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Millions of California renters are about to receive some of the nation’s strongest protections against rent hikes and evictions—and the primary advocacy group for California landlords is OK with that.

State legislators this week passed AB 1482, a bill from Assemblyman David Chiu, a Democrat from San Francisco, which limits annual rent increases to 5 percent plus the rate of inflation (typically 2-3 percent). Modeled after a first-in-the-nation Oregon measure adopted earlier this year, the bill also requires landlords to provide a “just cause” for evicting tenants and, in some circumstances, pay for tenants to relocate.

“We do not have time for those suffering in our streets,” Chiu said after the bill’s final passage. “We do not have time for those (who are) one rent increase away from eviction and homelessness.”

Gov. Gavin Newsom has lobbied fiercely for the bill in recent weeks, arguing that the measure is necessary to combat the state’s twin gentrification and homelessness epidemics. Half of all California renters—more than 3 million households—spend more than 30 percent of their income on rent, meeting the federal government’s definition of “rent-burdened.”

“These anti-gouging and eviction protections will help families afford to keep a roof over their heads, and they will provide California with important new tools to combat our state’s broader housing and affordability crisis,” Newsom said in a statement. The bill now awaits his signature.

Here are five takeaways from the most ambitious renter-protection bill the state has passed in recent memory.

The new measure would curb extreme rent hikes, and it’s stronger than what Oregon passed. But it’s not conventional rent control.

Oregon made national headlines when it became the first state in the country to pass a statewide measure capping how much landlords could increase rents. Often characterized as rent control by the national press, the Oregon law limited yearly rent increases to 7 percent plus inflation.

Although Chiu’s bill imposes a tighter cap—5 percent plus inflation—the assemblyman has been very careful to frame the measure as “anti-rent-gouging,” as opposed to typical rent control. Fifteen California cities currently impose some form of traditional rent control on apartments, with the legally allowable rent increase hovering between 1 and 4 percent. Chiu’s bill also does nothing to prevent landlords from raising rents when a tenant leaves, a provision called “vacancy control” that is often associated with how rent control worked decades ago in places like Santa Monica and Berkeley.

“Words matter. This is not rent control. This is an anti-rent-gouging bill,” said Assemblyman Rob Bonta, Democrat from Alameda, a co-author of the bill.

So how many renters will the new California law actually help?

While landlords have access to proprietary data that can better answer that question, publicly available data can’t. A UC Berkeley study of 10 gentrifying California communities found that over a five-year period, the average yearly rent increase exceeded 10 percent about once every three years. An analysis by the real estate data company Zillow, working with admittedly incomplete data, found that about 7 percent of California renters would have benefited from Chiu’s cap in 2018. While a minority of California renters will enjoy real savings from the new law, those who do benefit are very likely to be low-income and thus most vulnerable to rent hikes.

Mike Wilkerson, an economist with ECONorthwest, which analyzed the Oregon plan with proprietary landlord data, said the majority of major rent increases in Oregon are occurring in lower-cost units. He suspects the same is true of California.

“Really, what this is doing is protecting lower-rent units, where we’re consistently seeing rents going up,” Wilkerson said shortly after the California bill was introduced. “And the benefit is preserving more units to be naturally affordable.”

Some opponents of the California legislation argue that the measure could backfire: Landlords, they say, may treat the rent cap not so much as a limit on what they can charge but as a benchmark for what they should charge—especially if they fear future unanticipated costs or having to take a tenant to eviction court.

“The large property owners can build this cost into their business because they have a lawyer on payroll,” said Sid Lakireddy, president of the California Rental Housing Association, an advocacy group for smaller landlords. “That’s not the case for mom and pop (landlords) throughout the state.”

Although the rent cap has received most of the attention, the eviction protections are arguably more controversial. And a “third rail” of California housing policy gets very lightly touched.

In most parts of California, landlords can evict a tenant without stating an explicit reason why they don’t want that renter in the property anymore.

