2020 Legislative Highlights
| Publication year | 2021 |
| Author | Robert McCormick and Michael Maurer |
Robert McCormick and Michael Maurer
Robert M. McCormick is Of Counsel at Downey Brand LLP in Sacramento and a member of its Corporate, Real Estate, Securities and Tax Group. He is also currently serving as a member of the Executive Committee of the Real Property Law Section of the California Lawyers Association. His practice is focused on commercial real estate transactions, including office and retail leasing, acquisitions, real estate secured financing, and the formation of common interest developments. bmccormick@DowneyBrand.com
Michael J. Maurer is a partner at Best Best Krieger's Los Angeles office and a member of its municipal law practice group. He serves as City Attorney to the cities of San Jacinto and L Habra Heights. His practice focuses on land use, infrastructure, and community economic development. Michael. Maurer@bbklaw.com
When the 2020 session of the California State Legislature opened on January 6, 2020, the Democratic Party held a veritable governmental "trifecta" with veto-proof supermajorities in the California State Senate and State Assembly and with Governor Gavin Newsom occupying the governor's office. With this one-party hegemony in place, the stage was set for the Legislature to undertake major progressive actions to address California's most chronic political problems, including the affordable housing shortage, homelessness, and the increasing poverty rate. Then the COVID-19 pandemic overwhelmed the State, resulting in a suspension of the legislative session from March 16, 2020 until May 4, 2020. One effect of this crisis was to refocus the Legislature's attention away from the traditional progressive agenda and onto enacting measures intended to ameliorate the crippling effects of the pandemic-induced economic shutdown and to counteract the spread of COVID-19. Consequently, when the 2020 session ended on August 31, 2020, several progressive bills that had been considered high priority at the start of the session remained unfinished. Affordable housing is one example of this refocusing with only a few housing bills making it past the finish line while the Legislature focused instead on the pending eviction crisis by enacting the COVID-19 Tenant Relief Act of 2020 (Assembly Bill (AB) 3088), which is reviewed in Section VIII Landlord/Tenant. Despite the change in focus, some housing legislation did get enacted that may be of assistance to residential developers, including an increase in density bonuses for affordable projects (AB 2345), some streamlining of approval processes (AB 831 and AB 168), and an extension of certain housing entitlements (AB 1561), all of which are reviewed in Sections IV Density Bonus, V Environment, and VII Housing. One crisis that did compete with COVID-19 for attention was the wildfire crisis. The 2020 wildfire season set a new record as the largest in California's modern history. The Legislature's responses intended to address this alarming development are reviewed in Sections IX Property Insurance and XII Wildfires. Also of major significance are the changes in property tax exemptions and the homestead exemption reviewed in Sections X Property Taxes and VI Homestead.
[Page 32]
Overall, the 2020 legislative session will serve as a reminder of how crisis events can re-shape the legislative landscape and dominate existing political agendas. This legislative review selectively focuses on laws enacted in 2020 that the authors believe are the most significant for real property law practitioners. It does not, therefore, cover every real-property-related law enacted in 2020. In particular, this review does not cover new laws that affect only a specific locality or that are primarily revenue raising or funding measures. This article also provides only summary references to the text of the bills selected for comment. Practitioners should always review the actual chaptered versions, including specific references to the statutory provisions, rather than rely solely on the summaries in this article. The Legislature's website provides copies of these bills at http://leginfo.legislature.ca.gov under "Bill Information" for Session Year 2019-2020. Unless otherwise noted, all laws discussed became operative on January 1, 2021.
Amends Civil Code Section 1632.
AB 3254 modifies the existing requirement that a person engaged in a trade or business who negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, orally or in writing, shall in the course of entering into specified consumer contracts, deliver to the other party to the contract or agreement before the execution thereof, a translation of the contract or agreement in the language in which the contract or agreement was negotiated. AB 3254 adds to this requirement the delivery of the translation not only to the parties to the contract, but also to any other person who will be signing the contract or agreement such as a co-signer.
See also AB 2471 (Maienschein) discussed in Section XI.B below regarding rescission of contracts by senior citizens.
Amends Probate Code Section 5600.
In 2015, the Legislature enacted AB 139 (Gatto, ch. 293), which established a five-year pilot program that allowed owners of real property, until January 1, 2021, to transfer their property upon death, outside the normal probate procedure, through a written instrument known as a "revocable transfer on death deed." Because of concerns about possible misuse of this transfer vehicle, the Legislature directed the California Law Revision Commission (CLRC) to study the consequences of this pilot program and to report back to the Legislature by January 1, 2020. The report was issued in November 2019. However, the COVID-19 pandemic interrupted the Legislature's focus on this issue. The purpose of SB 1305 is to provide the Legislature with more time to consider the issue by extending the January 1, 2021 sunset for one additional year, until January 1, 2022.
Amends Government Code Sections 65400 and 65915.
The density bonus law is a well-established program that encourages otherwise market rate developers to reserve some housing units for low-income occupants, in exchange for increased density and other development incentives and concessions. While the goal of the density bonus concept is to increase affordable housing stock, the program has come under criticism during the housing crisis for having limited impacts on actual affordable housing development. The criticism centers on the fact that a developer need only develop a relatively small amount of affordable units to receive the density bonus. Prior law only required 10% lower income units or 5% very low income units to qualify, with some enhancements to get up to a maximum 35% density. Thus, developers can create projects that are nearly all market rate while receiving higher than normal density.
The Planning and Zoning Law requires the planning agency of a city or county to provide by April 1 of each year an annual report to, among other entities, the Department of Housing and Community Development that includes, among other specified information, the number of net new units of housing that have been issued a completed entitlement, a building permit, or a certificate of occupancy, thus far in the housing element cycle, as provided. This bill would require that the annual report include specified information regarding density bonuses granted in accordance with specified law.
AB 2345 establishes an enhanced density bonus program that follows a model that the City of San Diego previously implemented. The City of San Diego noted a significant increase in the density bonus applications that it received after implementing the program. The primary change is that developers will be entitled to up to a 50% density bonus based on the number and type of income-restricted units. For example, 15% very low income, 24% low income, or 44% moderate income units can qualify for a maximum density bonus.
[Page 33]
AB 2345 builds on the concept from last year's AB 1763 (Chiu), which established an 80% density bonus for 100% affordable developments. Whereas AB 1763 excluded the density bonus units from the 100% affordability calculus, AB 2345 now includes all units (except a management unit) within the 100% affordability restrictions.
The American Planning Association opposed the bill on the grounds that the bill did not require enough affordable units relative to the increase in allowable density, and the California State Association of Counties also registered its opposition. The League of California Cities maintained a "watch" position concerning the bill but no cities lodged a formal opposition. Given that AB 2345 adopts a program that was initially developed and successfully "test-run" by a city, perhaps the lack of opposition is unsurprising.
Amends Government Code Sections 65400, 65913.4, and 65941.1.
AB 168 preserves California Native American tribes' rights to consult on development projects even where the project is subject to a ministerial streamlined approval process. AB 168 is an effort to reconcile two recently adopted but potentially conflicting policies. In 2014, the Legislature adopted AB 52, which revised CEQA to acknowledge that an adverse change to a tribal cultural resource may result in significant environmental effects. AB 52 allows any California Native American tribe that is traditionally and culturally affiliated with the geographic area of a project to request a consultation that must occur prior to the release of the environmental impact report or (mitigated)...
To continue reading
Request your trial