Capitol Advocacy Wrap-Up: The New Year is Off and Running!

Industry News,

State Budget and Rental Assistance Update

In light of the state’s recent projections of tax receipts, the state is facing an unprecedented budget surplus in 2022.   The Governor has finished his 2021-22 budget, which has been scheduled for official released on or around January 10, 2022.

Speaking of additional money, on November 30, 2021, the state applied to the U.S. Department of Treasury for $1.9 billion of additional rental assistance funds from previously designated funds that are being reallocated from other states.  Overall, $27 billion of the $46 billion has been obligated nationwide, which leaves approximately $19 billion available to be reallocated.  Therefore, this request from California will be the first, but there will likely be others.  Other large requests for additional funds have been made by Texas at approximately $1.0 billion and New York at $0.9 billion.  These additional rental relief funds would be made available for state-run programs only and would not be allocated to local jurisdictions such as cities or counties that have chosen to administer relief programs on their own and not participate in the state administered program. These local jurisdictions will need to independently apply for additional Federal funding from re-allocated rental relief funds being distributed.

As of November 30, 2021, the state has distributed over $1.45 billion  in rental relief out of the approximately $5.94 billion originally requested.  The Apartment Association of Greater Los Angeles along with its state affiliate, the California Rental Housing Association, continues to work with the California Department of Housing and Community Development on the implementation of the rental relief program and allocation of funding.  For more information, please visit the state’s Housing is Key website.

Political Updates

In addition to the Redistricting Commission releasing the new draft legislative and Congressional district maps, which is causing a lot of discussion and angst, there have been several other recent announcements, including:

  • Senator Sydney Kamlager-Dove has officially announced she is running for U.S. Congress
  • Assembly Member Richard Bloom, who is termed out in 2024, is running for Los Angeles County Supervisor
  • Assembly Member Ed Chau, who is termed out in 2024, has been appointed by the Governor as a judge, which will leave a vacancy in the Assembly
  • Assembly Member David Chiu left to be the San Francisco City attorney, leaving a vacancy in the Assembly
  • Assembly Member Jim Frazier has announced he will not be returning in January and will instead pursue work in the private transportation sector
  • Assembly Member Marc Levine, who is termed out in 2024, is running for state Insurance Commissioner
  • Assembly Member Kevin Mullin, who is termed out in 2024, is running for Congress
  • Assembly Member Rudy Salas, who is termed out in 2024, is running for Congress

Legislative Updates

The Legislature is in recess until January 3, 2022, but the Apartment Association of Greater Los Angeles and its affiliates throughout California have been busy planning its legislative priorities for 2022.  The Association has been working diligently with stakeholders, legislators, and legislative staff on its sponsored bill, Assembly Bill 916 (Salas), which would streamline bedroom and accessory dwelling unit (ADU) construction and will need to pass the Housing and Local Government Committees in January.

The legislative calendar for 2022 has been set.  The deadline for new bills to be introduced is February 18, 2022, after which time we will have a sense of most of the legislative fights we will be facing next year.

Proposed Ballot Initiatives

Several active, proposed ballot measures have been submitted for the 2022 ballot that are of interest to the rental housing community, including:

  • The Taxpayer Protection and Government Accountability Act
    • Requires tax increases to be approved by voters or governing body elected by voters. Intent to increase transparency and accountability over higher taxes.  Places limitations on how new and increased taxes can be spent.
    • Proponent(s): Thomas Hiltachk
    • Submitted for Title and Summary on November 30, 2021
  • “Affordable Housing and Financial Accountability Act of 2022”
    • Bonds for housing and homelessness prevention/Local Government authority to levy majority vote ad valorem tax on real property for bond indebtedness. New bonds issued with 55% or 50% majorities.
    • Proponent(s): Amie Fishman
    • Submitted for Title and Summary on November 12, 2021
  • “The Tax Cut and Housing Affordability Act of 2022”
    • Establishes property tax 1% surcharge (may be up to 1.2%) for properties assessed over $5 million, with phase-in starting at properties assessed between $4 million and $5 millon. Increases homeowners’ property tax (“homesteading”) exemption to $200,000 (from $7,000) and increased renters’ tax credit
    • Fiscal Impact Estimate Report
    • Proponent(s): Stanley Apps
    • Submitted for Title and Summary on October 6, 2021
  • “The Tax Cut and Housing Affordability Act of 2022“
    • $26 billion property tax increase: 1.0% (possibly up to 1.2%) property tax surcharge on properties having assessed values of $4 million or more (phase-in between $4 million and $5 million).
    • Property tax cut for homeowners by increasing “homesteading” from $7,000 to $200,000 (~$!,900 of property tax savings per year) and increased Renters Credit (Max. Renters Credit available for taxpayers earing up to $200,000 per year for single filers and $400,000 for married filers).
    • Title and Summary Issued on November 30, 2021
    • Proponent(s): Stanley Apps
  • “Local Land Use and Zoning Laws Override Conflicting State Laws”
    • Establishes that city and county land use and housing laws override state law. If passed, ability of local jurisdictions to preempt Ellis Act, Costa-Hawkins Rental Housing Act, new Accessory Dwelling Unit (ADU) laws, Senate Bill 9 and Senate Bill 10
    • Title and Summary Issued on November 1, 2021
    • Proponent(s): John Heath, Bill Brand, Peggy Huang, Jovita Mendoza, Dennis Richards (and, possibly, Michael Weinstein, President of the AIDS Healthcare Foundation)
  • “a/k/a, Repeal the Death Tax”
    • Expands inherited property exclusions and removes limitation on transfer value for inherited homes. Allows transfer of primary residence (without residency requirement) and up to $2.4 million of assessed value of other real properties to decedents without reassessment.
    • Title and Summary Issued on November 1, 2021
    • Proponent(s): Jon Coupal, Howard Jarvis Taxpayers Association

Kate Bell, the Founder and Chief Executive Officer of Kate Bell Strategies, is a former Partner of Capitol Advocacy, which is ranked among California’s top lobbying firms. Ms. Bell’s firm specializes in lobbying, strategic planning, coalition building, budget advocacy, procurement, and political involvement.  Kate Bell Strategies and Capitol Advocacy represent the interests of the Apartment Association of Greater Los Angeles through its affiliation with the California Rental Housing Association.  Both firms are based in Sacramento.