CC SR 20200818 I - AB3182
RANCHO PALOS VERDES CITY COUNCIL MEETING DATE: 08/18/2020
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA TITLE:
Consideration and possible action to authorize the Mayor to sign a letter of opposition to
AB 3182.
RECOMMENDED COUNCIL ACTION:
(1) Authorize the Mayor to sign a letter of opposition to AB 3182, which would bar
homeowners associations from prohibiting home rentals.
FISCAL IMPACT: None
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Megan Barnes, Senior Administrative Analyst
REVIEWED BY: Karina Bañales, Deputy City Manager
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. Draft letter in opposition to AB 3182 (page A-1)
B. AB 3182 Fact Sheet (page B-1)
C. Text of SB AB 3182 (as amended July 27, 2020) (page C-1)
BACKGROUND AND DISCUSSION:
Earlier this year, Assemblymember Phil Ting of San Francisco introduced Assembly Bill
No. 3182, which aims to increase the state’s rental housing supply by barring
homeowners associations (HOAs) from prohibiting members from renting out their
homes.
For some background, in 2012, legislation took effect that required HOAs to allow
owners to rent their units, but applied prospectively, exempting HOA rental bans
adopted prior to January 1 of that year. AB 3182 would eliminate these “grandfathered
1
in” rental prohibitions and effectively bar HOAs from prohibiting or “unreasonably”
restricting rentals, including rentals of accessory dwelling units (ADUs).
The bill would allow HOAs to ban short-term rentals of less than 30 days. It would also
allow HOAs to have a rental maximum of 25% (excluding ADUs and junior ADUs).
This cap could be higher if needed to meet loan or insurance requirements.
AB 3182 passed the Assembly in June and is now in the Senate.
The City Council has strongly opposed legislation that would impose “one size fits all”
approaches to housing. Given this bill’s widespread impact on the rights of private
property owners, including many HOA members in Rancho Palos Verdes, Staff
recommends the City Council authorize the Mayor to sign a letter to Assemblymember
Ting, as drafted, or with revisions, opposing AB 3812.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative action s are available
for the City Council’s consideration:
1. Identify revised language to add to the letter.
2. Do not authorize the Mayor to sign the letter.
3. Take other action as deemed appropriate by the City Council.
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August 18, 2020 Via Email
The Honorable Philip Ting
California State Assembly
State Capitol, Rm. 6026
Sacramento, CA 95814
SUBJECT: Notice of Opposition to AB 3182
Dear Assemblymember Ting:
The City of Rancho Palos Verdes opposes AB 3182, which would bar homeowners
associations (HOAs) from prohibiting home rentals, including rentals of accessory
dwelling units (ADUs).
This legislation would not only infringe on the rights of private property owners, but
invalidate the voices of voting HOA members. AB 3182 would impose a “one size fits
all” approach on tens of thousands of HOA neighborhoods, taking away decision-
making that is best left to homeowners and governing board members. The bill is also
problematic because it leaves unclear what exactly would “unreasonably” restrict rental
prohibitions.
For these reasons, the City of Rancho Palos Verdes opposes AB 3182.
Sincerely,
John Cruikshank
Mayor
cc:
Al Muratsuchi, Assembly Member, 66th Assembly District
Ben Allen, Senator, 26th State Senate District
Jeff Kiernan, League of California Cities
Meg Desmond, League of California Cities
Marcel Rodarte, California Contract Cities Association
Rancho Palos Verdes City Council
Ara Mihranian, City Manager
Karina Bañales, Deputy City Manager
A-1
AB 3182
HOA Rentals
Office of Assemblymember Phil Ting | AB 3182 Fact Sheet 1
SUMMARY
Sixty to 80% of all new housing construction in
California is governed by a Homeowner’s
Association (HOA). Due to a loophole in state
law, these HOAs can prohibit homeowners
from choosing to rent out their properties,
stunting the potential impact of this new
construction during a time when California
needs it most. AB 3182 prohibits HOA rental
bans and restrictions to make new and existing
housing available to more Californians.
BACKGROUND
California’s housing crisis is among the worst in
the United States. According to the California
Department of Housing and Community
Development, more than 30% of California’s
renters pay more than 50% of their income in
rent. Experts agree that more rental housing is
needed to abate housing pressures.
Some communities are allowed to discriminate
against renters by banning a homeowner from
renting out their property. This ban is enacted
through the Codes, Covenants, and
Restrictions, commonly known as CC&Rs, of
homeowners’ associations (HOAs) and other
common interest developments (CIDs). By
banning renters, these communities can also
ban the development of naturally affordable
housing types, such as accessory dwelling units.
CIDs, such as HOAs, are numerous and growing.
There are approximately 48,150 HOAS’s in
California, the second most of all states. HOAs
govern 25% of existing housing, and 13.7
million Californians live in an HOA. Research
suggests that 60% to 80% of new construction
in California is controlled by an HOA.
Making sure that state housing laws are not
undermined by HOAs is an increasingly
important part of ensuring that California can
meet its housing needs. Policies that prevent
renters from occupying housing, such as those
policies that some HOAs have adopted,
discriminate against renters and against those
types of people who tend to be renters, such as
low-income people and people of color.
THIS BILL
AB 3182 solves this issue by limiting the areas
where CIDs can ban renters. Except as
otherwise provided, this bill would make any
provision of the governing documents of a CID,
such as an HOA, banning rentals or effectively
prohibiting them is void and unenforceable.
Under AB 3182 CIDs may restrict the use of
homes for short-term rentals and they may
impose a 25 percent rental cap in order remain
eligible for federal loans and insurance.
