Partnership Backs Bill Expediting CEQA Review, Opposes Controversial New State Rent-Debt Assumption Program
IRWINDALE - This week, the Legislative Action Committee of the San Gabriel Valley Economic Partnership voted to support AB 3279 (Friedman), an important bill with bipartisan support that greatly expedites the court review process of the California Environmental Quality Act (CEQA). The Committee also voted to oppose SB 1410 (Caballero), a controversial bill that would set up a new program that would issue tax credits to participating property owners and allow the state to assume the debt payments for tenants who are unable to pay rent during the coronavirus pandemic.
"It's indicative of this year's compressed legislative session that we have both an excellent bill that will expedite the complicated, often time-consuming CEQA process as well as a risky program that has good intentions but major financial implications," said Partnership President and CEO Bill Manis. "In times of crisis, we often get policy that has good intentions but the full effects are not fully vetted. That's the case with SB 1410."
AB 3279 improves the CEQA process to allow more housing and other projects to be built with less delays. Specifically, the bill authorizes the courts to hear CEQA appeals sooner, reduces the time petitioners take to file briefs, expedites the preparation of the administrative record, and authorizes courts to issue interlocutory remand orders instead of setting aside project approvals and forcing applicants to start the process all over again. AB 3279 maintains the existing environmental safeguards while making meaningful changes to improve CEQA approval procedures.
Senate Bill 1410 establishes a new temporary rental assistance program that would allow the state to assume unpaid rent debts accrued during the coronavirus pandemic from landlords and property owners in exchange for tax credits. Renters would then pay the state for unpaid rent as part of their taxes beginning in 2024. The Department of Housing and Community Development would administer this new program. Eligible renters for the program would include those who can demonstrate, as determined by the department, inability to pay rent due to COVID-19 or a government response to the COVID-19 pandemic. Rental housing providers who agree to participate in the program would receive at least 80 percent of the monthly rent the tenant owes for up to seven months, if they agree to:
- Not increase rent for the unit for a specified period;
- Not collect late fees for the past due rent paid by the program;
- Not pursue any remaining rent owed for the months paid by the program.
The Franchise Tax Board (FTB) is still developing its estimates of (1) the bill’s administrative costs, and (2) revenue losses to the General Fund. While subject to considerable uncertainty, General Fund revenues would likely decline by a minimum of hundreds of millions of dollars per year between 2024 and 2033.
The immense and unknown financial implications of SB 1410 and its complicated participation process led to the Partnership's opposition. Given the murky financial outlook over the next two years in particular and the possibility of the coronavirus pandemic extending well into 2022 or beyond, there's no telling how long the emergency orders will last and therefore, how much rent the state would eventually assume to be paid back over the next 20 years.
For information about these positions, contact Brad Jensen, Director of Public Policy at email@example.com.