21 |
| 17 | 22 |
| 18 | 23 |
| 19 | 24 |
| 20 | 25 |
| 21 | 26 |
| 22 | 27 |
| 23 | 28 |
| 24 | 29 |
| 25 | 30 |
| 26 | 31 |
| 27 | 32 |
| 28 | 33 |
| 29 | 34 |
| 30 | 35 |
(2)This increase shall be in addition to any increase in density mandated by subdivision (b), up to a maximum combined mandated density increase of 35 percent if an applicant seeks an increase pursuant to both this subdivision and subdivision (b). All density calculations resulting in fractional units shall be rounded up to the next whole number. Nothing in this subdivision shall be construed to enlarge or diminish the authority of a city, county, or city and county to require a developer to donate land as a condition of development. An applicant shall be eligible for the increased density bonus described in this subdivision if all of the following conditions are met:
(A)The applicant donates and transfers the land no later than the date of approval of the final subdivision map, parcel map, or residential development application.
(B)The developable acreage and zoning classification of the land being transferred are sufficient to permit construction of units affordable to very low income households in an amount not less than 10 percent of the number of residential units of the proposed development.
(C)The transferred land is at least one acre in size or of sufficient size to permit development of at least 40 units, has the appropriate general plan designation, is appropriately zoned with appropriate development standards for development at the density described in paragraph (3) of subdivision (c) of Section 65583.2, and is or will be served by adequate public facilities and infrastructure.
(D)The transferred land shall have all of the permits and approvals, other than building permits, necessary for the development of the very low income housing units on the transferred land, not later than the date of approval of the final subdivision map, parcel map, or residential development application, except that the local government may subject the proposed development to subsequent design review to the extent authorized by subdivision (i) of Section 65583.2 if the design is not reviewed by the local government prior to before the time of transfer.
(E)The transferred land and the affordable units shall be subject to a deed restriction ensuring continued affordability of the units consistent with paragraphs (1) and (2) of subdivision (c), which shall be recorded on the property at the time of the transfer.
(F)The land is transferred to the local agency or to a housing developer approved by the local agency. The local agency may require the applicant to identify and transfer the land to the developer.
(G)The transferred land shall be within the boundary of the proposed development or, if the local agency agrees, within one-quarter mile of the boundary of the proposed development.
(H)A proposed source of funding for the very low income units shall be identified not later than the date of approval of the final subdivision map, parcel map, or residential development application.
(h)(1)When an applicant proposes to construct a housing development that conforms to the requirements of subdivision (b) and includes a child care facility that will be located on the premises of, as part of, or adjacent to, the project, the city, county, or city and county shall grant either of the following:
(A)An additional density bonus that is an amount of square feet of residential space that is equal to or greater than the amount of square feet in the child care facility.
(B)An additional concession or incentive that contributes significantly to the economic feasibility of the construction of the child care facility.
(2)The city, county, or city and county shall require, as a condition of approving the housing development, that the following occur:
(A)The child care facility shall remain in operation for a period of time that is as long as or longer than the period of time during which the density bonus units are required to remain affordable pursuant to subdivision (c).
(B)Of the children who attend the child care facility, the children of very low income households, lower income households, or families of moderate income shall equal a percentage that is equal to or greater than the percentage of dwelling units that are required for very low income households, lower income households, or families of moderate income pursuant to subdivision (b).
(3)Notwithstanding any requirement of this subdivision, a city, county, or city and county shall not be required to provide a density bonus or concession for a child care facility if it finds, based upon substantial evidence, that the community has adequate child care facilities.
(4)Child care facility, as used in this section, means a child day care facility other than a family day care home, including, but not limited to, infant centers, preschools, extended day care facilities, and schoolage child care centers.
(i)Housing development, as used in this section, means a development project for five or more residential units, including mixed-use developments. For the purposes of this section, housing development also includes a subdivision or common interest development, as defined in Section 4100 of the Civil Code, approved by a city, county, or city and county and consists of residential units or unimproved residential lots and either a project to substantially rehabilitate and convert an existing commercial building to residential use or the substantial rehabilitation of an existing multifamily dwelling, as defined in subdivision (d) of Section 65863.4, where the result of the rehabilitation would be a net increase in available residential units. For the purpose of calculating a density bonus, the residential units shall be on contiguous sites that are the subject of one development application, but do not have to be based upon individual subdivision maps or parcels. The density bonus shall be permitted in geographic areas of the housing development other than the areas where the units for the lower income households are located.
(j)(1)The granting of a concession or incentive shall not require or be interpreted, in and of itself, to require a general plan amendment, local coastal plan amendment, zoning change, study, or other discretionary approval. For purposes of this subdivision, study does not include reasonable documentation to establish eligibility for the concession or incentive or to demonstrate that the incentive or concession meets the definition set forth in subdivision (k). This provision is declaratory of existing law.
(2)Except as provided in subdivisions (d) and (e), the granting of a density bonus shall not require or be interpreted to require the waiver of a local ordinance or provisions of a local ordinance unrelated to development standards.
(k)For the purposes of this chapter, concession or incentive means any of the following:
(1)A reduction in site development standards or a modification of zoning code requirements or architectural design requirements that exceed the minimum building standards approved by the California Building Standards Commission as provided in Part 2.5 (commencing with Section 18901) of Division 13 of the Health and Safety Code, including, but not limited to, a reduction in setback and square footage requirements and in the ratio of vehicular parking spaces that would otherwise be required that results in identifiable and actual cost reductions, to provide for affordable housing costs, as defined in Section 50052.5 of the Health and Safety Code, or for rents for the targeted units to be set as specified in subdivision (c).
(2)Approval of mixed-use zoning in conjunction with the housing project if commercial, office, industrial, or other land uses will reduce the cost of the housing development and if the commercial, office, industrial, or other land uses are compatible with the housing project and the existing or planned development in the area where the proposed housing project will be located.
(3)Other regulatory incentives or concessions proposed by the developer or the city, county, or city and county that result in identifiable and actual cost reductions to provide for affordable housing costs, as defined in Section 50052.5 of the Health and Safety Code, or for rents for the targeted units to be set as specified in subdivision (c).
(l)Subdivision (k) does not limit or require the provision of direct financial incentives for the housing development, including the provision of publicly owned land, by the city, county, or city and county, or the waiver of fees or dedication requirements.
(m)This section does not supersede or in any way alter or lessen the effect or application of the California Coastal Act of 1976 (Division 20 (commencing with Section 30000) of the Public Resources Code).
(n)If permitted by local ordinance, nothing in this section shall be construed to prohibit a city, county, or city and county from granting a density bonus greater than what is described in this section for a development that meets the requirements of this section or from granting a proportionately lower density bonus than what is required by this section for developments that do not meet the requirements of this section.
(o)For purposes of this section, the following definitions shall apply:
(1)Development standard includes a site or construction condition, including, but not limited to, a height limitation, a setback requirement, a floor area ratio, an onsite open-space requirement, or a parking ratio that applies to a residential development pursuant to any ordinance, general plan element, specific plan, charter, or other local condition, law, policy, resolution, or regulation.
(2)Maximum allowable residential density means the density allowed under the zoning ordinance and land use element of the general plan, or, if a range of density is permitted, means the maximum allowable density for the specific zoning range and land use element of the general plan applicable to the project. Where If the density allowed under the zoning ordinance is inconsistent with the density allowed under the land use element of the general plan, the general plan density shall prevail.
(p)(1) Except as provided in paragraphs (2) and (3), upon the request of the developer, a city, county, or city and county shall not require a vehicular parking ratio, inclusive of handicapped and guest parking, of a development meeting the criteria of subdivisions (b) and (c), that exceeds the following ratios:
(A)Zero to one bedroom: one onsite parking space.
(B)Two to three bedrooms: two onsite parking spaces.
(C)Four and more bedrooms: two and one-half parking spaces.
(2)Notwithstanding paragraph (1), if a development includes the maximum percentage of low-income or very low income units provided for in paragraphs (1) and (2) of subdivision (f) and is located within one-half mile of a major transit stop, as defined in subdivision (b) of Section 21155 of the Public Resources Code, and there is unobstructed access to the major transit stop from the development, then, upon the request of the developer, a city, county, or city and county shall not impose a vehicular parking ratio, inclusive of handicapped and guest parking, that exceeds 0.5 spaces per bedroom. For purposes of this subdivision, a development shall have unobstructed access to a major transit stop if a resident is able to access the major transit stop without encountering natural or constructed impediments.
