Apartments For Rent By Owner In Los Angeles – The measure would cap annual rent increases at 5% plus inflation and require landlords to list a “just cause” for eviction.
Millions of California renters are about to receive the nation’s strongest protections from rent hikes and evictions. And California’s premier homeowner advocacy group is fine with that.
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State lawmakers today passed AB 1482, which caps annual rent increases at 5% plus the rate of inflation (typically 2%-3%) by Rep. David Chiu, D-San Francisco, approved the bill. The bill, modeled after Oregon’s first measure passed earlier this year, also requires tenants to provide “just cause” to evict and, in certain circumstances, pay to relocate tenants.
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“We don’t have time for those who are suffering on our streets,” Chew said after the bill received final approval today. “Apart from evictions and homelessness, we don’t have time for that one rent increase.”
Gov. Gavin Newsom has lobbied hard for the bill in recent weeks, arguing the measure is necessary to combat the state’s twin epidemics of racism and homelessness. Half of all renters in California — more than 3 million households — spend more than 30% of their income on rent, according to the federal government’s definition of “rent-burdened.”
“These anti-foreclosure and eviction protections help families keep a roof over their heads, and they give California important new tools to combat our state’s broader housing and affordability crisis,” Newsom said in a statement. The bill now awaits his signature.
1) The new measure could curb extreme rent increases and is stronger than what Oregon passed. But this is not a simple rent control.
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Oregon made national headlines when it became the first state in the nation to pass a statewide cap on how much landlords can raise rents. Often characterized by the national press as rent control, Oregon law caps annual rent at 7% and increases for inflation.
Although Chiu’s bill sets a strict threshold of 5% and inflation, the assemblyman was careful to define the measure as “anti-rent” as opposed to general rent control. Fifteen California cities currently implement traditional rent control, with legally allowable rent increases ranging from 1% to 4%. Chiu’s bill would do nothing to prevent landlords from raising rents when a tenant moves out, a provision known as “vacancy control,” similar to how rent control worked decades ago in places like Santa Monica and Berkeley.
Assemblyman David Chiu was congratulated by his colleagues after he passed AB 1482, a bill that would put a cap on annual rent increases. Photo by Anna Wernikoff
“Voices matter. This is not rent control. This is an anti-rent bill,” said the bill’s co-sponsor, Assemblyman Rob Bonta, D-Alameda.
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While landlords have access to proprietary data and can best answer that question, publicly available data cannot. A UC Berkeley study of 10 wealthy communities in California found that average annual rent increases over a five-year period exceeded 10% every three years. An analysis by real estate data company Zillow, working with admittedly flawed data, found that 7% of California renters benefited from Chiu’s threshold in 2018. Those who benefit tend to have lower incomes and are therefore more vulnerable to rising rents.
Mike Wilkerson, an economist at ECONNorthwest who analyzed Oregon’s plan based on owner data, said the main rent growth in Oregon has been in low-cost units. He suspects the same is true in California.
“Really, it’s about protecting low-rent units,” Wilkerson said shortly after the California bill was introduced. “And the purpose is to naturally make more units available.”
Some opponents of the California law argue the move could backfire. Landlords, they say, can view the rent cap as a benchmark for what they should charge, rather than a limit on how much they can charge. Especially if they fear future unexpected costs or having to take the tenant to eviction court.
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“Large property owners can pass these costs onto their business because they have a fee attorney,” said Sid Lacyred, president of the California Rental Housing Association, an advocacy group for small landlords. “That’s not the case with mom and pop [landlords] across the state.”
2) While the rent cap has attracted the most attention, the eviction defense is arguably more controversial. And the “third rail” of California housing policy is touched too lightly.
In most of California, landlords can evict a tenant without giving a clear reason why they don’t want the tenant in the property.
When Gov. Gavin Newsom said in August he wanted to toughen the rent cap, he mostly wanted to include “just cause” eviction protections. Assuming Newsom signs the bill, California landlords would have to list one of several specific reasons why they want to evict a tenant, such as drug dealing or failure to pay rent on time. Landlords who want to convert an apartment into an apartment or move a family member must transfer one month’s rent to the displaced tenant for relocation assistance.
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Marcos Segura, an eviction attorney with the nonprofit Legal Services of Central California, said very few of his clients in the Central Valley are fired without cause. Most of the time, landlords are accused of non-payment of rent or breach of lease.
But he said the “just cause” defense can be useful in preventing landlord retaliation. When landlords evict tenants for no reason, it’s often because tenants complain about poor living conditions, he said.
“If you take that option away from landlords, they can serve no-cause eviction notices, which makes all the difference in the world in those cases,” Segura said.
To compromise with landlords and developers, Chiu excluded an increasingly popular segment of California’s rental housing from its rent: single-family homes. Meanwhile, single-family homes owned by investment companies will be subject to the new measure. Homes owned by mom-and-pop landlords exclude a large portion of the single-family rental market.
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Even by that margin, Chiu’s bill represents the largest expansion of renter protections in recent California history, affecting 8 million renters, according to estimates from the lawmaker’s office.
Many renters live in cities that already have local control, but are not eligible for it. A 1995 state law known as Costa-Hawkins prohibits cities from extending rent control to units built after 1995, and some cities limit the control to units built before then. In Los Angeles, for example, rent control applies only to units built before 1978.
Chiu’s bill applies to all eligible rental units in California that were built at least 15 years ago, meaning units built in 2005 are subject to rent restrictions.
This is a major change in California housing policy. Costa-Hawkins has been considered the “third rail” of the California legislature for decades. Although AB 1482 does not actually touch the language of the 1995 law — which would still prohibit cities from extending strict rent limits on new properties — millions of new housing units would be subject to a legal cap on rent increases.
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3) Developers say the measure should not impede new construction and they do not oppose it. But there will be no signed housing-production law with a rent cap.
For those worried about California’s shortage of million-dollar homes, the most compelling argument against the rent cap is that developers have repeatedly said it could prevent them from building new homes.
California homebuilders typically expect annual rent increases of 2 to 3% when they finance their projects, and the flexibility to raise rents helps convince investors to invest in the often uncertain and time-consuming construction process. A new apartment.
But Gov. Even before Newom’s public comments, the California Construction Industry Association, a leading lobbying group for California developers, said it would not oppose the bill after exempting new construction from the rent cap for 15 years.
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“The new construction exemption is critical because it’s difficult for investors to invest in apartment buildings in a 10-year window that just doesn’t pencil out,” said group leader Dan Dunmoyer. “The opportunity to attract capital is fifteen years. Anything less will make it harder to bring investors to California.”
The organization’s withdrawal of opposition is also notable, as it has had mixed success pushing legislation that would ease regulatory burdens and allow more housing. Many Capitol insiders believe combining a pro-development bill with a pro-rent bill is a logical way to ensure both become law.
In Oregon, a bill allowing developers to build up to four units in areas specifically zoned for single-family homes was passed shortly after the rent cap bill. A similar developer-driven effort in California, SB 50,
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