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"California Eviction Study Helps Defeat Pre-Trial Rent Deposit Legislation,"

by Richard LeGates September 1992 issue of Poverty & Race

Hours before the 1992 California legislative session ended on August 31st, Senate Bill 270 - California's controversial pre-trial rent deposit legislation - died. Sophisticated lobbying by anti-poverty lawyers combined with PRRAC-funded research to defeat legislation which would have kept tens of thousands of tenants from defending themselves in court, massively increasing the number of evictions in California, and speeding up the eviction process.

237,000 unlawful detainer (eviction) actions, or UD's, are filed in California each year. Most of the people evicted are the poor, especially people of color and single women with children. UD's now account for 40% of all California Municipal Court cases. In more than half these cases, tenants defend themselves - always gaining a short amount of time, frequently reaching compromises that allow them to stay in possession, and sometimes both assuring their tenancy and obtaining reduced rent for violations of the implied warranty of habitability.

Under California law, UD's ordinarily must be disposed of within 20 days of a landlord's request to set a trial date. In cases set for trial after 20 days, judges may require a tenant to pay rent into court. Under federal law, a tenant who files for bankruptcy obtains an automatic stay of an eviction until the case is reviewed by a federal bankruptcy judge who determines whether the stay should be lifted.

The Landlords Attack

For the last four years, the California Apartment Law Information Foundation (CALIF) - an apartment owners' advocacy organization - has been conducting an extensive and well-funded program of research and advocacy on evictions. CALIF paid a real estate research firm to examine LTD case files throughout the state in order to document the process - particularly the time UD's take in court, amounts of rent landlords lose while UD's are pending, and case outcomes. CALIF packaged the results in professional reports and slick public relations materials.

The CALIF studies' findings were striking: 237,000 evictions a year, taking an average of 48 days in court, with tenants losing 99.4+% of the time, and landlords never collecting rent due during the time the UD was in court. According to CALIF, landlords are now losing $337,000,000 a year because deadbeat tenants live rent-free while LTD's grind slowly though the courts.

CALIF then developed SB 270 to cure the problems they had documented They proposed requiring tenants to pay 20 days' rent into court as a condition of defending UD's: a pre-trial rent deposit requirement. If the tenant did not pay 20 days' rent into court at the time of answering the complaint, courts would immediately enter judgment for the landlord as to possession of the unit, and the eviction could proceed immediately with no court hearing. SB 270 also required sheriffs and marshals to ignore federal bankruptcy eviction stays and evict tenants as soon as a California court held that the landlord was entitled to possession, despite the likely unconstitutionality of this provision.

The Legislative Counter-Strategy

In California, committee action is the decisive stage in the legislative process. Bills passed by committees of origin in the Senate and House are generally passed by the full legislature. Legislation which the Legislative Counsel determines will cost the state money must also pass out of the Ways and Means Committee, which has the power to kill bills, amend them, or hold them until adequate funding is assured.

SB 270 was introduced in the Senate Judiciary Committee in 1991. Anti-poverty lawyers, spearheaded by the Western Center on Law and Poverty, California Rural Legal Assistance, and the Legal Aid Foundation of Los Angeles' Eviction Defense Center, led a wide array of tenant organizations, anti-poverty, and civil rights groups opposed to the legislation. They were joined by groups concerned with the administration of justice - notably the California Judicial Council and the Municipal Court Clerks Association.

CALIF's studies had a powerful impact on the Senate Judiciary Committee. Without solid empirical research to dispute CALIF's findings, opponents were badly out gunned, and SB 270 was reported out of committee. Consideration by the Assembly Judiciary Committee was put over until 1992.

The Research Strategy

In early Fall 1992, opponents of SB 270 obtained a PRRAC grant to undertake basic research on evictions which could prove useful in the SB 270 debate as well as other landlord-tenant issues.

Richard LeGates, director of the Urban Studies Program at San Francisco State University, and Allan Heskin, Chair of the Department of Urban Planning Program at UCLA, were the principal PRRAC researchers. Both are housing lawyers who also have city planning degrees and training in public policy research methodology. They received able assistance from a number of graduate students, technical experts and faculty colleagues at UCLA and UC-Berkeley. LeGates and Heskin conferred by phone and FAX with tenant advocates throughout California to develop a research design and rushed to complete research before the Assembly Judiciary Committee hearings scheduled for January.

The researchers computed statistics on UD court time for all 23,000+ evictions which occurred in Los Angeles during the first six months of 1991. These data showed that CALIF's statistics on the length of time UD's take in court were inflated. They collected studies of the California eviction process by court administrators, academics, and tenant advocates which often conflicted with CALIF's findings. They analyzed apartment owners' bad debt record relative to gross rent receipts and bad debt losses in other industries to show that UD rent losses represented a tiny percentage of gross receipts and that bad debt losses suffered by apartment owners were lower than in many other industries. They worked with anti-poverty lawyers to prepare case studies of situations where tenants with legitimate defenses could not post pre-trial rent deposits and would be evicted under SB 270. Finally, they interviewed court administrators to identify administrative and fiscal consequences of making the municipal courts collect and administer tens of thousands of small rent deposit accounts.

