Assembly Standing Committee on Housing and Community Development

The items are number two, AB 1801 by Jackson, item 15, AB 2597 by yours truly, and item 19, AB 2897 by sunlight Connelly. When we establish a quorum, we'll be able to entertain the consent calendar. In addition, for those Members here early. Thank you. And you'll know that today is going to be the last day that we're going to do sign in order. So we are going to be amending our rules to change the Bill hearing order dates going forward to file order.

The proposed amendments are in everybody's packet and on page three of the Committee rules is adopted on March 292023 and if approved, the amendments will be in effect for our next hearing April 172024. Each Bill can have two main witnesses and support and opposition, and each main witness gets up to two minutes each. Please feel free to submit any written testimony through the position portal on the Committee's website.

This will become part of the official record of the Bill and the hearing room will be open for attendance of this hearing. All are encouraged to watch the hearing from its live stream on the Assembly's website. I want to thank you all for your patience and understanding with that. We have our first author here to present his Bill. I'd like to welcome up assemblymember Treeta for item number 11. This is AB 2460.

When you're ready, and supporters are ready as well, we can begin your presentation.

Good morning, and thank you. Chair and member of the committee, I accept the Committee amendments, and I really want to thank the committee staff for working with my office to ensure that AB 2460 is a safe cleanup bill to my AB 1458 from the last section, which was signed to law.

That bill provided a process where an Association could utilize a reduced quorum of 20% of the membership for borrower election if they were not able to achieve the state quorum requirement in their governance documents. Just prior to the end of the last section, my office was contacted last year by the Governor's Administration requesting ratification of one piece of the Bill. We agreed that if I would run the clean-up of this section and keep my promise, AB 2460 would include an upon-notification request by the Governor.

AB 2460 also notifies two other issues. First, an association with a lower current requirement that created in AB 1458 may follow its governing document. Second, this bill clarifies that it is an association membership, not solely the board, that reconvenes the election meeting. This is ridicule as I have learned that several SOA boards have refused to recognize the new lower quorum threshold out of fear of being seated when the votes are tallied.

Today, I have Louie Brown from the Committee Association Institute to testify in support, and I ask for your aye vote.

Mister Chair and members, the Committee Louie Brown here today on behalf of the Community Association Institute-California Legislative Action Committee in support of the bill asking for an aye vote. As Mister Ta said, we did receive the communication late last session from the Governor and included that in 2460.

We then also wanted just to provide some additional clarification in changing the references to the board to the Association. And then, we wanted to provide some consistency in the bill, and we saw that the definition or the description of how you would calculate the reduced quorum was actually stated differently in a number of sections in last year's bill. So, we provide that clarification and make sure that it's consistent throughout that section of law. With that, we ask for an aye vote.

Thank you for the presentation.

Are there any other members of the public here in support? Any primary witnesses in opposition? Okay, seeing them, we can turn it back to committee. Any questions from members? Oh, I'm sorry. We move quickly. So, do we have a primary witness? Yes. If you want to come up to the dais or up to the presentation table. Thank you. Take your time and when you're ready, you can have up to two minutes for testimony.

Good morning, Chairman Ward. Good morning, members of the committee. Marjorie Murray, Center for California Homeowner Association Law. You're going to be considering another homeowner association voting bill this morning. It's unfortunate that we're not looking at the two bills together because it's not clear to us how they are going to coexist. That said, if we look at 2460 in isolation, it deals with the issue of quorum, an association board elections only.

It's a requirement in the corporations code to ensure that there is sufficient participation, sufficient consensus in these communities as to the selection of their leaders. So we're concerned about the reduction in quorum but acknowledge that the bill was signed last year by the governor. We did submit a letter of opposition; however, we have proposed some amendments. We have talked to the author's office and also to the sponsor of the bill about amendments that we think would help them reach their goal of achieving better quorum.

If, in fact, the issue is low voter turnout, which we know is an issue in public elections, we think our amendments can help increase quorum, and I'm turning to my colleague, Tom Sur, to present our two primary amendments.

Thank you.

The issue is setting my timer.

Mister Chairman and members of the committee, this bill does address some improvements that were needed from last year's bill, and what we are doing today is presenting some proposed amendments that we believe will improve the bill even further, make it more workable, safer for everyone.

I got you. Don't worry about it.

The first of our amendments expands the notice provisions to homeowners so that instead of just posting a notice or putting it somewhere that nobody sees that there is this extended voting period that members be given individual notice; that is, everyone is sent a notice directly so that everyone can see, "Ah, the voting is continued because they didn't meet quorum, and therefore, I better get my rear end in gear and go vote." That's what they're trying to do: increase the turnout.

So we would like to have that expanded notice, not only because it helps the homeowners and hopes achieve the purpose of the bill, but it also kind of insulates the whole procedure from challenge because there has been proper notice, and we just have an overriding concern about, you know, our goal at the center is to represent the interests of individual homeowners. The second of these is provisions to safeguard the ballots.

The current bill, current law is totally silent on what happens with the ballots that have been submitted, and then you count, you know, the way it should be done, we say, is you count the number of envelopes unopened that you have, and if you don't have enough for quorum, you leave them unopened, have the inspector of elections safeguard them, and not open them until quorum is reached. So you don't have a partial tally, and then maybe results leak out, and then you continue it.

So those are our two amendments, and we're very hopeful that the author will continue to work with us on these proposed amendments. Thank you.

Thank you. Are there any other members of the public here in opposition? Okay, seeing none now, we will turn it back to committee comment. Seeing none. Okay, thank you. Mister Grayson.

Thank you, Mister Chair. I do want to say I appreciate the author for carrying this bill forward and the cleanup and making it all.

I trust that you are going to work with opposition. I have no doubt about that. I just wanted to say I really appreciate your effort to try to help homeowners associations get to a quorum, which is ultimately your goal is to have more people voting and having a say. So, thank you for bringing it forward.

Thank you, Mister Grayson. I would echo his comments as well, and I appreciate some thoughtful response here. We want to get this right.

We want to have that balance of making sure that there's access and different options. You've been a leader in this space, and I'm grateful that you're responsive to the Department of Real Estate for their late concerns last year, and that's why we have the bill before us today. But I'm trusting that you'll continue to be able to listen to some of these points and continue to improve and be a leader in this space. With that, Mister Ta, would you like to close?

I really appreciate your comment, and one of the things our committee staff has been working on with my office last year and until this year for the new bill. So I humbly ask for your aye vote.

Thank you. At the time when we establish quorum, we'll take this measure up. Thank you. Next, we have Assembly Member Schiavo, who has two bills, item three, AB 1820 and item 17, AB 2674. And which would you like to start with?

1820.

We will begin with item three when you are ready.

Thank you. Thank you so much Mister chair Members. Happy to be here today to present AB 1820 and we are accepting the committee amendments. Appreciate the staff working with us on these AB 1820 is a simple transparency measure that allows housing developers to have the knowledge and transparency of development fees prior to committing shovels into the ground.

In a 2021 study conducted by the Turner Center for Housing Innovation, UC Berkeley found inconsistent compliance with AB 1483 from 2019, which required cities and counties to post these fee schedules on their websites. Many jurisdictions had incomplete, unreliable, or hard to find information.

Knowledge of these fees are critical because many of these fees add up to 20% of the cost of a home, which can be a tipping point for many people having to access an affordable home, and late fees or unexpected fees can actually just completely ruin a project and stop it. Even AB 1820 provides guardrails for affordable home developers to have predictability. My measure takes the surprise out of any unknown exorbitant fees that could potentially threaten an affordable housing project.

We're continuing to discuss with stakeholders in opposition, and I've already taken a number of amendments to address some concerns, and we'll continue to have dialogue with them on this matter and hope to find space where we can all be comfortable. I want to thank Spur and CBIA for sponsoring the Bill and happy to have the support of Habitat for Humanity as well. And here to testify in support is Mike Mwali.

He's a local land user attorney with Coblenz, Patch, Duffy and bass, and Wes Sage Walker, who's a local Sacramento developer.

Thank you. Welcome. Good morning. Thank you chair Ward, Members of the Committee, thank you for having me here today. My name is Myles Imwally and I'm a land use partner at the law firm Cobblents, Patch, Duffy and Bass in San Francisco. For the last 20 years, I have assisted developers in obtaining entitlements in a variety of project types with a focus on residential.

One aspect of my work is to help developers understand what impact fees their projects will have to pay and where there's ambiguity to negotiate those fees. My practice focuses on the Bay Area, where impact fees vary widely between jurisdictions and where fees at times can be quite high. A recent study found that fees levied on single family homes in Santa Clara County range from a high of $146,000 per unit to a Low of just under $10,000 per unit.

From a developer's perspective, this means that fees can have a material impact on a project's pro forma, and the wide variation means it is critical to understand each jurisdiction's fees. Despite this importance, fees are often difficult to pin down. Often, it can be difficult to identify all fees and determine how they are calculated. Recent legislation, AB 1483, has improved transparency, but difficulties remain.

Many fee programs are ambiguous in how they are implemented or there are unwritten local practices that aren't seen on the face of a fee program. These issues include things like how to measure square footage, how to categorize a particular use within a fee program, whether credit will be given for existing uses when redeveloping a site, among others. This uncertainty means that surprises can arise late in the process, which can hamper housing production.

The requirement in AB 141820 that local jurisdictions provide early estimates in a final amount at the time of entitlement would really help address this issue. Thank you.

Hello chair Members of the Committee, and thank you for your consideration of this issue. My name is Wesley Sagewalker. I'm speaking here as a developer of privately financed, attainable workforce and affordable housing here in the Sacramento region.

It's been my experience that although recent changes improve the availability of updated fee schedules, currently several local municipalities do not have a comprehensive consolidated fee schedule listing all of the potentially applicable fees related to new development. Moreover, the fee schedules that are published contain numerous items that involve staff discretion in determining eligibility with respect to their application for a proposed project. This reflects the individual circumstances of any project and affects which fees and fee categories will be implemented.

With the benefit experience, a developer can conduct a fee estimate by gathering and sifting through the relevant schedules based on previous similar projects. New developers do not necessarily have this prior knowledge and can encounter difficulties in preparing an estimate with accuracy. Furthermore, the imposition of offsite improvements to pay for various infrastructure upgrades can represent a significant financial imposition on a project and importantly, these offsite requirements are excluded from fee schedules given their individualized nature.

However, as someone who's had to abandon projects as a result from large and unexpected offsite requirement costs, I believe that it is important to give developers sufficient time and notice to analyze and model their impacts. As previously mentioned, experience can help mitigate this issue for a developer who has analyzed the cost impacts of similar offsite requirements for other projects. For new developers, this can again be significant challenge to appropriately model until it is too late.

In many ways, the principal task of a developer is to manage and mitigate risk. Fees are a potential source of uncertainty which I believe this Bill can help ameliorate. If a project is presented with a reasonably accurate and comprehensive list of applicable fees and requirements in a timely manner, it can help developers improve their performance to better reflect the real cost the project is likely to incur. Thank you. Thank you. Are there any other Members of the public here in support of 1820? 1 second, please.

Brooke Pritchard on behalf of California YIMBY as a proud co sponsor.

Bob Naylor for Fieldstead and Company, that's Howard Amundsen Junior and Orange County philanthropist in support.

Katherine Charles on behalf of Housing Action Coalition Housing California in support Rebecca Marcus representing Leading Age California in support.

Seamus Garrity from lighthouse public affairs on behalf of Spur Habitat for Humanity of California, Sandhill Properties, Buckaye Properties, Build Casa and Civic well in support.

Good Morning Chairman Members Skyler Wonnacott with the California Business Properties Association in support.

Good morning chair members. Ralph Asanenfeld with YIMBY action and on behalf of East Bay YIMBY, Mount View YIMBY Northern neighbors, Peninsula for everyone, San Francisco YIMBY, Santa Cruz YIMBY, Santa Rosa YIMBY, Sloco YIMBY, Urban Environmentalists Grow the Richmond, Ventura County YIMBY, Streets for people, Southside Ford how to ADU, People for Housing Orange County progress in Noe Valley, South Bay EMB and Napa Solano for everyone in support. Thank you.

Good morning chair Members, I only represent one group. We're happy to co sponsor the Bill. California Building Industry Association. Urge your iv vote. Thank you.

Good morning. Chris Rosa, on behalf of the Silicon Valley Leadership Group and support.

Good morning, Mister chair. And Members, Lauren De Valencia, representing the American Planning Association. We're kind of in an in between position, but just want to acknowledge the amendments that have been made to the Bill. We really appreciate the ongoing conversations and look forward to moving to a neutral position soon. Thank you.

Morning, Mister chair. And Members Andres Ramirez, on behalf of the Tri Valley Cities Coalition, which includes Dublin, Livermore, Pleasanton, Danville and San Ramon, just want to thank the author's office and spur for having a meeting with our coalition a few weeks back. We expressed concerns, those concerns were addressed. We don't have a formal position, but thank the author's office. Thank you very much. One more.

Yeah, one more apologies. Good morning, chair Members. Brady Gertin, on behalf of the League of California Cities, in respectful, opposing unless amended positions.

Taking a second?

Zero, I thought we were just making.

Sure we have all of our supporters who have registered support. Okay, Brady, if you want to come on up and give your up to two minute testimony.

Apologies. Didn't even want to stand in and lead one, but that's okay. So, League of California cities and our local government partners are in a respectful opposite. Amended. That said, we've had very productive conversations with the author's office, and we'll continue those. The concerns being we don't want to make sure. We want to make sure our cities are not locked in during the preliminary application process to the fees that we have.

So we're working through those differences right now and look forward to those continued conversations and wanted to thank the author's office for that. So, thank you.

Thank you very much. Are there any other Members of the public here in opposition?