When Gov. Gavin Newsom said in August he wanted to strengthen the rent-cap bill, he mostly meant he wanted to see “just-cause” eviction protections included. Assuming Newsom signs the bill, California landlords will have to list one of several specific reasons why they want a tenant out, such as dealing drugs from an apartment or failure to pay rent on time. Landlords who want to convert a unit into a condo or move a family member in will have to fork over one month’s rent to the displaced tenant for relocation assistance.

Marcos Segura, an eviction defense lawyer with the nonprofit Central California Legal Services, said a relatively small minority of his clients in the Central Valley are evicted without cause. Most of the time, landlords accuse them of not paying rent or otherwise breaking the lease.

But he says “just cause” protections could prove beneficial in preventing landlord retaliation. When landlords do evict tenants without cause, he says, it’s often because tenants have been complaining about shabby living conditions.

“If you take that option away from landlords, where they can serve no-cause eviction notices, in those cases, it would make all the difference in the world,” Segura said.

To compromise with landlords and developers, Chiu exempted an increasingly popular swath of California rental housing from his rent cap: single-family homes. While single-family homes owned by investment firms would be subject to the new measure, those owned by “mom and pop” landlords—the vast majority of the single-family-home rental market—would be exempted.

Even with that carve-out, Chiu’s bill represents the largest expansion of renter protections in recent California history, applying to 8 million renters, according to estimates from the lawmaker’s office.

Many of the renters live in cities that already have local controls but aren’t eligible for it. A state law passed in 1995, colloquially known as “Costa-Hawkins,” bans cities from expanding rent control to units built after 1995 and in some cities limits control to units built well before then. In Los Angeles, for example, rent control can apply only to units built before 1978.

Chiu’s bill would apply to all eligible California rental units built at least 15 years ago, meaning units built as recently as 2005 would be subject to rent caps.

That would be a major shift in California housing policy. Costa-Hawkins has been considered a “third rail” for the California Legislature for decades. While AB 1482 doesn’t actually touch the language of the 1995 law—cities would still be banned from expanding tighter rent limits on newer properties—millions of new housing units would be subject to a legal limit on rent increases.

Developers say the measure shouldn’t impede new construction, and they don’t oppose it. But no signature housing-production legislation will accompany the rent cap.

For those concerned with California’s million-unit housing shortage, the most compelling argument against a rent cap was that developers kept saying it could impede the construction of new housing.

While California apartment builders generally forecast annual rent increases of 2 to 3 percent when lining up financing for their projects, the flexibility to raise rents to what the market can bear helps persuade investors to plow money into the often uncertain and time-consuming process of building new housing.

But even before Gov. Newsom’s public comments, the California Building Industry Association—the premier lobbying group for California developers—announced it would not oppose the bill after it exempted new construction from the rent cap for 15 years.

“The new construction exemption is key, because it’s hard to get investors to invest in multifamily units on a 10-year window; it just doesn’t pencil out,” said Dan Dunmoyer, head of the group. “Fifteen years is a balance of what is doable for attracting capital. Anything less than that just makes it harder to bring investors to California.”

The organization’s withdrawal of opposition was also notable, because it has had mixed success in pushing through legislation it says would ease regulatory burdens and allow for more housing. Many Capitol insiders thought packaging a pro-development bill with a pro-tenant bill was a logical way to ensure that both could become law.

In Oregon, a bill that allowed developers to build fourplexes in areas zoned exclusively for single-family homes was passed shortly after the rent-cap bill. A similar developer-backed effort in California, SB 50, fizzled this year.

When making public comments about strengthening the rent cap bill, Newsom also publicly embraced SB 330, a bill from Sen. Nancy Skinner, a Democrat from Berkeley, that would limit many of the tools developers say cities use to stymie new housing.

Dunmoyer says Skinner’s proposal is a step in the right direction. But he admits it wasn’t the big boost to housing production that developers had hoped for, considering Newsom’s audacious goal of 3.5 million new housing units by 2025.

