After making it through two legislative committees, SB 594 heads to the Senate Appropriations for crucial vote.
Californian tenants and workers are another step closer to critical protections from abuses by large corporations that hide behind the current limited liability company (LLC) structure after lawmakers voted to pass SB 594, the LLC Owner Transparency Act.
The bill, authored by Sen. Maria Elena Durazo (D-26) and co-sponsored by the California Reinvestment Coalition and UNITE HERE! Local 11, passed the Senate Judiciary Committee Tuesday and the Senate Banking and Financial Institutions Committee last week. It now heads to Senate Appropriations and then to the Senate floor for a final vote before moving onto the Assembly.
SB 594 would establish transparency in the ownership of LLCs and similar corporate entities by requiring that they register the name of each person with substantial control over the entity, both upon creation and upon making required biennial filings.
“The lack of owner transparency finds an avenue to skirt responsibility for substandard housing, and when local code enforcement agencies finally close in, the bad actors simply switch LLCs and create substantial delays,” said Sen. Durazo. “SB 594 is a good-governance bill. It does not change, in any way, the legal protections afforded to the entities.”
Jyotswaroop K. Bawa, CRC’s Chief of Organizing and Campaigns, provided testimony explaining that the bill would help relieve California of several housing issues, including the troubling trend of large corporations buying up limited housing stock.
“Data from Q4 of 2021, when interest rates were at a historic low, shows that 75% of all purchases made by limited liability corporations were in all cash. These buyers are clearly not small investors, these are large operations growing as monopolies,” Bawa said. “In a state that is already stressed by housing unaffordability, further consolidation under these large corporate landlords who are motivated first and foremost by their need to show quarterly gains in their investment has undoubtedly made things worse for tenants.”
The bill’s only opposition during Thursday’s hearing came from the California Apartment Association, which represents the politically conservative voice of rental housing owners.