Legislative Lowdown

June 8, 2025

Now midway into 2025, Bornstein Law has invested a lot of time educating the rental housing community on laws that went into effect this year. We need to begin looking forward to what new regulatory regime housing providers will face in 2026.

There is a profusion of housing bills incubating under the dome of the Capitol, and here are a handful of them that have made it on our radar.

 

AI tools used by rental housing providers are on the chopping block

San Francisco and Berkeley were pioneers in banning the sale and use of algorithmic rent-setting software like RealPage that utilizes non-public competitor data to recommend rents and manage occupancy levels. It is argued that AI-based rent pricing tools are tantamount to collusion and lead to artificially inflated rents, increased vacancies, and higher eviction rates.

With housing such a political hot potato throughout California, there are at least four proposed bills being incubated that would ban this practice statewide.

We don't view RealPage and other software as price-fixing schemes, but intelligence to evaluate market trends and make smart business decisions. In fact, there are many industries that rely on algorithms to evaluate prices in real time. Think airlines, hotels, ride-sharing services like Uber and Lyft, energy companies, online streaming services, etc. These AI capabilities put a finger on things like demand, updated competitor prices, time of the year, how many people are interested in a product or service, and more.

We were unaware of any initiatives to prohibit the use of algorithms by airlines or other industries, but landlords have been singled out. Expect a lively debate between two camps. On the one hand, there are lawmakers concerned about the potential abuse of private data to influence rents, lease terms, or occupancy levels. Housing providers and their advocates will argue that under existing antitrust laws, it is already illegal to fix prices.

Remember the typewriter? It is out of fashion. Technology is here, and the rental housing community should embrace it. Given the public policy of keeping people housed, we suspect that, unfortunately, our message will fall on deaf ears and there will be some sort of statewide restriction on this technology, if not an outright ban.

 

When it comes to addressing rental housing fees, lawmakers kick the can down the road

Assemblyman Matt Haney has become one of the most prolific authors of anti-housing legislation and has now focused on the advertising and disclosures of fees in rental properties. This is really part of a larger consumer protection effort aimed at eliminating "junk fees." This movement seeks to increase price transparency and reduce hidden or excessive charges that businesses tack onto advertised prices.

In an exercise in democracy, AB 1249 has been paused for the year to allow more time for collaboration between all stakeholders. We are pleased that the original wish list of the bill has been significantly watered down.

One item up for debate is the use of "RUBS," or Ratio Utility Billing Systems. Under RUBS, landlords can bill tenants for unmetered utilities such as water, sewer, and electricity. As we explained in an earlier article, the logic behind RUBS seems equitable enough. Essentially, everyone pays their fair share of the utilities they consume.

The analogy we use is dining with several friends, and then comes the awkward moment when the festivities are over and it's time for everyone to figure out how to split the bill. Who consumed what, or should everyone pitch in? If someone at the dinner party has an appetizer, should they contribute to the free-flowing wine and exquisite entrees of others? Maybe there’s a vegetarian who doesn’t feel comfortable paying for the table’s calamari.

Yet state legislators have raised alarms that there is a lack of transparency and that tenants are not protected from unpredictable utility costs. This is an academic topic for many of you who have properties in one of several cities that have already implemented regulations to prohibit or restrict the use of RUBS.

 

Local governments will not be incentivized to institute rent control and fund eviction defense and prevention

Under current law, each county and city must adopt a comprehensive, long-term plan for physical development. Part of this obligation is what's called a "housing element." The Department of Housing and Community Development (HCD) is tasked with determining whether the housing element in a particular jurisdiction is in substantial compliance with those provisions.

The quintessential question for HCD: Is a city or county "pro-housing?"

SB 262 would designate local governments as being pro-housing if it imposes residential rent stabilization ordinances and funds for eviction prevention and defense. This logic has been debunked, with housing and business groups stating, "Rent control is objectively not a pro-housing policy. It does not facilitate housing development — it strangles it.”

As amended, this bill axes any provisions relating to rent control or funding free legal representation for tenants facing eviction.

 

Is there insecurity in receiving Social Security payments?

Unlawful detainer (eviction) actions are already an elongated process, but the Social Security Tenant Protection Act (AB 246) would make it longer when the nonpayment of rent or other charges is because of a delay or stopped checks in Social Security payments.

This proposed legislation, which remains alive, would prohibit a court from issuing a summons and complaint when there is an underlying loss of income during the pendency of a declared Social Security payment interruption. This is a timely topic as the Trump Administration has taken a chainsaw to the federal workforce.

We should all share the concern for vulnerable tenants. Yet broader financial support for both landlords and renters should be included in this bill if an interruption in payments occurs. Politicians should take a balanced approach that recognizes the hardships of all parties. Many small, mom-and-pop landlords are on Social Security themselves and will be impacted by delays in rent payments.

 

Getting lost in translation?

Housing providers may be saddled with burdensome foreign language translation requirements under AB 863. Tenants would have to be served legal notices in Spanish, Chinese, Tagalog, Vietnamese, or Korean, as well as well as English, if the lease was negotiated in one of those languages, or the landlord has been notified by the tenant or anyone else acting on the tenant's behalf that their primary language is other than English.

Of course, everyone should understand the terms of a contract, but we fail to see why there is a need to have other documents translated into a foreign language in the first place. The larger concern is the major compliance challenges and legal exposure for rental housing providers, particularly small ones that may lack the resources to translate accurately.

The bill would give more ammunition to tenants' attorneys. If there are any translation errors, they are sure to point them out and potentially invalidate notices, leading to further delays in an already protracted eviction process.

Still more housing bills and proposals march on

Bornstein Law, in concert with industry partners, will keep a watchful eye on the status of legislation that may be consequential to housing providers and the real estate professionals who serve them. Be sure to subscribe to timely updates or follow us on Facebook to stay in the know.

We cannot predict the future, but we can do the next best thing by providing informed guidance in navigating a myriad of laws, regulations, and government edicts.