(3)Notwithstanding paragraph (1), if a development consists solely of rental units, exclusive of a managers unit or units, with an affordable housing cost to lower income families, as provided in Section 50052.5 of the Health and Safety Code, then, upon the request of the developer, a city, county, or city and county shall not impose a vehicular parking ratio, inclusive of handicapped and guest parking, that exceeds the following ratios:
(A)If the development is located within one-half mile of a major transit stop, as defined in subdivision (b) of Section 21155 of the Public Resources Code, and there is unobstructed access to the major transit stop from the development, the ratio shall not exceed 0.5 spaces per unit.
(B)If the development is a for-rent housing development for individuals who are 62 years of age or older that complies with Sections 51.2 and 51.3 of the Civil Code, the ratio shall not exceed 0.5 spaces per unit. The development shall have either paratransit service or unobstructed access, within one-half mile, to fixed bus route service that operates at least eight times per day.
(C)If the development is a special needs housing development, as defined in Section 51312 of the Health and Safety Code, the ratio shall not exceed 0.3 spaces per unit. The development shall have either paratransit service or unobstructed access, within one-half mile, to fixed bus route service that operates at least eight times per day.
(4)If the total number of parking spaces required for a development is other than a whole number, the number shall be rounded up to the next whole number. For purposes of this subdivision, a development may provide onsite parking through tandem parking or uncovered parking, but not through onstreet parking.
(5)This subdivision shall apply to a development that meets the requirements of subdivisions (b) and (c), but only at the request of the applicant. An applicant may request parking incentives or concessions beyond those provided in this subdivision pursuant to subdivision (d).
(6)This subdivision does not preclude a city, county, or city and county from reducing or eliminating a parking requirement for development projects of any type in any location.
(7)Notwithstanding paragraphs (2) and (3), if a city, county, city and county, or an independent consultant has conducted an areawide or jurisdictionwide parking study in the last seven years, then the city, county, or city and county may impose a higher vehicular parking ratio not to exceed the ratio described in paragraph (1), based upon substantial evidence found in the parking study, that includes, but is not limited to, an analysis of parking availability, differing levels of transit access, walkability access to transit services, the potential for shared parking, the effect of parking requirements on the cost of market-rate and subsidized developments, and the lower rates of car ownership for low-income and very low income individuals, including seniors and special needs individuals. The city, county, or city and county shall pay the costs of any new study. The city, county, or city and county shall make findings, based on a parking study completed in conformity with this paragraph, supporting the need for the higher parking ratio.
(8)A request pursuant to this subdivision shall neither reduce nor increase the number of incentives or concessions to which the applicant is entitled pursuant to subdivision (d).
(q)Each component of any density calculation, including base density and bonus density, resulting in fractional units shall be separately rounded up to the next whole number. The Legislature finds and declares that this provision is declaratory of existing law.
(r)This chapter shall be interpreted liberally in favor of producing the maximum number of total housing units.
|
Date
|
Status
|
|---|---|
| May 31, 2018 | Read third time. Refused passage. |
| May 10, 2018 | Read second time. Ordered to third reading. |
| May 9, 2018 | Read second time and amended. Ordered returned to second reading. |
| May 8, 2018 | From committee: Amend, and do pass as amended. (Ayes 7. Noes 3.) (May 8). |
| May 7, 2018 | Re-referred to Com. on JUD. |
| May 3, 2018 | From committee chair, with author's amendments: Amend, and re-refer to Com. on JUD. Read second time and amended. |
| May 1, 2018 | Re-referred to Com. on JUD. |
| Apr 30, 2018 | From committee chair, with author's amendments: Amend, and re-refer to Com. on JUD. Read second time and amended. |
| Apr 25, 2018 | From committee: Do pass and re-refer to Com. on JUD. (Ayes 5. Noes 2.) (April 25). Re-referred to Com. on JUD. |
| Apr 3, 2018 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Apr 2, 2018 | Re-referred to Com. on H. & C.D. |
| Mar 22, 2018 | Referred to Coms. on H. & C.D. and JUD. |
| Feb 15, 2018 | From printer. May be heard in committee March 17. |
| Feb 14, 2018 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| May 31, 2018 | AB 2364 BLOOM Assembly Third Reading | Assembly Floor |
Failed |
|
| May 8, 2018 | Do pass as amended. | Assembly Standing Committee on Judiciary |
Passed |
|
| Apr 25, 2018 | Do pass and be re-referred to the Committee on [Judiciary] | Assembly Standing Committee on Housing and Community Development |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Aaron Reed and Associates | * Against | Apr 25, 2018 |
| Aids Healthcare Foundation | ** Support | May 6, 2018 |
| Apartment Association of East Bay | ** Indeterminate | May 8, 2018 |
| Apartment Association of Greater Los Angeles | * Indeterminate | May 8, 2018 |
| Apartment Association of North Valley | ** Indeterminate | May 8, 2018 |
| Apartment Association Of Orange County | * Indeterminate | May 8, 2018 |
| Apartment Association of Southern California Cities | ** Indeterminate | May 8, 2018 |
| Apartment Association, California Southern Cities | ** Against | May 6, 2018 |
| California Apartment Association | * Against Unless Amend | May 8, 2018 |
| California Association Of Realtors | * Against | May 8, 2018 |
| California Building Industry Association | ** Against | May 6, 2018 |
| California Business Properties Association | ** Against | May 6, 2018 |
| California Chamber Of Commerce | ** Against | May 6, 2018 |
| California NBME | * Support | Apr 25, 2018 |
| California Rural Legal Assistance Foundation | * Support | May 8, 2018 |
| City of Santa Monica | * Support | May 8, 2018 |
| City of West Hollywood | * Indeterminate | May 8, 2018 |
| Civil Justice Association Of California | ** Against | May 6, 2018 |
| East Bay Rental Housing Association | ** Against | May 6, 2018 |
| Four Regional Apartment Associations | * Against | Apr 25, 2018 |
| Legal Aid Association Of California | * Support | May 8, 2018 |
| North Valley Property Owners Association | ** Against | May 6, 2018 |
| San Diego County Apartment Association | * Indeterminate | May 8, 2018 |
| Santa Barbara Rental Property Association | ** Indeterminate | May 8, 2018 |
| Santa Monica Rent Control Board | * Support | May 8, 2018 |
| western center on law and poverty | ** Support | May 6, 2018 |
ASSEMBLY THIRD READING
ATR Bill Id:AB 2364
Author:(Bloom and Chiu)
As Amended Ver:May 9, 2018
Majority vote
Committee | Votes | Ayes | Noes |
Housing | 5-2 | Chiu, Chau, Gloria, Limón, Wood | Maienschein, Choi |
Judiciary | 7-3 | Mark Stone, Chau, Chiu, Gonzalez Fletcher, Holden, Kalra, Reyes | Cunningham, Kiley, Maienschein |
SUMMARY: Makes a number of revisions and changes to the Ellis Act, the state law that allows landlords of rent-controlled properties to exit the rental market by evicting the tenants, if certain procedures are followed. Specifically, this bill:
- Provides that if the property is offered again for rent within five years (increased from two years) of the date the property were withdrawn from rent or lease, then certain provisions govern. Among the applicable provisions changed by this bill are that:
- The property owner is liable to any tenant who was displaced by that action for actual and exemplary damages, but the suit must be brought within one year (decreased from three years) of the date when the withdrawn accommodations are offered again for rent or lease.
- Requires the owner to offer to reinstitute the agreement or lease on the same terms and at the same rent in effect at the time of displacement to that displaced tenant or lessee.
- Provides that if the property is returned to the rental market within 10 years from the date of withdrawal, the owner must first offer the returned unit to the tenant displaced by the withdrawal, if the tenant has advised the owner in writing within 30 days of the displacement of his or her desire to consider an offer to renew the tenancy and has furnished the owner with an address to which that offer is to be directed.
- With respect to the owner's offer in 2) above, requires the owner to offer to reinstitute the agreement or lease on the same terms and at the same rent in effect at the time of displacement to that displaced tenant.