Alyssa. Still high. In behalf of the California Association of Recreation and park districts with an opposed, unless amended position, and then on behalf of my colleague at the California Special Districts Association. They're in a pose. However, for both of us, we really thank the author, her staff, Committee staff, and the Bill sponsors. We've had really productive conversations. Our Members both are looking over the most recent amendments and continue to evaluate the impacts.

It's taking a little while to get some of that back and look forward to continued discussions and hope to be able to resolve it.

Thank you very much. Okay. Seeing no other Members of the public wishing to state a position at this time, I believe we have a quorum. So, Madam Secretary, would you call the roll? Ward Ward.

[Roll call]

Thank you. We have quorum, I'll bring it back to the dais for Member comment. Mister Lee?

Yeah. Thank you to the author for bringing this Bill forward. I think a simple fee, transparency and some estimation of how, of what developers and people want to intend to build in our community is very reasonable. So I would love to be added as co author if possible to this Bill and I'm happy to move the Bill as well. Thank you Mister Lee. And second by Mister Grayson.

Any other Member comments? Vice Chair Patterson? Yes. Thank you. I have a Bill up later today that would delay impact fees until certificate of occupancy and hasn't received too warm of a reception from some groups. But you know, we have to create systems to, you know, where government's not getting in the way because, you know, things like that. And we're just asking for a little bit of transparency in helping people make massive multimillion dollar investments in our community. So I'm happy to support this Bill.

Thank you.

Thank you Mister Patterson. Seeing no other Members, Ms. Schiavo, I want to thank you for bringing this Bill forward and working on something that's really important.

It's important for transparency's sake, but importantly, the predictability to make sure that you know what you're going into, that you can schedule and price this out throughout the lifetime of the development, and that every side here, I appreciate also your earnest efforts to be able to work with opposition on some of their points to make sure that they have what they need for the accountability sort of on their back end. And with that, would you like to close?

Thank you so much. Appreciate the comments from the Committee and the chair. And you know, we, it's exactly about that. It's about transparency, but it's about making sure that when it comes to developers, those costs are passed on to people who are buying those homes. And we know that housing affordability is a crisis right now. So being able to plan upfront, being able to predict that, and being able to know and hopefully lock in those prices early will make a huge difference, hopefully in home prices.

And then when it comes to affordable housing developers, as I said earlier, this really can be something that makes or breaks development. And when you get a surprise $1.0 million fee at the end of a project and you didn't anticipate for that, when that, you know, that is a razor thin margin. Just appreciate an I vote and thank you.

Thank you. And just to clarify, you are taking the amendments presented today, correct? Thank you very much. So this has a motion for do pass as amended. Madam Secretary, please call the roll.

[Roll call]

We will hold that Bill open for absent Members. And next, you are here to present item number 17. This is AB 2674. When your new witnesses are ready to go, you may begin presentation.

Thank you. Thank you again, Mister chair and Members. I'm grateful for the opportunity to present AB 2674 to you today. AB 2674 supports development of housing for foster youth and the many in need of affordable housing by adding three additional financial tools to the Cal HFA toolbox. Nearly one in three transition age foster youth in California experiencing homelessness. Both federal and state governments have invested in supporting foster youth and transitional age in finding permanent housing.

But the major barrier is the lack of availability of housing dedicated to these individuals. Unfortunately, the nature of foster youth rental subsidies, which are portable, has led to the perception that housing is a riskier investment. However, foster youth housing subsidies are consistent, especially when partnered with service providers. AB 2674 borrows from the successful Transportation Infrastructure Finance and Innovation act, which uses loan guarantees, lines of credit, and loans to encourage private investment into infrastructure by reducing perceived risk factors for financiers.

Creating an ecosystem where foster youth service providers can more easily access private funding for acquisitions and renovations will make it easier for youth to find a place to call home. Here to testify in support is Sue Evans, Chief Operating Officer of Walden Family Services, and Kevin Clark, Senior Director of Good River Partners.

Good morning, Chair Ward and Members of the Committee. Kevin Clark with Good River Partners. And we are a public benefit firm that is completely dedicated to eliminating the foster care to homelessness pipeline here in California. As Assemblymember Schiavo just mentioned, you know, we know from research that about, excuse me, about one quarter of transition age foster youth are going to experience homelessness in California during the ages of 21 to 23.

And on top of that, an additional one third are going to experience or going to have experience with couch surfing. Personally, I'm a former foster youth myself. I experienced transitional housing when I was about 19, and I was in between places, and the only transitional housing that was available to me, the only one that had an open bed, was about 3 hours from the evening job I was working in Hollywood.

So as a solution for me, I would just sleep on the buses and just go back and forth on the buses in the evening until there was a more direct line to the transitional housing. A lot of my friends in community college, you know, they called home their cars. You know, they reclined the passenger seat of their car, and that would be their place to sleep for the evening.

So it's extremely difficult to focus on long term goals when our kind of immediate needs are in jeopardy. As Assemblymember Schiavo mentioned, AB 2674 is a sensible and cost effective solution to this issue and would expand the number of available units for transition age youth and low income families throughout California, as the bill does so by borrowing from very, very successful federal transportation policy, TIFIA, as Ms. Schiavo had mentioned.

And I'll just point out that TIFIA has been wildly successful in leveraging private capital to fund our nation's roads, highways and bridges. In fact, between federal fiscal year 2018 and 20, TIFIA utilized about 3.1 billion in their mechanisms, their financing mechanisms, to spur an additional 12.2 billion in additional capital into this base. So that's almost a forex leverage ratio.

And AB 2674 would actually act as a revenue generator, we believe, for the state, as Cal HFA could charge fees and interest on any financing products provided. So that's the high level leverages proven track record. Thank you. Generates revenue. Thank you.

Appreciate it. Ma'am.

Good morning, Chair and Committee Members. My name is Sue Evans. I'm the Chief Operating Officer for one of the transitional housing providers. It's a nonprofit, Walden Family Services. We've been in business for almost 48 years and we're very proud to be a sponsor of AB 2674. Walden provides transitional housing and support services throughout California for foster and former foster youth 18 to 25 years. Sadly, over 30% of former foster youth end up homeless.

This impacts their ability to complete school work and transition into becoming self sufficient young adults. We at Walden are providing services in some of the highest cost counties, including LA County and San Diego County. Even though the demand for youth needing housing has increased, we frequently cannot find enough naturally occurring affordable rental units to meet the number of beds we are contracted to provide.

We are competing for rental apartments on the open market, frequently being forced to leave apartment complexes as apartments are converted into luxury apartments with exorbitant rents. In addition, many housing managers are also turning us away as they're not wanting transitional agencies in their complexes. Walden decided to purchase some scattered site housing with the support of a conditional award from Homekey. However, there's been a short term gap between the purchase of our units and the funds being reimbursed.

This has required us to take a hard money loan at great expense. Even though Walden is an established nonprofit with many county contracts, we have never owned any property and we were turned away from accessing conventional loans as we were seen to be a high risk. The only loans we have been able to access are extremely expensive with very high interest rates, which takes away funding which is much needed for the supportive services we have to assist more youth.

10 seconds.

Homekey has been a huge success and we're very grateful for the legislators' investments in the programme, though access to debt for transitional housing providers remains extremely costly and oftentimes outright impossible to obtain. I urge your aye vote. Thank you so much.

Appreciate it. Are there any other members of the public here in support?

Nicole Moroles, on behalf of Children Now, in support.

Thank you.

Rafa Sonnenfeld with YIMBY Action, in support.

Mr. Chair, Members. Adam Keigwin, on behalf of the Television Academy Foundation, in support.

Thank you. Seeing no other members wishing to be recognized for support. Are there any primary witnesses in opposition for this bill? Seeing nobody approach the table. Any members of the public in opposition? Okay, bringing it back to Committee. Any Committee member comment? Mr. Patterson. Vice Chair Patterson moves the bill, seconded by Mr. Kalra.

Ms. Schiavo, I want to thank you for working on this. Clearly, we know that supporting our foster youth through these programs is essential. You're one of a few members that is really standing up to be able to support this vulnerable community. And we're grateful. Certainly, we all also know that we're facing the challenges that we are with the state budget and trying to be able to protect many of our investments that we have. And that is a priority of mine.

From a policy perspective, I very much support what you are trying to do, and I'll be happy to support the bill today. Would you like to close?

Thank you. Yes, thank you. And I think, you know, this is a second iteration. We tried another version of this bill last year which did not make it across the finish line. This one we're very excited about because it actually is budget positive instead of budget negative. And so this is an opportunity for us to actually do the important work that needs to be done to make sure we're providing housing for foster youth and affordable housing, and also, you know, will have a positive impact on our budget. And we all know that those are solutions we need this year. So appreciate an aye vote. Thank you so much.

Thank you, Ms. Schiavo. Madam Secretary, call the roll.

Motion due pass to the Assembly Committee on Human Services. [Roll call]

And that bill will be out. We're at 6-0, we're gonna hold the roll open for absent members. Thank you. Next, we will entertain item number six by Assemblymember Maienschein, my neighbor. This is Assembly Bill AB 2159. When you and your sponsors are ready, we can begin the presentation.

Well, thank you very much, Mr. Chairman. It is good to see you sitting up there. And let me start by accepting the Committee amendments.

AB 2159 will authorize a common interest development to use an electronic voting system for a narrow list of association business. The Davis-Stirling Act governs the operation of CIDs, outlining the rights and duties of the Association and its members. One crucial aspect is the election process which is currently conducted through a paper and mail based system akin to California's secret ballot process. In response to the COVID-19 pandemic, many associations embrace the implementation of technology to increase participation.

This Legislature passed a bill last year to allow the continued use of that technology to conduct association business. As of today, 27 states have authorized associations to utilize electronic voting systems. This method of voting attempts to address a key issue in current elections, voter apathy. Many associations are not even able to obtain a quorum, an issue that legislatures attempts to address last session. The current system is also expensive and inefficient, especially if it's required to be done multiple times.

AB 2159 is permissive, giving associations an option. It has also recently been amended to add provisions to safeguard homeowner privacy and ensure accessibility, and provide for a homeowner to opt out and request a paper ballot. The Committee amendments narrow the scope further, only allowing this option to be used for board member elections and changes to the association's governing documents. Other than allowing for an electronic ballot to be used, AB 2159 makes no other changes in the election procedures or process currently outlined in law.

This bill represents a solution to increase homeowner participation while also reducing costs. I respectfully ask for an aye vote and with me here today to testify on support is Louie Brown, representing the Community Associations Institute.

Thank you Mister Chair and Members of the Committee, Louie Brown here today on behalf of the Community Associations Institute, California Legislative Action Committee. Just a couple points to support Mister Maienschein's statement is that first, this is permissive. We're just authorizing associations to utilize this as a tool if they so choose.

We've also added and in our research of the 27 states that authorize this now, we went through and looked at all the various security measures and transparency measures that are provided. And we took, along with the help of your staff, what we thought were the best and most protective and incorporated them in the Bill in order to ensure the secrecy is still there in these elections, as well as the protection of the homeowners. With this, we do believe that it is a viable tool.

Thank you. Are there any other Members of the public here in support? I see no one approached the microphone. Are there primary witnesses in opposition? It.

The technology has come a long way over the years, and if a board so chooses to do it, then they should be given the opportunity to do so to save costs, increase voter participation, and hopefully have greater turnaround in these elections. With that, we ask for an aye vote.

Thank you.

Good morning. Marjorie Murray, Center for California Homeowner Association Law. We are extremely concerned about this bill. It is the second attempt by the Association industry to introduce Internet voting. The last one was in 2013, and that effort was rejected by the California Secretary of State in a two page letter to the Senate Judiciary Committee, which laid out her reasons. The main reason being Internet voting cannot be made secure. It can be hacked, it can be manipulated, the outcome can be changed. Voter identity cannot be assured.

And the bedrock of voting, as we all know, is the secret ballot. And the bill and the analysis refer repeatedly to the electronic secret ballot, which is going to be conveyed by email and by websites. This is a contradiction in terms, that no such animal exists. You cannot have an electronic secret ballot. And it's not just me saying it. It's the California Secretary of State. It's every electronic technology expert from MIT to UC Berkeley.

The most recent study is from last October, UC Berkeley Goldman School of Public Policy, which actually was attempting to determine if Internet voting could be made secure. And despite their best efforts, in a 60 page policy paper, they made clear it doesn't exist. Yes, the earlier bill was in 2013. We're now 10 years on. The technology simply doesn't exist. It might in the future. It doesn't exist now.

10 seconds.

So... Sorry. My colleague Tom Suhr will talk about another aspect of the bill which is extremely important to us, and that is, how does a homeowner go about challenging this system and the outcome of elections? That system is in place now. This bill would change that system.

Thank you. Sir.

My name is Tom Suhr. I'm a retired Superior Court Commissioner, and I've been hearing small claims cases since 2002, continuing after retirement and through the present. I also spent five years as the Chair of the Advisory Subcommittee to the Judicial Council on Small Claims. And so I have a lot of small claims background. Now, unlike the Florida statute, which has been cited, offered as a prime example of a state that allows this kind of voting.

Note that in Florida, there is an executive branch agency that arbitrates and decides challenges to HOA elections. California, by contrast, relies on small claims courts to resolve such challenges. Simply put, electronic voting simply cannot be challenged in small claims court, where laypersons are there presenting their cases unassisted by anyone, including an attorney.

I would like to note that there is at the San Diego University School of Law, a seven week course for attorneys that discusses, quote, the best practices to properly identify, preserve, collect, review, produce, and use electronically stored information in litigation. So it is quite unrealistic to expect a layperson in small claims court to be able to bring any kind of a challenge to an electronic voting process. So we do urge that you no vote on this bill for that reason and the other cited by Marjorie.

Thank you. Are there any other members of the public here in opposition? Seeing none, we can bring it back to Committee Members. Ms. Quirk-Silva.

