Governor signs California-wide rent cap bill into law

In a move aimed at stemming the tide of skyrocketing rents that
have helped spur a statewide housing crisis, California Gov. Gavin
Newsom signed a sweeping rent cap bill into law Tuesday.

Beginning in January, landlords in California will face limits
on how high they can raise rents.

“No one thought this could be done,” said Newsom at the

AB 1482 bill
signing Tuesday at a senior center in West Oakland
surrounded by lawmakers and tenant advocates.

Under the new law, property owners across the state won’t be
allowed to increase rent by more than 5 percent plus local rate of
inflation and they will be required to give “just cause” for
evictions of tenants who have lived in a unit for at least a
year.

“This is historic legislation,” said Assemblyman David Chiu
(D-San Francisco), the lead author of the legislation. “But let
me tell you, folks, our work is not done.”

Landlords won’t be allowed to boot renters following the rules
of their lease unless the owner is tearing down the residence,
renovating it, taking it off the rental market or moving in. In
some cases, such as when they convert a building into condos or
make substantial renovations, owners will have to pay tenants
relocation fees.

Proponents have hailed the new law, which will be retroactive to
March 2019 in an attempt to aid tenants whose landlords recently
boosted rents ahead of the bill signing, as an important step
toward addressing the state’s housing crisis, which is
particularly acute in the Bay Area.

“I know from personal experience how important today is,”
said Sasha Graham of the group Alliance of Californians for
Community Empowerment.

Graham became homeless for several years after her landlord
raised the rent on her Richmond apartment more than 100 percent and
later evicted her and her son from their home with no cause.

“It was traumatizing,” Graham said, adding that the new law
“will literally save laws.”

But critics have said the new law, which exempts units built in
the last 15 years and would sunset in 2030 unless lawmakers extend
it, could dissuade some landlords from renting property at all.

Regardless, Newsom’s signature makes California one of the
first states in the country to take such a step. Oregon passed
similar legislation earlier this year and New York has moved to
enact widespread caps on rent. It’s also a political win for the
governor, who helped negotiate the controversial bill to
passage.

Lupe Arreola, executive director of Tenants Together in San
Francisco, said the law will offer useful protections for renters.
The organization did not take a position on the measure.

Renters need additional help as more become “rent burdened,”
paying more than 30 percent of their income on housing, Arreola
said. “People in Stockton are having these crazy rent
increases,” she said. “People in Fresno are having these crazy
rent increases.”

But the reach of the protections might be limited. A study by
Zillow found just 7 percent of California renters would have
benefited from the rent cap. In places like Oakland and San
Francisco, which already have rent restrictions, tenants may not
see many changes. Those local rules will still apply.

“We can do better and we know that we have a lot of work to
do,” said state Senate President pro tempore Toni Atkins (D-San
Diego). “I can’t think of anything better than to make sure
people have a roof over their head.”

Nearly a third of renters in Vallejo and Sacramento — popular
retreats for former Bay Area residents — would have benefited
from the cap.

The law will apply mostly to multi-family dwellings. Only condos
and single-family homes owned by big corporations or major
investors, not an individual, will be covered.

Still, small landlords say the measure will stifle new
development and encourage property owners to regularly hike rent to
make up for lost revenues.

“There is a reason that the cities with the strictest rent
control and just cause eviction policies have some of the worst
housing affordability rates and the most severe housing crisis,”
said Sid Lakireddy, president of the California Rental Housing
Association, a union of smaller property owners. “As the housing
crisis worsens, we will continue to advocate for real solutions
that provide real relief to Californians.”

Newsom said the rent cap law helps address the “protection”
of tenants. But, he said, the state needs to do more to preserve
existing affordable housing and produce more new housing.

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“We need to build more damn housing,” the governor said,
bluntly.

Still, he said, the signing of AB 1482 could prompt other states
to consider similar measures.

“Once a mind is stretched, it never goes back to its original
form,” Newsom said. “You’re going to see this happening in
states all across the country.”

Staff writer Louis Hansen contributed to this report. 

Source: FS – All – Real Estate News 1
Governor signs California-wide rent cap bill into law