AB 3182 closes important loopholes in existing
law that give CIDs the ability to thwart state law
and discriminate against renters, helping
California address its housing crisis.
SUPPORT
Abundant Housing LA
ADU Task Force East Bay
Bay Area Council
California Apartment Association
California YIMBY
East Bay for Everyone
Lake Wildwood Association
The Casita Coalition
STAFF CONTACT
Tara.gamboa-eastman@asm.ca.gov
B-1
AMENDED IN SENATE JULY 27, 2020
AMENDED IN SENATE JULY 15, 2020
AMENDED IN ASSEMBLY MAY 7, 2020
AMENDED IN ASSEMBLY MAY 4, 2020
california legislature—2019–20 regular session
ASSEMBLY BILL No. 3182
Introduced by Assembly Member Ting
February 21, 2020
An act to amend Section 4740 of the Civil Code, relating to common
interest developments.
legislative counsel’s digest
AB 3182, as amended, Ting. Common interest developments:
governing documents: rental or leasing of separate interests.
Existing law, the Davis-Stirling Common Interest Development Act,
defines and regulates common interest developments. Existing law
provides that an owner of a separate interest in a common interest
development shall not be subject to a provision in a governing document
or an amendment to a governing document that prohibits the rental or
leasing of any separate interest in that common interest development
to a renter, lessee, or tenant unless that governing document, or
amendment thereto, was effective before the date the owner acquired
title to the owner’s separate interest. Existing law permits an owner of
a separate interest of a common interest development, despite the above
provision, to expressly consent to be subject to a governing document
or an amendment to a governing document that prohibits the rental or
leasing of any of the separate interests in the common interest
95 C-1
development to a renter, lessee, or tenant. Existing law makes these
provisions applicable only to a provision in a governing document or
a provision in an amendment to a governing document that became
effective on or after January 1, 2012.
This bill would recast those provisions to instead provide that an
owner of a separate interest in a common interest development is not
subject to a provision in a governing document or an amendment to a
governing document that prohibits, has the effect of prohibiting, or
unreasonably restricts the rental or leasing of any of the separate
interests, accessory dwelling units, or junior accessory dwelling units
in that common interest development to a renter, lessee, or tenant, except
as otherwise provided. The bill would specify that the bill’s these
provisions do not prohibit a common interest development from adopting
a provision in a governing document that prohibits transient or
short-term rentals of 30 days or less or adopting reasonable rental
restrictions that have the effect of limiting the total number of rentals
to 25% of the separate interests in the common interest development,
subject to certain exceptions. or a higher percentage, subject to certain
conditions.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
The people of the State of California do enact as follows:
line 1 SECTION 1. Section 4740 of the Civil Code is amended to
line 2 read:
line 3 4740. (a) Except as otherwise provided in this section, an
line 4 owner of a separate interest in a common interest development
line 5 shall not be subject to a provision in a governing document or an
line 6 amendment to a governing document that prohibits, has the effect
line 7 of prohibiting, or unreasonably restricts the rental or leasing of
line 8 any of the separate interests, accessory dwelling units, or junior
line 9 accessory dwelling units in that common interest development to
line 10 a renter, lessee, or tenant.
line 11 (b) Notwithstanding any other provision of this section, a
line 12 common interest development is not prohibited from doing either
line 13 of the following:
line 14 (1) Adopting a provision in a government governing document
line 15 that prohibits transient or short-term rental of a separate property
line 16 interest for a period of 30 days or less.
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line 1 (2) Adopting reasonable rental restrictions that have the effect
line 2 of limiting the total number of rentals to 25 percent of the separate
line 3 interests in the common interest development. An association A
line 4 common interest development may adopt a higher percentage to
line 5 do any of the following:
line 6 (A) Facilitate buyers to qualify for loans insured by the Federal
line 7 Housing Administration or guaranteed by the Department of
line 8 Veterans Affairs, the Federal National Mortgage Association, or
line 9 the Federal Home Loan Mortgage Corporation.
line 10 (B) Facilitate association loan financing. loan financing for the
line 11 common interest development.
line 12 (C) Facilitate obtaining or maintenance of insurance at
line 13 industry-recognized community association rates.
line 14 (c) For the purposes of this section, an accessory dwelling unit
line 15 or a junior accessory dwelling unit shall not be construed as a
line 16 separate interest and shall not be subject to any rental percentage
line 17 cap in a governing document or an amendment to a governing
line 18 document.
line 19 (d) For purposes of this section, the right to rent or lease the
line 20 separate interest of an owner shall not be deemed to have
line 21 terminated if the transfer by the owner of all or part of the separate
line 22 interest meets at least one of the following conditions:
line 23 (1) Pursuant to Section 62 or Section 480.3 of the Revenue and
line 24 Taxation Code, the transfer is exempt, for purposes of reassessment
line 25 by the county tax assessor.
line 26 (2) Pursuant to subdivision (b) of, solely with respect to probate
line 27 transfers, or subdivision (e), (f), or (g) of, Section 1102.2, the
line 28 transfer is exempt from the requirements to prepare and deliver a
line 29 Real Estate Transfer Disclosure Statement, as set forth in Section
line 30 1102.6.
line 31 (e) Before an owner rents or leases their separate interest as
line 32 provided in this section, the owner shall provide the association
line 33 common interest development with verification of the date the
line 34 owner acquired title to the separate interest and the name and
line 35 contact information of the prospective tenant or lessee or the
line 36 prospective tenant’s or lessee’s representative.
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AB 3182 — 3 — C-3
line 1 (f) Nothing in this section shall be deemed to revise, alter, or
line 2 otherwise affect the voting process by which a common interest
line 3 development adopts or amends its governing documents.
O
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