• AB 21 would establish a Task Force to develop clear and consistent policies for the management of rental housing in my District by Caltrans. The Department currently owns over 500 homes in the communities of El Sereno in the City of Los Angeles, South Pasadena, and Pasadena.
• Tenants who rent these houses have experienced years of inconsistent and non-responsive treatment by Caltrans. Many of their properties are poorly maintained. Various of the homes suffer from rat infestations, mold, lack of heat, and leaky plumbing.
• Furthermore, even while Caltrans has failed to maintain the houses, it has attempted to raise rents by as much as 25% a year.
• We are in the midst of an affordable housing crisis. The fact that these houses were acquired by eminent domain for public benefit suggests that they should be used to fill an acute need for housing. Many are currently used by the filming industry at no or minimal charge to help keep the entertainment industry operating in California. Shouldn't the people of California receive a similar benefit?
• I understand that this bill is recommended for suspense based on cost estimates provided by the Department of Finance. I ask the Committee to consider the following points:
  1. The Task Force created by this Legislation is one that Caltrans agreed to participate in and then withdrew over the issue of whether or not they are mandated to charge fair market rent.
  2. According to the Legislative Counsel, Caltrans is not mandated to charge fair market rent. In fact, legislation passed in the 1980's known as the Roberti Bill, establishes a policy for ultimate sale of the homes that anticipates they would be occupied by low- and moderate-income tenants.
  3. The cost analysis provided by DOF fails to consider that Caltrans has opened the state to liability by exposing tenants to lead-based paint, asbestos, and mold and by not fulfilling its obligations as a landlord. Tenants have the legal right to withhold rent when a landlord fails to meet its obligations under state law.
  4. Cost estimates based on lost rent also ignore the likelihood that excessively raising rents will cause many houses to be vacated by people who have been the virtual caretakers of these properties for decades. This will result in significant lost revenue to the state and increased expenditures to repair and restore the houses to the point where they can be re-rented.
• I have attempted to work with Caltrans to address these issues for the last two years but to no avail. It is now time for the Legislature to step in and exercise its oversight and policy-making authority over Caltrans, which has been unable to solve these problems on it own.

"Accordingly, it is our opinion that neither Section 104.6 of the Streets and Highways Code, Article XIX of the California Constitution, nor any other law requires the Department of Transportation to charge fair market rental rates for residential real property that it rents to the public when the real property was purchased for future highway use with revenues subject to Article XIX of the California Constitution."

• 1. The Task Force will most likely not continue due to Caltrans and District 7 not complying with the original decision made by Assemblywoman Carol Liu and Jeff Morales, the head of the Department of Transportation, that the mission of the Task Force was to set policy on property management issues and not just Fair Market Value.



• 2. And most important, due to these events, Assemblywoman Carol Liu introduced legislation on December 2, 2002 to protect the tenants.

BILL NUMBER: AB 21 AMENDED BILL TEXT

AMENDED IN ASSEMBLY APRIL 7, 2003
AMENDED IN ASSEMBLY MARCH 27, 2003

INTRODUCED BY Assembly Member Liu
DECEMBER 2, 2002

An act relating to housing, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL'S DIGEST

AB 21, as amended, Liu. Housing: 710 Corridor.

Existing law authorizes the Department of Transportation to lease or rent lands held by the department for highway purposes. This bill would require the Director of Transportation to establish not later than January 1, 2004, the 710 Freeway Corridor Task Force with a specified membership. It would require the task force to report its findings and recommendations to the Legislature regarding rental rates on department-owned residential property in the 710 Freeway Corridor.

This bill, until January 1, 2005, would require the rents on residential units owned by the department and occupied as of July 1, 2001, within the 710 Corridor of southern California to be maintained at the July 1, 2001, levels. The bill would place a moratorium on any without cause eviction processes against persons who, on July 1, 2001, occupied those units.
The bill would declare that it is to take effect immediately as an urgency statute.

Vote: 2/3. • Appropriation: no. • Fiscal committee: yes. • State-mandated local program: no.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. (a) The Legislature finds and declares all of the following:

(1) There is an extreme shortage of rental housing in California, particularly for moderate- and low-income renters, where one-half of all low-income renters and three-fourths of all very low income renters spend more than 50 percent of their income for housing.

(2) Over 360,000 Californians are homeless, according to the Department of Housing and Community Development, and the most rapidly increasing segments of the homeless population are seniors and families with children.

(3) California has lost more than 20,000 affordable housing units over the past five years, with almost 50 percent of the loss coming from the Counties of Los Angeles, Ventura, Orange, San Bernardino, Riverside, and Imperial.

   (b) It is the intent of the Legislature to use existing properties owned by the Department of Transportation to ease the critical shortage of affordable housing in California and particularly southern California.

   (c) It is the further intent of the Legislature to ensure that the Department of Transportation manages and maintains rental properties in a consistent and equitable manner.

SECTION 2. (a) Not later than January 1, 2004, the Director of Transportation shall establish the 710 Freeway Corridor Task Force to do all of the following:

(1) Review existing Department of Transportation policies and procedures for establishing rental rates for department-owned residential rental properties in the 710 Freeway Corridor.

(2) Review existing Department of Transportation procedures for increasing residential property rental rates that are deemed to be below appropriate levels.

(3) Develop recommendations for policies and procedures to establish rental property rates , and to increase those rates, that provide fair and equitable treatment of all tenants and a reasonable return of revenue to the state that enables the department to maintain the properties in accordance with its obligation as a landlord under state and local law.

(4) Not later than June 1, 2004, report its findings and recommendations to the Legislature. Copies of the reports shall be delivered to the chairpersons of the Senate and Assembly Committees on Housing and Community Development.

   (b) The task force shall be convened by the director and shall consist of the following:

     (1) One member and one alternate member elected from department-owned residential rental property residents in each of the three affected communities of Pasadena, South Pasadena, and El Sereno.

     (2) One member designated by the city manager, or if there is no city manager, the mayor, of each of the three affected Cities of Pasadena, South Pasadena, and Los Angeles.

     (3) One member from the office of each of the two Assembly Members and two Senators representing the affected area and one member from the office of the Los Angeles city council member whose district includes El Sereno.

     (4) Three members from the department designated by the director representing Bay Area District 4, Sacramento headquarters, and District 7.

(5) Two members from the affordable housing advocacy community designated by the director.

   (c) The chairperson of the task force shall be designated by the director selected by the task force from its members . The department shall provide staff for the support of the task force.

SECTION 3. (a) With respect to any residential units owned by the Department of Transportation and occupied by tenants on July 1, 2001, within the 710 Corridor of southern California, the department shall maintain the rents for those units at the July 1, 2001, levels. The department shall reduce any rent if necessary to comply with this section, and shall not subsequently increase the level of rent on any of those units.

  (b) There shall be a moratorium on any without cause eviction process against any person who, on July 1, 2001, was an occupant of a residential unit owned by the Department of Transportation within the 710 Corridor of southern California.

SECTION 4 This act shall remain in effect only until January 1, 2005, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2005, deletes or extends that date.

SECTION 5 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to ease the critical shortage of affordable housing in California, it is necessary that this act take effect immediately.