- Removes the cap on the amount of punitive damages that a displaced tenant may recover against an owner of accommodations for violations of 2) or 3) above.
- Clarifies that none of the above provisions relating to enforcement of the Act precludes a tenant or public entity from pursuing any alternative remedy under the law.
- Provides that any amended local ordinances, regulations, or rules implementing these provisions shall be prospective only and shall have no effect on a withdrawal for which the notice of intent to withdraw the accommodation has been filed with the public entity prior to January 1, 2019.
- Clarifies that the owner may elect to extend the tenancy on any other rental unit up to one year after date of delivering the notice of intent to withdraw to the public entity.
- Provides that the date of withdrawal for the accommodations as a whole for the purposes of calculating the time periods described above shall be the last date of withdrawal of any extended tenancy.
- Provides that it was not the Legislature's intent, in enacting the Ellis Act, to permit an owner to withdraw from rent or lease, or return to the rental market, less than all of the accommodations withdrawn pursuant to the Act.
EXISTING LAW, the Ellis Act:
- Prohibits a public entity, by statute, ordinance, or regulation, from compelling an owner of any residential real property, except for a residential hotel meeting specified requirements, to continue to offer rental units for rental housing. (Government. Code Section 7060 et seq. All further references are to this code unless otherwise stated.)
- Provides authority for a public entity to regulate the subsequent use of the property and mitigate any adverse impacts on people who are displaced by the withdrawal of a property from the rental market. (Section 7060.1)
- Authorizes a public entity having a system of rent controls to require the following when the owner of a rental property subject to rent controls has exercised his or her Ellis Act rights:
- If the property is returned to the rental market within five years following the filing of the notice of intent to withdraw or within five years after the property's withdrawal, the rental unit must be offered at the lawful rent in effect at the time any notice of intent to withdraw the accommodations is filed with the public entity, plus annual adjustments available under the system of control. (Section 7060.2(a))
- If the property is offered for rent within two years from the date the property was withdrawn from rent or lease, then the following apply:
- The property owner is liable to any evicted tenant for actual and exemplary damages, but the suit must be brought within three years of the withdrawal of accommodations from rent or lease.
- The public entity may also sue the property owner for exemplary damages for the displacement of tenants and lessees; and
- The property owner must offer former evicted tenants the right of first refusal to reoccupy the property pursuant to a reinstituted rental agreement where the tenant has advised the owner of this entitlement within 30 days of the tenant's eviction from the premises when the property was first withdrawn. (Section 7060.2(b)
- If the property is returned to the rental market within 10 years from the date of withdrawal, the owner must first offer the returned unit to the tenant displaced by the withdrawal where the tenant has requested the offer within 30 days after the owner had notified the public entity of an intention to offer the property again for rent. The owner of the accommodations shall be liable to any tenant or lessee who was displaced by that action for failure to comply with this requirement, for punitive damages in an amount which does not exceed the contract rent for six months. (Section 7060.2(c))
- If the accommodations are demolished, and new accommodations are constructed on the same property, and offered for rent or lease within five years of the date the accommodations were withdrawn from rent or lease, the newly constructed accommodations shall be subject to any system of controls on the price at which they would be offered on the basis of a fair and reasonable return on the newly constructed accommodations, notwithstanding any exemption from the system of controls for newly constructed accommodations. (Section 7060.2(d))
- Provides that in rent-control jurisdictions, the rent control ordinance may require owners to give notice before withdrawing the building from the market. The owner must provide 120 days' notice — or one year's notice in the case of tenants who are disabled or more than 62 years old, provided they have lived in the accommodations for at least one year prior to the date of delivery to the public entity of the notice of intent to withdraw — before terminating the tenancy. (Section 7060.4(b))
- States that it is the intent of the Legislature in enacting the Ellis Act to supersede any holding or portion of any holding in Nash v. City of Santa Monica, 37 Cal.3d 97 to the extent that it conflicts with this chapter, so as to permit landlords to go out of business. Further clarifies, however, that the Act is not otherwise intended to, among other things, permit an owner to withdraw from rent or lease less than all of the accommodations, as defined. (Section 7060.7)
FISCAL EFFECT: None.
COMMENTS: The Ellis Act (Government Code, Title 1, Division 7, Chapter 12.75, commencing with Section 7060) is the 1985 state law that allows landlords to exit the rental market by evicting the tenants without cause, as long as sufficient notice is given and certain procedures are followed. Under the Act, a landlord's authority to evict even extends to rent-controlled properties in cities where the tenants would otherwise be protected by rent control or just-cause ordinances. As a result, the Act is susceptible to abuse by unscrupulous actors who may see an incentive to "game the system" and use the Act to evict good tenants who would not otherwise be so easy to remove. As noted by the City of West Hollywood, a chief proponent of this bill: "The law allows owners to re-enter the residential real estate market and offer the units for rent at market rates after just 5 years of the property being withdrawn from the rental market. This creates a powerful incentive for owners to leave the rental market only temporarily in order to evade eviction protections and terminate long-term below-market tenancies."
In response to reports of potential abuse of the Ellis Act, this bill seeks to make a number of modest changes to the Ellis Act, including extending the penalty phase for violations of the Act from a two-year window to a five-year window, and eliminating the cap on punitive damages.
Recent data highlights increased rate of Ellis Act evictions. Recent statistics clearly show that Ellis Act evictions have been on the rise in the past decade. In 2016, a Los Angeles Times analysis of housing data revealed that 1,137 rent-controlled units in Los Angeles were removed from the market in 2015—a number that has almost tripled since 2013. During that time, the researchers found the number of evictions from rent-controlled units has doubled. As the Times investigation noted, many of these recent evictions were carried out by developers who purchased the buildings with the intention of demolishing them to construct pricier housing. At least 51% of the Los Angeles properties removed under the Act in 2013 had been purchased within the previous year. (Ben Poston and Andrew Khouri. "More rent-controlled buildings are being demolished to make way for pricier housing." Los Angeles Times (April 2, 2016). Available at: http://www.latimes.com/local/california/la-me-apartments-demolished-20160402-story.html.)
In March 2017, the Anti-Eviction Mapping Project (AEMP), in partnership with Los Angeles's Coalition for Economic Survival, released an interactive time-lapse digital map detailing the accumulation of Ellis Act evictions in Los Angeles from the beginning of 2001 to the end of 2016. Their map, based upon Rent Board data, shows 21,200 evictions across all of Los Angeles. Their analysis showed that while there were only 102 Ellis Act evictions filed in 2013, that number has more than tripled with 352 filed in 2016 alone.
Similarly, the AEMP, in partnership with the statewide tenant rights organization Tenants Together, analyzed San Francisco Ellis Act evictions filed between 2009 and 2013, finding that also 51% of Ellis Act evictions occurred within the first year of property ownership and that 78 % transpired within the first five years. In 2013 in San Francisco, 60 percent occurred within the first year of ownership and 79 within the first five years. Thus, in both Los Angeles and San Francisco, AEMP concluded that Ellis Act evictions are clearly linked to real estate speculation.
Background on the Ellis Act. In Nash v. City of Santa Monica (1984) 37 Cal.3d 97, the California Supreme Court upheld the power of a city, in the context of a land use ordinance, to require a residential real property owner to obtain a removal permit, under specified criteria, before the owner could demolish his or her rental property and cause its removal from the marketplace. SB 505 (Ellis), Chapter 1509, Statutes of 1985, preempted a local government's authority to compel a rental property owner to stay in the rental housing business by prohibiting a local government from enacting or implementing any law to compel a residential real property owner to offer, or continue to offer, the property for lease or rent.
The Act only applies when an owner seeks to remove all the units within a building or all units on a property with a building containing three or fewer units from the market, and only has real effect in cities or counties with rent control and just cause evictions. The Act authorizes local governments to place restrictions on how property owners can utilize the Ellis Act to withdraw a property from the rental property market. An owner can be required to give tenants 120 days' notice that the property is being withdrawn from the rental market. Tenants who are over 62 or disabled must receive one year's notice, provided they have lived in the accommodations for at least one year.
A number of restrictions apply to situations where owners offer units for rent within certain time frames (two years, five years, and 10 years) after removing a property from the rental market pursuant to the Act. For example, if an owner reintroduces a property for rent within five years of having withdrawn it, he or she is required to re-rent a unit at the rent control amount at the time the unit was withdrawn (i.e. the same amount as it would have been had the landlord continued to rent the property).
