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California Legislature Embraces New Rent Control Measures

The shortage of affordable housing, especially for low-income families, is one of California’s most pressing issues. As a result, the state legislature continues its focus on housing legislation around tenant protections and funding for affordable housing.

Regional Solutions to California’s Affordable Housing Crisis

In recent years, a regional approach to California’s affordable housing crisis has gained momentum. In fact, the concept originated in the Bay Area. 

San Francisco leaders came up with the plan — a regional department with the authority to raise revenues. The approach had three goals: 1.) spur development 2.) preserve existing housing 3.) assist low-income tenants remain in their homes.

The San Francisco Bay Area Regional Housing Finance Act (AB 1487)

In 2019, AB 1487 established California’s first regional agency. The San Francisco Bay Area Regional Housing Finance Act created the Bay Area Housing Finance Authority (BAHFA). The agency raises and allocates funds for affordable housing programs in the Bay Area. It also supports tenant protections, and the preservation and building of affordable housing. 

While San Francisco’s housing authority is still a work in progress, and given the immense scale of our state’s housing shortage, it’s unclear whether this approach can make a significant impact statewide.

The Los Angeles County Regional Housing Finance Act (SB 679)

The plan may be tested again in Los Angeles County with SB 679. The Los Angeles County Regional Housing Finance Act creates a new Los Angeles County Affordable Housing Solutions Agency.

Under the new law, the agency could raise funds by issuing bonds, or through a voter-approved property tax or business tax. The agency could use the revenue to fund its own projects, or give it to the county’s cities for housing development.

The Los Angeles County Affordable Housing Solutions Agency would be comprised of a governing board of 21 voting members and 1 nonvoting member from Los Angeles County. It would also include a Citizens’ Oversight Committee of 11 voting subject matter experts and 1 nonvoting expert with knowledge in areas such as affordable housing finance, tenant protection or homelessness.

Another Housing Agency?

One of the reasons for creating regional authorities is to make it easier to place affordable housing funding measures on voter ballots. It bypasses the need to gather signatures to get a measure approved. Instead, the agency board can vote directly to place the measure on the ballot.

Affordable housing authorities can also specifically allocate funds for tenant protection programs and help cities implement their own ordinances. The idea is that it creates a framework for an entire county to come together as a whole to create strategies to tackle the affordable housing shortage.

What Does This Mean For California Landlords?

If Senate Bill 679 becomes law, it would allow the local affordable housing authority to create additional housing regulations and tenant protections. As a result, owners may see an increase in property taxes to fund and administer the programs. 

With many housing providers still recovering from the last two years of rent restrictions, staying compliant with additional requirements is unwelcome news for them. Further tenant protections and higher taxes may strain owners, especially mom and pop landlords.

What Does This Mean For California Tenants?

With many Californians paying so much in rent, they often survive paycheck to paycheck, with little left over for other essentials. A loss of income or unexpected expense can cause a tenant to easily fall behind on rent and face eviction. A dedicated, local affordable housing authority could provide a jump start to developing more affordable housing.

Is the Private Sector an Option for Affordable Housing in California?

With high costs, the increased tax revenue wouldn’t come close to providing enough housing for the homeless. 

Opponents of S.B. 679 say that tax incentives to private developers are a more effective option to addressing homelessness. Rather than come up with new, cost-effective solutions, they fear the housing agency will fall short. They argue that tapping into the know-how of developers who can build efficiently and cost effectively is an option that can’t be ignored. By encouraging the private sector to develop affordable housing, government could avoid wasteful spending.

Senate Bill 1477 — New Restrictions on Garnishing Wages for Back Rent

On September 29, 2022, Governor Gavin Newsome signed SB 1477 into law and it will take effect on September 1, 2023.  SB 1477 limits a landlord’s ability to collect judgments from tenants who owe past due rent. It also imposes maximum amounts on garnishing a tenant’s wages. 

What Landlords Should Know About SB 1477

SB 1477 will be almost impossible for landlords to collect past due COVID rent in court. 

Under SB 1477, a landlord could not garnish wages from individuals who earn $36 per hour or less. In areas where there is a $17 per hour minimum wage, the limit is $41 per hour.

Small  landlords could be hit especially hard under this law as it would limit their options even further when a tenant fails to pay rent. For example, landlords could be prohibited from eviction and forced to take a tenant to small claims court. But, if they can’t garnish wages, any monetary judgement would have little to no value.

What Tenants Should Know About SB 1477

On the other hand, SB 1477 does not eliminate the legal obligation to pay a debt.

But wage garnishment can cause low-income and middle-class workers in high cost regions of the state to spiral deeper into financial crisis. SB 1477 may help those Californians who are struggling to pay down their debts.

Under the bill, the maximum amount garnished would not exceed the lesser of 20% of the disposable earnings for the week, or 40% of the amount that exceeds 48 times the state minimum hourly wage at the time the earnings are payable. 

As San Francisco’s dedicated landlord-tenant attorneys, we can help you understand your options when it comes to California housing law. For over 30 years, the team at Steven Adair MacDonald & Partners have successfully resolved landlord-tenant disputes and real estate issues. To schedule a consultation, please call 415-991-6078.

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