The researchers also documented fallacies and errors in CALIF's methodology. A key example: CALIF assumed landlords lost all the rent they did not collect during a UD court proceeding; they did not even mention security deposits which California landlords routinely hold to secure themselves against just such loss. Another example: CALIF considered that a tenant won a UD case only if s/he prevailed at a court trial in which both parties appeared. Since only 8% of UD's reach this stage, CALIF's methodology grossly overstated landlord victories. In contrast, the LA Municipal Court data showed that more than a third of UD filings fade away and are dismissed with no judgment. Another 11 % are settled by agreement of the parties under court supervision. Most of the balance of cases end with a default judgment or judgment for failure to appear (landlords don't appear at trial in only about 2% of the cases) in which the court never considers the facts in the case or the tenant defenses. In many of these cases, tenants with legitimate defenses do not come to court because they lack the language skills and representation to make their case. One study the researchers used to good advantage showed that in the Berkeley Municipal Court, tenants who were represented by lawyers were about as likely as landlords to prevail at trial.

Legislative Gymnastics

California's 1992 legislative agenda has been consumed by a budget crisis, and the SB 270 debate was played out with budget matters dominating legislators' concerns. The bill was finally calendared for the final meeting of the Assembly Judiciary Committee before the legislature's usual adjournment date of July 1. The research was released, and Christine Minnehan of the Western Center on Law and Poverty led a sophisticated campaign against the legislation. The research helped convince the important California Judicial Council, the presiding judge of the LA Municipal Court, and other opponents to vigorously oppose the bill in hearings.

But the Assembly Judiciary Committee hearing was a triumph for the apartment owners. Political alliances had shifted after the June primary so that SB 270 proponents had the votes they needed. Housing advocates were particularly upset that Margarite Archie-Hudson, an African American Assemblywoman who represents South Central Los Angeles, switched from support for poor minority tenants in her district to side with minority apartment owners. Committee members, exhausted by the budget controversy, kept testimony on SB 270 to a minimum, showed no interest in either CALIF's or the PRRAC-funded study and voted decisively to pass the legislation out of committee. At this point passage appeared virtually certain within a matter of days.

In California, a bill is reviewed by the Legislative Counsel and keyed as having or not having a fiscal impact prior to committee consideration. It is very unusual to have a bill "rekeyed" after passage from a committee. A key break came when opponents convinced the Legislative Counsel to rekey SB 270 so it would go before the Assembly Ways and Means Committee.

At this point the study of costs involved in implementing SB 270 played an important role. The research (prepared with the able assistance of Alex Greenwood, a graduate student in the UC-Berkeley Public Policy Program) had documented the cost of collecting and accounting for tens of thousands of small deposits, and estimated the cost of time required in additional judicial hearings just on the rent deposits.

In mid August, with temperatures ove 100 and legislators even more sleep--deprived and frustrated with the budget stalemate, the Assembly Ways and Means Committee held hearings on the bill. In contrast to the perfunctory hearing and resounding defeat in the Assembly Judiciary Committee, the Ways and Means Committee departed from its usual practice of conducting quick hearings only on the fiscal aspects of a bill. They conducted a lengthy and spirited policy debate on the bill, in which research findings and arguments from both sides were vigorously advanced, disputed, and debated. Opponents' testimony, including particularly effective presentations by Rod Field of the Los Angeles Legal Aid Foundation Eviction Defense Center and Ilene Jacobs of California Rural Legal Assistance, made a major impact on the committee.

When there is no budget, in addition to passing or failing to pass bills, the Ways and Means Committee may put a bill in a suspense file pending determination that funds necessary for the bill will be available. Since proponents did not have enough votes to get the bill out of committee, and opponents did not have enough to kill it, the bill went into the suspense file.

During the next weeks, Assemblyman John Burton worked with opponents to, wring concession after concession (-amendments to the legislation, and SB 270 changed drastically to incorporate many tenant protections. But it was still bad law. This process delayed passage from the Ways and Means Committee until the final hours of the legislative session.

Midnight August 31 is by law the ending date for a legislative session. Bill sponsors now found themselves in the position of having two widely different versions of their legislation -- one of which was so reformulated as to make passage of dubious utility and attractiveness to the apartment owners -- with only hours to secure Senate concurrence to the Assembly amendments. Late in the night before the last day of the session, Senate president pro tempore David Roberti invoked a little used rule rendering SB 270 officially dead.

When the California legislature reconvenes after the November elections, there will be many new legislators. At the time of this writing, the composition of the Senate and Assembly and of the key committees cannot be predicted. Landlords may reintroduce pre-trial rent deposit legislation and if so, its fate will be uncertain. But for now, tenants snatched victory from the jaws of defeat. During 1992-93, tens of thousands of tenants retain important protections which would have been swept away.

The Role of Research

Public policy research made a difference to the SB 270 debate, but in unexpected ways. The Assembly Judiciary Committee paid almost no attention to the research. No legislator took the time to really figure out who was right on such crucial issues as the length of time UD's take in court, how much rent landlords really lose during the UD process, and who wins UD's. Two findings considered by the PRRAC researchers to be less important did make a difference. The study on SB 270 costs mobilized institutional opponents such as the Judicial Council, judges, and court clerks. This played an important role in the critical decision to rekey the bill to the Ways and Means Committee. The research on landlord security deposits acting as an offset to UD losses formed the basis for a major crippling amendment that helped splinter opponents and convince the Senate president to kill the bill. The reports had the important psychological effect of equalizing the information balance: whether or not they understood the reports, legislators on the Assembly side perceived the issue as a serious one with strongly conflicting expert opinion.
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