This bill establishes a single withdrawal date for a given property and eliminates one method of gaming the system. According to the author, current law indicates there is only one withdrawal date for the purpose of calculating the amount of allowable rent when an apartment is subsequently re-offered for rent. However, other parts of the Act governing the lease termination date seem to allow for multiple withdrawal dates. Unfortunately, there is no clear provision that specifies that there is only one date that applies if the property is put back into the rental market.
As a consequence, the author contends, some landlords are taking advantage of the ambiguity in the law and removing units from the rental market, only to reintroduce them for rent in a piecemeal fashion in order to avoid the Act's restrictions and evade rent control laws. According to proponents, some landlords also apply different withdrawal dates to different units and claim that returning one unit to the market does not obligate the landlord to re-offer any other units to former tenants. If unchecked, this allows a landlord to effectively withdraw less than all the units from the rental market and, in fact, never actually leave the rental market at all, while still having successfully evicted all the tenants. The author elaborates:
This confusion has led at least one court of appeal to find that a landlord could apply different withdrawal dates to determine the rental amount when re-renting a unit. This allowed the landlord to choose a date outside the window of time when the Act's rent restrictions apply, despite having returned multiple other units on the property to the rental market at an earlier time. The landlord never actually left the rental market but nevertheless was able to evict all the tenants and re-rent all the units at market rates. This is a gross distortion and subversion of the purpose of the Ellis Act. AB 2364 seeks to remedy this by creating one clear and concise exit date, the last tenant to leave. In addition it increases penalties and the time frame for those penalties.
Accordingly, this bill seeks to close the loophole and prevent landlords from using this piecemeal approach to game the system and try to subvert the Ellis Act. First, the bill expressly establishes that the date of withdrawal for the accommodations as a whole, for the purposes of calculating the time periods in Section 7060.2, shall be the last date of withdrawal of any extended tenancy. (See proposed new paragraph (6) of Section 7060.4(b).) In addition, this bill amends Section 7060.7(d) to clarify that the Act is not intended to permit an owner to return to the rental market anything less than all of the accommodations at issue. Therefore, if the landlord returns any unit in the building back to the rental market, then the bill acts to deem the entire property to back on the market, thereby obligating the landlord to comply with all requirements of the Act.
This bill extends existing penalty provisions under the Act to cover properties withdrawn and then later returned to the rental market within a five year period, rather than two years. Existing law, Section 7060.2(b), specifies a number of procedural protections and liability provisions that apply when a landlord for residential purposes re-offers accommodations for rent or lease within two years of the date the accommodations were previously withdrawn from rent or lease. In order to strengthen the law and cut down on potential abuses, this bill extends the penalty/liability period from two years to five years, measured from the date the accommodations were withdrawn from rent or lease. To balance this, the author has listened to opponents' concerns and taken an amendment to require that any lawsuit brought by a tenant seeking damages for being illegally displaced from the property must be brought within one year (rather than three years) of the date when the withdrawn accommodations are offered on the market again for rent or lease.
To strengthen enforcement, this bill uncaps punitive damages in civil lawsuits for certain violations of the Act. Existing law, Section 7060.2 (c), provides that a property owner is liable to a tenant who has been displaced from an apartment through actions that fail to comply with the Act, including, among other things, failure to first offer the unit to the tenant displaced by the withdrawal of accommodations at the same rent in effect at the time of the tenant's displacement. Under existing law, however, punitive damages are capped at an amount that does not exceed the contract rent for six months. According to proponents, because the potential windfall to the landlord is so great for illegally evicting a rent-controlled tenant and re-renting the same accommodations later for much higher rent, the cap on punitive damages is an insufficient deterrent to misconduct. Accordingly, this bill deletes the cap on punitive damages, which are available to the displaced tenant in addition to exemplary and actual damages suffered.
Previous related legislation.
AB 982 (Bloom) of 2017 would have extended the term for withdrawal of accommodations under the Ellis Act to one year for all tenants and lessees without regard to age or disability. AB 982 died in the Assembly Committee on Housing and Community Development.
AB 423 (Bonta) of 2017 would have exempted residential hotels in the City of Oakland from the Ellis Act beginning January 1, 2018. AB 423 failed passage on the Assembly Floor.
SB 1267 (Allen) of 2016 would have required a tenant with a custodial or family relationship with a pupil enrolled in a primary or secondary school to be give one-year's notice before being evicted under the Ellis Act. SB 1267 died in the Senate Transportation and Housing Committee.
SB 364 (Leno) of 2015 would have allowed the city and county of San Francisco to prohibit, by ordinance or ballot measure, a rental housing owner from removing a building from the market pursuant to the Act unless all owners in the property have held their ownership interest for at least five years. SB 364 failed passage in the Senate Transportation and Housing Committee.
Analysis Prepared by: Lisa Engel / H. & C.D. / (916) 319-2085 FN: 0002890
Date of Hearing: May 8, 2018
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
ABPCA Bill Id:AB 2364
Author:(Bloom) – As Amended Ver:May 3, 2018
As Proposed to be Amended
SUBJECT: RENTAL CONTROL: WITHDRAW FROM ACCOMMODATION
KEY ISSUES:
- in order to address reported abuse of the ellis act with respect to the piecemeal return to the rental market of different units in a single property, should it be established that there is only one withdrawal date for the overall property, and that if any unit in the buIlding is returned to the rental market, then the whole building is deemed to be back on the market and thus regulated by the ellis act?
- in order to strengthen enforcement of the ellis act, should the cap be lifted on punitive damages that a tenant may seek for being displaced by an illegal ellis act eviction?
SYNOPSIS
The Ellis Act is the 1985 state law that allows landlords to exit the rental market by evicting the tenants without cause, as long as sufficient notice is given and certain procedures are followed. Under the Act, a landlord's authority to evict even extends to rent-controlled properties in cities where the tenants would otherwise be protected by rent control or just-cause ordinances. Supporters, including the City of West Hollywood and the Western Center on Law and Poverty, contend that this creates a powerful incentive for owners to leave the rental market only temporarily in order to evade eviction protections and terminate long-term below-market tenancies. Statistics show that Ellis Act evictions have sharply increased in just the past few years, and make a compelling case that the statute is not necessarily being used as intended. In response to these reports of potential abuse, the bill tries to close an important loophole in the law by expressly establishing that the date of withdrawal for the accommodations as a whole, for the purposes of calculating key restrictive time periods, shall be the last date of withdrawal of any extended tenancy. In addition, the bill clarifies that the Act is not intended to permit an owner to return to the rental market anything less than all of the accommodations at issue. Therefore, if the landlord returns any unit in the building back to the rental market, then the bill acts to deem the entire property to back on the market, thereby obligating the landlord to comply with all requirements of the Act.
The bill makes several other modest changes to the Ellis Act, including extending the penalty period for violations of the Act from a 2-year window to a 5-year window, and eliminating the cap on punitive damages that a tenant can seek for being illegally displaced under the Act. Proposed amendments are technical and clarifying, including establishing the bill shall be applied prospectively only, and not interfere with any pending withdrawal filed with a public entity prior to January 1, 2019, the operative date of the bill. With these amendments, it is believed that the California Apartment Association, California Building Industry Association, California Business Properties Association, California Chamber of Commerce, and Civil Justice Association of California no longer oppose the bill and will adopt an official "Neutral" position once all the amendments go into print. At the time of this analysis, it was believed that the California Association of Realtors and several other regional apartment associations remain opposed to the bill, even as proposed to be amended. This bill previously passed out of the Assembly Housing and Community Development Committee by a 5-2 vote.
SUMMARY: Makes a number of revisions and changes to the Ellis Act, the state law that allows landlords of rent-controlled properties to exit the rental market by evicting the tenants, if certain procedures are followed. Specifically, this bill:
- Provides that if the property is offered again for rent within five years (increased from two years) of the date the property were withdrawn from rent or lease, then certain provisions govern. Among the applicable provisions changed by this bill are that:
- The property owner is liable to any tenant who was displaced by that action for actual and exemplary damages, but the suit must be brought within one year (decreased from three years) of the date when the withdrawn accommodations are offered again for rent or lease.