I want to thank the author for bringing this forward. We've now had two under this kind of topic this morning. But the opposition's remarks do seem serious. One of the areas I'm hoping you can speak to is not only the opposition, but also the opt out part of this. I will give you an example. My mother does live in a HOA, and she's 87 years old and would have no interfacing with any type of electronic experience. So if you could speak to that.

Sure, I'll let Mr. Brown talk to it as well. But I'd start with the premise that this is permissive only. So in a lot of these instances, that's probably in practice, not an association that's going to utilize something like that. This isn't something that's being mandated or pressed down or acquiring or we're changing. It's just another option. We talk about, all of us in here, in fact, our Legislature's done a good job of it. How do you increase voting?

We know for a lot of these, for example, for a lot of boards, they can't even get people to be on the board, let alone vote for the board. So that's a premise behind it. We've worked with the Committee a lot. We'll continue to work with anybody who brings up opposition, anyone else who brings up points, as you know. And I'll turn it to Mr. Brown if he has anything to add to that.

Well, let me just ask, would they then, in fact, receive a letter saying they could opt out? And then they would have to literally make a call to opt out. So what I'm saying is it wouldn't be electronic opt out.

Correct.

Yes. Every, if an association moved down this path, every member of the association would receive notice along with the normal election process. An election is going to take place. And within that notice, it would say we're utilizing this electronic balloting system. If you prefer to receive a paper ballot, let us know. Now, that could be an electronic notice back. That's up to the association and how they want to handle that type of communication. But it is going to be given to every member of the association, the opportunity to be given one of those paper ballots.

Thank you.

Thank you. Vice Chair Patterson.

Thanks. Despite the fact that I've been in a constant state of war with my HOA over not enough bark in my front yard, I do live in a very large Homeowners Association, and my district is filled with HOAs, many of them, or at least two of them, being for 55 and older. And I think the questions asked by my colleague are well placed. I like the fact that you can get a paper ballot still. I think that's really important.

But also, with how large my HOA is, the difference between elections where I don't support normal elections being electronic, is that if we have 10% voter turnout, the election results stand. That's what happens. But in an HOA election, the threshold is higher. In the process of sending these things out all the time, it's very hard for us to get quorum and, but we have big issues, you know, that we have to decide with 3000 homes, by the way. So it's a really big HOA.

So I support this. I do think having more safeguards to ensure, you know, the... It seems to be okay how it is, but you know, I would definitely listen to the opposition and see if there are more ways to ensure that people that don't want to vote electronically can continue to access a paper ballot and make sure that the HOAs are unable to really, you know, kind of get around that. But with that said, I think this is a really important bill, and I'll be supporting it.

Thank you, Mr. Patterson. Any other Members wishing to comment? Well, Assembly Member Maienschein, I want to thank you for working on this issue. I would hope that over the last 10 years that we've made improvements industry-wide on issues of security. I know that that is something that, if this passes this Committee today, you're going to be taken very seriously as we think about things through the lens of the Judiciary Committee.

And ultimately, this is about an opportunity for more participation for me, and testing out new models that might be able to afford more people to lend voice. But for restating, you know, what others have mentioned here around the option, first of all, the permissiveness of this bill, and secondly, the option that there still be access to a paper ballot. I think this is a step in the right direction. With that, would you like to close?

Well said. I would use that as my close. I think you you hit the exact pertinent points. I mean, that's exactly what I would have said. So I'll save you the time so you can get through the next people. I respectfully request an aye vote.

Thank you, Mr. Maienschein. Madam Secretary, please call the roll.

Motion do pass as amended to the Committee on Judiciary. Ward.

I'm sorry, was there a motion? By Vice Chair Patterson and a second by Ms. Reyes. Thank you. Please call the roll.

[Roll Call]

Thank you. We are at 6-0. The bill will be out, but we're going to hold the roll open for absent Members. Next, we have Assembly Member Alvarez, my other neighbor, who's here on two bills at the moment. This is item number four, AB 1886, and item number 13, AB 2560. Which one would you like to begin with?

Mr. Chair.

I'll begin with 1886.

Great. When you're ready, go ahead and begin presentation.

Thank you very much, Mister Chair. Colleagues, good morning. I'm here on a AB 1886. Want to start off by clearly stating we are accepting the Committee's amendments and thank the staff for their work with us on this bill.

Assembly Bill 1886 clarifies because it appears that it needs to be clarified that HCD, the Housing Community Development Department, determines whether a local jurisdiction's housing element is in compliance with the housing elements law, and that if a project is submitted during this period of non compliance, it is eligible for the builder's remedy, regardless of whether the city reaches compliance before it is approved. For some context, the builder's remedy is a tool that the Legislature established three decades ago.

The Legislature envisioned that it would incentivize local governments to submit a housing element that would be complete and substantially approved with the planning for enough housing in each one of our jurisdictions. Unfortunately, the provision went unused for decades and now that it is being used, there has been some cases that have been brought forward to challenge what the Legislature's intent was three decades ago.

Given the shift in support for more housing at the state level, developers have been using this forgotten code and have begun to submit builder's remedy projects. Despite the uptick in these projects, due to the lack of the clarity, many cities have refused to even process the applications that have been submitted by project proponents. Again, as I stated, court cases have been brought many occasions that have slowed down housing development even more in areas, mainly in areas that need the housing the most.

At its core, AB 1886 is a good governance bill that would fix a tool that the Legislature established 30 years ago. It is written to provide certainty and clear up ambiguity in the law.

With AB 1886, it will be clear that the builder's remedy can and should be used as intended to build more housing, particularly in cities that are not doing their part in solving the state's housing crisis, we will eliminate the threat of lengthy legal delays that are caused by those who just don't want to build more housing. I want to acknowledge the analysis by the staff on page seven. There's one sentence I think in particular that really captures the intent of this and want to make sure.

Put this on the record. Final paragraph. Towards the bottom. Sorry, not the final paragraph. Fifth paragraph. Final sentence. This bill would eliminate arguments made by local governments that by self certifying, which is a tool that often is used by governments, that arguments made by local governments that by self certifying or adopting a housing element that does not reflect HCD's findings, the local government satisfies the requirement for compliance per the builder's remedy.

Also acknowledge with the NLS states that there appears to be some redundancy, or it's mentioned that it might be unnecessary, rebuttable presumption. It is because there have been so many cases. We're just trying to be very clear with this law of what the intent of the builders remedy is. And that's why we are, in various aspects of the language of the bill, restating what is in fact already law, but again, wanting to make it very clear.

So with that, I'd like to turn it over to Nick Cammarota, who is with General counsel at the BIA for some testimony.

Thank you very much Mister Chair and Members Nick Cammarota for the California Building Industry Association. I'm proud to be a co-sponsor of this legislation. I want to back up for a moment and say that a builder's remedy project is, is not just any project, but a project that includes 20% affordable housing. So just 100% market rate housing project is not going to qualify.

Second, in anticipation, I would say that most local governments are not in the position of having to be in violation of housing element law. Most local governments are in compliance. So this is just to target those as a consequence of their failure to comply with what the Legislature has said it wants in local housing elements and comply with the dates that they have been given to do that.

The existing process requires local governments to work with HCD in making sure that they comply with housing element law. HCD has proven to be flexible and persistent and allowing local governments some discretion in doing that. It's important, I think, for everyone involved that they are not left to just judge for themselves to self certify their own housing elements. And so what this bill says that you're not in compliance until you have an HCD sign off or you have court sign off.

So if a local government doesn't like what HCD does, they can go to the courts and challenge their determination. And then in addition to what was said, I think what we're looking at in the second part of the bill is really to make sure that the status of the housing element compliance at the time an application is submitted is vested with that submission of application for the project.

Otherwise, local governments will just delay processing the application and go back and fix the housing element insufficiencies and that project will be dead. So those are the two key points, and I'm happy to answer any questions.

Thank you. Are there any other members of the public here in support? AB 1886.

Brooke Pritchard on behalf of. California, YIMBY in support,

Bob Naylor for Fieldstead in support.

Seamus Garrity with Lighthouse Public Affairs, SPUR, and Civic Will in support.

Kathryn Charles on behalf of Housing Action Coalition in support,

Ralph Sonnenfeld on behalf of YIMBY action and for brevity's sake, I won't include the other 19 coalition members in support. Thank you.

Rebecca Marcus with Leading Age California in support.

Thank you. Are there any primary witnesses in opposition?

You can use the presentation table or the mic, whichever you prefer.

Good morning. Good morning. Chair and Members Brady Guertin, on behalf of the League of California Cities in respectful opposition to the current measure. Our concerns are the fact that one of the main issues that we've seen with HCD being the sole determinant of this has been our cities are working continuously hard to make a good faith effort to get into compliance with housing elements.

So many of our cities and members have told me that they're working from three to four years to get a compliant housing element. Now, what this Bill would do is when HCD determines that they are not in compliance despite the best good faith efforts, that means a developer could build wherever they want during that time process while waiting to get into compliance or waiting for a court of law. So that is where our concerns are.

We understand that our cities are continuing to struggle with getting a compliant housing element. We're working through that. It's been a lot of differences in terms of unclear guidance, staffing, resources that kind of delays the process. And our cities are doing our best to get into compliance. So those are our main concerns with the measure, and we'll look forward to continuing to work with the author's office to address our concerns. Thank you.

Thank you. Are there any other Members of the public here in opposition?

Alyssa Silhi. On behalf of the City of Corona. Respectfully opposed.

Thank you. Okay. Seeing no other Members of the public wishing to register, support or opposition, turn it back to Committee. Miss Wilson.

Thank you. Thank you to the author. Definitely understand the intent to ensure that we, as I like to say, produce, produce, produce housing in the state. One follow up question in regard to the opposition's concern, the time period that you're talking about, making sure I understand the Bill very clearly, is the time when HCD says we're not in compliance for various reasons and the time period when a city may take them to court or negotiate with them, what part of it is in compliance or not? And that time period usually is a self certification period. And that's the time period that your talking about in terms of eliminating.

So as it refers to allowing an application to be vested. Yes, that is correct.

Okay. And yours makes it from the moment HCD responds back to there, there's no time period in terms of like giving. I think you noted that. Or maybe it was in the testimony that a city could then choose to self certify and then never try to resolve the issue and never take the court and they're forever self certified. Right.

That is that is maybe what. So we're characterizing a loophole, but yes, that is essentially the loophole that's trying to be.

That was expired. And so. And there is no thought to just putting a time period, meaning giving an opportunity that they are. They can self certify for a certain amount of time.

Well, you know, there is a time period given when the first submittal occurs, when HCD has 90 days to review and provide the feedback to the cities in order to comply, that period exists. And even prior to that, HCD is available and can, if a city wishes, to submit parts of their element to get assistance to make sure they are compliant. And so not in the Bill.

I'm talking about the period. Yeah, no, no, no. I'm talking about the period of when. When HCD says not in compliance. So up until that point, a builder can submit an application and the city has free control to say, based on their zoning, whatever, not accepting. But the moment their housing element is not considered not compliant by HCD, whether the city disagrees or not, at that particular moment, is when the builder's remedy is allowable for those that are moderate or below. That includes that percentage. So, like the testimony was not somebody who's 100% market, we're talking about people who have an affordable component to their building at that particular point.

That is correct.

Okay. And so you have no leeway to allow. So if someone comes in with the application the next day, they're allowed to do whatever it is they please as long as they have an affordability component because of that. So there's no leeway. And so is there a reason why you allowed for no leeway once that moment - that moment - the moment HCD puts that down, even though the city might feel like that they have a reason.

Yeah. And if you want to chime in, you can. But I think that the thinking from us was we believe that HCD acts in good faith. Maybe there are some who might not believe that, and that there is an exchange in order to reach substantially compliance, which then would not trigger builder's remedy. And that should fix that. But I understand what you're saying in terms of maybe there should be an additional time period, and we'll have to take that back.

Just if I could, for clarification. There is a statutory timeline, a deadline that the Legislature gives to every jurisdiction, and they know the process ahead of time. And prior to their adoption of the housing element, there is a back and forth with HCD. And even at that time, if HCD says you're not in compliance, the builder's remedy is not triggered unless and until they remain not in compliance by the deadline.

And so if they plan correctly and allow enough time for HCD to review and engage in a back and forth with them on what they want, then they're going to meet that deadline, as I'm told 60% of the jurisdictions are doing. And what we're talking about is if they tell HCD, go pound sand, I'm not going to do what you suggest, and the deadline passes. Now you're into the period of time where you're in builders remedy.

There is a process, after the local government has adopted their housing element, for HCD to go back and comment on what and find whether or not they're in compliance based on the final adoption of their housing element. And it's at that point when the statutory deadline hits and whether or not they're in compliance, that's when the builder's remedy would start.

It's really meant as a way to encourage good faith action by local government to do this by when the element, the housing elements are required to be submitted. And there is, again, as was stated before and stated just now, the ability for that back and forth to make sure it is in compliance. What we're seeing in cases like La Cañada Flintridge, that was just last month, went to court, is there's some actors who just refuse to do that in good faith. That's what we're trying to resolve.

Right. And I think given the fact that you said 60% are compliant, 40% are not, but 40% are not bad actors, we wouldn't say. So that's my concern, is that there's not sufficient time from, because it does require multiple submittals, and for some of our smaller, more rural cities within that, that are in that 40% that we would not call them bad actors, we would call them operating in faith that there is no window to then challenge once it's final.

And so that is the concern I have, is creating potentially a window for them for that, to make that challenge. And if they're not, then we know they're bad actors. They're just gonna thumb their nose at HCD and thus the state. And we don't want that because we need to produce housing. But I think there is an opportunity to provide a window of where post the finality from HCD that they have an opportunity to challenge before the builders remedy kicks in. And I think that's important.

Noting even from the own testimony, is 60% are in compliance, 40% are not, and we do not have, anecdotally in the news, 40% of cities, you know, being calling them bad actors. We do have clearly a handful of cities who are not doing what they're supposed to do and refuse to not only allow for additional housing, but allow for in particularly affordable housing or workforce housing.

