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San Diego County Apartment Association

Apartment owners voice opinions on proposed laws

The San Diego County Apartment Association has staked its opposition to proposed legislation ranging from whether tenants will be able to smoke in their units to parcel and split-roll taxes.

On April 10, Sacramento attorney and San Diego County Apartment Association lobbyist Stephen Carlson discussed several potential laws in Assembly or state Senate committees -- legislation that could have a profound impact on how landlords conduct their businesses -- during the San Diego County Apartment Association’s 38th Annual Education Conference & Expo.

Carlson said some 2,000 potential laws are up for consideration by the California Legislature this year in a political climate where Democrats have the governorship and more than a two-thirds supermajority in the state.

This creates a climate that tips the balance in favor of the tenant, and in the case of AB 746, tenants who don’t smoke, Carlson said.

AB 746, sponsored by Assemblyman Marc Levine, D-San Rafael, would ban smoking in complexes with two or more units, except in designated areas of the complexes.

SDCAA spokeswoman Molly Kirkland said this would be a terrible idea.

“You shouldn’t have to be the smoking police,” Kirkland said.

This is just one of the many measures that stand to have a local impact and Carlson said keeping up with them all hasn’t been easy.

“Eight bills would either increase parcel or property taxes,” Carlson said.

For example, Carlson said SCA 3 by state Sen. Mark Leno, D-San Francisco, would allow school districts, community college districts and county offices of education to impose, increase or extend parcel taxes with a 55 percent threshold rather than the two-thirds requirement under the current statute.

AB 59, authored by Democratic Oakland Assemblyman Rob Bonta, is another parcel tax measure that has raised the ire of the California Apartment Association.

The legislation would allow school districts to impose different parcel tax rates based on whether the property is residential, commercial or industrial.

Carlson noted there are multiple bills concerning a split-roll tax whereby Proposition 13 protections for commercial properties (including apartments) that have been in place for decades, would be lifted.

“The idea of a split-roll property tax has been fully vetted and consistently rejected since the passage of Proposition 13 in 1978,” wrote Gina Rodriguez, CalTax vice president of tax policy in a March letter to the Assembly Revenue & Taxation Committee.

“While some believe that a split-roll would bring in additional revenue, it would stifle the state’s economic growth in the long term. From what is known about the economic impacts of split-roll, it remains an ill-advised idea.”

A variation on the split-roll, AB 188 by San Francisco Democratic State sen. Tom Ammiano, states a reassessment would be triggered when 100 percent of the ownership is transferred in cumulative transactions in a rolling three-year period.

“Then there are four bills in Sacramento that would require landlords to pay interest on security deposits,” Carlson added. “If you screw up and don’t pass these monies back including the interest, you could be sued. We’re definitely opposing that.”

One of these bills -- SB 603, also by Leno -- would prohibit the interest on deposits to commingle with an owner’s operating accounts, and would increase penalties on landlords who fail to return the deposits.

“Some tenant organizations say that it’s landlord theft not to pay interest on security deposits,” Carlson said.

Landlord advocate organizations have long complained that evicting a nonpaying tenant seems to be getting harder.

Now, Carlson said another bill by Ammiano could make the process even more difficult.

AB 969 would do two things: first, it states a tenant is not in default on the rent if that payment or a portion thereof is being withheld because of what they contend are needed repairs.

Carlson said the problem with this idea is the tenant could make complaints “ad nauseum” just to get out of paying the rent.

Secondly, AB 969 would allow a jury to determine whether the tenant has a valid claim. This determination is typically made by court judges today.

Carlson argued existing statutes are on the books that already allow the withholding of rent if the problems affect a unit’s habitability.

As for the need for juries, Carlson said they would further gum up an already clogged court system.

“Jury trials are not common, except in certain areas of the state where tenant attorneys use it as a delay tactic to prolong the eviction process and to improve their client’s bargaining position,” Carlson added.

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