#CAHOUSING: The State of the Rental Market
CAPITOL WEEKLY PODCAST: This Special Episode of the Capitol Weekly Podcast was recorded live at Capitol Weekly’s Conference on Housing, which was held in Sacramento at the California Endowment Conference Center on Thursday, March 9, 2023.
This is Panel 3: The State of the Rental Market
Panelists: Senator Rosilicie Ochoa Bogh; Assemblymember Alex Lee; Debra Carlton, California Apartment Association; Alex Lantsberg, State Building and Construction Trades Council; Shanti Singh, Tenants Together
Moderated by Lindsey Holden, Sacramento Bee
This transcript has been edited for clarity.
RICH EHISEN, CAPITOL WEEKLY: So if anybody just showed up, I’m Rich Ehisen, I’m Editor-in-Chief of Capitol Weekly. Thank you for being here for our final panel of the day, which deals with the state of the rental market. First of all, thanks to our moderator, Lindsey Holden of the Sacramento Bee, of course, she’s going to let everybody introduce themselves or she’s going to do it… We’ll see. That’s up to her.
LINDSEY HOLDEN: Thank You. This is the last panel today, if I’m really stoked about it. We’re gonna be talking about rental housing, and I kinda wanted to kick things off with a little bit of census data for you. So about 44% of Californians rent their housing. And that’s compared to about 35% of people nationwide. And if you spend more than 30% of your household income on your rent, you’re considered cost-burdened, and more than 50% of tenants spend 30% or more of their income on rent in California.
So clearly, this is a significant issue for many Californians. And I know previous panelists talked about wanting to own a home, that being the gateway to the middle class, and obviously that’s a California Dream for many people. But for many residents here, just finding a safe affordable rental is out of reach. And so I’m excited to dig into this topic with our panelists, and introduce them. So we have Senator Rosilicie Ochoa Bogh, we have Debra Carlton of the California Apartment Association. We have Shanti Singh of Tenants Together, Alex Lantsberg of the State Building and Construction Trades Council, and we also have Assemblyman Alex Lee, who will be joining us later. So maybe you all could just briefly talk about how you interact with rental housing through your work. Maybe we can start with Senator Ochoa Bogh.
SENATOR ROSILICIE OCHOA BOGH: So, to talk about how I interact with rentals… I’m a realtor by profession, I’ve been a realtor for 20 years. Matter of fact, I just renewed my license as a realtor. So working with a lot of people in my district with regards to either purchasing homes for investments, or trying to help locate homes for renters in our area. As far as policy-wise in this capacity as a Senator, I’ve been working with reviewing and assessing different bills that impact both landlords and tenants in California. And looking at the fact [garbled] COVID, was elected in 2020, so much of the policy had to deal with having rental protections for our renters during COVID, which were necessary, for sure. And I was actually quite pleased to see that we also, last year, included the ability for landlords to be able to participate in getting some… Securing those funds for their rents. So protecting them both sides, which is I think good policy and a good balanced approach to the rental. So those are the efforts that I have in interacting with the tenants.
LH: You can go ahead, Alex.
ALEX LANTSBERG: Alright, thank you everyone. Alex Lantsberg, Research and Advocacy Director with the San Francisco electrical construction industry and working with the State Building Trades on much of this housing-related stuff. So, in terms of the Building Trades, I think or we just build this stuff, at the end of the day. I think that’s a way a lot of folks see it, but I think… Lindsey, you shared some stats, so I will too. While 44% of Californians are renters, at least my quick review of census numbers, I show that more than half of construction workers are tenants themselves. So the issues discussed here are absolutely relevant for our members as well as the construction workforce more broadly.
“We have 17 million renters in California. That’s bigger than almost every US State in population.” – Shanti Singh
As I think Mr…I don’t know if he’s still here… Danny Curtin, said earlier in his panel, you see Berkeley Labor Center did some research on where construction workers are sort of in the socio-economic ladder, and what they’ve shown is that they’re disproportionately impacted by housing uncertainty and just really rely on public services in order to be able to meet their needs. And lastly, I think the last thing I’ll put out there is that our members recognize that we need a vibrant construction market happening in order for them to go to work. That’s how it works.
SHANTI SINGH: Hi Everyone, Shanti Singh. I am Legislative Director at Tenants Together. We are a statewide coalition of, I keep saying 50, but I think we’re almost at 60 at this point, because they keep forming…. local renters’ rights organizations across California. That includes housing justice organizations and communities of color and low income communities. It includes tenant unions, includes legal aid organizations. We’re a pretty big tent and we’re growing.
I’m the legislative director, but most of our work is organizing. Organizing renters across California to collectively assert their rights and… Yeah, I think we’re gonna talk about representation, and now that we have Assemblymember Lee here to talk about the Renters Caucus, I won’t steal his thunder. But we do have …. a lot of what we’re trying to do and change a Tenants Together is the lack of representation for renters. And we have 17 million renters in California. That’s bigger than almost every US State in population. I sometimes joke that if everybody scattered around, we’d basically be able to have a significant block in the US Senate, just California renters only. And so we really are trying to elevate those voices because we have a lot of… there’s a lot of us.
DEBRA CARLTON: Good afternoon, Debra Carlton with the California Apartment Association. I’m the Executive Vice President of our public affairs program. Primarily, legislation is our focus compliance. We represent over 50,000 rental property owners and managers of for-profit and non-profit housing in California. And even though ‘Apartment’ is in our name, our largest group of owners are single family and small mom and pop owners, because we know in the State of California, if you can look at where the rental housing is situated, it is in your single family homes, your duplexes and fourplexes. And that is over 50% of the population of the housing here in California, so it’s a very large mom and pop, if you will, type of ownership in California. So we believe that it’s important for us, of course, to make sure that there is compliance and forms that they understand what the laws are here in California. So that’s our primary focus for the California Apartment Association.