And so capturing, making sure we capture those and not those that are acting in good faith, but don't have the resources to do multiple submissions and all of that, and do all this pre planning work with it, with an agency that does take time, that doesn't always even meet their own statutory requirements for response. And so that is my concern. I'll be supporting it today. But I do think you should consider some type of window post that - yeah, determination that allows them to do that. They know they have to act within that time to either challenge in court or submit something formal back, and that they only have that window before the builder's remedy kicks in.

Appreciate the feedback.

Thank you, Miss Wilson. Any other Members? Vice Chair Patterson.

Thanks. Great questions and responses. I think if we took like 10% of the brain trust that goes into the housing element process to actually deliver housing, we'd probably be in a much better position. And that's what I really don't like about it. But when I was on the City Council and we were moving forward, our housing elements, we would get a response from HCD that says things that, in our opinion, really have nothing to do with the delivery of housing at all.

You know, they wanted us to change ordinances on this and that and do all these sorts of things. And I will say, in fairness, we did respond with like, okay, we'll take a look at it. And then, you know, we got our housing element approved eventually, but, you know, we took it very seriously. We were one of the fastest growing cities in California.

But despite that, you know, there was like, no, no consideration of, you know, the evolution of the types of products that might be delivered, for example, ADUs, and how we had no success with ADUs in the past. Laws change and you saw it starting to cook, and they wouldn't allow that to incorporate that into our housing element at all, despite the new laws. And so we had a lot of back and forth.

And so I am concerned that if we get into that sort of window that Miss Wilson was talking about, that there could be, you know, you're not compliant because you're not changing an ordinance or you're insistent that you can actually meet those objectives that you've proposed. So I would recommend kind of bracketing it a little bit, if you can, on really catching the bad actors.

I'm definitely sympathetic towards if you put in an application and they're kind of like dragging their feet and I kind of - I agree with the intent of the Bill. Totally agree with the intent of the Bill. I mean, we don't want cities dragging this out so long while developers sitting there waiting, gonna deliver housing, and then all of a sudden they get an approved thing and then now they're saying, oh sorry, you can't do the project now. So I agree with the intent, but I am very concerned, I'm going to lay off today because I'm concerned about that window that you were discussing when there is a good faith effort actually going through there. So thank you.

Thank you.

Thank you, Mister Patterson. Any other Members wishing to comment or question? Okay, Miss Reyes.

I just want to thank my colleague for so eloquently asking the question. We know we've got to find solutions and I think that this window, as it's been described, I think is extremely important. I appreciate your willingness to work on that. I absolutely will be supporting it. I think that you're headed in the right direction. We just need to find the details and make sure that we don't punish those good actors who are, they're not dragging their feet, they just can't take care of it in a timely way. But we also have to light a fire under some people and make sure that they take care of business. Thank you. With that, I would move the Bill.

Motion by Miss Reyes, second by Miss Wilson. Assemblymember Alvarez, I want to thank you for working on this issue. For a very long time, cities have had the responsibility to plan and zone for appropriate housing so that we can meet our population's needs. And we've got the RHNA process, which we all know is an evolution. It needs work, we're going to continue to work on that. And we've got our kind of individual requirements that we know we need to set through our housing element law.

And again, as you mentioned in your statement, reflecting back on the origins of that housing element law, this has been around, but not really exercised until recently, which has really helped us realize we don't have arena process that's not enforceable. We actually have a tool there which courts have really dug into and realized that this is an opportunity. What you're doing here is trying to codify that so that the rules are clear for everybody going forward.

We have that responsibility to plan and zone for, but there is a consequence that I do like and I really appreciate the depth that Assemblymember Wilson, and would echo that as well, is looking, because there should be a good faith effort on both sides to be able to try to get this right. And I think that that as you're going to approach local government committee is an opportunity to be able to look a little bit deeper into making sure that there's fairness on both sides. And I know that you will with that. Would you like to close?

Yeah. Thank you. As you stated, and those of us who come from local government, when it comes to housing, certainty is the most important thing. And we're trying to create that certainty when it comes to the Housing Accountability Act. And so I appreciate the feedback. Very well taken and appreciate your support on the Bill.

Thank you, Madam Secretary call the roll.

Motion do pass and rereferred to the Committee on Local Government. [Roll Call].

The bill currently has seven votes. It is out. We will hold the roll open for absent members. And next you have item number 13, AB 2560. And when your presenters are ready, you can begin your presentation.

Thank you, Mr. Chair, again. Good morning to all. This is Assembly Bill 2560. This bill I would also categorize as a bill about certainty, certainty of building along our coast in California, where we need to build housing, just like everywhere else in California. What 2560 does is we require that the state density bonus law, which the legislature has on multiple occasions continue to increase and support housing through state density bonus law, be implemented within the coastal zone of California without restriction.

As you all know, you deal with this in this committee all the time. We are in the middle of a housing crisis. The legislature has taken numerous steps in the right direction to the extent that last year, HCD reports, California added 123,000 housing units overall to the state housing stock, the most since the Great Recession.

However, some of the most important housing legislation that has passed and has led to that increase in housing units throughout California have included carve outs or exclusions, effectively exempting the coastal parts of California. Keep in mind that as one of the most expensive places to live in the entire country, the coastal zone desperately needs the implementation of the state housing laws.

Research at the Public Policy Institute found that in 20198 out of 10 of the least affordable major metropolitan areas in the United States were in the State of California in the California's coast. I should say eight out of 10 least affordable major metropolitan areas in the country in coastal California. This exorbitant cost is partially due to the lack of density being built on coastal areas.

The Turner center found that between 1980 and 2010 30 year period, the housing units in the typical us metro area grew by 54%, while California coastal metro areas increased only by 32%. The 2015 Legislative Analyst Office report that directly called for an increase in density to decrease the cost of housing in the region was also supported doing so in the coastal areas.

I fully recognize the importance of the coast, obviously as someone who lives in the coastal area and I value the resource for our state and the need for it to have a layer of protection to stymie development in areas that are truly not fit for development, such as wetlands near cliffs that are subject to sea level rise. This recognition is why the state density bonus law is perfectly tailored to be fully implemented on the coast.

A developer can only use incentives and concessions in the state density bonus line areas that were already previously determined to be fit for housing through their local zone residential designation by local government. I'd also like to point out the fact that this is not only a housing issue, but also an equity and climate issue. For the coastal economy to function, it requires significant amount of service workers to serve as the backbone.

However, being able to afford housing near their place of employment means that workers spend resources, emit further CO2 into the air, travel further for work, compounding the climate crisis and threatens the coastline. And the Coastal Commission is entrusted to protect. By ensuring that we increase housing density in areas determined fit for housing. Again already approved for housing on the coastal area, we can make a real impact in the housing crisis there. Appreciate you hearing us on this item.

I'd now like to introduce Colin Parent, executive director and general counsel at. Excuse me. Circulate San Diego and Rafa Sonnenfeld from YIMBY action to testify.

Great, thank you. Two minutes.

Great. Thank you very much assembly member. I was going to begin my remarks by saying it was great to see my friend Chris Ward in the Chairman's seat, but I appreciate seeing his name flagrant.

What about me?

Yeah, yeah. Appreciate it.

Getting back your time either.

So, yeah, again, I'm Colin Parent. I'm the executive director and general counsel at Circulate San Diego. We're one of the co sponsors of this bill. I also serve on the city council in La Mesa, California, about 10 miles east of the coast in San Diego. And just a little intro about density bonus. So it says density in the name. It's not really about density, it's about creating deed restricted affordable homes.

And if a project density bonus law says that if a project includes affordable housing and it complies with local zoning rules and it's already in an area that's zoned for multifamily housing, then it limits the discretion of local elected officials, city council members, boards of supervisors, to say no to those projects. Right. Or to require other bells and whistles on those projects.

And as those of you who serve in elected local government know, that kind of tying your hands, making sure that they're holding folks accountable, living up to what they've zoned for and agreed to in their plans, is really important. I rely on that with my colleagues all the time to get them to do the right thing.

And what this ill does is it applies those same basic standards that we're requiring of local governments to the Coastal Commission, and it only applies to projects that are already zoned as multifamily only applies to projects. And by the way, those local zoning have to be approved by the Coastal Commission. So the coastal commissions looked at and said, yeah, this is an appropriate place.

And all it says is that now when those, when projects that meet those standards that include affordable housing, that they ought to be held to that same account. And so that's good. We want more housing. We want more affordable housing, especially in high opportunity areas like much of the coast. There's been testimony in the past to this committee from staff of the Coastal Commission saying, hey, don't worry about it. We're supporting affordable housing. We always support affordable housing.

There's some good examples where that show that that's not always exactly the case. Right.

So in 2019, 89 an 89 unit condominium development with about 10 deed restricted, permanently affordable homes in there were approved in the City of Santa Cruz. There was an appeal to the Coastal Commission. The Coastal Commission waited four years before changing, saying, actually, this is fine. It can go forward now. Good on them for letting it go forward. But the fact that it took four years to make that decision is a problem and something we need to, need to fix.

And then just in February of this year, in the Venice area in Los Angeles, there's a project that the Coastal Commission just found is not consistent because it had different setback requirements and heights than its surrounding properties. But that's like relief from setback limits. And heights are exactly what density bonus allows. Right.

And so this is a situation where, where there really does need, there's really demonstrable evidence, where there's examples where we need to have some reform to be able to effective affect the Legislature's desire to implement density bonus and to allow for the production of affordable homes throughout California. So thank you.

Thank you.

Good morning, committee members. Rafa Sonnenfeld, policy director with YIMBY Action I'm also a volunteer housing advocate in my home coastal county of Santa Cruz. YIMBY action in our chapters fight for better housing policies because we want to reduce poverty and homelessness, eliminate racial segregation, create jobs, and stop climate change.

It's important to note that the coastal zone includes large swaths of urbanized and already developed interior areas for inland, far inland from the coastline and beaches where new housing is needed and would be appropriate, including in San Diego, Santa Monica, Los Angeles, Santa Cruz, San Francisco, Arcata, Eureka, amongst others.

By ensuring density bonus law is fully applicable in the coast, we reduce the risk of uncertainty that comes with the likely relitigation before the Coastal Commission of issues like the applicability of a density bonus height waiver, which is critical for virtually all multifamily housing projects to be feasible.

The Coastal Commission will tell you that this bill is unnecessary, that the law already requires the harmonization of density bonus law and the Coastal Act, but that requires both a local jurisdiction's motivation to update their LCP, their local coastal program, and the commission's discretionary approval of the LCP that allows the density bonus projects.

And even then, the Coastal Commission staff is on record opposing heights for density bonus projects in cities like my hometown of Santa Cruz that have lcps which allow density bonus height waivers for density bonus projects. This is a common sense measure to ensure that the state's affordable housing production laws actually produce affordable housing everywhere in the state, including our most affluent coastal communities. I'm available for questions. Thank you.

Great. Thank you. Any other witnesses in support? Name and organization, please.

Mark Stivers with the California Housing Partnership, in support.

J.T. Harechmak, the Non-Profit Housing Association of Northern California, in support.

[Unintelligible] Lighthouse public affairs on behalf of Spur and Civicwell, in support,

Lauren De Valencia, representing the American Planning Association, in support.

Anya Lawler, on behalf of the California Rural Legal Assistance Foundation and the Public Interest Law Project, in support.

Brooke Pritchard, on behalf of California YIMBY, in support.

Francisco Morales, on behalf of the Housing Action Coalition here in support.

Jim Finnegan, representing AARP, and we're in support of the bill because it provides for more affordable housing.

Good morning. Don Wilcox with the California Conference of Carpenters, in support of the bill.

Rebecca Marcus, Leading Age California, in support.

Bob Nayler for Fieldstead. With apologies to the author, we have a tweener suggestion exempt a half a mile.

Great. Thank you. Any primary opponents to this measure?

You have two minutes, but I'll give you two and a half if you're excited to see me, unlike the.

I appreciate that. I'll try to keep it brief. Good afternoon, honorable Committee Members. My name is Christopher Mouawad and I'm a legislative fellow with the Environmental Action Committee, or EAC, and I'm speaking today on behalf of groups that submitted an opposed unless amended letter on April 3. And we submit an opposed unless amended letter rather than holding a straight opposed position because we firmly and genuinely believe that there exists a path where the density bonus law can coexist with public access and coastal resource protection.

Applicable state law or applicable statutory law requires the harmonization of the Coastal Act and the Density Bonus Law, and this is evidence within statutory language within the Coastal Act and the legislative intent of the density bonus law. Applicable case law demonstrates that the Coastal Commission is not a bad actor. Rather, it is recognized that the Commission approved land use plans are consistent with current density bonus law, and our concerns stem from the author's bill having unintended consequences.

Simply because an area has been zoned for residential areas, or just because the development currently exists on a site does not mean that site is devoid of natural resources or public access opportunities. Rather, it means that the development which exists has had its impacts mitigated. The removal of mitigation requirements for additional development on that same site is illogical. Mitigation should not be construed as prohibition or denial. Discretionary review for public access guarantees is not frivolous.

Public access is not always an eight foot cement walkway with hand railings. It changes as conditions along our coast change. Further, the author's assertions are unsupported by his own materials. Most compelling is that the author's own citation to Massachusetts 40B law urges him to consider using the Coastal Act to implement housing policy rather than exempt housing policy from the Coastal Act.

Further, the PPIC report that the author cited lists three jurisdictions which don't even have a coastal zone, and coastal areas should not be construed as areas within the coastal zone. Ultimately, this bill takes aim at the wrong target. We are happy to work with the author develop legislation which utilizes the Coastal Act and Coastal Commission as a means to further affordable housing, not as an obstacle, and I'm happy to answer questions from the author or Committee. Thank you.

