California is on the brink of rent control across the country.
Assembly Bill 1482—which will bar landlords in one year from raising rents of more than 5 percent plus local inflation — was approved in a 46-22 vote this afternoon at the State Assembly. Inflation varies by region, but in California it averages about 2.5 percent.
The bill now heads to Gov. Gavin Newsom’s desk; he has said he will sign it.
Assembly member David Chiu (D-San Francisco), who introduced the bill, says the rent limit was designed to avoid “price gouging” and “serious” increases.
It also includes a provision requiring landlords to have “just cause” when evicting a tenant. Examples include non-payment of rent and breach of lease.
It will extend in municipalities that do not already have rent control laws and in those that do, it will strengthen rent control. Lawmakers endorsing the bill hope it will provide tenants with immediate relief and help keep them in their homes in the midst of a nationwide housing crisis that has sparked a surge of homelessness.
“Folks are being asked to pay 50, 60, 70 percent of their net spendable income on rent, because landlords are raising the rents,” said Assemblymember Richard Bloom (D-Santa Monica. “What’s someone to do in that situation?” The California Association of Realtors, an influential lobbying group, opposed the bill, and Assemblymember Al Muratsuchi (D-Torrance) said his office was inundated with calls from local real estate agents over the past couple of days, urging him to vote no. But he ultimately voted yes. “Even in affluent parts of my district, I’m hearing more and more stories of people who can’t keep up with rents,” he said. “We need to side with the renters on this one.”
But critics argue that the bill would potentially stymie the construction of new housing when more is desperately needed by California — and Los Angeles. They also say it will hurt mom and pop landlords who have “sweat” and “toiled” to buy property and rely on rental income.
Assembly Republican leader Marie Waldron, whose district includes Escondido, said that unraveling “outrageous regulations imposed” on developers would be the best solution to the housing crisis in California.
“Why would anyone look now to invest in housing for multiple families?”She’s been asking.
But the bill would not extend to buildings that have been built over the past 15 years and would exclude single-family homes unless they are owned by a company or duplexes where the owner lives in one of the units.
AB 1482 will include units that are not currently covered in cities such as Los Angeles that have rent control policies. Because LA’s rent control legislation applies only to pre-1978 buildings, the bill will cover several hundred thousand new units that opened from 1978 to 2004 in the nearly three decades. (In the city of Los Angeles, rents are set at 4 percent this year.) The bill is based on a report by UC Berkeley’s Terner Housing Research Center, which found a 5 percent limit, plus the Consumer Price Index, will “provide significant coverage” against “the worst rent increases.” Chiu says it would also encourage property owners to continue to make money. He points to data prepared by Housing Now that show “California’s average annual rent increase is far below this proposed cap.” It is also far below the amount property owners have raised rents in Los Angeles County, where rents are up about 2 percent year-over-year, according to CoStar.
The law would be in effect from January 1 until 2030.