Legislative updates

City of Los Angeles Considering Vacancy Tax

In early June 2020, the Los Angeles City Council members discussed the possibility of imposing a vacancy tax on residential properties. This idea was proposed by councilman Mike Bonin. The arguments in favor of this proposal was that due to the affordability and homeless crisis within the city, landlords should not intentionally keep residential units vacant. Proponents also argued that the city has a large number of absentee owners whose properties remain vacant while thousands of individuals remain without shelter. Blue Sky, a consulting company, initially recommended a flat tax rate of $5,000 for residential properties, and rates ranging between $5,000 and $40,000 depending on the size of the property. Some landlord groups argued that the measure would unfairly penalize property owners who are trying to rent their units while developers argued that they would be taxed on vacant parcels of land while waiting for an approval to build.

City council members required further studies on this issue and may reconsider it for the 2022 ballot.

SB 1190: AB 1482 Fines and Victims of Crime

It allows a tenant to terminate a rental agreement if tenant or tenant’s family is a victim of a crime. Tenant will have to provide landlord proof that he or she is a victim of crime. It is expected that this bill will be approved by the California legislatures. You can read the context of the bill by clicking on the following link.

November 2020 Ballot Initiatives

California Schools and Local Communities Funding Act: California ballot initiative 19-0008

The measure claims to raise taxes to assist schools and communities. However, it is a partial repeal of Prop. 13. Under this act, the property tax rate for commercial and industrial properties will be based on current, fair market value as opposed to the standard 1% rate.

Rent Control Affordability Act

The measure will prevent a landlord from raising the rent of a vacated residential unit to market level. Under the measure, the maximum allowable rent increase for a vacated unit is 15% over the subsequent three years in addition to any other increase allowed under a local ordinance.Single-family homes and two-unit residences are exempted.

Assembly Constitutional Amendment 11 (ACA 11) called “The Home Protection Act for Seniors, Severely Disabled, Families and Victims of Wildfire or Natural Disasters Act.”

This act will amend the California constitution pertaining to properties inherited by children from parents and/or grandparents. Current California law allows a property’s tax base to transfer to the heirs upon the death of a parent or grandparent. ACA 11 will trigger a reassessment of the property unless the property is the primary residence of the heir.

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