“I’m not surprised (the rent cap bill passed) because I’m a political analyst who looks at the dynamics—it’s easier to regulate than reform,” Dunmoyer said.

This is a big win for Newsom, who angered a key interest group to make it happen.

Gov. Gavin Newsom kind of needed this.

Shortly after a state ballot initiative that would have allowed cities to expand rent control failed overwhelmingly last November, Newsom (who very quietly opposed it) said he wanted to broker a deal between tenant groups and landlords. He reiterated his desire in February in his inaugural State of the State speech, calling on lawmakers to send him a package of renter protections he could sign into law this year.

Newsom’s late efforts to strengthen the bill by adding eviction restrictions and tightening the rent cap flipped opposition among key interest groups. While he was able to secure a compromise from the state’s biggest landlord lobby, he angered the powerful California Association of Realtors, who thought the governor was breaking a deal they had struck on a softer version of the rent cap.

The Realtors are a major source of fundraising for California Democrats, contributing nearly $1.38 million in campaign funds to sitting Democratic lawmakers and $2.5 million to the state Democratic Party since 2017. Since the stronger bill was introduced, Realtors have flooded Democratic lawmakers with phone calls and emails.

How Newsom’s intervention will affect future relations between the Realtors and state Democratic leaders remains to be seen.

The Realtors have a reputation for holding a grudge, no matter the party involved. After Rep. Mimi Walters, a Republican from Irvine, voted for a Trump tax-reform plan the Realtors opposed, the state and national realtor advocacy groups spent $3 million supporting her 2018 Democratic opponent, Katie Porter. Porter won.

The big landlord lobby is OK with this. Which could hurt the prospects for rent control at the ballot box in 2020.

The California Apartment Association and its allies spent more than $70 million against a statewide rent-control initiative in 2018, defeating it by nearly 20 points. That victory gave landlords a major rhetorical advantage in pushing back against Chiu’s bill: Californians had already been given an opportunity to expand rent control and voted it down.

So why cave now, less than a year removed from that decisive victory?

Progressive firebrand Michael Weinstein, president of the Los Angeles-based AIDS Healthcare Foundation, is currently collecting signatures for yet another statewide rent-control initiative for the November 2020 ballot. Weinstein maintains Chiu didn’t go far enough to protect tenants. However, landlords can now say lawmakers have already moved to curb excessive rent increases and egregious eviction practices without endangering new development.

“We will argue the state has already spoken on this topic; we will argue this is a balance; we will argue everyone came to the table and found some common ground finally for a temporary solution,” said Debra Carlton, lobbyist for the California Apartment Association.

Landlords may have also gained assurances from key Democratic leaders that they may oppose, or simply mute their support for, rent control in 2020. Asked by the Los Angeles Times whether the California Apartment Association had requested that Gov. Gavin Newsom oppose Weinstein’s potential initiative, Carlton gave no comment.

CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics. 

Published in Politics

Democratic legislators say they've settled their differences on net neutrality in California, advancing bills that, if passed, would create the most far-reaching internet regulation in the country.

In December, the Federal Communications Commission voted to repeal net-neutrality protections that ensured internet service providers such as Comcast and AT&T give consumers and partners equal access to the web. It jettisoned those rules as of June, saying they were unnecessary and “heavy-handed” market interference. Critics characterize this as a play by the Trump administration to undermine consumer safeguards.

California—if this bill were to become law—would restore the old nationwide net neutrality regulations within the state.

“The Internet wasn't broken in 2015, when the previous FCC imposed 1930s-era regulations on Internet service providers. And ironically, these regulations made things worse by limiting investment in high-speed networks and slowing broadband deployment,” said the FCC.

Last month, net-neutrality bill author Sen. Scott Wiener, a San Francisco Democrat, said his bill was “gutted” in a committee hearing chaired by Assemblyman Miguel Santiago, a Los Angeles Democrat. Santiago’s committee elbowed through—without time for comment—amendments stripping out key prohibitions, including one designed to block internet providers from charging its customers access fees, and another intended to bar them from creating “zero-rating” services to steer consumers away from competitor content.

