Tenant Protection Act of 2019: AB 1482 

The legislature has declared that the unique circumstances of the current housing crisis require a statewide response to address rent gouging by establishing statewide limitations on gross rental rate increases. This bill places an upper limit of five percent plus inflation on annual rent increases, but new tenancies are not subject to any rent increase limitations. To prevent landlords from engaging in rent-gouging by evicting tenants, this bill also requires that a landlord have and state a just cause, as specified, in order to evict tenants who have occupied the premises for a year.

The landlord may evict if the property is going to be occupied by a family member, is being withdrawn from the rental market, or is ordered vacated by a government agency. In those instances the owner must pay relocation expenses or waive payment of rent for the final month of the tenancy.

Both the rent cap and the just cause provisions are subject to exemptions including, among others, housing built in the past 15 years and single family residences unless owned by a real estate trust or a corporation.

This bill sunsets after ten years and does not preempt any local rent control or just cause ordinances adopted before September 1, 2019.

New Density Bonus for 100% Affordable Housing Projects: AB 1763

The Density Bonus Law (DBL) was enacted in 1979 to help address the affordable housing shortage and to encourage development of more low- and moderate-income housing units. The DBL requires local governments to adopt ordinances that provide concessions and incentives to developers seeking a density bonus on top of the cities’ zoned density in exchange for including low income housing. Local governments must grant a density bonus when an applicant for a housing development of five or more units agrees to construct a project that will contain, in particular circumstances, certain amounts of low- or very-low-income households, senior citizen housing, and housing for foster youth, disabled veterans, or homeless persons.

This bill gives housing developments that are 100 percent affordable an 80 percent density bonus, and gives developments that are 100 percent affordable and near a major transit stop an unlimited density bonus as well as an increase of up to three stories or 33 feet. The additional density will make it easier for affordable housing developers to compete against market-rate developments for housing sites. The additional density they can access under the bonus will increase the number of units on the site and help reduce the per-unit cost of the development.

Prevailing Wage Law Applies to Pre-Construction Activities: AB 1768

Under Labor Code section 1773, contractors employed for public works must pay “prevailing wages” (as defined by federal and state law). For purposes of the prevailing wage law, this bill expands the definition of “public works” to include work conducted during site assessment or feasibility studies. Under the new law, preconstruction work, including design, site assessment, feasibility studies, and land surveying, is deemed part of a public work, regardless of whether any further construction work is conducted.

New Law Relating to the Provision and Renewal of Insurance: AB 1816

The devastating wildfires that have ravaged parts of California in recent years has led to a rash of property owners receiving notices of non-renewal from insurers hesitant to write new policies.
This bill:

• Requires that, for any insurance policy expiring on or after July 1, 2020, insurers must deliver or mail a notice of nonrenewal to the named insured at least 75 days before the policy expiration (previously just 45 days) and, if the insurer fails to do so, requires the existing policy to remain unchanged and in effect for 75 days (previously 45 days) from the date the notice of nonrenewal is delivered or mailed.
• Increases from $500,000 to $1 million (or the amount recoverable under the policy, whichever is less) the limit of a covered claim that a residential homeowner may file with the California Insurance Guarantee Association (the agency that pays and discharges covered claims against insolvent insurers) for damage to, or loss of, a dwelling structure. In addition, each claim for a loss under a different coverage category is to be considered a separate covered claim.
• Provides that insurers who voluntarily write basic property insurance on risks in high or very high fire hazard severity zones, as well as those who do so in brush hazard areas, are proportionately relieved of the obligation to participate in the California FAIR Plan Association, the joint reinsurance association formed by licensed California insurers.

Mortgages Are Treated as Consumer Debt: SB 187

This bill expands the definition of “consumer debt” to include mortgage debt for purposes of the Rosenthal Fair Debt Collection Practices Act. The bill also removes the exception for an attorney from the definition of “debt collector” (thus making mortgage collection attorneys subject to the Act). Recently, courts have issued conflicting decisions on whether the Rosenthal Act applies to mortgage debt. This bill codifies the holding of Davidson v Seterus (2018) 21 CA5th 283.