Thank you. Are there any other members here in opposition? Members of the public.

Thomas Alvarez with AZUL in opposition unless amended. Thank you.

Thank you. Seeing no others, we will bring back to Committee getting with Assemblymember Kalra.

Thank you Mister Chair, and thank you to the Assemblymember for bringing this forward. I do, you know, and I'm having my housing hat on here. I know this is, if it gets through, is going to go to natural resources. So I may have kind of further contemplation prior to that.

But just regarding some of the concerns from opposition and one aspect of what's being done here, I know there was a lot of conversation because there's no doubt that the housing that does exist currently along our coastal areas is not exactly accessible to most Californians, including the workers, as was alluded to. Are there affordability requirements as part of this, as part of this legislation? Specifically?

Yeah you only can utilize this density bonus law, which testimony from Mister Perrin, I think it's labeled density bonus law, but it's about affordable housing. So only if you build affordable housing are you allowed to utilize this incentive to create a project that has a few more units. But it's got to have the low income component and you can get an additional bonus by a law that we all approved last year that I, that I brought forward. If you provide middle income housing that's also deed restricted.

So low income, middle income, if that's, if you have derestricted low income and middle income, that's the only way that you can actually utilize this.

Yeah, I just wanted to get that on the record because I think that's really important aspect of this, really create true access to all Californians, including, as you stated, the workers that are working in these same coastal communities. And so with, certainly with my housing hat on, we'll be supporting the bill today.

And we'll just hope that there's continued conversation with some of the concerns from the environmental groups in terms of coastal access, coastal protection, to whatever extent, you know, that can be further worked on. And I'll take another look at it in the next Committee, but for the Housing Act Committee, certainly in support. Thank you.

Thank you, Assembly Member Quirk-Silva.

Thank you. And I want to thank the author, Assemblymember Alvarez, for bringing a very pragmatic solution to building affordable housing on our coast. Now, when we use the word coast, this brings up all of the iconic California images that we all so enjoy, from the Laguna Beach landscape to any of our Santa Cruz favorite places. But what we already know, not even related to housing, is many of our communities of color don't get to experience those same experience that have made California iconic.

And not only that related to not even talking about housing, it's even the accessibility to some of the most pristine areas, which there have been long term legal fights for decades of having these very narrow accesses to some of the most pristine.

There's even beaches in California that have signs on them that say no public access when we know that it is a public beach, but when we refer to housing, and we had this very stern conversation last year, I think, related to your, to your bill, which is that we continue to look for carve outs, exclusions, exemptions, not only on the coastal area of California, but all over the State of California to not build.

On the other hand, we will have many who are on opposition of these types of bills who will say, we don't like housing encampments, why aren't we solving the homeless issues? We don't want sober living homes, we don't want mental health beds. So this continues to be the rhetoric. And now the newest way to try to get around building housing is historic preservation, to use a landmark and say, we can't build around there.

So I simply would say, not only do I support this, but we cannot expect our low wage earners to be coming in from San Bernardino, coming in from northern LA, inner cities, to do the work in some of these high income resort areas, and travel an hour each way and sometimes even further than that, and to work in the restaurants, work in hospitality, to do all of those jobs and say, but you are shut out from any possibility.

This is a thoughtful piece of legislation that focuses on building small swaths of affordable housing. When we look at the timeline that it takes to get a project done in California, sometimes a decade or more, we should not feel that all of a sudden the sky is going to be falling and we're going to have thousands of affordable units on the coast of California. That is what we hear in any project. And it's a stall and delay tactic.

And to be honest, it's becoming very offensive when we see people on our streets and we hear the complaint. We know in polling, homelessness and housing is a number one concern of Californians. But let me say it clearly, you can't have it both ways. You cannot say no to shelters, no to housing production, no to mental health, and no to coastal building, no to so many parts of California building, and then complain. So I fully support this and I move this forward.

Thank you. Motion by Quirk-Silva, second by Mister Lee, Vice Chair Patterson.

Yes, thank you. Just, well, that was a fiery speech, by the way. That was really good. So appreciate that. I think from the opposition standpoint, what's been great about this Committee is just learning what's happening statewide. And I think it is somewhat disingenuous to say that the Coastal Commission hasn't denied a density bonus project before. I mean, the truth is the capital isn't going to go into there because there's such massive risk in getting a project done.

I mean, I've seen the Coastal Commission in many documents now opine about their concerns about things like an ADU and somebody's own private property. So I think now we're seeing some frustration from that and I think we're open to some solutions. This is one. And maybe it goes too far. I mean, maybe propose other solutions that meet in the middle. And maybe there's an author, there's 80 of us crazy people here, so maybe one of us would take the bill and 40. Well, they're not crazy.

They're, you know, but I think we can't just say no to this. We have to allow, we can't just allow every other community, minus coastal communities, take the share of, of housing and density bonus law. And by the way, this is for the, for a lot of the people, my mom lives in affordable housing. I've talked about that a lot. But this is for people who want to live in affordable housing.

I mean, that's a component of this bill, not through this bill directly, but the density bonus law. And so it'll help some people get off the streets that are living right now on the beach. And that's a bigger impediment to getting to the beach than a house are having to walk around with your family, people who are sleeping in tents on the beach. So we have to address that. And this is a great solution.

I'd love to be added as a co-author, if you'll have me. I can understand why you wouldn't, but I'd love to be added if the time comes. So thank you.

Thank you, Vice Chair. You're welcome to co-author anytime.

Any other member comment? Okay, seeing none similar. I want to thank you for working on this issue. I'd remind everybody that this passed out of housing Committee last year with the, the sort of intent of this language also included as well. For consistency sake. I wanted to note that on the record and appreciate you continuing to work on this because I don't think that our interests here are actually mutually exclusive.

We have, first of all, celebrated the density bonus law. And as you mentioned, this is like very, in a way narrowed for 100% affordable units that, but for that product type, it is working and it is producing a lot more opportunities across most communities. But here, you know, we still have this extra step that we have to go through the coastal zone. And my personal view, we'll talk about this more.

I know in you're going to do natural resources, I guess I have local gov this year. You know, we are having those very difficult and meaningful conversations with local governments and where there is necessarily an overlay with the land use plan, land use authority of the coastal zone. I want to see those really reflected. Right.

And so if we have one law that's doing one thing that is changing sort of the requirements or the outcomes, I guess, for a local government, let's make sure that's reflected in what we're seeing here. And that's what you're trying to do through this bill as well, is make sure that we have parity here.

And that's not to say, though, that we are somehow throwing out the special attention that we give to coastal resources and access to the coast and particularly special sensitive lands that we have along our coastline. Much of that is still reflected in the plan itself, which is actually back in turn back a reflection on the local community plan or the general plan for that city as well. They are in harmony. So that's what you're trying to do through this bill as well.

And the ultimate goal here is to make sure that we're not using additional roadblocks or additional time delay to be able to produce affordable housing very much in a place where we desperately need it, close to jobs, close to the tourism sector. And for that, I'm happy to support the bill here today. Would you like to close?

Yeah. Thank you. Appreciate all everybody's comments. I would just remind, you know, what was raised by the opposition was the threat to wetlands and to other things.

If a city does not get their local coastal program approved by the Coastal Commission, this doesn't matter. The plans that are submitted by cities must be approved by the Coastal Mission Commission to begin with, for you to be able to build anything on there. This does not supersede those plans, does not supersede that. If the city has said, we want housing on this parcel, this bill aligns to that. It does not take away that decision that was made locally. Housing on the coast is about accessibility.

It is about everybody having access to the coast, not just those who can afford it today. The other thing about this is this project in a time where we face budget difficulties and inability to do more, although I think some of us are working on this, providing assistance to build affordable housing, this does not cost the state one penny. This is an incentive to those who are building and they build it on their dime.

Thank you. Madam Secretary, please call the roll.

And so, for those reasons, I think this is, as was mentioned, I appreciate the comments and a thoughtful approach to try to help solve the housing crisis throughout the State of California and create affordable housing opportunities in our coast so that everybody has access. Thank you.

Motion do pass to the Committee on Natural Resources. [Roll Call]

I think that's eight.

[Roll Call]

8-0.

Okay, that bill will be out 8-0. We'll hold the roll open for absent members at this moment. I'm gonna go ahead and clean up on a couple of items that we want to go ahead and get on the. On the roll and then we'll proceed. Mister, was it Arambala would be next? So, if you want to get yourself ready for the presentation at this time.

Eight.

Members of the committee, we have a rule change here for our committee rules to move towards file order as opposed to sign-in order. Is there any objection to amending the committee rules as stated in your packet? Seeing none, that will be passed by unanimous consent, we need a motion and a second on item number 1, Mister Ta. So moved by Mister Patterson, second by Miss Quirk. Silva. Madam Secretary, please call the roll.

Motion do-pass as amended to the Committee on Judiciary. [Roll Call].

That bill will be out seven to one. We'll hold the roll open for absent members. Next, I need to entertain a motion and a second on the consent calendar moved by Mister Kalra and second by Miss Reyes. Madam Secretary, please call a roll.

We have three items on the consent calendar. AB 1801, do-pass and refer to the Committee on Local Government. AB 2597, do-pass and refer to Committee and Local Government. AB 2897, do-pass and refer to the Committee on Revenue and Taxation. [Roll Call]

Consent calendar is adopted by 8-0. We will hold the roll open for absent members. Going back to item number three. This is AB 1820. Secretary, please call the absent members.

[Roll Call]

That count is now up to 8-0. We'll hold the roll open for absent members. Item number six. AB 2159. Madam Secretary, please call the absent Members.

[Roll Call]

Current roll is at 7-0 with one not voting. We'll hold the roll open for absent members and then item number 17, AB 2674. Secretary, please call the absent members.

[Roll Call].

That new count is 8-0. We'll hold the roll open for absent members.

Item four is this Assemblymember-

Thank you. We are ready to proceed, and we're back on business. So this is file item number seven, AB 2240. When you're ready, Doctor Arambula.

Thank you, Mister Chair and members. Farm workers should be treated with the dignity and respect reflective of the essential contribution that they make to California's agricultural economy and our communities. This bill authorizes migratory farmworker centers to allow residents to live in their homes year-round and redefines the term migratory agricultural worker to remove the requirement that a farm worker reside outside of a 50 mile radius of the center in the off-season.

Before modern migratory farmworker housing centers were established, many lived in overcrowded, substandard motel rooms, makeshift shacks, or near orchards and streams without plumbing or safety. In response, in 1965, California provided migrant farmworkers and their families with affordable seasonal rental housing from April through November. Today, however, the majority of farm workers are no longer migratory single men but instead are settled with families. Only 8% of California's farmworkers were migrants in the fiscal year 2019 and 2020, according to the US Department of Labor.

In 2023, the Sacramento Bee surveyed seven migrant centers and 150 farmworkers. Results from this survey confirmed that 80% of farmworkers would continue to live at their center if it remained year-round. About 69% of the farmworkers with children said that migration negatively affected their kid's education. As the demographics of farmworkers are changing, it becomes essential to remove outdated requirements.

Despite this change, farmworkers still must reside outside of 50 50-mile radius of a center for a minimum of three months in order to qualify for migratory farmworker housing. This is devastating to children whose school years do not align with these closures and to families who are required to separate as a condition of residency.

AB 2240 ensures that farm workers and their families are not separated because of outdated policies and that their children's education is not interrupted; in support of AB 2240, today are two lead witnesses, beginning with Raul Mora, Principal at Marshall Elementary from Stockton Unified, and Lauren Ornelas, reading testimony on behalf of an 11th grader, Brenda Ochoa from East Union High School in Manteca.

Thank you.

Good morning. Thank you. My name is Raul Mora, and I was a school principal for over 28 years in Manteca Unified at both French Camp Elementary School and East Union High School. Currently, I work at Marshall School in Stockton Unified.

During my tenure, I've experienced the children of migrant parents living at Artesi migrant camps I and II, the vast majority of whom are United States citizens who were either born here or are legal resident aliens being impacted by this archaic and unjust law that mandates migrant families move more than 50 miles away. This policy is often reinforced by camp managers who tell families that if they see them around town, they will lose all opportunity to stay at the campsite following spring.

This forces all migrant students to leave their schools and teachers whom they are familiar with and transfer to another camp, state, or country that has a completely different curriculum or are viewed as merely a temporary, seasonal students by the school that absorbs them and requires that they just sit in the back and not create problems. Or if they are moved to a rural town in Washington state or a small town in Mexico for the winter holidays, they may not be in school at all as they are closed. All schools require fees in Mexico as well, so students have no school for three to six months every year. This creates huge gaps and discrepancies in a child's education, leaving many unable to catch up with their peers and drop out in high school when the gap becomes too big.

As students who are able to catch up their sophomore or junior year, the families are faced with a very hard decision of either taking their students with them and impacting their chances of college scholarships or entrance or allowing their children to stay all alone with older siblings, extended families, or unfamiliar or unscrupulous strangers always hiding in the shadows. Just like the previous video you heard this morning that ensures education equity for homeless and foster youth, this bill will finally end students who must hide, run out of money when left by their parents in a motel, get assaulted by gang members, and taken advantage of by criminals who stay in ow rent housing.

10 seconds.

Please ensure educational equity for all of California citizens and stop having children and dreamers pay the price for this unawareness that has occurred in the fringes for the last 70 years when migrant workers and families were only viewed upon as necessary farm equipment. We must be better now. Thank you.

Thank you.

Hello, members of the committee. My name is Lauren Ornelas, and I am the founder and senior programs director of Food Empowerment Project, one of the sponsors of AB 2240. I thank you for your attention to this important issue. I will be reading a statement from a high school student good morning. "My name is Brenda Ochoa. I am 16 years of age and I'm currently attending high school in Manteca, California, near Stockton.