In response, Wiener had said he would withdraw the “hijacked” bill if those key protections from the FCC’s regulation were not restored.

After weeks of negotiation along with Los Angeles Democratic Sen. Kevin de Léon, author of a related net neutrality bill in the Senate, and Alameda Democratic Assemblyman Rob Bonta, a co-author of Wiener’s bill, announced Thursday, July 5, that they had reached a deal to advance bills they say provide the same protections for Californians that the FCC temporarily provided to all Americans.

“We know that the federal government is not going to fix things in the foreseeable future,” Wiener said.

Without such regulations in place, internet providers would be free to speed up or slow down services like calls or video streaming, based on who pays for “fast lane” access. Advocates say these practices would hurt small businesses and consumers who cannot afford more expensive service. For consumers, that could mean higher prices and fewer choices.

The bills by Wiener and de Léon would ban internet companies from charging businesses access fees in order to reach its online customers.

They also prohibit “zero-rating” services, which allow internet providers to charge consumers for data when accessing competitors’ content, and interference and manipulation at the point where data enters the network. Without that protection, an internet provider could, for instance, slow down competing video applications to give itself a competitive advantage.

“Generally speaking, the bill is great. They are right that it’s the strongest protection in the country … with the three provisions back,” said Ryan Singel, media and strategy fellow at Stanford University’s Center for Internet and Society.

He added that grassroots organizations and consumers rallying for net-neutrality regulation got legislators to listen. The gutting of Wiener’s bill sparked thousands of calls to legislators, a flood of social media comments and $14,000 in crowdfunding to install a billboard in Santiago’s district.

“Basically, we won. Literally, this is what a grassroots effort looks like. When the internet is mad at you, it’s really loud and really hard to deal with. We had three things we wanted to defend, and we got all of them back,” Singel said.

Democrats know a battle is coming, but are hopeful the bills—assuming they win approval of the full Legislature and Gov. Jerry Brown’s signature—will stand up to a legal challenge. Republican leaders, however, have warned from the beginning that such regulation will face litigation from internet companies.

“To be clear, we are not out of the woods … This is going to be a fight,” Wiener acknowledged.

The internet giants have denied that they slow down or throttle internet traffic and violate other net neutrality rules. In an open letter earlier this year, AT&T Chairman and CEO Randall Stephenson said: “We don’t block websites. We don’t censor online content. And we don’t throttle, discriminate or degrade network performance based on content. Period.”

These providers also argue that net neutrality regulation will drive up their costs to operate in the state. They say rural areas are more expensive to provide service in, and this regulation would discourage expanding broadband service there.

The Internet Association, an organization representing tech companies like Airbnb and Uber, found broadband business did not slow down after the FCC first adopted net-neutrality regulations three years ago. Fixed broadband subscriptions increased 3.5 percent, and wireless broadband subscriptions increased 10 percent from June 2015 to June 2016.

Net-neutrality supporters, including labor groups and technology companies like Amazon and Twitter, say a fair and protected web is crucial for workers and businesses relying on open communication and access to do their jobs. More than 20 states have recently introduced bills meant to reinstate the federal net neutrality protections. Washington and Oregon have already passed legislation.

“California is the world’s fifth largest economy and home to the globe’s most important tech companies,” said Robert Cruickshank, campaigns director of Demand Progress, an internet-activism organization based in Washington, D.C. “Passage of this bill will also give huge new momentum to the effort to get the U.S. House of Representatives to follow the U.S. Senate and restore the net neutrality protections the FCC gutted last winter.”

The bills have passed the Senate and have until Aug. 31 to pass the Assembly and move to the governor for a signature.

“What happens now is good old-fashioned politics—just securing the votes. No more negotiating,” said de Léon.

CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Local Issues

The passage of Proposition 64 not only decriminalized the adult use of marijuana; the Adult Use of Marijuana Act created a path for people to have prior pot convictions reduced—or entirely cleared from their records.