- Requires the owner to offer to reinstitute the agreement or lease on the same terms and at the same rent in effect at the time of displacement to that displaced tenant or lessee.
- Provides that if the property is returned to the rental market within 10 years from the date of withdrawal, the owner must first offer the returned unit to the tenant displaced by the withdrawal, if the tenant has advised the owner in writing within 30 days of the displacement of his or her desire to consider an offer to renew the tenancy and has furnished the owner with an address to which that offer is to be directed.
- With respect to the owner's offer in 2), requires the owner to offer to reinstitute the agreement or lease on the same terms and at the same rent in effect at the time of displacement to that displaced tenant.
- Removes the cap on the amount of punitive damages that a displaced tenant may recover against an owner of accommodations for violations of 2) or 3) above.
- Clarifies that none of the above provisions relating to enforcement of the Act precludes a tenant or public entity from pursuing any alternative remedy under the law.
- Provides that any amended local ordinances, regulations, or rules implementing these provisions shall be prospective only and shall have no effect on a withdrawal for which the notice of intent to withdraw the accommodation has been filed with the public entity prior to January 1, 2019.
- Clarifies that the owner may elect to extend the tenancy on any other rental unit up to one year after date of delivering the notice of intent to withdraw to the public entity.
- Provides that the date of withdrawal for the accommodations as a whole for the purposes of calculating the time periods described above shall be the last date of withdrawal of any extended tenancy.
- Provides that it was not the Legislature's intent, in enacting the Ellis Act, to permit an owner to withdraw from rent or lease, or return to the rental market, less than all of the accommodations withdrawn pursuant to the Act.
EXISTING LAW, the Ellis Act:
- Prohibits a public entity, by statute, ordinance, or regulation, from compelling an owner of any residential real property, except for a residential hotel meeting specified requirements, to continue to offer rental units for rental housing. (Govt. Code Section 7060 et seq. All further references are to this code unless otherwise stated.)
- Provides authority for a public entity to regulate the subsequent use of the property and mitigate any adverse impacts on people who are displaced by the withdrawal of a property from the rental market. (Section 7060.1.)
- Authorizes a public entity having a system of rent controls to require the following when the owner of a rental property subject to rent controls has exercised his or her Ellis Act rights:
- If the property is returned to the rental market within five years following the filing of the notice of intent to withdraw or within five years after the property’s withdrawal, the rental unit must be offered at the lawful rent in effect at the time any notice of intent to withdraw the accommodations is filed with the public entity, plus annual adjustments available under the system of control. (Section 7060.2 (a).)
- If the property is offered for rent within two years from the date the property was withdrawn from rent or lease, then the following apply:
- The property owner is liable to any evicted tenant for actual and exemplary damages, but the suit must be brought within three years of the withdrawal of accommodations from rent or lease.
- The public entity may also sue the property owner for exemplary damages for the displacement of tenants and lessees; and
- The property owner must offer former evicted tenants the right of first refusal to reoccupy the property pursuant to a reinstituted rental agreement where the tenant has advised the owner of this entitlement within 30 days of the tenant’s eviction from the premises when the property was first withdrawn. (Section 7060.2 (b.)
- If the property is returned to the rental market within 10 years from the date of withdrawal, the owner must first offer the returned unit to the tenant displaced by the withdrawal where the tenant has requested the offer within 30 days after the owner had notified the public entity of an intention to offer the property again for rent. The owner of the accommodations shall be liable to any tenant or lessee who was displaced by that action for failure to comply with this requirement, for punitive damages in an amount which does not exceed the contract rent for six months. (Section 7060.2 (c).)
- If the accommodations are demolished, and new accommodations are constructed on the same property, and offered for rent or lease within five years of the date the accommodations were withdrawn from rent or lease, the newly constructed accommodations shall be subject to any system of controls on the price at which they would be offered on the basis of a fair and reasonable return on the newly constructed accommodations, notwithstanding any exemption from the system of controls for newly constructed accommodations. (Section 7060.2 (d).)
- Provides that in rent-control jurisdictions, the rent control ordinance may require owners to give notice before withdrawing the building from the market. The owner must provide 120 days’ notice — or one year’s notice in the case of tenants who are disabled or more than 62 years old, provided they have lived in the accommodations for at least one year prior to the date of delivery to the public entity of the notice of intent to withdraw — before terminating the tenancy. (Section 7060.4 (b).)
- States that it is the intent of the Legislature in enacting the Ellis Act to supersede any holding or portion of any holding in Nash v. City of Santa Monica, 37 Cal.3d 97 to the extent that it conflicts with this chapter, so as to permit landlords to go out of business. Further clarifies, however, that the Act is not otherwise intended to, among other things, permit an owner to withdraw from rent or lease less than all of the accommodations, as defined. (Section 7060.7.)
FISCAL EFFECT: As currently in print this bill is keyed non-fiscal.
COMMENTS: The Ellis Act (Chapter 12.75 of Division 7 of Title 1 of the Government Code, commencing with Section 7060) is the 1985 state law that allows landlords to exit the rental market by evicting the tenants without cause, as long as sufficient notice is given and certain procedures are followed. Under the Act, a landlord's authority to evict even extends to rent-controlled properties in cities where the tenants would otherwise be protected by rent control or just-cause ordinances. As a result, the Act is susceptible to abuse by unscrupulous actors who may see an incentive to "game the system" and use the Act to evict good tenants who would not otherwise be so easy to remove. As noted by the City of West Hollywood, a chief proponent of this bill: "The law allows owners to re-enter the residential real estate market and offer the units for rent at market rates after just 5 years of the property being withdrawn from the rental market. This creates a powerful incentive for owners to leave the rental market only temporarily in order to evade eviction protections and terminate long-term below-market tenancies."
In response to reports of potential abuse of the Ellis Act, this bill seeks to make a number of modest changes to the Ellis Act, including extending the penalty phase for violations of the Act from a 2-year window to a 5-year window, and eliminating the cap on punitive damages.
Recent data highlights increased rate of Ellis Act evictions. Recent statistics clearly show that Ellis Act evictions have been on the rise in the past decade. In 2016, a Los Angeles Times analysis of housing data revealed that 1,137 rent-controlled units in Los Angeles were removed from the market in 2015—a number that has almost tripled since 2013. During that time, the researchers found the number of evictions from rent-controlled units has doubled. As the Times investigation noted, many of these recent evictions were carried out by developers who purchased the buildings with the intention of demolishing them to construct pricier housing. At least 51% of the Los Angeles properties removed under the Act in 2013 had been purchased within the previous year. (Ben Poston and Andrew Khouri. "More rent-controlled buildings are being demolished to make way for pricier housing." Los Angeles Times (April 2, 2016). Available at: http://www.latimes.com/local/california/la-me-apartments-demolished-20160402-story.html.)
In March 2017, the Anti-Eviction Mapping Project (AEMP), in partnership with Los Angeles’s Coalition for Economic Survival, released an interactive time-lapse digital map detailing the accumulation of Ellis Act evictions in Los Angeles from the beginning of 2001 to the end of 2016. Their map, based upon Rent Board data, shows 21,200 evictions across all of Los Angeles. Their analysis showed that while there were only 102 Ellis Act evictions filed in 2013, that number has more than tripled with 352 filed in 2016 alone.
Similarly, the AEMP, in partnership with the statewide tenant rights organization Tenants Together, analyzed San Francisco Ellis Act evictions filed between 2009 and 2013, finding that also 51 percent of Ellis Act evictions occurred within the first year of property ownership and that 78 percent transpired within the first five years. In 2013 in San Francisco, 60 percent occurred within the first year of ownership and 79 within the first five years. Thus, in both Los Angeles and San Francisco, AEMP concluded that Ellis Act evictions are clearly linked to real estate speculation.
Background on the Ellis Act. In Nash v. City of Santa Monica (1984) 37 Cal.3d 97, the California Supreme Court upheld the power of a city, in the context of a land use ordinance, to require a residential real property owner to obtain a removal permit, under specified criteria, before the owner could demolish his or her rental property and cause its removal from the marketplace. SB 505 (Ellis), Chapter 1509, Statutes of 1985, preempted a local government's authority to compel a rental property owner to stay in the rental housing business by prohibiting a local government from enacting or implementing any law to compel a residential real property owner to offer, or continue to offer, the property for lease or rent.
