Understanding the Impact of the CARE Act on Rental Housing in California

March 27, 2024

Posted By: Mic Burns in Educate,

As members of the East Bay Rental Housing Association (EBRHA), it's essential to stay informed about legislative changes that directly affect our industry. The California rental housing landscape has undergone significant transformations with the implementation of the CARE Act, impacting both rental owners and renters alike. In this article, we'll delve into the key provisions of the CARE Act as it pertains to rental housing in California and explore its implications on our operations.

Legislative Measures Affecting Housing Development and Streamlining

Several legislative measures have been enacted to streamline housing development processes and address the housing affordability crisis in California:

Housing Development and Streamlining

1. SB 4 enables the development of 100% affordable housing on lands owned by religious institutions and nonprofit colleges [1] .
2. SB 423 extends the mandate of SB 35, requiring cities to approve housing projects with minimum affordable housing requirements through 2036 [1] .
3. SB 684 simplifies the approval process for small, infill apartment buildings, promoting the development of up to 10 units on vacant lots in apartment-zoned neighborhoods [1] .

Tenant Protections and Housing Stability

1. AB 12 and AB 976 together limit security deposits to one month's rent and allow for the construction of accessory dwelling units without owner occupancy, respectively, providing renters with more financial flexibility and housing options [2][4] .
2. SB 567, known as the Homelessness Prevention Act, introduces a cap on rent increases at 10% and establishes legal cause requirements for evictions, enhancing tenant stability and predictability in housing costs [6] .

Environmental and Legal Adjustments

1. AB 1449 and AB 1307 exempt 100% affordable housing projects from the California Environmental Quality Act and clarify noise regulations for university housing, respectively, facilitating smoother project implementations and reducing legal ambiguities [3] .

These measures collectively aim to address the housing affordability crisis, streamline development processes, and protect renter rights, significantly influencing California's rental housing landscape.

Impact on Renters and Rental Assistance Programs

The CARE Act has significantly influenced the landscape for renters in California, especially in the realm of rental assistance and eviction protections. Key aspects of this influence include:

Eviction Protections: Renters are shielded from eviction based on calls to law enforcement, suspected criminal activity, or other alleged nuisance activity [6]. Additionally, the California COVID-19 Tenant Relief Act and the COVID-19 Rental Housing Recovery Act offer protections to renters financially impacted by COVID-19, extending eviction protections through March 31, 2022 [9][10] .

Rental Assistance Programs:

1. Rental owners must apply for rental assistance on behalf of their tenants by March 31, 2022, before proceeding with eviction lawsuits for unpaid rent due to COVID-19 hardship [9].
2. The CA COVID-19 Rent Relief program supports eligible renters and owners by covering past-due rent and utilities dating back to April 1, 2020 [9] .
3. Over 70,000 households are awaiting application processing under the Housing Is Key program, which has distributed more than $4.7 billion to nearly 370,000 lower-income households [11] .

Legal Assistance and Rights:

1. Tenants receiving a “pay or quit” notice are advised to seek legal assistance immediately to understand and protect their rights [9].
2. New statewide measures include caps on rent increases, stricter eviction regulations, and expanded rent control, enhancing renter protections [3][4] .

These measures collectively aim to mitigate the financial distress caused by the pandemic, ensuring housing stability for renters while also providing avenues for rental owners to recoup lost income through rental assistance programs.

Impact on Landlords and Property Owners

In light of the CARE Act, property owners in California are navigating a series of new regulations designed to balance renter protections with the rights of property owners. These changes have a significant impact on the operational aspects of rental housing:

Renter Screening and Security Deposits:

1. Credit history cannot be used in the application process for those receiving government subsidies, promoting fairness in renter selection [7] .
2. Security deposits are capped at one month's rent, though small rental providers may charge up to two months; [7][5]

Property Maintenance and Legal Obligations:

1. Written notice is required for substantial remodeling or demolition, ensuring renters are well-informed of potential disruptions [7] .
2. Rental Housing providers face penalties for violating these regulations, emphasizing the importance of compliance [7] .

Eviction and Property Taxation:

A minimum 12-month occupancy by the rental owner is required for owner or relative move-in evictions, protecting renters from abrupt displacement [7] .
Vacant units may incur a tax penalty, encouraging rental owners to keep properties occupied and contributing to the housing supply [4] .

These measures, while aimed at enhancing renter protections, also underscore the need for rental owners to adapt to the evolving legal landscape, ensuring both compliance and the sustainability of their rental operations.

Navigating Legal Changes and Resources

Navigating through the legal changes introduced by the CARE Act and accessing available resources can significantly impact both healthcare providers and recipients in California's rental housing scene. Key updates include:

Reimbursement Rates and Funds:

1. Enhanced reimbursement rates for primary and obstetric care, including doula and certain mental health services, ensuring healthcare providers are adequately compensated [14] .
2. The transition from the Health Care Services Special Fund to the Managed Care Enrollment Fund, supporting Medi-Cal program subcomponents [14] .

Healthcare Provider Protections and Responsibilities:

1. Legal protection against discrimination for providing sensitive healthcare services, ensuring patient access to necessary care [14] .
2. Increased supervision capabilities for physicians and pharmacists, allowing for more efficient healthcare delivery and patient safety [14] .

Patient Rights and Access:

1. Expanded minor consent for substance abuse treatment, enhancing access to necessary healthcare services [14] .
2. Authorization for pharmacists to verify medication orders remotely, improving the efficiency of healthcare delivery [14] .

These updates facilitate a more inclusive and efficient healthcare landscape, directly affecting California's rental housing scene by improving access to care for renters and ensuring healthcare providers operate within a supportive legal framework.

FAQs

Q: What changes are being made to the laws regarding inmate relocation in California starting in 2024?

A: Starting January 1, 2024, individuals released from prison in California will have enhanced relocation options that align with opportunities for education, treatment, housing, or employment. These changes will also affect those who are currently under parole supervision.

Q: Will California enforce a "Just Cause" requirement for evictions in 2024?

A: Yes, in 2024, California's eviction regulations will include key protections such as notice requirements and a "just cause" provision. Rental owners must provide written notice ranging from 3 to 60 days, depending on the eviction cause, and verbal notices will not be considered valid. Rental owners will need a legitimate and verifiable reason for eviction, such as non-payment of rent or lease violations.

Q: What are the updates to California's ADU laws for 2024?

A: California's Accessory Dwelling Unit (ADU) laws will see significant changes in 2024. These include relaxed height restrictions, allowing ADUs to be built up to a maximum of 25 feet, which is an increase from the previous 16 feet limit. Additionally, there will be greater clarity regarding the 60-day rule for ADU applications and approvals.

Q: What is the new rental law in California that will take effect in April 2024?

A: Effective April 1, 2024, the Tenant Protection Act (TPA) of 2019 will include provisions that protect renters from no-fault evictions. This means that rental housing providers cannot evict renters without a valid reason, such as non-payment of rent or breach of the lease agreement. This law is designed to prevent rental owners from evicting tenants arbitrarily or without just cause.