LH: Awesome. Assemblyman Lee, I was asking everyone how they interact with housing or rental housing through their work. So, you could talk about that? Just a brief introduction.
ASSEMBLYMEMBER ALEX LEE: Okay, good afternoon. everyone. I’m Alex Lee of the 24th Assembly District, which is Alameda and Santa Clara County. I live in San Jose, which is the second most unaffordable city in the nation, and I am one of six renters in the entire state legislature… So, 5% of the entire state legislature are renters, meaning folks who do not own any property and rent a home. So, I’m proudly representing the 5% of us here, I guess. 5% of the state legislature.
LH: Awesome, thank you. So, I’ll start with a question about the state of the rental market. So the covid pandemic obviously had a significant impact on the rental market, tenants and landlords. I hesitate to say the pandemic is over, but as a condition shift toward kind a new normal… I’m looking for a little bit about what things are looking like from all your various perspectives? I think we might wanna start maybe with Shanti, you could talk about what tenants are facing, maybe, then go to Debra.
SS: [Garbled] I think there have been a lot of premature declarations that covid is over when it’s really not for a lot of people. All the economic issues that we’re having, not withstanding, during covid, there has been job recovery as we’ve been moving through covid, but at the same time, that job recovery has not been even. Disproportionately, unsurprisingly, it’s disproportionately, Black and Brown renters who are already struggling with low wages, and we had people talk about 50 years of historically low wages… But when we looked at… When we look at unemployment, a lot of people’s hardships, their economic hardships that they had through covid, through no fault of their own, continued well beyond even the sort of rental assistance or the eviction protections of the programs, as the state programs that were on offer expired. And so we’re still dealing with the repercussions of that. People are still really hurting. But at the same time, we’re pivoting back to, I guess our regularly scheduled housing crisis, and in terms of what tenants are pushing for, it is permanent protections. We’ve… and despite the horrendous-ness of covid, we have actually made a lot of progress on that at the local level.
LH: Awesome. Yeah, Debra, you wanna share?
DC: Those are good points. Covid changed everything for… Especially the way in which we are operating. Finding employees is extremely difficult. Vacancy rates, fascinatingly enough, despite the fact of what we all hear about rising rents… rents are not rising, rents are declining. Our vacancy rates are huge, especially in some areas of the state. In San Francisco in particular, vacancy rates are very high. In fact, some of the owners or indicating they’re gonna have a hard time meeting their requirements, either for mortgage payments or other types of bills that are necessary.
I think what’s fascinating, we do still have as Shanti indicated, some protections on the local level that are in place, Los Angeles, Alameda County in particular. I think our biggest challenge in some of those areas, especially Alameda County, you didn’t have to prove that you had a hardship. So many tenants have lived there for two years rent-free. And while that was very necessary in some cases, some of those owners were not paid because those tenants didn’t qualify for any rent relief. We did a survey recently, on average, the owners who responded are behind 30,000 in rent, and those tenants didn’t qualify.
We know that there was a lot of money available. The governor made a money available for individuals to apply, the owner and the tenant had to apply together if the owner didn’t apply, the money went to the tenant. So there were protections in there. So I think part of the conversation going forward is what do we do next? As Shanti indicated, how do we provide protections that are balanced so that we make sure that we don’t have housing that is lost? Because in the end, tenants are not going to have that housing if it’s lost to a bank or if the owners sell it to owner occupied, owner-occupant. So I think we need to find a really good balance going forward.
LH: Gotcha, maybe we could have our electeds talk a little bit about where things are at in the legislature with housing policy? I don’t know if Senator Ochoa Bogh, do you wanna talk about that briefly?
ROB: So, we just had an oversight hearing with regards to housing. We’re working on that and trying to understand the different struggles that we’re having with housing… But in general, it’s interesting to hear someone say… and we have an increase in vacancy in rental units; on the other side, we have about three million units short of housing in the state of California we need to build. And I think that has on the housing part of it, I think ideally would want to have enough housing available so that people could actually afford to purchase a home and not have to rent.
I think that as someone who has been a realtor for 20 years, and as a daughter of immigrant parents, I ran on the foundation that I believe that owning a home is ultimately the… it’s achieving the American dream. I know many immigrants who come to this country, their dream, if you own a home, and it doesn’t matter, a starter home, medium size home, the idea of owning real estate is part of that immigrant experience and desire. But then there’s some like my mother who did not want to own a home because she wanted to… As a single mom did not want to care for a property. So I think… And I mentioned this in the Oversight Committee: The question talks about home affordability, because it comes down to that.
It’s how do we make housing more affordable, because rent will be reflective of the cost of either building those apartment complexes or purchasing that home at a mortgage rate that needs to be paid off. So ultimately, the supply will have a huge impact on the ability to make housing much more affordable, which directly impact the rental space. Especially when we’re talking about the smaller mom and pop owners of properties that put it out to rent. I know there’s been a lot of policy that has allowed to expand ADUs for instance, on properties. Having more flexibility to be able to build on those, and restrict local control within those parameters to increase supply. So ,we’ve seen that in the past two years since I’ve been in the legislature.
I know we’ve worked on policy to make the renters credit much more of a balance, both from the landlord and from the tenant’s perspective, which in my district, as I speak to property managers, was actually very much welcomed on that end. Because we had a lot of renters who were not taking advantage of the ability to receive those funds. So, on the landlord side, there were very grateful property managers, very grateful that that came into being last year.
Let’s see what else? I think we need to work on policy that streamlined the process of building housing, so it’s not so cost burdensome, which directly has an impact on consumers, whether we like it or not. It will have a direct impact on that end. With that in mind, I think that CEQA [reform] at the foundation of construction and building these homes and property would be a huge impact in making housing much more affordable. And there’s other areas and spaces within that space that would need to be addressed.
