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Housing Crisis: Critical Mass?

Michael Belote, Esq.

By Michael Belote, Esq., California Advocates, UTA California Lobbyist

Like foreclosures, litigation, and much of what we deal with every day, issues in Sacramento seem to have lifecycle to them.  Sometimes issues take years to percolate and then finally achieve critical mass, such that the Legislature must take action.  Obviously mortgage defaults reached critical mass, and for better or worse, the Homeowner’s Bill of Rights was the result, for example.

The housing crisis, essentially given lip-service by policymakers for year, may now be reaching the point where the Legislature will make major changes.  Governor Newsom recently announced a goal of 3.5 million new housing units in six years, an exceedingly ambitious number for a variety of reasons.  The big question is what statutory changes will be necessary to help achieve the goal.

With the February 22 deadline for new 2019 bills in California now behind us, we can see that many dozens of bills were introduced on the housing issue.  Most of the bills seem to be clustered around three ideas: punish local governments for not meeting their fair shares of housing need, modify CEQA litigation statutes, and encourage the building of more accessory dwelling units.

The local government fair share issue has already kicked up a fair amount of dust in Sacramento.  Governor Newsom and others believe that the “NIMBY” attitude of certain cities must change, and he suggests both legislation and litigation to foster that change.  Specifically, the Governor has suggested withholding SB 1 transportation funds from those entities which do not meet their fair share numbers.

This is very controversial. Legislators with bogged-down transportation corridors are alarmed about the idea of tying transportation funding to housing production, arguing that the lack of housing production is caused by many factors beyond NIMBYism, some of them outside the control of public entities. Interest rates, impact fees, and the availability of construction workers are three examples.

Another idea is to speed up the processing of actions under the California Environmental Quality Act, or CEQA.  Groups opposed to development have sometimes tied up housing proposals with CEQA claims, which can take years to resolve.  In the recent past, the Legislature has passed bills fast-tracking the CEQA process for certain high-profile individual developments, usually sports stadia. Why not provide for the same fast-tracking (a maximum of 270 days for the trial and appellate courts to handle cases) to all housing proposals?

This too is controversial. Court already must fast-track criminal cases under the constitution, unlawful detainer cases, issuance of protective orders in family law, and many other types of disputes.  What will fast-tracking CEQA cases do to the ability of courts to handle their workloads?

These questions may not relate directly to trustees, but as participants in the world of housing writ large, UTA members should be aware of the discussion. Other high-profile issues will have a more direct impact on trustees, even if they are not trustee-specific.  The biggest probably is privacy.  Last year’s package of bills, including AB 375 and SB 1121, arguably constitute the world’s most expansive privacy protections.  Implementation of the package was postponed until January 1, 2020, in order to give the Legislature time to refine the provisions on this incredibly complicated subject.

This year, business groups have coalesced to urge dozens if not hundreds of changes to last year’s bills, while privacy advocates are pushing back on what they see as attempts to “walk back”.  But regardless of what the Legislature does this year, trustees are going to need a working familiarity with the new privacy laws.  For example, companies with over $25 million in annual revenue are covered by the laws, which in turn give consumers a whole series of rights, including the right to stop the sharing of personal information, and the right to delete certain information held by a covered business. If the trustee is part of a covered entity, what is the response when a trustor demands deletion of personal information? Like, for example, home address?

Besides monitoring changes in privacy laws proposed in Sacramento for this year, UTA will need to familiarize members with provisions of the law which will not change, and which will become effective on January 1, 2020, less than a year away.

Future columns will discuss key proposals contained within the 2576 bills introduced in Sacramento for 2019 (a modern-day record), and provisions within UTA-sponsored SB 306 (Morrell).  Stay tuned!

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