The legislation specifies that people can initiate this process on their own, but in some counties—most notably San Francisco and San Diego—district attorneys have taken it upon themselves to review cases and reduce or dismiss convictions.

Those who oppose relief from prior convictions often say that since a crime was committed—marijuana was illegal then, after all—people need to face the consequences. But this same argument did not hold water for alcohol Prohibition—and should people continue to pay for a crime that was the result of misguided government policies?

This is a social-justice issue—one that all of us who care about our democracy should pay attention to. Why? People of color were much more likely to be arrested and convicted under the old laws. In fact, recent studies have shown that although whites and people of color use marijuana at about the same rate, black people are almost four times as likely, and Latinos two to three times as likely, to have faced arrest—even for possession of a small amount of marijuana. An old pot conviction can negatively impact a person’s ability to vote, get a job, rent an apartment and get student loans—and it can affect child-custody and immigration decisions. Therefore, it is particularly important for the government to ensure everyone is treated fairly under the law.

Prop 64 makes it clear that not everyone is eligible for conviction reductions or dismissals: The law specifies that this relief is reserved for those with relatively low-level offenses. A person with a history of violence, multiple convictions or convictions for selling to minors is not eligible to have his or her records expunged or reduced. In other words, hard-core drug dealers and people working for drug cartels are unlikely to somehow be set free.

Here’s hoping that other district attorneys around the state choose to follow the lead of San Diego and San Francisco counties and review old convictions—because it can be expensive and intimidating for people to initiate the process on their own. If someone can’t get a job or student loans because of a past marijuana conviction, it’s unlikely that person can afford a lawyer. The Drug Policy Alliance and other organizations are hosting free expungement clinics, where lawyers and paralegals are present to help, but they tend to happen in and around larger cities—with none planned here in the Coachella Valley that I could find. (If you know of any, please let us know.) That means someone from here would need to drive into Los Angeles on the chance they might get to speak to a lawyer about possibly having an old conviction reduced. Also: This is not the most well-known piece of the law, and the government is unlikely to publicize this information—so spread the word.

San Diego has already reduced the records of more than 700 people, and has identified more than 4,000 people who may be able to access this relief—yet Riverside County so far has reminded silent. Although a great number of people in the county have applied to have their records reduced or cleared, as of this writing, the office of District Attorney Mike Hestrin has made no public comment, nor did anyone from the office respond to my inquiries about plans to relive this burden. As a community that prides itself on progressive values, it’s incumbent upon us to put pressure on our local elected officials.

Legislative help may be on the way: Assemblyman Rob Bonta, a Democrat from Alameda, introduced Assembly Bill 1793 in January to “to allow automatic expungement or reduction of a prior cannabis conviction,” but the legislative process is a slow one. The bill went through its first reading in early January, and there has been no movement since. One possible reason for inaction: The Legislature would also need to provide financial resources to assist the counties in doing this work.

Real people continue to be harmed by old laws that the voters of the state of California have thrown out. Old felony convictions that today would be, at worst, misdemeanors—and possibly not even worthy of arrest—are keeping a disproportionate number of African Americans and Mexican Americans from fully participating in our democracy. After all, a right delayed is a right denied.

Published in Cannabis in the CV

No, Jefferson. Let it go …

Our evil elf of a U.S attorney general is whining about pot again, this time in a letter asking Congress not to renew the Rohrabacher-Farr amendment.

The Rohrabacher-Farr amendment, which became law in December of 2014, prohibits the Department of Justice from spending any federal funds to interfere with state medical cannabis laws. It must be renewed each year—and Sessions is requesting it not be renewed this time around.

“I believe it would be unwise for Congress to restrict the discretion of the department to fund particular prosecutions, particularly in the midst of an historic drug epidemic and potentially long-term uptick in violent crime. The department must be in a position to use all laws available to combat the transnational drug organizations and dangerous drug traffickers who threaten American lives,” Sessions wrote in the letter, first made public by Tom Angell of MassRoots.com.