LH: Awesome. Assemblyman Lee if you wanna speak to this as well…
ALEE: Yeah, I mean, I think the greatest framework we have to keep in mind in dealing the housing crisis. We do just as much production… when you do, we need to have as much protection. It’s technically a three legged stool. By [building] in protection into one side of it is that we need to, of course, have more opportunities and more homes for people to be able to live in. But at the same time, those homes cannot be so out of reach for folks that they cannot keep them or ever get into them. That’s an important dual aspect of how we should tackle the housing crisis. The Renters Caucus is going to be advancing a series of bills that I will let individual authors debut them as they come. And so, Debra, we will talk about them.
“I torture myself by going on Zillow every now and then, to see what is possible for me to buy a home… To afford the down payment, I’d have to save my salary for three years… have to be very frugal, no more avocado toast. – Asm. Alex Lee
It’ll be a lot of bills for us to talk about, but I think right now with the renewed interest of the Renters Caucus, there’s gonna be a lot more protection bills advanced just to have parity of production bills. I will never diminish the importance of reduction, but we also need to protect the people that live in them now, and also have a stability in their lives.
I’ll give you an example right now, and often I compare… Obviously, home ownership is one of those coveted goals that many people want to have. I wanna have that one day. But I live in the second most unaffordable city in the country, and the average home price in my neighborhood in Berryessa in San Jose is 1.5 million dollars. 1.5 million dollars right now. And funny enough, actually, even on the rental side, and sometimes the ownership side, a condo, a town home and a single, more traditional single family home are all roughly within the same margin. They’re only a couple… I say a couple, a couple hundred thousand dollars off of each one another. And it kind of shows you the disparity in which we lack a supply, but also lack attainment for so many people. And I give an example, this is that… So a lot of our programs, which also we talked about the emergency rental system program. They applied to people who are 80% area medium income or under. In my county… In my county, home county, 80%, AMI for a family of four is a family that makes $117,000, so when we start making sure that we can… A lot of these families aren’t really struggling to even be able to do that, even with a 117 grand a year, that’s really not enough to even get a two-bedroom in San Jose.
And also example, because I torture myself by going on Zillow every now and then, to see what is possible for me to buy a home, is that if someone, say hypothetically, had $100,000 earned every year. To afford the down payment, I’d have to save my salary for three years… have to be very frugal, no more avocado toast [laughter]. I’d have to save all of my salary for three years.
And I wanna test point out, we talked a little bit about the emergency rental system program, is that very early on- I had flagged with some of my colleagues – that the first concept of it where it was like if a tenant applies, you have a certain amount, and if landlord applies it’s a certain amount… and at the end of the day, we settled on where 80% of the rent, rent that was owed would be paid by the government to landlord. I always always argued that 100% should be paid. There’s clearly, as we kept amending and changing the program, we saw the flaws in it, and it is one of those presence where we have now, set during an acute crisis, the government can step in and say, ‘let’s acutely, make sure that landlords are whole, but also keep people housed.’
And I think we really dropped the ball in this program, we could have so much more improved it. The simplest thing is to make landlords whole is giving 100%.. the simplest Thing. 20%, I get that. Super unfair. But also making sure that maybe only one party needs to apply instead of these… When you had disagreements between a tenant and a landlord… one person just said, ‘Hey look, I’m gonna apply it to the government and that money will go to you, landlord, it’s for you. So you can keep me housed.’ We should have made a lot more simple.
So we have experienced a lot out of the pandemic, where we can have an active intervening role in keeping people housed. And I think we need to continue to do that, especially as the state of emergency winds down and individual counties start going back to normal or [garbled] practices. We need to think of the state is how do we prevent a wholesale eviction crisis, and homelessness crisis, but also where now landlords are thrust into the opportunity of all got a shop for 100 different clients or different customers, again. It’s a really awful experience for all.
LH: Yeah, Alex, think you also wanted to add something. Thank you.
AL: So I’m the odd guy out here, so respect, but I do think it’s important that we talk about this stuff ,or that then when we think about this, that we’re guided as much by data as we are by vibes and ‘anecdata.’ And are sort of our own personal individual experiences. I think one thing that a lot of folks may not recognize and they may not understand is that fair market rents from the identified by the Department of Housing and Urban Development from 2017 to today have gone up from about $1,000 on average, statewide about $1,050, I don’t how… I only have a chart that I made, so I don’t have the exact number to almost 1,400 in this period.
Also, I just wanted to come back to something that Assemblymember Wicks said: within this period, we’ve done 275 streamlining bills and code changes. And what has that resulted in? Multi-family housing construction is flat, so it’s really not affected by all that. And the massive development that we’ve seen from SB35 has been in affordable housing precisely because the state has decided to invest in it. As long as we have a housing system tethered to somebody needing to make a fairly significant profit in order to move forward, the entire idea that we are actually going to be able to lower rents or you can stabilize them while increasing production doesn’t seem make sense. It’s just… You can’t have both. So, I think part of what this really forces us to do is really think hard and think creatively about things such as social housing bills, and, not just subsidies, but really taking a fundamentally different way to approaching how we build housing for California’s workers, working families, and people who need it.
LH: Yeah, gotcha. So kind of the Renters Caucus has come up several times. And so I do wanna talk about that a little bit, Assemblyman Lee, you’re part of a new Renters Caucus, and I think that kind of opens up a broader discussion about tenant power in the capitol. Obviously tenants have historically struggled to push legislation that benefits their interest. And AB 1482 with the Just Cause rental protection and rent caps, that was passed four years ago. And that seems to have been the most significant piece of legislation as of late. So maybe we can start with you Assemblyman Lee, where do you see the state of tenant power in the capitol right now?
