This is What Passed in California This Year
This year has been huge for housing and workforce & labor law in California.
October 13th was the last day for Governor Gavin Newsom to approve bills passed in 2019, marking the end of the legislative year. This session, we saw a number of hotly-debated bills work their way through the legislature to reach the Governor’s desk. To wrap up this season, we’re giving you a summary of what passed in our issue areas of housing and workforce & labor, and what it means for our affordability crisis moving forward.
Housing
During his 2018 campaign, Gavin Newsom promised to dramatically increase housing production in California. He aimed to create 3.5 million new housing units in California by 2025, or 500,000 new units per year. Over the past ten years, California has only averaged 80,000 new units annually and has never created more than 350,000 units in a single year.
With Newsom in the Governor’s office, many housing advocates were cautiously optimistic about this year’s policy prospects. While our legislators did not pass the laws sufficient to set California on a course to hit the Governor’s ambitious target, they did pass a number of important bills that will protect renters and facilitate housing production.
Protection & Preservation
This year, the legislature passed a series of critical laws that will provide much-needed protections for California tenants. The highlight of this package is the Tenant Protection Act of 2019 (AB 1482). The law limits rent increases on most properties (exempting single-family homes not owned by corporations, owner-occupied duplexes, and buildings less than 15 years old) to 5% per year plus inflation. It also requires landlords to have just cause before evicting a tenant.
In units not covered by AB 1482, landlords must provide 90 days notice before increasing the rent by more than 10% (AB 1110). Tenants using Section 8 housing vouchers to pay rent are now protected by anti-discrimination protections (SB 329). The legislature also extended protections for tenants in buildings sold in foreclosure (SB 18).
Other tenant protection legislation was proposed but did not pass this year. A bill to remove statewide limitations on rent control for buildings at least 10 years old (by reforming Costa-Hawkins) did not make it out of committee (AB 36). A proposal to establish a statewide rental registry also died in committee (AB 724). Protections for tenant organizing, fair chance to housing for formerly incarcerated people, and public loans for security deposits were also proposed this year but were not passed. Many of these policies that were not approved in this session are expected to come back in the future.
The legislature also passed property tax exemptions for housing leased by non-profits focused on affordable housing (SB 294), but this bill was vetoed by Governor Newsom.
Production
The headline production-focused bill, SB 50, did not make it through the Senate this year. It was instead designated a two-year bill, which means it is up for vote in the upcoming 2020 legislative season. SB 50, if passed, would have dramatically upzoned areas near public transit for denser housing, creating the potential for Governor Newsom to reach his 500,000 unit per year goal.
While this major bill did not succeed in 2019, other bills focused on increasing production in the state were successfully passed into law.
One of the highlights was a package of bills (AB 68, AB 670, AB 881, and SB 13) that eliminate most barriers to building accessory dwelling units (ADUs), effectively banning single-family zoning in the state. The legislature also passed laws that ban on housing construction moratoriums for five years (SB 330) and block challenges to building homeless navigation centers (AB 101).
The state’s budget devotes $2 billion to housing, including $650 million to assist unhoused Californians. The budget, however, also weakens the link between localities’ share of gas tax revenue and housing production. The legislature also moved to replace funding lost when the state’s redevelopment program was canceled in 2011 with SB 5, but Governor Newsom vetoed the bill. SB 5 would have once again allowed cities to set aside a portion of property tax revenue for affordable housing and made $200 million (eventually growing to $2 billion) of state money available. It also would have increased state oversight of that money to address accountability issues that plagued the original redevelopment program.
Several bills that address financing for affordable housing passed, including creating the Bay Area Housing Finance Authority to raise money for the region via the ballot (AB 1487), authorizing cities to create public banks which could finance affordable housing (AB 857), and requiring localities to be more transparent about zoning laws and housing fees (AB 1483). A bill to expand the Low Income Housing Tax Credit (AB 10) by $500 million was passed by the Assembly but failed to pass in the Senate.
While SB 50 was pushed to next year, the legislature did address some zoning and approval streamlining issues. AB 1763 expands the density bonus for 100% affordable projects. AB 1485 broadens the range of projects that can receive accelerated approval under SB 35 passed in 2017, which applies to cities that have not met their housing needs. The legislature also passed SB 6, which creates a database of surplus public land that can be used for housing, and AB 1486, which facilitates building housing on that land. AB 1717 would have eased zoning and incentivized affordable housing near transit and AB 1279 would have facilitated mixed-income housing in high-resource but low-density cities, but both bills were not passed by the legislature.
Workforce & Labor
The highlight in workforce & labor legislation was AB 5, which makes it much harder for workers to be misclassified as independent contractors. The law codifies the “Dynamex” court decision from 2018, which mandated the so-called “ABC test” for determining whether a worker is an employee or independent contractor.
Under the “ABC test”, a worker is classified as an employee unless their work is
A) free from company control,
B) not central to the company’s business, and
C) the worker has an independent business in that industry.
Uber and Lyft sought but did not receive an exemption for their drivers. They have stated that they will continue to classify drivers as independent contractors, setting the stage for a showdown in the courts.
Governor Newsom also signed into law a number of other worker protection laws, including a package inspired by the #MeToo movement that had been previously vetoed by former Governor Jerry Brown. These laws ban forced arbitration for labor violations including sexual harassment (AB 51) and extend the deadline for harassment and discrimination claims by two years (AB 9).
Workers are now more likely to receive their proper pay with extra protections against wage theft (AB 673). An expansion of eligibility for paid family leave was proposed but did not make it out of committee (SB 135).
Early-childhood educators won approval for another bill that had been rejected by former Governor Brown. For the very first time, AB 378 allows educators to collectively bargain with the state. Teachers’ unions and charter school advocates struck a deal that allows local school districts to have more control over charter school approval and pauses new online charter schools for two years (AB 1505). Legislators also compromised over the scope of the California Consumer Privacy Act by exempting worker data from the provisions for one year (AB 25).
Two bills that were priorities for the California Labor Federation did not make it through the legislature: one would have required a human operator on public transit vehicles (SB 336) and the other would have expanded unemployment insurance to striking workers (AB 1066).
The legislature is now on hold through the end of the year, and the 2020 legislative session begins in the new year. As the next session ramps up, we’ll pick our coverage back up to keep you informed.
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