California is One Step Closer to Rent Control

Earlier this week, on Wednesday, California’s State Senate and the State Assembly passed and approved a new bill that would enact a statewide rent control.  AB 1482 passed the assembly with about two-thirds majority vote.  The bill, dubbed the “anti-rent-gouging bill”, now sits at the desk of California Governor Gavin Newson.  It is expected that he will sign the bill, which would go into effect January 1st.

Under Assembly Bill 1482, landlords cannot increase the rent more than 5% plus inflation.  Of course, inflation rates vary every year.  Included in the bill are protections for the tenants, who cannot be evicted without just cause.  This literature was placed by the Governor, who has been in support of the bill since its inception.  The bill does, however, have an expiration date after 10 years.

California is the third state to enact strict limits on increasing rents.  Oregon was the first state to enact a statewide rent control, of which does not have an expiry date.  New York has a comprehensive stance on rent, with rent-controlled buildings and rent stabilization.  These vary by city and county.  However, California’s bill comes about a year after California voters turned down a previous initiative for rent control. 

Proposition 10, however, was geared towards repealing a housing act that was enacted in 1995.  The Costa-Hawkins Rental Housing Act puts limits on municipal rent control ordinances.  Coincidentally enough, two-thirds of California voters were against repealing the housing act. 

The new legislation does not overrule current policies in place in cities like San Francisco and Los Angeles.  It also does not apply to newer apartment buildings no more than 15 years old or single-family home rental by an individual.  It does apply to single-family rentals that are owned by an investor or company.

While this latest bill doesn’t fix all of the issues California is experiencing with tenant rights and the burden many feel by rising rents.  However, it is a step in the right direction.