ALEE: I think tenant power is definitely increasing and building in the state capitol. I think with the formation of the Renters Caucus, for the first time ever you’re seeing this concerted effort to take on renter-centered policies for the first time in a long time. I mean, before we had really great allies, Assemblyman Chiu, David Chiu, was a great ally and able to pass 1482 with now-Attorney General Bonta, but they did it out of… Not the current lived experience, perhaps in the past, they have that. But without having that keen voice of renters as a caucus, they were able to do those things. So, I think now with our caucus, even though we are 5% of the legislature, I think we can accomplish a lot.
“I’m not gonna name any names, but I’ve had conversations where some legislators didn’t even know how many renters were in their district.” – Shanti Singh
I think in the last legislative session, I think there was one substantive renter protection bill that passed…. I remember the end, we were like, ‘There’s no more, that was like… We lost most of them.’ But we do have… As I pointed out, we do have a lot of good production bills, I guess there. We allow production bills to get through, but we don’t have the parity when it comes to rental protections, and I think there’s a lot of common sense things left on the table that we’re gonna pursue.
The Renters Caucus is gonna be able to do that. So, this time I think there’s a stronger concerted effort rather than say one-offs, where I was before Renters Caucus, like I said, I did my thing, someone did their thing. And now we’re leveraging it together, even though we’re just six… I think you can do a lot with six people.
LH: Gotcha. D you wanna talk about any of the common-sense solutions that you alluded to?
AL: Yeah. Well, I think my common sense may be different than others. So I think, honestly, one thing that we really need to do is to revisit Costa-Hawkins. We do not apply rent stabilization to single-family homes, new homes, which are the ones coming up online right now, and vary it to different homes. We should be applying uniform standards everywhere. I think the best case of economic planning, especially when it comes to housing, is when you have uniform standards, not county by county, not city by city, not this type of home by this type of home. It causes a lot of confusion for landlords, renters alike, and if people knew their rights and understood the market as it was, as one stable place, that’s how it should be. There are several Costa-Hawkins bill efforts this year, and you’re gonna see more and more conversation about that, I think.
LH: Shanti or Debra, do you wanna speak about this as well?
SS: Yeah, I agree with Assemblymember Lee – tenant power is building and it’s our job at Teneants Together to build it. And again, we’re getting new member organizations forming faster than we can onboard them, particularly in response to this covid crisis. So, there’s a lot of positive… Obviously, the formation of the Renters Caucus… there’s definitely more conversation, more intersectional conversation, between tenants groups and organized labor. Which is which is really critical because tenants are workers and workers are tenants, and so that’s been really, really inspiring to see. And I think it’s gonna yield amazing results in the future, or better than the ones we’ve had before.
And, a couple of notes that I took about this.. But I think there is a… besides the problem of representation, in terms of which legislators rent. There’s been a lot of… a lot of times I hear from legislators that they’re just not hearing from their renter constituents. And if you’re a tenant facing eviction, if you’re working two jobs to feed your family and pay the rent, you’re severely rent burdened, etcetera. You’re not necessarily going to have the same time that other people do to contact their state legislator.
“You talk about amending Costa-Hawkins and of course, every rental property owner will come out of the woodwork.” – Debra Carlton
And we’re trying to change that because I mean, I’m not gonna name any names, but I’ve had conversations where some legislators didn’t even know how many renters were in their district. They underestimated it, even when it’s on the census data on their own website. Right, so there needs to be… What we’re trying to do, and I think tenants, as they’re getting increasingly fired up because this housing crisis is not going away any time soon. What we’re really trying to do is build tenant power also through political education and legislative engagement, because it’s necessary. Renters are just not… they’re not respected as constituents as much as property owners are. And that’s really not… I don’t think that’s very in the spirit of democracy.
LH: Gotcha. Debra, do you wanna talk about this dynamic from the Apartment Associations’ perspective?
DC: So, Costa-Hawkins, the Holy Grail… You talk about amending Costa-Hawkins and of course, every rental property owner will come out of the woodwork. Costa-Hawkins was passed in a time when the legislature saw extreme forms of rent control, those extreme forms of rent control had actually run tenants out of town. Remember, rent control’s not means-tested. So what you had in those situations, were the wealthy renting. The landlord makes a decision about who’s renting, and the low-income tenants were moving and having to move to neighboring cities.
You also had low construction rates, Berkeley’s construction rate came to a standstill. And even Berkeley’s housing department admitted that in a study that they did, so the legislature said, ‘Look, we’ve got to put some safeguards in place when it comes to rent control.’ Single-family homes should not fall under rent control. You wanna lose a large population of rental housing? They can sell, and they’ll sell to owners. So, I don’t think that’s the answer.
And the legislature also looked at that when they were considering 1482. 1482 was the answer, not revisiting Costa-Hawkins. So, I think 1482… and I’m sure we’ll see legislation… but there was over 300 tenant organization and individual tenants that brought forth 1482. I cannot again overstate what a big deal that was, so. I haven’t seen legislation yet to change, 1482, I’m sure will be introduced in the next week or so. But it’s gonna be a challenge for the industry. 1482 hasn’t really taken effect because of covid. We always argue we need a balance: if you want… If your goal is to stop investment, go ahead and pass strict forms of rent control. That’s not the answer, we need a balance. So I think that’s our message to the legislature.
ALEE: I just want to point out something – is that we have these commonplace controls for homeowners, it’s called a 30-year fixed mortgage. So, we have these expectations where if you become a homeowner you can enjoy these kind of benefits. As renters, you don’t. And look, today we still are in slump of production, it’s not any much better, we’re still having the same problems and in fact, the housing… [garbled] only gotten worse since ‘70s, or I should say since 1995, when I was born and Costa-Hawkins passed.