My parents and I moved to Artesi II Migrant Family Housing Center when I was six. You could say I have been basically living my whole life here. This is my home where I truly feel comfortable and at peace, because everyone here is just one big family, and I never have to worry about being mistreated. Both my parents are farm workers and are currently working with strawberries, making an income of $500 each a month.

Our rent is more than $300 a month, which leaves the rest for food for the rest of the month. My grandparents were farmworkers as well and used to live in the exact same house I'm living in now. Despite everything I love about living in the camps," just so you all know, they refer to the migrant centers as camps, "my family and I always struggle with having to move out every year and missing school.

From December through late March, most of us have nowhere to go when the camps close. Some families live in their cars so their children can finish their finals. I've been struggling for the past three years because of all the moving due to the camps closing, and I truly wish I could be there with you all at this moment to tell you all the story of my community.

Sadly, I couldn't make it due to the fact that I'm very behind on my credits towards graduation due to the same reason; since I cannot attend my school for the whole year, I cannot afford another absence. I am Brenda Ochoa, and I ask the members to vote yes on AB 2240. You wouldn't only be helping me, but hundreds of more students like me with a dream to be someone in life, to give back to all the sacrifices our parents have made for us."

Thank you and our thanks to Brenda. Are there any other members of the public here in support? If you are, you can come up to the microphone and just state your name in any organization in your position.

Manuel Barajas, Professor of Sociology at SAC State. I'm with the Center on Race, Immigration, and Social Justice, and I strongly support this bill. Gracias.

Thank you.

Good morning. Julie Solomon, Doctor Julie Solomon, representing Human Agenda, one of the co-sponsors of the bill, is asking for your aye vote. Thank you very much.

Good morning. Alejandra, representing Center for Farmworker Families, one of the sponsors of the bill asking for your aye vote. Thank you.

Thank you.

Jeff Neil, representing Yolo County in support.

Thank you.

Good morning. My name is Anna Santana. I'm a public high school teacher and a doctoral student at Santa Clara University. I'm also the daughter of former farmworkers and granddaughter of the Bracero. My doctoral dissertation has focused on the lived experiences of farmworker families and children residing in estates migrant housing center. For more than ten years, I've dedicated myself to serving and advocating for migrant students and their families in various roles. Evidence clearly indicates a connection between housing and the quality of education.

Thousands of migrant farmworker students across generations have been deprived of stable education opportunities due to the rules imposed on migrant housing centers. Education, being a fundamental human right, deserves our support, especially for the families who feed our nation and the world.

Hi, Elizabeth Rocha Zuñiga, student at McGeorge School of Law. As a daughter of immigrants, I'm in full support of AB 2240. Thank you.

Thank you for your statement.

Christopher Liu with Diversity Matters at Valley Christian High School in support.

Thank you.

Jessica Romero: my family currently resides in our Artesi II migrant center. I am a high school Spanish teacher, and I'm here in support.

Thank you.

Michael Liu, resident of Fremont, support.

Thank you.

I'm Jasmine Wu. I'm Miss San Jose's Teen and I'm in support of AB 2240. I volunteered at the Center for Farmworkers Association down in Watsonville, and I've met the people and the students who are affected by this and as a high schooler myself, I couldn't imagine having to change schools twice a year, so I strongly support the bill, AB 2240. Thank you.

Thank you.

Thank you.

Hi, my name is Esther Wu. I am the board member of Youth for Difference nonprofit in Gilroy. I'm here to support.

Thank you. Is there anybody here in primary opposition to AB 2240? You can come up to the presentation table or use the microphone. Your choice. Good morning. When you're ready, you have two minutes each - up to. That's fine. We can allow different time, additional time.

[Foreign Langugae]

Okay. Hi, my name is Angelica. I come here to advocate for migrant workers and their families. We received a notice of the AB 2240 law and how this law would affect us as migrant workers. Although we are a group of migrant workers who come here in California and pick seasonal crops, we rely on migrant centers on the OMS housing to ensure we have a safe place part of the year. We oppose eliminating seasonal migrant housing in California.

If AB 2204 serial law passes, we will lose access to housing, and we'll have nowhere to live. We don't have the resources to afford housing, being migrant workers due to a minimum wage. Please don't make OMS housing round year. We need more time to dialogue with Joaquin Arambula. I'm here for you guys to help us find a solution for us as migrant workers. I would like to tell you a little bit about me. I've been living there for the past 23 years.

I graduated with honors, and I've been going back and forth to Mexico. But thanks to that, I've also learned how to pick crops, and I'm thankful for that. And I have an education. Just passing this law will not help anyone. I feel like it depends on everybody and how if they want to become someone in the life. So thank you.

Thank you. At this time, if anybody else, Members of the public wish to approach the microphone, I'm gonna ask if I - one of our witnesses here, can you help me with translation? If anybody would like to state your name and organization and position on the record, you may do so. We certainly see you in the audience, Miss Reyes.

My name is Avellino Magagna, and I do not support this. This 2240.

Thank you.

[Speaking in Spanish].

Thank you.

Hello. My name is Aaron Rodriguez, and I'm a current resident at ..., and I would like to oppose.

Hello, my name is Alejandro Silva, and I don't support 2240.

Thank you.

Thank you.

[Speaking in Spanish].

Thank you.

Good morning my name is ... and I am not supporting 2240.

Thank you.

[Speaking in Spanish].

Thank you.

[Speaking in Spanish].

Thank you.

[Speaking in Spanish].

Thank you.

[Speaking in Spanish].

Thank you. Are there any other Members of the public here? Yes.

[Speaking in Spanish].

Thank you. Okay I want to also thank and recognize many individuals might be here for the first time to weigh opinion for this important Bill. We're going to move to Committee Member comments, beginning with Assemblymember Reyes.

Thank you so much, and thank you to the author. And congratulations on graduating with honors.

Thank you.

[Speaking in Spanish]. I also want to thank those who spoke in favor. The young lady who spoke more than she was supposed to, but she's a PhD candidate who is doing her dissertation on the lives of migrant workers. The question when we see this particular Bill is absolutely, we need to provide the housing that is needed. And these archaic rules of okay, you're in now you got to be out for three months. And you better not show your face around town or you lose your housing. We can't do that to human beings. We cannot impose that kind of a restriction on a human being.

On the other hand, there has to be some way to provide for those who are migrant workers who do want to leave and have that way of life, and they want to be able to leave, but that it be a choice as opposed to being told you have to leave, you have to be gone for three months and don't show your face around town. May I say something in Spanish?

[Speaking in Spanish]. I am certain that with the author that we have that there is no question that it is dignity. It is honoring our farm workers. It is providing housing for our farm workers. It is protecting our children who should not be forced to leave their school to live in their cars in order to comply with the regulation that you're out of this migrant housing. I absolutely appreciate the Bill. I know that you're going to work with the opposition to try to find some solution. And I would love to be added on as a co author of your Bill. And with that I would move the Bill.

Thank you, Miss Reyes. Motion by Miss Reyes second by Mister Kalra. Assemblymember Kalra.

Thank you Mister Chair. And thank you to my colleague for putting forward the motion. And the young lady, you're an example of the California dream quite seriously. Congratulations on all your success. And you know, I really appreciate the author bringing this forward. You know, I think the policy that's been in existence has been bereft of dignity and respect and choice. Because really this is about choice.

Families should have the option to do what they would want to do. I'm very grateful to Lauren and Food Empowerment Project who worked a lot with this incredible organization for a number of years. Human Agenda. You know, these are folks that certainly are on the side of dignity, of farmworkers and I'm very grateful to the farmworkers that have come taking time out to be here today, all their voices need to be heard.

And I think the key to this is that, again, we want to make sure that families have choice. If they're truly migrant, they want to be six months here, six months in Mexico, and that's the life that they choose because it works for them the best and works for their children the best. And that's why in the Bill itself, it does allow. It does allow for approval by the Department to create situations where it would be allowed.

So what it's saying is that it doesn't say you have to be out in six months. And that's just it. It's saying that, no, you can't do that anymore unless the Department gives approval. And so I think that's where we're gonna have to kind of land this plane, so to speak. And I have full confidence in Doctor Arambula and the sponsors to be able to find that balancing act so that families, it's up to the families. It's not up to the growers.

It's not up to the, you know, these - the housing authority operators to say, no, you're out of here. If you want to stay, you should be able to stay. And so. And if you want to leave, you should be able to leave. Choice should be up to the families and their children. And that's where this Bill has to. It already is there in terms of having a discretion, but we have to make it as clear as possible. And we're in working with.

And that's what, that's why it's like the opposition is families. That's not opposition in my perspective, because at the end of the day, this is being done for families. But we must listen to the families that are saying that. Look, we need to make it very clear that we have the options here. So with that, would love to be added as a co author and be as helpful as I can be to making sure we get there, because I'm confident we will. And ultimately, this is a Bill about empowering the families that are doing the work that all of us need to survive. So thank you.

Thank you, Assemblymember Kalra. Assemblymember Silva.

First, I want to thank the author for bringing this forward. But all of the participants who came to speak and for the individuals who came to the first time to the Capitol, we want to welcome you and say that we see you and we hear you. One of the things that people don't always realize about legislators or elected officials is we have a lot to learn. We might come up here for different regions, different locations, different occupations, and still we learn all the time through committees.

So I'm a former elementary school teacher for many, many years in Fullerton. And certainly your comments about students moving back and forth from school to school, we know impacts any student. This year, as a Latino Caucus Member, we were able to hear speak Jose Hernandez, who is an astronaut, the first Latino astronaut coming from Stockton. And one of the things, there's a movie about him right now. So if you haven't seen that, I recommend it. It particularly has a part that shares that.

His teacher actually went to his father and said, the moving back and forth can really have an impact on your education. And of course we have seen that. And it isn't just farmworker students. We've seen this with any student, foster students, families that have to move because of rent issues, homeless students. This does impact their education. On the other hand, the choice of the family is imperative in we always want to understand what the family chooses to do. We don't know their personal circumstances.

Going back to Mexico for a certain amount of time may be a very important part of staying related to their culture, sustaining themselves financially. What I would say is, the one question that I really do have is when the families are told they need to move for a certain amount of time, the three months, is that because there is not enough housing and they're trying to get other families in, or it's just a certain amount of time that has been specified that they should be there?

And then the other side of that is, if families do have the opportunity to stay year round, what will that look like as far as numbers for other families who are going back and forth to have the opportunity to have access to those spaces.

As current law. They have up to 180 days with the option to extend it to 270 days to stay in the farm worker housing. After such time, they must leave the residence. That housing then is vacant until it's time for people to move back in. And so for us to utilize the housing supply we have more effectively. If we're able to have the option to continue to stay while allowing people to migrate, if they so choose, we should do more with the housing supply that we have.

Can I say something? Okay, so housings there are not like, during the cold, they're super cold. So they're not like, they don't have heaters, enough heaters for them. So that's another thing. If you guys make the houses, like, year round, we won't be able to live there. I've been living there for the past 23 years, or 22, I believe so. I believe it's not adequate for them to keep it long term.

And instead of using that money for investing on housing, I believe they should invest it on having programs for those migrant workers there during like vacations during summer. I believe that's what they should do. Programs for them to help them learn more and have better opportunities in life.

Mister Kalra, something more.

Just on that point. Thank you, Mister Chair, for your indulgence. On that point. I think that is another issue that we have to look into. Maybe because they've been accustomed to folks not being there for three months, they didn't account for heating and what have you, and that, that is not, that's an issue then we have to work on, because that's not acceptable. And the last thing I want to mention is a lot of folks from San Jose here.

I want to thank you for being here. Cesar Chavez historical home for those that don't know. When he came back from the wars in San Jose, he learned to organize there. So it's not a surprise coming from the Valley of Hearts Delight, which became Silicon Valley, to be here in support of the farmworker. So thank you.

Thank you, Vice Chair Patterson.

Great, thanks. I'm from Napa, and, you know, quite sizable migrant population there. And my stepdad is, who's been my stepfather for the majority of my life, 37 years. How long he's been my stepdad. He is a Mexican immigrant, he's a citizen. But through that, obviously, we have a lot of family Members that are still live in Mexico, and they come back here to work, and that's what they like to do, you know, in my experience. Right. So is they all have families now.

They, you know, they, you know, to provide for their families. They leave their families, they come here, you know, they work, and then they go back. And so I was kind of surprised by the opposition. But now, you know, I'm kind of understanding it. So makes sense. I was trying to understand the Spanish, but that's kind of. I haven't used it for like 20 years, so a little rusty. But, um.

So I had an interpreter explain it to me in a couple sentences, uh, but so I was kind of surprised by that. But I do believe that you're trying to get to the right part here. I think there's a fiscal, you know, component to that that, uh, you know, I am concerned about. But I think just given the discussion and just kind of see where it goes, I might lay off this Bill.

But I philosophically agree with where you're going, because are, if you have kids here, in some situations, maybe you don't want to go back. Right. So, you know, it's just been an interesting conversation. Appreciate. I appreciate all of it. I appreciate the people who showed up in opposition and just raised points that I wasn't even really thinking about. So thank you.

Thank you. See no other Members wishing to address the Bill. I just really would kind of summarize some of those other thoughts. I think multiple things are true here. One, we don't have enough total farm worker housing, and we need to work on that, and we will work on that. And while we are, we recognize that. I think some of the demographics that we're seeing within our farm workers community have shifted over the years.

And so that doesn't always gel well with what we have in stock available and sort of what the conditions are to be able to access some of that housing stock. And I think to the point that you had made in response is exactly why you brought forward this Bill. For any given day of the year, we shouldn't let our own laws be the barrier to keeping a housing unit vacant. There is some, while we're working on the totality of what our needs are here, maybe shifting of that law that will be able to maximize, I think, the housing opportunity.

