Capitol Alert AM Newsletter

Rent caps + 2020 candidates weigh in on Prop. 13 + Newsom vetoes bill on signature gatherers

A house on M Street south of Yosemite Avenue in Merced is for rent on Thursday, Nov. 9, 2017. Almost half of Merced County’s renters were “cost-burdened,” spending 30 percent or more of their income on rent, according to a report from Apartment List. Nearly a quarter spent half of their income on rent.
A house on M Street south of Yosemite Avenue in Merced is for rent on Thursday, Nov. 9, 2017. Almost half of Merced County’s renters were “cost-burdened,” spending 30 percent or more of their income on rent, according to a report from Apartment List. Nearly a quarter spent half of their income on rent. tmiller@mercedsunstar.com

Happy Wednesday, readers! We’re halfway to the weekend.

HOME SWEET HOME

With his signature, Gov. Gavin Newsom ended a session-long saga to legislate new tenant protections, when he signed Assembly Bill 1482 into law in Oakland on Tuesday.

The two-for-one tenant protection bill is one of the strongest renter advocacy laws in the country, according to Newsom’s office. The legislation places a statewide rent increase cap of 5 percent plus inflation, and restricts when landlords can evict tenants.

“About a third of California renters pay more than half of their income to rent and are one emergency away from losing their housing,” Newsom said. “One essential tool to combating this crisis is protecting renters from price-gouging and evictions. The bills signed into law today are among the strongest in the nation to protect tenants and support working families.”

It was no easy feat, getting AB 1482 into signable condition. The bill became the center of a battle between housing activists and real estate lobbyists who’ve long debated solutions to California’s housing crisis.

AB 1482’s advocates said it will protect tenants from “egregious” rent increases and unfair evictions that could leave people homeless. Its critics argued it would stymie housing production and financially harm small property owners. Those in the middle advocated for the bill, but expressed fear it would pull focus away from new construction.

“AB 1482 will add even more stress to small mom and pop rental property owners to keep their businesses afloat, will discourage further investment, and encourage annual rent increases,” said Sid Lakireddy, president of the California Rental Housing Association. “There is a reason that the cities with the strictest rent control and just cause eviction policies have some of the worst housing affordability rates and the most severe housing crisis. As the housing crisis worsens, we will continue to advocate for real solutions that provide real relief to Californians.”

Bill author and San Francisco Democratic Assemblyman David Chiu, however, said AB 1482 isn’t rent control. Instead, the bill’s proponents argued that it will stop unmanageable rent increases while the state figures out how to efficiently build housing amid an overwhelming shortage.

“This bill will prevent egregious rent gouging and predatory evictions, while striking a balance to allow landlords to make a fair rate of return,” Chiu said earlier last month. “Until we build the 3.5 million units that will stabilize our state’s housing crisis, we need to help Californians stay in their longtime homes.”

Newsom signed the bill to kick off a statewide housing affordability tour, during which he plans to make stops in Los Angeles and San Diego and sign additional housing production measures.

You can read my report on rent caps here, as well as a new law also signed on Tuesday to ban landlords from discriminating against tenants who use housing vouchers here.

PRESIDENTIAL PERSPECTIVE

Sophia Bollag writes...

A handful of Democratic presidential candidates are lining up behind a union-driven ballot measure that aims to raise property taxes on California businesses.

“We need to fully invest in our public school system, finally pay our educators a living wage, and fight to achieve equity in our classrooms by closing funding gaps,” former Texas Rep. Beto O’Rourke said in a statement this week. “I stand with those across California—including thousands of SEIU members—who are advocating for this bold Schools and Communities First measure, and I am proud to endorse their campaign to enact it.”

California Sen. Kamala Harris mentioned two unions supporting the measure, the California Teachers Association and Service Employees International Union, in her tweet endorsing the proposal last week.

“A corporate tax loophole has allowed billions to be drained from our public schools & local communities to benefit wealthy investors. No more,” she tweeted. “Proud to support @seiucalifornia and @WeAreCTA’s efforts to close this loophole.”

Elizabeth Warren, Bernie Sanders, Pete Buttigieg and Julian Castro have also endorsed the measure.

Under a 1978 law known as Proposition 13, property taxes in California are set based on their assessed value at purchase. The so-called split-roll measure the candidates are endorsing would change that law so big California businesses are taxed based on their current property value.

The initiative still has an uphill battle to convince voters, however, according to polling from the Public Policy Institute of California. A survey last month found just 47 percent of likely voters say they would support the measure.

The initiative exempts small businesses, but opponents of the measure argue many small businesses would still be affected because they rent their space from larger companies.

“California small businesses are delighted to see the split-roll property tax initiative failing to gain traction,” John Kabateck, state director for the National Federation of Independent Business, said in a statement. “Higher property taxes on businesses also mean higher prices for the goods and services we buy every day, impacting all consumers.”

Backers aim to place the measure on California’s November 2020 ballot.

PETITION DENIED

Via Bryan Anderson

Newsom struck down a bill on Monday that would have made it more difficult for petitioners to get items onto the ballot.

Under the proposal from Assemblyman Evan Low, D-Campbell, signature gatherers could not be paid on the basis of the number of names they collect for an initiative, referendum or recall petition. Additionally, at least one in 10 signatures would have needed to be collected by an unpaid volunteer.

In his veto message, Newsom said he likes the idea of incentivizing grassroots support for initiatives. Even so, he worried Assembly Bill 1451 would have made the qualification process “cost-prohibitive.”

“I am a strong supporter of California’s system of direct democracy and am reluctant to sign any bill that erects barriers to citizen participation in the electoral process,” Newsom wrote.

Low did not respond to a request for comment on the bill’s failure. Former Gov. Jerry Brown vetoed a similar bill last year and in 2011. Brown’s predecssor, Arnold Schwarzengger also rejected similar measures during his governorship.

TWEET OF THE DAY

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Hannah Wiley joined The Bee as a legislative reporter in 2019. She produces the morning newsletter for Capitol Alert and previously reported on immigration, education and criminal justice. She’s a Chicago-area native and a graduate of Saint Louis University and Northwestern.
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