But, to say that one thing necessarily leads to the other, I think it’s a bit over simplification in this case, because we have plenty of developed democracies in this world, especially in Europe, that have very generous protections and stabilizations for residents of all types, homeowners or renters. And they also enjoy production. It’s a wholesale systemic problem we need to be fixing. And also the heart of it, of course, is production that does not have profit at the heart of it… social housing is the missing pillar of it.
So I think there is a balance to be in these things, I don’t think we need to be afraid of it. Because also part of this rent stabilization is if you have renters moving around different cities, their rights change from zip code to zip code, and that is very confusing for people. Same thing for landlords that live in one city, rent in a different city. We need to have a uniform market, uniform standards, and that’s what I’m asking for, is that people understand the common marketplace they’re playing in.
DC: And just one comment to that, ’cause I can… With you, mortgage rates, I get that, but remember, the homeowner pays for all the maintenance: the re-roofing everything, tenants don’t. But that’s why rents are not necessarily stabilize consistently and why they go up because the landlord pays for all those costs. So again, a balance is I think what we’re looking at here.
LH: Senator Ochoa Bogh, did you wanna add anything?
ROB: I just wanna… I do talk about… I know you had talked about some of the pieces of legislation that we’re going to be probably seeing in the coming year. But I just wanna echo that conversation… Two observations based on the conversations that we had today: So one of the most important things that I advocate for is, that in order to have good policy in any space, we need to have all stakeholders at the table. And it’s been very interesting to me in coming to the legislature that as legislators you’re kind of… what’s the word I’m looking for?.. You’re kind of pigeon-holed, either representing one component of a space, or another component in the space. And in reality, they’re interrelated in so many ways that if we are to act with as good-intended policymakers, we need to have and represent all stakeholders at the table. So, I actually appreciate this panel right here, because you hear the different concerns and as I’m hearing them, I’m going, ‘Okay.‘ My mind is thinking. My ‘mama brain,’ always trying to figure out how to bring it together.
But it’s really interesting to hear the different perspectives on this on this end, but before I lose my train of thought, really quick… the problem with having a one-size-fits-all with regards to policy and protections. Really… It’s very difficult to do, especially when you start considering the different ordinances within communities, within cities and the different elements, As Debra mentioned, with regards to the cost of maintaining these properties. It’s hard to have those caps when you are maintaining those… issues with homes. Because everything needs maintenance, and there’s a cost.
As a realtor, I know that when I was dealing with my first-time home buyers, I always said, ‘Just because you can purchase a property for 50% of your income does not mean that that is the wisest way to go. Don’t spend more than 33% of your income on that, but once you purchase it, make sure that you set aside at least 10% of your income, so that you can accumulate enough money for these emergency repairs, so that your home increases in value and does not going to disrepair.’ It’s about financial literacy.
But going back to the previous question, I just wanted to talk about a little bit and mentioned some of the bills that right now, the 2023 rental legislation that we were seeing. I’m not sure if it’s all been commented on or not in previous panels. But right now, under a newly introduced bill, Assembly bill would allow California cities would no longer be able to force landlords to evict renters based on their the alleged actions at or near the property. The bill is AB 1418 by Assemblywoman Tina McKinnor. She’s from Inglewood and targets the most stringent versions of so-called crime-free housing policies adopted by some California cities.
“2022 was actually an historic year for rent control in California. I think it’s the first time that seven new municipalities, who never had rent control passed rent control.’ – Shanti Singh
There’s another bill, a Senate bill introduced this year that would prohibit most California landlords from using criminal background checks as part of the tenant screening process. The legislation, SB 1460, by Senator Aisha Wahab from Hayward would create the Fair Chance Access to Housing Act, and prohibit most rental housing providers from directly or indirectly, 1) inquiring about an applicant’s criminal history; 2) requiring an applicant to disclose their criminal history; 3) requiring an applicant to authorize the release of their criminal history.
A newly introduced bill would also limit a landlord’s use of credit reports and screening prospective tenants with Section Eight housing vouchers or other government rent subsidies. The bill SB 267 by Senator Susan Eggman from Stockton would allow, would only allow the use of credit reports when a voucher or other government rent subsidies is present if the lender offers the applicant a chance to show other evidence of their ability to pay the rent. If the applicant does so, the landlord would have to consider the evidence in lieu of the applicant’s credit history in deciding whether to proceed with the tendency. Asimilar bill last year by Eggman died in the Assembly Housing Committee, and so forth.
And there’s other issues right now they’re being dealt with in the courts, so anyway, thought I’d mention…
LH: Do you support those bills or do you have any position on them?
ROB: I haven’t read all the specifics, these are just summaries from them. So they haven’t come in front of me to have a holistic view on these.
LH: Gotcha, yeah… just flows into my next question a little bit. As the state and cities are moving forward from covid eviction protection… Some of them… and we talked about this a little bit… are of beefing up their tenant rights frameworks. For instance, the LA City Council recently passed an ordinance expanding some protections for renters. And I think we talked a little bit about this, but Senator Maria Elena Durazo tomorrow is gonna announce a bill that will shore up 1482, which created state-wide eviction protections and rent caps. So maybe you all can speak to the effectiveness of, or need for these kind of laws or ordinances, maybe whoever wants to start… Maybe Shanti can go ahead.
SS: Yeah, yeah, I mean, I’d be remiss if I didn’t note, but 2022 was actually an historic year for rent control in California. I think it’s the first time that seven new municipalities, who never had rent control passed rent control, and I have that list: Pasadena, Pomona, Bell Gardens, Fairfax, Antioch, Santa Ana and Oxnard. And what’s important to point out about that is that that is a lot of these places or places where you think you wouldn’t pass rent control. The need and the crisis is growing into places that politically have been hostile to it before, including Orange County, four cities, Ventura County, four cities. It’s amazing to see, but it is really… It is really in response to the inadequacy of current protection.