But I know you'll pay special attention as well to the important points that those who continue to utilize migratory farm worker opportunities for their needs. We don't want to shift everything, even though this is a shift in that program that would somehow rob one group of individuals in favor of another. I know you're going to work on that and find the balance for that. I'm very happy to be able to support the Bill. Doctor Arambula, would you like to close?

Thank you for the opportunity to present today. And I also want to appreciate everyone who participated in today's public process. It allows us to make sure that we're producing the best pieces of legislation that we can. I look forward to the ongoing discussions that we may have about how to strengthen it, and in particular, how we can improve the quality of housing that we have for our farmworker communities while we work on making sure that we have sufficient housing to meet our needs as a state. With that, I respectfully ask for an aye vote.

Thank you, Madam Secretary, please call the roll.

Motion do pass to the Assembly Committee on Appropriations. [Roll Call].

That measure is 6-0 with two not voting. We'll hold the roll open for absent members and its out. Thank you. Next, we have Assemblymember Connolly who is here to present item number 12. This is AB 2539 and I know we have a lot of movement in the room, so when we all get situated, you can begin your presentation. All right, members of the audience, we're going to resume our presentation, so I ask for your silence. Senator Connolly, you may begin your presentation.

Thank you, Chair and Members, great to see everyone. I would like to begin by thanking the Committee and staff for their work and input on this bill. And I'll note that I'll offer at the end of my remarks a suggestion that I think may continue to move the discussion forward.

AB 2539 would allow residents of mobile home parks the time necessary to organize and the opportunity to purchase their park when an owner is interested in selling mobile homes are one of the last forms of naturally occurring affordable housing in California. These parks house an estimated 363,000 homes in California. Mobile home parks enable low income communities to attain home ownership and build equity in an otherwise unattainable housing market. In recent years, investment firms and corporations nationwide have begun buying up mobile home parks.

Many vulnerable residents, like seniors or people with disabilities who live on fixed incomes, cannot afford the rent spikes that are now commonplace when park ownership switches from an individual park owner to corporate ownership. Not owning the land their home sits on effectively traps homeowners and forces them to pay endlessly rising rents at the discretion of the park owner or abandoning their home since moving. It is either financially or physically impossible as most homes are not actually able to be relocated.

Mobile home residents often have a significant financial investment in their homes and displacement due to park sale can be disruptive and expensive. Many residents are seniors and or living on a fixed income or low wage earning families with pay that is inadequate to cover endlessly rising rents for seniors, there is simply not enough affordable housing in existence or being built, should they be displaced from their mobile home park communities.

This is of great concern as adults aged 50 and older are the fastest growing age cohort of people experiencing homelessness in California and their numbers are expected to continue to grow. AB 2539 builds on an existing resource at no cost to the state by allowing residents to secure their own long term housing affordability and stability by purchasing the park and controlling future rent increases.

It can help address the growing issue of displacement and loss of affordable housing options, particularly for vulnerable populations like fixed income seniors. Additionally, owning the park incentivizes residents to invest in repairs and upgrades, whereas corporate owners or investors have little incentive to make the capital improvements so many parks need to address this crisis. Several states have passed some form of what's known as a right of first refusal law with success.

Under the current mobile home residency law in California, a park owner is required to give an existing resident organization a minimum of 30 days notice of their intent to sell. AB 2539 as drafted, would provide a longer minimum notice period of 120 days to give residents the time needed to form a resident organization for purposes of purchasing the park and would create a right of refusal for a residential organization to make an offer to purchase a park within six months of receiving notice.

The park owner must then engage in good faith negotiations with the resident organization and would be prohibited from negotiating with or accepting an offer from another party until the six month period has elapsed. I have heard concerns from my colleagues regarding this timeframe and indeed some confusion, which I think has been justifiable regarding the, the proposed process.

So what I'd like to offer is, as currently drafted, we're talking about four months notice that residents have to receive before the property is listed at the time of the notice. Concurrently, there's a six month right of first refusal time period. Another proposal, and I'm willing to go forward with this and would love input, is to shrink the total time period down to the 120 days.

So basically, that would subsume both the notice and the time period with which a resident organization would have to come forward and the right of first refusal would be in place. So with that, I will now pass it off to my witnesses, Margaret DeMatteo, representing legal aid of Sonoma County, the bill sponsor, and Patty Restaino, a mobile home park resident from Windsor.

Thank you, Assemblymember Connolly. Good morning, Chair Ward and honorable Committee Members. Let me move this a little. Thank you for your time and consideration of this bill. My name is Margaret DeMatteo. I'm the housing policy attorney with legal aid of Sonoma county. Our housing team sees Californians struggling to keep a roof over their heads, especially mobile home residents. Home ownership feels impossible for most Californians. Working families, seniors, and black and brown communities are hit the most.

And I know this is not new information for this critical Committee. Mobile homes, though often overlooked, offer a chance for these vulnerable populations to own a home and set down roots into a community. They're the last source of naturally occurring affordable housing in this state, and we need to protect it. AB 2539 offers a life raft. It grants mobile home residents, many of them seniors, the right of first refusal a real shot at community ownership.

This is not about taking property, it's about giving residents a fighting chance. And it's not a new idea. Many states have similar laws to promote resident owned communities and prevent parks from becoming mirror investments. The bill balances fairness. Residents get a reasonable time to find financing while sellers receive fair market value. California's housing crisis threatens displacement. Rents rise, wages don't budge, and stable housing is a dream. AB 2539 offers a way out for some. Some say it restricts property rights.

But isn't stable housing a legitimate government interest? Protecting seniors, reducing homelessness. Additionally, resident owned communities are often better maintained, fostering a sense of belonging and safety, especially for seniors. Let's empower our most vulnerable to weather this storm. Please pass AB 2539 out of this Committee. Thank you.

Thank you.

Good day and thank you all for your service. My name is Patricia Restaino. I offer you a senior's perspective who lives in a low income mobile home park. I turned 65 in July, and I ask you to support AB 2539 to protect seniors and to preserve low income housing. Mobile homes may be simple, but they offer independent living, a place to garden, a community who socializes and watches out for one another.

Most of us choose these homes as our final resting plate, place to complete our life's journey honorably. AB 2539 is important to us. I live in Windsor Mobile Country Club, a senior park with over 330 mobile homes and many low income residents like me, our landowner is resident owned parks. Despite the name, the residents do not own the park. The homeowners, when we move in, we're told that we will eventually own the land.

But the owners and the owners shared that promise with the town of Windsor during their purchase process. These days, if someone brings it to the park owner's attention, we're laughed at. So AB 2539 would actually give us the right to actually own the park if we so desired. We ask that you recognize the impact of living on a fixed income. When profit oriented investors buy mobile home parks, they see the value of the land, not the people.

They often shift the parks to all ages, raise rents as much as possible, or remove the homes and build something else. That's greed in action. Investors assume that seniors are easier to take advantage of because they think our voices are weaker and our energy is declining. Imagine if hundreds of thousands of low income seniors living in mobile homes throughout California lose their homes. Where would you put us? Protect the affordability and quality of housing for seniors.

AB 2539 offers independent living and supports communities that takes care of themselves. So please support AB 2539.

Thank you. Are there any other members of the public here in support of this bill?

Good morning. Anya Lawler, on behalf of the California Rural Legal Assistance foundation, the National Housing Law Project and rise economy in support.

Thank you.

Good morning. Ralph Sonnenfeld with YIMBY Action and support

Thank you. Are there anybody here? Is there anybody here in primary opposition to this bill? Welcome. If you'd like, you can come to the presentation table.

Good morning Mister Chair and Members. My name is Chris Wysocki, representing WMA, the largest Association of Mobile Home Park owners in the state, and I respectfully asked for a no vote on AB 2539. This bill removes the right to sell mobile home parks to a selected buyer, a right provided by the California Constitution. It stops a park owner from selling a park by allowing residents to freeze title for 10 months while deciding to take control and operations from the park owner.

Already, 183 resident groups own parks in California, and that represents about 10% of the spaces in the state, and another 70 or so are up for sale right now. In fact, facilitating tenant purchases has become a cottage industry in California. Several nonprofits that specialize in helping residents buy or subdivide or lease their parks are in existence. AB 2539 is effectively a taking of private property that is unconstitutional in California.

Giving resident groups 120 days to decide if they are even interested takes mobile home parks out of the equation for others who may want to purchase the park through a 1031 exchange. Even worse, if after 120 days a group decides it doesn't want to buy the park or does want to buy the park, they get another six months to put together the financing and keeps the current owner from even talking with anyone who may be interested.

What happens if after that 10 months, a resident group fails to come up with the money or simply changes its mind? I understand the desire to make sure mobile home parks are not swept up by Wall Street firms, but more than 90% of WMA parks in California or California based businesses. You simply can't force someone to stay in business who wants to sell.

10 seconds.

I understand it's housing, but it's still a business, just like a flower shop or a restaurant. For these and many other reasons contained in our letter, WMA strongly opposes 2539 and we ask for a no vote. Thank you. And I ask I'm available for any questions.

Thank you.

Thank you Mister Chair and Members Jason Ikerd, on behalf of the California Mobile Home Park Owners alliance, also opposed to the bill for many of the same reasons stated by Mr. Wysocki, but want to start by saying, there is no doubt in my mind that the amendment offered by the author is made in good faith and genuinely. As our letter states, our opposition to this bill is more fundamental than the timelines it relates to the right of first refusal.

As Mister Wysocki says, we view this as a fundamental taking of a property right that we have not only our ability to voluntarily negotiate with parties on a voluntary right or first refusal, but more fundamentally on the value of our parks and our ability to dispose of them, which is a fundamental property right protected under the state's constitution. I apologize. A fundamental property right to get compensation for any taking. I apologize.

Regardless, we are very concerned that there is not an allegation of bad faith on the part of CMPA or as Mr. Wysocki said, WMA's Members, we are California based park owners and we operate our parks in good faith and we try to make them good parks for our communities. But this bill serves the purpose of depriving us of our ability to get a fair market value for our parks after owning them, operating and holding all the liability for that property for many years.

Lastly, just a couple of quick items. In the last six years, if this bill is to pass and become law, our industry will be facing three bills that have passed in the last six years that we've had to go to the courts and litigate to protect our property rights on. I don't know that there are a lot of other folks in this capital that operate as stakeholders who could say the same.

And in this case, again, even where the intended purpose is to provide protection to residents, the courts have found that it is not constitutional to do this without compensation. So it would result in significant legal expenses for our clients to defend their property rights, but also significant expenses for the state to defend the statute. So for these reasons, we remain opposed to the bill and respectfully request your no vote.

Thank you. Are there any members of the public here in opposition?

Good morning Mister Chair and Members Karim Drissi, on behalf of the California Association of Realtors, in opposition, respectfully request your no vote. Thank you.

Thank you. You see no other members of the public, we'll bring them back to Committee meeting with Mister Kalra.

Thank you Mister chair. Senator Connolly, does this bill require mobile home park owners to sell the property below market rate?

No. So thank you for asking that. I'm going to clear up a few things. First of all, this does not freeze title for 10 months. That's the confusion. And so let's be clear. The rite of first refusal right now is six months. The four month notice is concurrent. What I'm saying is let's just collapse it down to four months for the whole process. You are absolutely right, Assemblymember Kalra, this in no way imposes a requirement to accept any offer, let alone one for below market.

So it does not prevent getting fair market value. The constitutional analysis being posited today is not on point. It's not a taking. There's simply a good faith requirement to negotiate. It is going on in other states right now. So I just want to get the record clear on what it does and does not do.

Thank you. And you know, San Jose with areas that I represent as well as some where Lee have amongst the highest rate of mobile home, probably only arrival by San Diego I think may have more and they have become de facto senior affordable housing in many cases. And I think that these are, we're not talking about single family homes. 120 days I think is quite reasonable because it does.

These are typically larger land sales and so I think that even reducing it further, I thought six months was reasonable. Reducing it down to 120, I think gives a fair but limited time to see if there's even an opportunity or interest. And if there's not, then, you know, the mobile home park owner can move on and sell it to whoever they're selling it to again at market rate. Either way it's going to be market rate or whatever is negotiated in good faith.

And so I'd like to be added as a co author and move the bill. And I appreciate you for bringing this forward.

Thank you. Mister Kalra moves, Mister Lee Seconds. Senator Wilson.

Thank you to the author. I understand the intent and protecting, you know, some of the most vulnerable people when it comes to housing as it's very affordable to live in mobile homes. So our seniors are there, veterans are there, you know, folks who cannot for whatever reason afford, you know, to own a, to own a, a permanent home. And yet see there's an option to live independently and have some level of ownership. Right. Because it is a level of ownership.

My concerns are, I guess with the whole principle of the matter. So currently current law does allow for a first right of refusal for 30, not first right refusal, sorry. A notification over 30, a notice 30 days to the rental organization now. And now one, there is a flaw in that. It's not noticed to the people who live there. It's only if they form a rental organization. And so I do think that, you know, is an opportunity for improvement.

But the first right of refusal in terms of you say it only does four months and it's not freezing. I mean, but I guess your amendment is to four months.

No right now its six months. I'm saying do you notice and write in four months.

And you said so you use the phrase it's not freezing for 10 months or even six months. So why isn't it not considered freezing?

It would be free. It would have frozen for six months. I was chafing at the 10 months.

Okay. All right, so it is. So you do consider it freezing the sale process, even in the amended version, for four months. Correct. Okay. And your bill makes no distinction whether it is a natural person who owns it versus a business or corporate entity, is that correct?

That's correct.

Okay, so a natural person. I own my mobile home park, and I like to dispose of it and no longer be in the business. I would be frozen under your amended version for four months from being able to do anything with that property.

Well, not anything you would be engaging in. Good. If an RO even comes forward to engage in good faith negotiations.

But under your current amendment, it would be four months. So someone could come in at month three?

No. Well, the whole process would have to begin and end within four months.

