The bill introduction deadline for this year’s California Legislative Session has passed. Between the Assembly and Senate, lawmakers introduced just under 1,800 bills. Nearly 600 of them, or 33%, were placeholder bills, also known as spot or intent bills. This represents a 23% reduction from last year, with 550 fewer bills introduced overall. This session marks the lowest number of introduced bills in the past twenty years.
During the final week alone, lawmakers introduced approximately 1,100 bills. On Friday, legislators introduced 390 Assembly Bills and 158 Senate Bills. That same day, legislators submitted 200 spot bills and 55 intent bills, totaling 255 placeholders introduced in a single day. As a result, lawmakers will likely amend nearly 600 bills over the next several weeks as they replace placeholder language with substantive content.
Several key proposals affecting apartment owners and investors have already emerged. The following overview highlights major developments in California multifamily legislation that warrant close attention.
Legislative Priorities Affecting Apartment Owners
Capital Rivers Commercial’s Matt Depa, CCIM, along with fellow board members of CalRHA and industry lobbyists, is actively engaged in legislation addressing several important issues. These include the 16-unit resident manager requirement, property left in common areas, trespass enforcement, habitability claim protections, and production streamlining.
Each of these areas plays a direct role in operational efficiency and risk management for multifamily property owners across California. As amendments unfold, these topics will remain central to ongoing policy discussions.
Assembly Bills in California Multifamily Legislation
AB 1611 (Haney): Taxation of Rental Properties and Loss of 1031 Exchange Benefits for Owners of 50 or More Units
Under current law, tax rules do not recognize gains or losses from exchanging similar properties for business or investment purposes. AB 1611 would change that treatment for certain owners. The bill proposes preventing the non-recognition of gains for taxpayers who exchange single-family residential rental properties if they own 50 or more such properties in California.
If enacted, the changes would apply to exchanges completed beginning January 1, 2026, and would align with taxable years starting on that date. For larger portfolio owners, this proposal could significantly impact long-term disposition strategies and capital reinvestment planning.
AB 1768 (Bryan): Transactions and Use Tax Expansion in Los Angeles County
Existing law allows local governments to levy transactions and use taxes within established procedures and limits, including a 2% total tax rate cap per county. AB 1768 would allow Los Angeles County to impose an additional tax of up to 0.5% until December 31, 2031, for general or special purposes, subject to voter approval.
This additional levy could exceed the typical 2% county cap. While specific to Los Angeles County, proposals of this nature are closely watched by investors statewide, as local tax structures influence acquisition underwriting and operating expenses.
AB 1771 (Alvarez): On-Site Manager Requirement for 16 or More Units
Current law requires a manager or responsible party to live on-site in apartment buildings with 16 or more units. AB 1771 seeks to eliminate this mandate. The bill would prevent state or local entities from requiring on-site residency for managers or caretakers.
It also directs the appropriate department to update its regulations accordingly. The bill specifies that these changes are of statewide importance and apply to all cities, including charter cities. For multifamily owners, this proposal could offer greater flexibility in staffing models and reduce certain operational constraints.
AB 1842 (Harabedian): Mortgage Forbearance for Uninhabitable Properties
AB 1842 would allow borrowers to request mortgage forbearance if their property becomes uninhabitable due to an emergency. Borrowers would need to affirm that the property meets the uninhabitable standard.
The bill requires mortgage servicers to provide an initial forbearance period of up to 180 days. Extensions could be granted in 90-day increments for a total period of up to 12 months. This proposal introduces additional borrower protections that could affect lender servicing practices and risk assessments.
AB 2025 (Pellerin): Digitally Altered Images for Rental Property Advertising
The Real Estate Law regulates licensing and activities of brokers and salespersons. Under existing law, if a digitally altered image is used in advertising for the sale of real estate, a disclosure is required, and an unaltered version must be included for online content. A willful violation constitutes a crime.
AB 2025 would extend these requirements to rental properties. If enacted, advertisements for rental units using digitally altered images would require disclosure and the inclusion of original images when published online. This bill has direct implications for marketing practices within California multifamily legislation.
Senate Bills in California Multifamily Legislation
SB 885 (Strickland): Major and Emergency Regulations
SB 885 proposes that a state agency may not finalize a major regulation until it prepares an impact analysis, submits a proposal to the Legislature, and the Legislature enacts a law authorizing the regulation.
The bill allows agencies to adopt emergency regulations under specific requirements. Emergency regulations would be limited to 180 days but could be readopted twice for additional 90-day periods under certain conditions. This measure addresses regulatory oversight and procedural safeguards.
SB 1117 (Cervantes): Impact Fees for Accessory Dwelling Units
Under current law, impact fees cannot be charged on accessory dwelling units with 750 square feet or less of livable space. For ADUs larger than 750 square feet, fees must be proportional to the size of the primary dwelling.
SB 1117 proposes that impact fees apply only to the portion of an ADU exceeding 750 square feet. This would alter how local agencies calculate fees and create a state-mandated local program. The bill states that these changes are of statewide concern and apply to all cities, including charter cities.
Monitoring the Evolving Legislative Landscape
As the session progresses, many placeholder bills will be amended with substantive language. Property owners, investors, and operators should expect continued developments across multiple policy areas.
California multifamily legislation remains dynamic and often complex. Proposed changes can affect tax strategy, compliance obligations, operational requirements, and marketing practices. Staying informed allows owners to adapt proactively and protect long-term asset value.
Conclusion and Next Steps
This legislative session has introduced fewer bills than in recent years, yet several proposals carry meaningful implications for apartment owners and investors. Key areas include taxation of rental properties, resident manager requirements, mortgage forbearance standards, digital advertising rules, regulatory oversight, and ADU fee calculations.
As amendments unfold, these bills may evolve significantly before final votes occur. Monitoring California multifamily legislation is essential for informed decision-making and strategic planning.
For guidance on how pending legislation may impact your multifamily portfolio, connect with Capital Rivers Commercial. Our team closely tracks regulatory developments across California and works with clients to navigate shifting policy environments. To discuss your investment strategy or explore available multifamily opportunities, contact us or browse our current listings.