This comes at a time when an overwhelming majority of Americans (including 65 percent of police officers!) are in favor of some form of legalization, and more and more states are starting to legalize marijuana for recreational use.

One of the law’s namesakes expressed annoyance with Sessions’ letter.

“Mr. Sessions stands athwart an overwhelming majority of Americans and even, sadly, against veterans and other suffering Americans who we now know conclusively are helped dramatically by medical marijuana.” said Rep. Dana Rohrabacher, a Republican who represents parts of Orange County, in a statement to the Washington Post.

Opioids are at the center of the worst drug epidemic facing Americans today—while marijuana is decidedly not. However, to Sessions, there is virtually no difference between opioids and marijuana, considering he recently described pot as just “slightly less awful” than heroin. Of course, the American Journal of Public Health published a study in September 2016 citing evidence that opioid use is lower in states with legal medical marijuana, but what do they know with their “statistics?” Pesky facts …

The DOJ actually challenged the amendment under President Obama, but it was upheld by the 9th U.S. Circuit Court of Appeals. This ruling leaves it up to Congress to decide whether to remove Rohrabacher-Farr from the yearly appropriations bill—but the amendment has received strong bipartisan support ever since it became law. Conventional wisdom dictates that Congress would be reluctant to go against the clear will of the people, but how often does conventional wisdom come into play in Washington, D.C., these days?

California is having none of this nonsense, and is making moves to become the first sanctuary state for cannabis. In anticipation of a legal showdown with Sessions’ DOJ, the State Assembly passed AB 1578 on June 1; the bill would prohibit state and local law enforcement from helping the feds enforce federal prohibitions against those adhering to California state law. The bill by Assemblyman Reggie Jones-Sawyer, a Los Angeles Democrat, passed in a close 41-33 vote.

The measure faces stiff opposition by law enforcement and Republicans, for reasons ranging from interference in federal and local interagency cooperation regarding other crimes, to claims that it violates federal law.

“The hubris of California Democrats believing they can flout federal law on immigration and drug policy is beyond words,” said Assemblyman Travis Allen (R-Huntington Beach) during the floor debate.

Jones-Sawyer’s retort: “AB 1578 ensures that our limited local and state resources are not spent on federal marijuana enforcement against individuals and entities that are in compliance with our laws.”

Rep. Rob Bonta (D-Alameda), a co-author of the bill, said: “People who are compliant with California law and operate within the legal cannabis market should not have to fear that a state or local agency will participate in efforts to punish or incarcerate them for activity that the state and its voters have deemed legal,” according to a Los Angeles Times report.

The Tenth Amendment Center, a constitutional-law and states’ rights advocacy group, claims there is solid legal standing for the measure. “Provisions withdrawing state and local enforcement of federal law in AB 1578 rest on a well-established legal principle known as the anti-commandeering doctrine. Simply put, the federal government cannot force states to help implement or enforce any federal act or program,” founder Michael Boldin said in a post on the group’s website.

Jones-Sawyer said the bill could be edited to make it clear that cooperation in moving against illegal operations according to state law could continue. A Newsweek report estimated that 1,400 dispensaries are operating illegally in Los Angeles alone, and Jones-Sawyer would like those businesses shuttered, while protecting those adhering to local and state law.

The bill faces an uncertain future as it moves to the State Senate.


MEANWHILE, HERE IN THE VALLEY…

The City Council of Cathedral City recently passed a moratorium on new dispensaries south of Interstate 10.

The city of 53,000 has 10 licensed dispensaries operating, with another opening soon—that’s around 4,800 residents per dispensary. By comparison, Palm Springs has six dispensaries servicing 44,552 residents (or 7,452 residents per dispensary). The move is designed to help ensure the continued success of existing dispensaries in what is a comparatively saturated market.

Cathedral City dispensaries may also see fewer customers in the future, as Palm Desert and Coachella are slowly moving toward allowing retail cannabis businesses.

The measure passed 3-2, with Greg Pettis and Shelley Kaplan opposing.

Published in Cannabis in the CV