The Act only applies when an owner seeks to remove all the units within a building or all units on a property with a building containing three or fewer units from the market, and only has real effect in cities or counties with rent control and just cause evictions. The Act authorizes local governments to place restrictions on how property owners can utilize the Ellis Act to withdraw a property from the rental property market. An owner can be required to give tenants 120 days' notice that the property is being withdrawn from the rental market. Tenants who are over 62 or disabled must receive one year's notice, provided they have lived in the accommodations for at least one year.
A number of restrictions apply to situations where owners offer units for rent within certain time frames (2 years, 5 years, and 10 years) after removing a property from the rental market pursuant to the Act. For example, if an owner reintroduces a property for rent within five years of having withdrawn it, he or she is required to re-rent a unit at the rent control amount at the time the unit was withdrawn (i.e. the same amount as it would have been had the landlord continued to rent the property).
This bill establishes a single withdrawal date for a given property and eliminates one method of gaming the system. According to the author, current law indicates there is only one withdrawal date for the purpose of calculating the amount of allowable rent when an apartment is subsequently re-offered for rent. However, other parts of the Act governing the lease termination date seem to allow for multiple withdrawal dates. Unfortunately, there is no clear provision that specifies that there is only one date that applies if the property is put back into the rental market.
As a consequence, the author contends, some landlords are taking advantage of the ambiguity in the law and removing units from the rental market, only to reintroduce them for rent in a piecemeal fashion in order to avoid the Act’s restrictions and evade rent control laws. According to proponents, some landlords also apply different withdrawal dates to different units and claim that returning one unit to the market does not obligate the landlord to re-offer any other units to former tenants. If unchecked, this allows a landlord to effectively withdraw less than all the units from the rental market and, in fact, never actually leave the rental market at all, while still having successfully evicted all the tenants. The author elaborates:
This confusion has led at least one court of appeal to find that a landlord could apply different withdrawal dates to determine the rental amount when re-renting a unit. This allowed the landlord to choose a date outside the window of time when the Act’s rent restrictions apply, despite having returned multiple other units on the property to the rental market at an earlier time. The landlord never actually left the rental market but nevertheless was able to evict all the tenants and re-rent all the units at market rates. This is a gross distortion and subversion of the purpose of the Ellis Act. AB 2364 seeks to remedy this by creating one clear and concise exit date, the last tenant to leave. In addition it increases penalties and the time frame for those penalties.
Accordingly, this bill seeks to close the loophole and prevent landlords from using this piecemeal approach to game the system and try to subvert the Ellis Act. First, the bill expressly establishes that the date of withdrawal for the accommodations as a whole, for the purposes of calculating the time periods in Section 7060.2, shall be the last date of withdrawal of any extended tenancy. (See proposed new paragraph (6) of Section 7060.4 (b).) In addition, the bill amends Section 7060.7 (d) to clarify that the Act is not intended to permit an owner to return to the rental market anything less than all of the accommodations at issue. Therefore, if the landlord returns any unit in the building back to the rental market, then the bill acts to deem the entire property to back on the market, thereby obligating the landlord to comply with all requirements of the Act.
This bill extends existing penalty provisions under the Act to cover properties withdrawn and then later returned to the rental market within a five year period, rather than two years. Existing law, Section 7060.2 (b), specifies a number of procedural protections and liability provisions that apply when a landlord for residential purposes re-offers accommodations for rent or lease within two years of the date the accommodations were previously withdrawn from rent or lease. In order to strengthen the law and cut down on potential abuses, this bill extends the penalty/liability period from two years to five years, measured from the date the accommodations were withdrawn from rent or lease. To balance this, the author has listened to opponents' concerns and taken an amendment to require that any lawsuit brought by a tenant seeking damages for being illegally displaced from the property must be brought within one year (rather than three years) of the date when the withdrawn accommodations are offered on the market again for rent or lease.
To strengthen enforcement, this bill uncaps punitive damages in civil lawsuits for certain violations of the Act. Existing law, Section 7060.2 (c), provides that a property owner is liable to a tenant who has been displaced from an apartment through actions that fail to comply with the Act, including, among other things, failure to first offer the unit to the tenant displaced by the withdrawal of accommodations at the same rent in effect at the time of the tenant's displacement. Under existing law, however, punitive damages are capped at an amount that does not exceed the contract rent for six months. According to proponents, because the potential windfall to the landlord is so great for illegally evicting a rent-controlled tenant and re-renting the same accommodations later for much higher rent, the cap on punitive damages is an insufficient deterrent to misconduct. Accordingly, this bill deletes the cap on punitive damages, which are available to the displaced tenant in addition to exemplary and actual damages suffered.
In addition, proposed technical amendments clarify that nothing in Section 7060.2 precludes a tenant or public entity from pursuing any alternative remedy available under the law. This operative language already appears in the section in more than one location, so the proposed amendment is considered purely technical cleanup. The amendments appear below:
On page 4, delete lines 34 and 35.
On page 5, line 9, delete "Nothing in" and delete lines 10 and 11.
On page 5 line 33, insert "(g) Nothing in this section precludes a tenant or public entity
from pursuing any alternative remedy available under the law."
Final amendments and removal of some opposition. The April 30 amendments to the bill were intended to finalize a compromise with the California Apartment Association, the California Chamber of Commerce, and other opponents that would address their concerns and cause them to remove their opposition. Unfortunately, that set of amendments inadvertently missed a few things, which were then included within the May 3 amendments. The May 3 amendments restore existing law to subdivision (a) of Section 7060.2, and no longer extend the period (from five years to 10 years) that a landlord must wait to re-rent a property at market rate after an Ellis Act closure.
In addition, the bill clarifies that these provisions shall be applied only prospectively and shall have no effect on a withdrawal for which the notice of intent to withdraw was filed prior to the effective date of this bill, should it become law. Unfortunately, the wrong date was stated in the April 30 amendments and was not corrected in the May 3 amendments. The necessary corrective amendment is:
On page 5, line 32, delete "July 1, 2018" and insert "January 1, 2019"
With these final amendments, it is believed that the California Apartment Association, California Building Industry Association, California Business Properties Association, California Chamber of Commerce, and Civil Justice Association of California no longer oppose the bill and will adopt an official "Neutral" position once all the amendments go into print.
Many other apartment associations strongly opposed the extension of the period that landlords must wait before charging market rate once again. Now that the author has amended that provision out of the bill, it is not entirely clear to what extent some of these apartment associations remain opposed to the bill, even as proposed to be amended.
ARGUMENTS IN SUPPORT: The bill is supported by Western Center on Law and Poverty and California Rural Legal Assistance Foundation, who submitted a joint letter stating:
One concern when SB 505 (the Ellis Act) was introduced was that landlords could potentially abuse the bill to make a mockery of local rent control laws and good cause requirements by “going out of the rental business,” only to go back into the business of rental housing after evicting tenants. As noted in the Senate Judiciary analysis of the April 18, 1985 version of SB 505, opponents (including our organizations and the City of Santa Monica) argued that “this bill could permit property owners to take a unit off the market and evict the tenant under the pretext of going out of business, and then relet the property as a new rent 6 months later.”
The original version of SB 505 allowed a landlord to say "I'm going out of the business in Apartment 101, but I'm staying in business in Apartments 103 and 105." To selectively use the Ellis Act to leave the business apartment-by-apartment flies in the face of the sponsor’s intent for the bill. The Judiciary Committee analysis also states: “The source of this bill … asserts that a property owner should have the right to conduct his personal affairs and cease rental operations without restriction when he no longer wishes to bear the responsibilities of being a landlord. In many cases … the rental of property involves not only the very considerable potential of personal liability, but also the continued expenditure of time and resources in the management of the property.” [Emphasis added.]
These stated concerns – liability, time, resources, and management – make sense when a property owner truly “goes out of business.” They do not support allowing landlords to evict some tenants and not others, or to evict tenants and leave the units temporarily vacant in order to raise the rent when re-rented. As the bill moved, amendments to SB 505 were made to try to address some of the opponents’ concerns. Landlords were required to close the entire property. Landlords re-entering the rental market after a short period were subject to penalties.
Unfortunately, over the years, circumstances have changed and have eroded the original compromises made in SB 505. The very concerns we expressed as SB 505 was being considered have now come to pass. Thus, contrary to the balancing of interests attempted in SB 505, local rent stabilization and eviction protection ordinances are subverted. As you are well aware, the next stop for many families evicted from a rent-stabilized unit is homelessness.
