Tenants would gain a potential pathway into permanently affordable housing — to weather the COVID-19 pandemic — under a bill making its way through the state Legislature.
Assembly Bill 1703 would require most owners looking to sell residential rental property to give the property’s tenants, as well as designated groups like nonprofits, the opportunity to make the first offer to purchase. If any of those outside groups bought the building, rents would be capped to help protect low-income tenants from displacement — a major threat as the state faces a recession and widespread job loss due to the COVID-19 pandemic.
The bill’s sponsors are trying to guard against a repeat of the 2008 financial crisis’ fallout.
“If you mapped where most homes were lost, and who lost them, they were Black and brown communities,” said Peter Cohen, co-director of the Council of Community Housing Organizations, one of more than 40 groups that sponsored the bill and brought the concept to the state Capitol, where Assemblyman Richard Bloom (D-Santa Monica) wrote and introduced it.
“These are people’s lives, their homes, that are at stake,” Cohen said.
The bill does not provide funding for the purchases. Buyers would have to raise the money on their own, but they would have a head start on others in the housing market.
“You have the Blackstones of the world who can come in and put in a cash offer and get it done,” said Luke Villalobos, legislative advocate at bill co-sponsor Housing California, referring to the private-equity company that owns tens of thousands of apartments across the country.
“AB 1703 is intentionally trying to level the playing ground a bit,” Villalobos said.
The bill is a variation on San Francisco’s Community Opportunity to Purchase Act, which lets certain local nonprofits make initial bids before residential properties hit the market.
The legislative session concludes August 31. If lawmakers pass the bill and Gov. Gavin Newsom signs it, AB 1703 will sunset after two years.