Right, so they can come in month three, and it might take them 30 days, but at any point, for four months, the moment I give that notice, I cannot do anything with my property for four months, no matter who I am.

What I meant is struggling with. I can't effectuate a sale.

Okay, so I can only. I can only do it with one, and I can't. And with. Only. I can only effectuate a sale with one entity in that four month period. Cause I cannot, under your language, negotiate even with anyone else. I can't concurrently consider.

Sure. I mean, you can negotiate, yeah. But the fact is, is if you at least have to consider a good faith offer from.

I thought you cannot entertain. And maybe I'm incorrect. I thought you cannot entertain with anyone else beyond the rental organization and that whatever month, period by amending. I'm using your language. Amending for. And. Excuse me. I'm back is spazzing, so if I'm pausing every moment, that is why. But I thought I understood it that you cannot enter, even entertain or enter negotiations with anyone else during that period.

Certainly in our reading of the bill, Assemblymember.

Wait, you guys are talking over, do you have a cite?

I'm working on that, yeah.

It prohibits an owner from negotiating with or accepting an offer from another party until this says six months have elapsed from delivery of the notice. So from that four month period. I'm using the word four month. Working with your amended. Your proposed amended language that you literally can't talk with anyone other than the RO.

You certainly cannot accept an offer from someone else. And, yeah, it sounds like the language. Right now, the presumption is you're engaging in negotiations with the resident organization.

And so that. I mean, that, I think, is a big issue. It seems like you would allow, if anything, and not saying I'm there yet, but I'm just saying just in general, if anything, it seems like you would allow negotiations and offers. It's saying if an RO submits an offer, then you have to consider that as a good faith offer first before accepting another offer that you receive.

I think that's the intent.

Yeah, but the way the bill is written, it is exclusive, which is a big deal. And I'm just noting that in the spirit of every bill needs work on it, not in saying that. I am leading towards a yes on that, but just noting that that is a flaw and have to be considered because that is a serious issue and property rights are important. And, you know, there is an argument, and I think opposition made the argument that this is a product. And in theory it is.

But we also know that the Maslow's hierarchy of needs says shelter is at the bottom of it, right. And so it is, there should be some protections around this particular product because it is something that we can't exist and live without. And if this Legislature is focused on high quality of life for folks and ensuring people have housing, then we should have protection and guard rules in place.

And so this is a matter of how do we get there when it comes to mobile home parks, as I understand it, I think opposition noted it in their testimony is there are quite a number of mobile home parks for sale in our state that are not yet purchased by a private entity nor by residential organizations.

And so I'm wondering why this particular protection needs to be in place in this particular way versus not allowing more freedom for residential organizations to form and to make a competitive offer without taking away the ability for a property owner to be able to, you know, dispose of their property as needed or relieve themselves from being as a part of that market.

And the other issue is that I think there absolutely should be a distinction between a natural person and a business because there are different issues related to that. I think you were going to respond to something I said.

Yeah, there's a lot to unpack there. But first of all, you were right earlier. The language is the owner shall not neglect, negotiate with, or accept an offer from another party until the time period prescribed in the paragraph we're now saying four months. I certainly think it would make sense to take out, not negotiate with or, and make it, the owner shall not accept an offer within the time period. That seems reasonable.

To your other point, starting with the last point, what about natural persons who are owners? What if they sell to a big corporation? I mean, so I think you still, we're not distinguishing between who the current owner is. What we're trying to address is who is the, who is the park sold to. We feel there's some social benefit in at least allowing the residents, if duly organized, to have a good faith shot at that. Why is this important and why?

I know other members have done similar legislation around other types of rental property. For example, I would suggest this is a narrower approach focused on a type of housing we know, I would even say disproportionately serves low income folks, including seniors. And I think we heard about that today. So that's why we're not trying to solve all possible forms of housing or issues, but focused on this particular one.

So my last to the chair, my last comment or question related to that is that currently there are caps on someone who owns a property and on what they can charge. Aren't they subject to the same statewide rent control camps as it relates to the land?

Well, oftentimes with mobile home parks, there's specific local rent stabilization ordinances. I know in my area that infamously was fought all the way up to the US Supreme Court, the locals won, but yeah, certainly it would also be.

Yeah, and if they weren't. If they weren't regulated by something happening local, they would fall under the statewide.

Yeah, yeah. And I think.

So, statewide, 5%. 5% that doesn't apply to the land?

Yeah, these are the experts on that.

If I could, Mister Chair.

Briefly, please. We have a more agenda ahead of us.

Yeah, absolutely. So, no, we are not subject to statewide rent control unless we are the owner of the home that we are renting to a person. Our spaces are not subject to rent. But as Mister Connolly said, and he's correct, there are numerous, I mean, hundreds of local rent control ordinances, often less permissive than what statewide law actually is already.

And I get that. Okay. I wanted to. Where I was going with this is in the sense that if under a rental organization, it doesn't, it doesn't stop. It gives them more control of their destiny, but at the same time it doesn't reduce their cost because the full cost of owning the home, of owning the rental park is something that they have to share in as cost. Right.

The increased purchase of the land because it would be current market weight, the property taxes associated with it and the investments. Is that not true?

If you don't mind, my attempt to answer that question is just that what it does control for is the skyrocketing rents. So we locally in Sonoma county have a lot of parks and we have a lot of rent stabilization ordinances, and generally those are capped at between three and 5% or 70-75% of the CPI. The park, if they were a resident owned park, would have a decision to increase the rent less than that.

They're not held to the cap, they're held to what the community desires. What we see when investor backed firms buy parks is they raise the rent to the maximum and they also defy the local rent stabilization ordinances by raising the rent above the allowable increase. In fact, in Harmony, communities raised it 350% in Petaluma, and three pillars raised it 100%, which triggered an arbitration process which was very expensive for the residents.

They had to pay for that $50,000 right now, looking at potentially $100,000 just to defend their right not to insane rent increase. So if a park owns, if the residents own the park, they will not have that fear and they will build equity in the land under their home, which is not going to happen when it's corporate owned. Does that answer your question?

It does. Thank you.

Great. Thank you. Assemblymember Reyes.

I know we've had some conversations on this, and I appreciate my colleague from Suisun City and the comments and the questions that were asked. This resident organization, the notice to the resident organization, that's one of the notices, but the other is to all the residents and to the Department of Housing and Community Development, correct?

Yes.

So if a resident receives the notice, would they then be able to form a resident organization during that four month period?

Yep.

Okay.

As written now, under a six month period, what I'm saying is what's during.

The four month period? All right. Clearly an owner wants to get the maximum amount and they want to negotiate with anybody in good faith to sell their property for the most that they can receive. And clearly a buyer, not just a buyer here, but a buyer anywhere, wants to buy the property for the least amount possible. Thus, the good faith negotiation begins between the two. My question is.

Here's, my first question is if notice is given to all of the residents, and on the notice it says, and also to the resident organization, and the notice says, if you are interested. Well, no, as I'm thinking of my question, I know it's not going to be a good one because they have four months to say they're interested.

Interested, form, and make offer.

Okay, so if, if the residents, during this four month period, if all the residents should say, I'm not interested in this, and the resident organization also signs saying, we are not interested, then that fulfills their obligation to have provided notice and give the first right of refusal because at that point it's already been refused.

That's right.

Okay. If during this four month period, the value of the property increases or decreases, is there anything that protects the owners who are now selling it for less than full value or protects the buyers, those who own the mobile homes, that protects them. If they started negotiations and then it turns out that the value is much less. Is there something in the bill that will protect either or both sides, like.

A reopener of some sort? That's something we should look at.

It currently is not in the bill.

Okay.

Okay.

And this will be going to the Judiciary Committee, hopefully.

I'm looking forward to it. It seems that the purpose for the bill, as long as I think we have two interests and they aren't always competing interests, the owners want to be able to sell. Once they make the decision, they want to sell. They want to be able to sell. And I would imagine most of them have good relationships with the mobile home owners.

And I'm going to assume that for the moment, and they have a good relationship, and if they're going to sell it to anybody, they would sell it to the people who've been renting from them all these years. And if they have a bad relationship now, they're going to have to negotiate. Then the homeowners get a chance to buy it and they get to make the decisions about it and as you say, build equity.

And I had texted and I just want to confirm it is a four month period. So the, and I'll use your phrase, the freezing is four months. And during that four months, so long as there is no, there's no refusal, then it remains open until the four months are up. And at four months, then the negotiations can then begin with anybody.

Yes, and that's accurate. And I would say, going to Assemblymember Wilson's point, I think it would make sense to just make it freeze on accepting another offer.

I would like to offer. I'm not sure that's the best thing, because if you're negotiating here, you're using that negotiation to have an effect on the price here. Although if that is the intent, then that is the intent.

Well, I'm in the business of trying to rustle up enough support to move this forward. Currently, it shall not negotiate with or accept. But I think we're open to further discussions.

But I do appreciate the comments that in the end, you want to be able to sell your property, you want to be able to get the best price for it, and you don't want your hands tied. The moment you've decided you want to sell, you want to be able to negotiate with the world.

And Assembly women. You're absolutely right in that respect. But let's be clear. Resident organizations can already do this. There's no prohibition under existing law firm from a resident organization to actually form a Committee and make an offer on a mobile home park. 183 parks right now across the state are actually owned by residents. You know, just since 2021, another 114 of them have been purchased by resident organizations. This can already be done.

What a forbearance on whether it's four months or 10 months is immaterial because the fundamental reality is that market conditions can change in four months. We've all seen it. Fluctuation of interest rates, the price of capital, changing economic conditions in a community. It also still keeps it out of the 1031 exchange rules that are currently in place. Because as everybody on this Committee knows, you have 45 days to exercise a 1031 exchange,

45 days from the date of the sale.

From the date of the accepted offer.

Right. So whether it's four months later or it's one year later, it's from that date.

So by that time on the 1031 exchange, you've already selected whatever property you're going to use for the exchange. I would imagine.

Right.

But the prime point here is that, you know, residents can already do this. There's nothing that precludes it. And I just have to address the concept of rent increases being driven by Wall Street firms. Resident groups already have a leg up. First of all, because they're tax exempt organizations, and often local rent control ordinances exempt property tax reassessments when they involve a nonprofit transaction. If the Committee is looking to increase housing, why just not make the sale of mobile home parks exempt from reassessed property values?

Well, I know the local governments are gonna go ballistic over that because they want the revenue, but that's where the rents come from generally. And the cases involving in Sonoma county, they involved multigenerational families that decided to get out of the mobile home business, and they actually sold. But they had been in the same corporate and family ownership structure for many, many decades. The rent increases come as a result of the property tax pass throughs that come with reassessment.

But if you're a resident organization, those assessments are not increased. You know, further, I just kind of am wondering if there's something else going on here, because there is a bill that would have implemented statewide rent control for mobile home parks at 3% and 5%. The bill is currently under litigation.

Mister Wysocki , I don't want to go on to maybe off topic on another bill. I do want to try to keep us on schedule to the extent we can.

I understand. All I'll close with is that the rent increase argument has to do solely with property tax pass throughs. And I'll just close with that.

I will tell you that if I may, through the chance, I will tell you that in my community I have many mobile home parks and rent increases are a big issue.

Absolutely.

And especially because as was mentioned earlier, many of our tenants, many of the homeowners, the mobile home owners are on a fixed income. And when you have a rent increase of 100% and we've seen those, this isn't out of the ordinary. We've seen too many in my community. This is basically forcing that person to leave and oftentimes leave, leaving their mobile home because they can't get a seller, they can't get a buyer. I think your best argument has to do with constitutionality.

And I know that the Assemblymember is working to make sure that that is addressed, but I think it's already been moved.

And can I just one final point through the Chair.

How about you in your close?

Okay, why don't we do that. Thank you.

Thank you Miss Reyes. That was a motion. Thank you Miss Sanchez. Okay. I don't get to hear from you much, so this is okay. Great. We're good. Appreciate it. Seeing no other members wishing to comment on the bill, I'll go ahead and just really briefly summarize. I do appreciate what you're doing here. We know that this is one form, an important form of what is more naturally affordable housing for members of Californians that are disproportionately, we heard seniors, veterans, disabled individuals, those that desperately need this housing typology. And of course we need a lot more across the board of a lot of different housing typologies.

And I want to commend as well, you know, your interest as you're getting into what is a real difficult situation here as you're trying to sort of shift conditions, recognizing the balance of the rights for owners as well as the needs for many of the residents there that already out of the gate, you're willing to compromise significantly on some of the parameters that I think steps in the right direction.

None of that's before us here today, but I know that you and I trust very much have good faith, effort that you will, should this move forward, work on some of these conditions and put them into writing ahead of Judiciary Committee.

I would agree with Senator Reyes as well, to be cautious of how you approach the consideration about outside negotiation, because you don't want to have a situation where you say, okay, I can't really publicly negotiate with you, but, you know, you know, give me an offer I can't refuse, and let's wait out the 120 days and everything. Right. So you can work on all these things. But I see you're there.

I think you see their points as well, too, that, like, you know, we want to not, if this became law, shift the world so much that, you know, it's not fair and difficult on other parties, too. I guess I would just, you know, sort of summarize with, you know, kind of a brief observation that when we're addressing bills like this, and we recognize that things are limited in the constraints that we have here in the State of California.

We are having to make policy choices, and there can be winners or losers or adjustments, I guess, to be able to try to balance, you know, pros and cons, depending on who's affected. And so for me, I do wanna support this today, and I know you'll work on some of the technical details going forward, because you're balancing what are the rights for a sale, and that must be done very constitutionally and carefully with the needs that we have for some vulnerable populations.

And I think when you sort of find that middle ground there, that, you know, makes it so that it can actually be workable in practice without necessarily affecting the opportunities for, you know, the sellers, on one hand. We have plenty of other housing types that we do set these kinds of parameters on. We've got eviction laws that make sure that those that might be subject to, that have certain protection.