In closing, we would point out that your bill prevents abuse of the Ellis Act procedures to undermine local ordinances, while still allowing a property owner to use the Ellis Act as intended -- to exit the rental market -- in good faith. While we recognize that a landlord might change his or her mind, the decision to displace a family from their home should not be made on a whim. The consequences for a landlord who may regret exiting the rental business are no less drastic than a tenant family’s loss of their home. This bill addresses the unintended consequences of the Ellis Act while permitting landlords with a genuine desire to exit the rental business to do so.
ARGUMENTS IN OPPOSITION: In opposition to the April 30 version of the bill, the California Association of Realtors state: "AB 2364 weakens the Ellis Act, discouraging rental property owners from returning rental units to the market if economic circumstances improve. C.A.R. must oppose AB 2364 as it will exacerbate the affordable housing crisis by keeping much-needed rental units off the market even longer."
The Apartment Association, California Southern Cities, and three affiliated associations, in opposition to the previous version of the bill, write:
Rental property owners should not be punished for the State’s housing problems. Rental property owners did not cause California’s housing shortage or affordability problems. According to the nonpartisan Legislative Analyst’s Office 2015 Housing Report, California’s housing problems stem from years of population growth combined with inflation in housing development costs, high government development impact fees, taxes, and regulatory burdens, government prioritization of business development over housing development, and government yielding to NIMBY policies. Rental property owners should not be punished for the years of government mistakes and inaction. Current Ellis Act laws already severely limits how when owners may remove from and bring property onto the rental market. Further restrictions will only serve to keep units off the market.
Previous related legislation. AB 982 (Bloom) of 2017 would have extended the term for withdrawal of accommodations under the Ellis Act to one year for all tenants and lessees without regard to age or disability. This bill died in the Assembly Committee on Housing and Community Development.
AB 423 (Bonta) of 2017 would have exempted residential hotels in the City of Oakland from the Ellis Act beginning January 1, 2018. This bill failed passage on the Assembly Floor.
SB 1267 (Allen) of 2016 would have required a tenant with a custodial or family relationship with a pupil enrolled in a primary or secondary school to be give one-year's notice before being evicted under the Ellis Act. This bill died in the Senate Transportation and Housing Committee.
SB 364 (Leno) of 2015 would have allowed the city and county of San Francisco to prohibit, by ordinance or ballot measure, a rental housing owner from removing a building from the market pursuant to the Act unless all owners in the property have held their ownership interest for at least five years. This bill failed passage in the Senate Transportation and Housing Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
AIDS Healthcare Foundation
California Rural Legal Assistance Foundation
City of West Hollywood
Western Center on Law and Poverty
Opposition (to the previous version of the bill)
California Apartment Association
California Building Industry Association
California Business Properties Association
California Chamber of Commerce
Civil Justice Association of California
Apartment Association of Greater Los Angeles
Apartment Association of Orange County
Apartment Association, California Southern Cities
California Association of Realtors
East Bay Rental Housing Association
North Valley Property Owners Association
San Diego County Apartment Association
Santa Barbara Rental Property Association
Analysis Prepared by: Anthony Lew / JUD. / (916) 319-2334
Date of Hearing: April 25, 2018
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
David Chiu, Chair
ABPCA Bill Id:AB 2364 (
Author:Bloom) – As Amended Ver:March 22, 2018
SUBJECT: Rental control: withdraw from accommodation
SUMMARY: Makes a number of changes to the Ellis Act (Act). Specifically, this bill:
- Provides that if the property is returned to the rental market within ten years (increased from five under existing law) following the filing of the notice of intent to withdraw or within ten years (increased from five) after the property’s withdrawal, the rental unit must be offered at the lawful rent in effect at the time any notice of intent to withdraw the accommodations is filed with the public entity, plus annual adjustments available under the system of control.
- Defines the term “lawful rent” to mean the last rent paid by the most recent bonafide tenant if the unit is vacant at the time the notice to withdraw is filed.
- Provides that if the property is offered for rent within five years (increased from two under existing law) of the property being withdrawn from the market:
- the property owner is liable to any evicted tenant for actual and exemplary damages;
- the public entity may also sue the property owner for exemplary damages for the displacement of tenants and lessees; and
- the property owner must offer former evicted tenants the right of first refusal to reoccupy the property pursuant to a reinstituted rental agreement where the tenant has advised the owner of this entitlement within 30 days of the tenant’s eviction from the premises when the property was first withdrawn.
- Provides that nothing in the section of the Act relating to enforcement precludes a tenant or public entity from pursuing any alternative remedy available under the law.
- Provides that if the property is returned to the rental market within 10 years from the date of withdrawal, the owner must first offer the returned unit to the tenant displaced by the withdrawal, if the tenant has advised the owner in writing within 30 days of the displacement of his or her desire to consider an offer to renew the tenancy and has furnished the owner with an address to which that offer is to be directed, of a desire to consider an offer to renew the tenancy. Existing law provides that a tenant only has a right of first refusal in this circumstance if the tenant has requested the offer within 30 days after the owner had notified the public entity of an intention to offer the property again for rent. This bill also requires the owner to offer to reinstitute the agreement or lease on the same terms and at the same rent in effect at the time of displacement to that displaced tenant, and removes existing law's cap on punitive damages if this provision is violated.
- Provides that the date of withdrawal for the accommodations as a whole for the purposes of calculating the time periods described above shall be the last date of withdrawal of any extended tenancy.
- Makes a number of technical changes to clarify that one date of withdrawal of accommodations applies to all units in a property subject to the Act.
- Provides that it was not the legislature's intent, in enacting the Act, to permit an owner to return to the rental market less than all of the accommodations withdrawn pursuant to the Act.
EXISTING LAW:
- Prohibits, under the Act, a public entity, by statute, ordinance, or regulation, from compelling an owner of any residential real property, except for a residential hotel meeting specified requirements, to continue to offer rental units for rental housing (Govt. Code Section 7060 et. seq.).
- Provides that the Act only applies when an owner seeks to remove all units from rent or lease in a building, or all units on a property with a building containing three or fewer units (Govt. Code Section 7060).
- Provides authority for a public entity to regulate the subsequent use of the property and mitigate any adverse impacts on people who are displaced by the withdrawal of a property from the rental market (Govt. Code Section 7060.1).
- Authorizes a public entity having a system of rent controls to require the following when the owner of a rental property subject to rent controls has exercised his or her Ellis Act rights:
- If the property is offered for rent within two years the property was withdrawn from the market:
- the property owner is liable to any evicted tenant for actual and exemplary damages;
- the public entity may also sue the property owner for exemplary damages for the displacement of tenants and lessees; and
- the property owner must offer former evicted tenants the right of first refusal to reoccupy the property pursuant to a reinstituted rental agreement where the tenant has advised the owner of this entitlement within 30 days of the tenant’s eviction from the premises when the property was first withdrawn.
- If the property is returned to the rental market within five years following the filing of the notice of intent to withdraw or within five years after the property’s withdrawal, the rental unit must be offered at the lawful rent in effect at the time any notice of intent to withdraw the accommodations is filed with the public entity, plus annual adjustments available under the system of control.
- If the property is returned to the rental market within 10 years from the date of withdrawal, the owner must first offer the returned unit to the tenant displaced by the withdrawal where the tenant has requested the offer within 30 days after the owner had notified the public entity of an intention to offer the property again for rent. The owner of the accommodations shall be liable to any tenant or lessee who was displaced by that action for failure to comply with this requirement, for punitive damages in an amount which does not exceed the contract rent for six months. (Government Code Section 7060.2)
- Provides that in rent controlled jurisdictions, the rent control ordinance may specify that if a landlord opts to remove rental housing from the rental market, the landlord must give tenants 120 days' notice before terminating the tenancy and in the case of tenants that are disabled or over 62 this notice must be one year. (Government Code Section 7060.4)
- Provides that in rent-control jurisdictions, the rent control ordinance may require owners to give notice before withdrawing the building from the market. The owner must provide 120 days’ notice — or one year’s notice in the case of tenants who are disabled or more than 62 years old, provided they have lived in the accommodations for at least one year prior to the date of delivery to the public entity of the notice of intent to withdraw — before terminating the tenancy. (Govt. Code Section 7060.4).