“If you want outsmart the market, build more housing.” – Debra Carlton
I do wanna make a really important point about 1482 that isn’t being made, and I think maybe we’ve just listened to two panels about land use mostly. And in land use, the problem… The laws can be onerous and people really get into the nitty-gritty about them. With tenant law and tenant protection, it’s the opposite. When tenants cannot enforce their rights and the legal mechanisms to enforce their rights are sorely lacking, then even those protections, even the weak ones are not worth the paper that they’re printed on. And that is a huge problem. We have a huge problem of enforcement of AB 1482. Constantly, our hotline at Tenants Together was inundated with people basically not even being able to enforce a clear violation that was pushing them out of their homes. Particularly… and keep in mind that with inflation, the 5% plus CPI cap of 1482 allowed for a 10% rent increase. We saw that disproportionately inflicted on renters who were struggling to pay the existing rent, and we’re waiting for rent relief funds. 10% is a lot. It’s a lot, right?
And that’s on top of the fact that I’m getting back to, which is that even when your rights are being violated, even if you are protected under 1482, and of course, there are massive loopholes like single-family homes. Which are not ,just because single family and multi-family are different sizes of building does not necessarily mean that a mom and pop owns a single-family home or a corporate landlord owns a multi-family. We shouldn’t conflate those two things… Just a side note.
But to go back to the enforcement point, it’s just, aside from the loop holes, we saw a lot of issues. We tried in 2020 to pass a piece of legislation that unfortunately did not pass, from Senator Durazo, which was SB 1190. And that simply would have clarified the ability of local jurisdictions, city attorneys, county attorneys, district attorneys, whoever, to actually be able to protect tenants and make sure that landlords were following 1482. Unfortunately, that didn’t pass.
“We have incredible [wage theft] laws on the books for public works. We have incredible laws on the books for private site construction, all these things. But it’s always the question of enforcement” – Alex Lantsberg
But I think we really need to, when we think about what is a good balance, we also need to make sure that we’re actually enforcing the laws that we pass. And I can’t talk a ton about what’s in Senator Durazo’s proposal, yet because the language isn’t out. I have it, but I don’t know what I’m allowed to say or not. But… We will be addressing these issues.
LH: Anyone else wanna wanna speak to this?…
DC: I also haven’t seen the language. I think we wouldn’t be here if we had enough housing. Right? That’s our biggest challenge that we have here. If you want outsmart the market, build more housing. It is challenging. I’m glad that the legislature has really focused on that and is taking to task some of the local governments that are refusing to build housing.
Assemblymember Lee, you have some great bills. We support your social housing bill, we support your other bills that will promote housing production. What’s going on in our local jurisdictions as well is, commercial space is empty. You walk past a lot of that housing, or I should say It should be housing, let’s put it that way. Adaptive reuse is what you’re focusing on too. That would be so important. We see that downtown here, buildings are just vacant. Commercial in some spaces are not coming back. Honestly, that would be the quickest way to provide some housing going forward, and so we appreciate what you’re doing with that, and those are the kind of bills that we believe should be supported and pushed forward this year.
LH: Gotcha. Alex I don’t want to leave you out. Do you have anything to add from the labor… from the labor space?
AL: As I said, I’m kind of the guy out here. I’m trying to figure out how all out issues relate to this. And I think so much of what’s being talked about is actually applicable so much to this discussion that we had earlier about skilled-and-trained standards and prevailing wages and wage stuff. And I think Shanti said something important about 1482 and just an enforcement and people understanding their rights, and I think that that actually provides a really perfect analog for the wage stuff discussion.
I was looking for some numbers. I had them in my files over here, I know that Assemblymember Wicks talked about best wage theft protections. Like, California has incredible laws on the books, but just to give you some… give you some idea. We have incredible laws on the books for public works. We have incredible laws on the books for private site construction, all these things. But it’s always the question of enforcement and at the end of the day. So when you think about it, how much – there is more than 65 billion dollars of construction work in the state of California in 2019. If you take a look at the reports from the Department of Industrial Relations, so 65 billion dollars of construction work, 300,000 state licensed contractors. There were 200… there were about 232 inspections in the private construction industry in 2018-19 for wage theft. With only 336 citations, only 3.3 million dollars in penalties, and of which… and 15 million dollars in back wages, only 2% of which were collected.
“When it comes to homelessness and housing, or people who are about to lose their property, [we need to find out] whether or not behavioral health is an issue. And making sure that we have systems in place to give people the support system” – Senator Rosilicie Ochoa Bogh
So we have these great laws on the books, we have these promises, ‘we’re going to be rolling out strong wage theft protections.’ But at the end of the day, it’s how these things are enforced and whether or not, the people who are actually harmed by the practices that these laws are intended to stop. Whether or not they have the power to enforce it. Whether it’s because they’re worried about their job or they’re worried about their home, or just their livelihoods down the line. So it’s wonderful to pass great laws, but I think it’s all the more important to think through and listen from the people who actually whose job is to help enforce them, how they’ll actually work out on the ground at the end of the day.
LH: Totally, yeah, it’s all connected. Definitely. Before we take questions from the audience, I want to throw in one more question about homelessness. Which is very closely connected to rental housing. So tenants who are evicted from their rental units obviously face an extremely uphill, almost impossible to to find new housing. So I’m curious to hear from folks, what do you think needs to be done to keep those at risk of losing their homes housed? And also for folks who’ve been evicted or experiencing homelessness, what can be done to help them find rental housing in the future? So who wants to start? I’m looking at people… Maybe [Senator Ochoa Bogh] go ahead…
ROB: As I said, we just had an oversight hearing both on housing and homelessness. Both issues which are very much within my interest. And it’s interesting because we were trying to figure out with homelessness what the number one issue was. There was a discrepancy in some of the studies that I personally saw that I didn’t care for. But I think we need to start really studying and really taking into account what are the sources of people being evicted or about to lose their home? Because there’s different approaches. When we talk about rental assistance, it’s really difficult when you hear from the landlord side, with regards to … not the landlord side, I’m sorry… employment, let’s talk about employment, and we’re talking about wages, employment. Where we’re talking about different businesses, non-profits that are in different spaces, whether it’s manufacturing or whether it’s distributions or non-profits, whatever it may be, a restaurant, who cannot fully be staffed.
