In 2024, California has introduced several key real estate laws that will impact various aspects of property ownership, rental agreements, and housing development. Here’s what to expect:
1. Security Deposit Limits (AB 12)
- Effective July 1, 2024: Landlords can only request a security deposit equivalent to one month’s rent for residential properties. Small landlords, defined as those owning no more than two properties with a total of four rental units, may charge up to two months’ rent. This is aimed at reducing the upfront financial burden on tenants.
2. Accessory Dwelling Units (ADUs) – AB 1033
- Conveyance of ADUs: Local governments can now allow the separate sale of ADUs as condominiums, which could lead to more affordable housing options. The law also includes specific requirements for such sales, including compliance with state condominium laws and obtaining lender and HOA consents.
3. Density Bonus Law Expansion (AB 1287)
- Increased Density Bonuses: This law provides larger density bonuses for developers who include a higher percentage of affordable housing in their projects. In some cases, developers can receive up to a 100% increase in base density, encouraging the construction of more affordable housing units.
4. Streamlined Development Approvals (SB 423)
- Extended Approval Process: The streamlined approval process for multifamily housing projects has been extended to 2036. This process now includes more areas, such as coastal zones, and aims to expedite the development of housing in regions that have not met their housing needs.
5. Zoning Consistency for Housing Projects (AB 821)
- Mandatory Compliance: Local governments must approve housing projects consistent with their general plan or amend the zoning ordinances within 180 days. This law aims to reduce delays and ensure that housing projects proceed smoothly.
6. Tenant Screening Protections
- Alternative Screening Criteria: Landlords are now required to offer alternative ways for tenants to demonstrate their ability to pay rent, especially for those receiving government assistance, such as Section 8 vouchers. This change seeks to provide more equitable rental opportunities.
7. For-Sale Affordable Units (AB 323)
- Sale of Deed-Restricted Units: Developers who build affordable units as part of inclusionary zoning laws must sell these units to income-qualified owner-occupants. If no qualified buyer is found within 180 days, the units can be sold to a nonprofit housing corporation under specific conditions.
8. Permanent Prohibition on ADU Owner-Occupancy Requirements (AB 976)
- Owner-Occupancy Prohibition: The law now permanently prohibits local governments from requiring that either the primary residence or the ADU on a property be owner-occupied, which is expected to encourage the development and rental of more ADUs.
9. Vacancy Tax Implementation
- Addressing Empty Homes: A new vacancy tax targets property owners who keep residential units unoccupied, aiming to increase the availability of rental units in areas with housing shortages. This is particularly relevant in cities like Los Angeles, where the housing crisis is acute.
10. Commercial Zoning for Residential Use
- Mixed-Use Development: Some areas previously zoned for commercial use are now being opened up for residential development, provided these projects include affordable housing units. This change is intended to better utilize underused commercial spaces to address the housing shortage.
These new laws reflect California’s ongoing efforts to increase housing availability, promote affordable housing, streamline development processes, and protect tenants’ rights. The legislation is part of a broader strategy to address the state’s persistent housing crisis.