FISCAL EFFECT: None
COMMENTS:
Background: In Nash v. City of Santa Monica (1984) 37 Cal.3d 97, the California Supreme Court upheld the power of a city, in the context of a land use ordinance, to require a residential real property owner to obtain a removal permit, under specified criteria, before the owner could demolish his or her rental property and cause its removal from the marketplace. SB 505 (Ellis), Chapter 1509, Statutes of 1985, preempted a local government's authority to compel a rental property owner to stay in the rental housing business by prohibiting a local government from enacting or implementing any law to compel a residential real property owner to offer, or continue to offer, the property for lease or rent.
The Act only applies when an owner seeks to remove all the units within a building or all units on a property with a building containing three or fewer units from the market, and only has real effect in cities or counties with rent control and just cause evictions. The Act authorizes local governments to place restrictions on how property owners can "Ellis" a property and exit the rental property market. An owner can be required to give tenants 120 days' notice that the property is being withdrawn from the rental market. Tenants who are over 62 or disabled must receive one year's notice, provided they have lived in the accommodations for at least one year.
A number of restrictions apply to situations where owners offer units for rent within certain time frames (2 years, 5 years, and 10 years) after removing a property from the rental market pursuant to the Act. For example, owners are required to re-rent a unit at the rent control amount at the time the unit was withdrawn, if they offer it for rent within five years of filing to withdraw or withdrawing the property.
Need for this bill: The author contends that the Act "expressly prohibits withdrawing less than all the units from the rental market. And the law indicates that there is only one withdrawal date for the purpose of calculating rental amounts when units are re-offered for rent. But there is also language governing the tenants’ lease termination date that seems to allow multiple withdrawal dates. In addition, there is no provision that specifies that there is only one date that applies if the property is put back on the rental market. As a consequence, landlords are taking advantage of this confusion and removing units from the rental market and returning them in a piecemeal fashion to avoid the Act’s restrictions and evade rent control. They are also applying different withdrawal dates to different units and claiming that returning one unit to the market does not obligate the landlord to re-offer any other units to former tenants. This allows landlords to effectively withdraw less than all the units from the rental market and, in fact, never actually leave the rental market at all while still having successfully evicted all the tenants.
"This confusion has led at least one court of appeal to find that a landlord could apply different withdrawal dates to determine the rental amount when re-renting a unit. This allowed the landlord to choose a date outside the window of time when the Act’s rent restrictions apply, despite having returned multiple other units on the property to the rental market at an earlier time. The landlord never actually left the rental market but nevertheless was able to evict all the tenants and re-rent all the units at market rates. This is a gross distortion and subversion of the purpose of the Ellis Act."
AB 2364 would make the following changes and clarifications:
1) That there is one withdrawal date for the property, and this date shall be the last date of withdrawal of any extended tenancy;
2) That if any unit is returned to the rental market, the property is deemed back on the market and all the obligations of the Act must be followed with respect to all the units;
3) That if a unit is vacant prior to the filing of an Ellis notice, the lawful rent for that unit is the rent for the most recent tenant.
4) Extends existing law's conditions on units returned to the rental market within two years to five years.
5) Extends existing law's conditions on units returned to the rental market within five years to ten years.
6) Makes changes to existing law's conditions on units returned to the rental market within ten years.
Arguments in support: According to the City of West Hollywood, "the Ellis Act is a blunt instrument. Most tenants, unless they are at least 62 years old are living with a disability, can be evicted with only 120 days' notice. Those who qualify based on age or disability status are allowed to remain for up to one year. But, if any tenant remains beyond that time, they are subject to an unlawful detainer proceeding. The owner meanwhile does not have to demonstrate any other viable use for the property or reveal any future plans for the site. In fact, the law allows owners to re-enter the residential rental withdrawal from the rental market. This creates a powerful incentive for owners to leave the rental market only temporarily in order to evade eviction protections and terminate long term below-market tenancies. Since its enactment in 1986, 764 units in 203 properties in the City of West Hollywood were removed from the rental market through the Ellis Act. In the City of Los Angeles, 1,000 units were removed in 2015 alone. AB 2364 will make much needed reforms to the Ellis Act by protecting California tenants from evictions and extending the timelines for tenants who do face evictions.
Arguments in opposition: Opponents are concerned that this bill will make it harder to return rental units to the market. According to opponents, "Current law allows rental units that were removed through the Ellis Act to be returned to the rental market after a period of 5 years, so long the owner first offers the units to the previous tenants. AB 2364 doubles the time period to 10 years for all the units in a building even those units that are vacant at the time of the Ellis Act. In addition, AB 2364 would also require an owner to return all units in the building back to the rental market even if the owner only wants to live in one and return all other units in the building.
Staff comment: As documented in the media, Ellis Act evictions have increased in recent years. A 2016 investigation by the Los Angeles Times revealed that 1,137 rent-controlled units in Los Angeles were removed from the market in 2015—a number that has almost tripled since 2013, while the number of evictions from rent-controlled units has doubled. Across Los Angeles, over 20,000 units have left the market since 2001. In Santa Monica, Ellis Act evictions jumped 75 percent between 2013 and 2014, according to a 2015 report by the Anti-Eviction Mapping Project.
The removals peaked during the housing bubble, bottomed out in the recession, and have risen significantly since then. As the Times investigation notes, many of the recent evictions have been carried out by developers who have purchased the buildings with the intention of demolishing them to construct pricier housing. At least 51% of the Los Angeles properties removed under the Act in 2013 had been purchased within the previous year.
Related legislation:
AB 982 (Bloom, 2017): Would have extended the term for withdrawal of accommodations under the Act to one year for all tenants and lessees without regard to age or disability. This bill died in the Assembly Committee on Housing and Community Development.
AB 423 (Bonta, 2017): Would have exempted residential hotels in the City of Oakland from the Act beginning January 1, 2018. This bill failed passage on the Assembly Floor.
SB 1267 (Allen, 2016): Would have required a city or county by ordinance, when the city or county requires notice of intent to withdraw accommodations pursuant to the Act, to give one year’s notice to a tenant with a custodial or family relationship with a pupil enrolled in a primary or secondary school who lives in an accommodation before terminating a tenancy. This bill died in the Senate Transportation and Housing Committee.
SB 364 (Leno, 2015): Would have allowed the city and county of San Francisco to prohibit, by ordinance or ballot measure, a rental housing owner from removing a building from the market pursuant to the Act unless all owners in the property have held their ownership interest for at least five years. This bill failed passage in the Senate Transportation and Housing Committee.
SB 1439 (Leno, 2014): Would have allowed the city and county of San Francisco to prohibit, by ordinance or ballot measure, a rental housing owner from removing a building from the market pursuant to the Act unless all owners in the property have held their ownership interest for at least five years. This bill failed passage in the Assembly Housing and Community Development Committee.
SB 948 (Alarcon), Chapter 968, Statutes of 1999: Made numerous changes to planning and zoning law, including changes to the Act that increased the time when a unit may be withdrawn from the market from 60 days to 120 days after notice is provided to the public entity. Increased the time when a unit occupied by a tenant who is disabled or at least 62 years old may be withdrawn from the market to one year after notice is provided to the public entity.
Double-Referred: If AB 2364 passes out of this committee, the bill will be referred to the Committee on Judiciary.
REGISTERED SUPPORT / OPPOSITION:
Support
California Rural Legal Assistance Foundation
City of West Hollywood
Western Center on Law and Poverty
Opposition
Apartment Association of Greater Los Angeles
Apartment Association of Orange County
Apartment Association, California Southern Cities
California Apartment Association (unless amended)
California Association of Realtors
California Building Industry Association (unless amended)
California Business Properties Association (unless amended)
California Chamber of Commerce (unless amended)
Civil Justice Association of California (unless amended)
East Bay Rental Housing Association
North Valley Property Owners Association
San Diego County Apartment Association
Santa Barbara Rental Property Association
Analysis Prepared by: Lisa Engel / H. & C.D. / (916) 319-2085
Discussed in Hearing
8MIN
Assembly Floor
12MIN
Assembly Standing Committee on Judiciary
38MIN
Assembly Standing Committee on Housing and Community Development
Bill Co-Author(s):