And that’s one of the biggest concerns that we have for many of these, these people who need employees who are working at, I don’t know anywhere between 70, 80, 85% of their capacity, because they just can’t hold people to work within their space for various reasons. But the number one or number one reason is they just can’t hold and nobody wants to come and work with these… In these jobs. So we need to try to figure out that we don’t create policy that disincentivizes people from going to work… from needing to have to work on that end.
And number two, I think when it comes to homelessness and housing, or people who are about to lose their property, whether or not behavioral health is an issue. And making sure that we have systems in place to give people the support system so that they can actually be able to keep employment. That’s when I talk about people who are about to lose their housing, trying to figure out what the source is an employment… Is it the fact it’s behavioral health that impede them from pursuing employment? We also have to be considerate of people who have been formally incarcerated, and their ability to gain employment or have the skills before they leave to be able to gain employment and be able to enter the system, now that there’s been policy to protect those individuals from obstacles that would hinder them from either getting employment or be able to be housed. I actually have a bill right now that would help build projects for people who were formally incarcerated. We just added the language on that end.
But there’s a lot of factors that we need to take in consideration right now, and making sure that we have those safety nets for people who actually have a need on that end. So, I think we’re working towards that policy, I think we’re aware of it, and I think that’s where we’re going to make sure that we have those safety nets for those people that are at or need. I think I answered that all?
LH: Yeah, yeah, thank you. Shanti, and then you Alex.
SS: I could go on about this for an hour, but I won’t [laughter]… Yeah, but one of the easiest no-brainers I have to start with is right to counsel. I think that the national figure is, let’s say it’s like 90% of tenants don’t have a lawyer when they go to eviction court, which means that they don’t go to eviction court. They get scared and they move into their cars. That is what happens, right? 80 to 90% of landlords have representation in eviction court. 80-90% of tenants do not, so that you don’t have access to the law when the deck is stacked against you like that. And that does create homelessness, we see it every day. People get scared. That’s a lot to go up against… Without anyone there to help you. [Question from panel, garbled] No, no public… No public defenders for eviction, although San Francisco now has that essentially. But they’re the only city that’s passed a universal right to counsel.
“Homelessness breaks people. And then putting them back together is incredibly difficult and expensive. So we need to do everything that we can to keep them from falling into homelessness.” – Alex Lantsberg
So yes, there is no public defender for tenants even if your eviction is potentially bogus. There are legitimate evictions and there are illegitimate evictions, but you can’t really defend yourself. And that does lead to a lot of homelessness because people don’t know their rights, people are scared. So, I know everybody already talked about social housing, but I will say that according to the National Low-Income Housing Coalition, we have a one million unit shortage for low-income people alone, just in California. And we need to address that. So there’s a lot of talk about Housing First solutions won’t work, and the thing is, we’ve never tried A Housing First solution in California, so, I don’t know how you can say that it won’t work.
And again, I can’t talk a ton about what’s in Senator Durazo’s bill yet, but we are a… we did name this AB 1482 expansion and improvement bill, the Homelessness Prevention Act for a reason. Tenants rights is homeless as prevention. There’s sometimes, I think, something that mystified me in some political discourse, particularly along some elected officials, where… the number one issue that Californians care about is homelessness. Polling shows that time and time again. But there’s this sense or sometimes I see people asking, it’s like, ‘Well, where did all these homeless people come from?’ And it’s like the answer is they were evicted.
Most homeless… people talk about homelessness in San Francisco a lot, that’s where I live… I think it’s something on the order of probably 80-90% percent of people who are un-housed in San Francisco were… lived when they last had housing lived in the Bay area, they were evicted most of the time. Judicially or extrajudicially, and another San Francisco statistic, 15% of homeless people in San Francisco are still employed. They are somehow trying to hold down in a job on top of all of the hardships that they’re enduring on top of not having a roof over their head, so… okay, and I could go on for another hour. But an ounce of prevention is worth a pound of cure. And the number one thing that we need to focus on is keeping people housed because even if you don’t care about the human rights aspect of it or the compassion aspect of it, if you just care about dollars and cents, it is way more expensive to get a tenant back into housing after they have been evicted, after they’re already homeless. It is way more expensive and to just keep them there in the first place…
LH: Gotcha. Alex?
AL: To pivot off what Shanti was saying… I think the takeaway here is that homelessness breaks people. And then putting them back together is incredibly difficult and expensive. So we need to do everything that we can to keep them from falling into homelessness. But in terms of helping people up and out… there’s a guy who I see on Twitter, he’s an IB Local 617 member, he’s formally incarcerated, spent a bunch of time, I think in San Quentin… – I think he was in Folsom – for a felony of some sort. And came back and he entered our apprenticeship program, and it’s obviously bringing it back to the Building Trades, it’s like, granted… construction isn’t for everyone. There’s no doubt about it. And it takes a certain type of person who wants to do that type of work. Be outside, do that. Work-is-dangerous work. And it’s ephemeral, it goes back and forth. But for people who that does fit apprenticeship programs are a tremendous opportunity. It’s like, you can find this guy, I can’t remember his name right now, but you find him on Twitter.
I’ve interviewed… members back when I was with the Carpenters Union years ago, there was a woman who just a tremendous story, and we were talking about the value of prevailing wages. And then really supporting and under-guarding the apprenticeship system. She literally was homeless, she had… she had fallen into homelessness, got hooked on something or other, and it was through Trades-affiliated apprenticeship programs… and pre-apprenticeship program that help us straighten out her life, helped her stabilize herself, get her onto a path to a sustainable career. And then years later, once you journeyed on and she became a full-fledged member as it were, getting the wage, she herself was giving back and supporting homeless shelters and the institutions and that helped her get out of it. But all that is incredibly hard work and we’re better off keeping people from falling into homelessness
LH: Totally, yeah, and I’m getting the signal – we’re probably gonna take some audience questions, thank you so much for taller panelists.
CAPITOL WEEKLY: I do have a question that came in remotely. So, Airbnb has come in around the same time that the housing crisis emerged as an issue, and I’m wondering if our panel or anyone on the panel can speak to that? Has that really played a role in changing the rental market, taking rentals off of the market that would otherwise be housing people, but instead they’re now a vacation rental that is maybe empty half the time… Is that playing any kind of a role in this?
DC: I’ll speak to some of that, and I know that the Assemblymember and Senator may have more information from their cities and counties, but we see cities and counties don’t like it. So we’re seeing ordinances passed to say no, or they’re capping them. We even sponsored legislation that forced AirBnB to say on their site, ‘you might not be allowed to do this.’ So we wanted an outright ban in some cases, but now they have to put on their site that you… And even as a tenant, you are not supposed to be AirBnBing your unit, it’s typically a violation, especially if you’re collecting a higher price under the Airbnb and not in paying that and keeping the rest of the money. That’s not… Okay. So that’s what we’re seeing in at least a lot of the local ordinances.
AL: Yeah, and I would just add that I agree that a lot of localities are reigning it in where a lot of Airbnbs are now, to the extent, where the owner has to be there. Or there’s a lot of restrictions in place. It’s really about enforcement right now. I think that’s the hard part of it is, when you’re looking up to a city or a county to do these things, and they do have the capacity to do that and really verify that’s happening. So there’s still a lot of work to be done there. I don’t doubt, especially in the early days of Airbnb, that the effect of turning rentals into micro-rentals really hurt, not just tenants, but hotels, [garbled] landlords, and really manipulated the market in such a drastic way that you saw that kind of reining in effect.
And just one thing I wanted to add also to the conversation is just in general, is that slightly different on this or related to this, is that if it is socially desirable amongst our policies to protect small mom pop landlords, we can do that. And when we work on the [garbled] Act, I really try very hard to make sure to protect those people, ’cause there is a vast difference between Grandma and Grandpa who have five properties and Blackstone that own cities, basically across the country. There’s a big difference. And I think the California people understand that difference and there is a very deliberate and smart way to make sure that our policies target different disparities. Just as we talk about different incomes, a renters, there are different classifications and categories of landlords out there, very, very different for another two
CAPITOL WEEKLY: We have a question here, too, unless someone was gonna keep addressing that?
AUDIENCE QUESTION: Thanks. Yeah, one thing that I haven’t heard touched on today is the fact that the LA Times reported that California’s lost hundreds of thousands of people, citizens and businesses that have left frankly more business-friendly climates. A lot of those businesses that we’ve lost are developers and homebuilders that are going to develop an Austin, Phoenix, Idaho, ’cause it makes more economic sense. And I hear a lot of talk about the legislation being targeted, it seems kind of targeting the landlords, and I’m wondering if there’s any legislation you all can speak to that might be proposed or that’s coming up, or that you support, that would provide incentives to developers. Because at the end of the day, it’s the developers and their bankers that decide where they’re gonna build and whether it makes sense… And I agree that we need more housing. My business is involved in creating more housing in Sacramento, so if you could speak to that, that’d be great.
DC: ….I know that the Assemblymember and Senator can speak to… Our list that we’ve identified with the California Apartment Association, 383 bills that we are tracking. And a lot of that is incentive-based. Adaptive re-use, as I mentioned earlier, a lot of… we’re looking at… CEQA is a big challenge for the industry. When it takes you five to 10 years to build housing, that’s a huge problem. And when you have CEQA being used as a battleground to stop and interfere with housing – unjustly – it should be used as it was intended. But I think that is a big problem, and of course, landlords can’t wheel their properties out of California, and as I mentioned earlier, the vacancy rates are climbing as a result of covid and people leaving the state.
SS: I’ll just quickly say, I mean, a lot of panels and speakers before us already said this, but it’s the 5000-ton elephant in the room, developmer incentives, and streamlining is one thing, but we’re not gonna crack this without massive public investment. It’s just not gonna happen.
AL: You know, I’m not going to dispute your own personal experience, or at least what you’ve seen on your end, but what the number shows that production in Phoenix, production in Austin, production in all of these are really around the country has gone into the toilet. And the fact that I think that we’ve been flat as a flat on the multi-family side, with some slight increases in the single family side, are probably indicative that it’s not as bad as folks say.
The other part is that from a public policy perspective, if we constantly keep chasing the returns of the bankers, they will always try to get a little bit more. Or they will go to… or they will point to another investment vehicle and then say, Oh, this one’s given me 3% more. You gotta make it attractive for me to go here instead of there. And that’s where I think the social housing conversation has really blossomed over the past few years… ought to be headed because let’s face it, we do not…
We have absolutely no compulsion about building roads with 100% debt financing. We have no problem extending these payment periods over 30 years – or not 30 years – over 50-60, 75 years. You’ve got federal infrastructure financing that can help extend repayment over 75 years. We have a lot of mechanisms to actually start building housing, and actually build housing that’s affordable to people. It’s whether or not we’re using them to their fullest extent.
LH: Awesome, I think that’s pretty much it. Thank you so much.
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