California is about to enact statewide rent control. Yesterday the California Assembly passed AB 1482, moving the rent control legislation to Governor Newsom’s desk. He will sign the legislation into law. Here is a summary of the legislation:
- Under Assembly Bill 1482, most yearly rent increases over the next decade will be limited to 5% plus inflation or 10% (whichever is lower of the gross rental rate). Concessions and discounts are excluded.
- Rents may be set to market rate once a tenant leaves a unit.
- Capital improvements may not be used to increase the rent beyond the cap for existing tenants.
- Tenants will receive protections against being evicted without cause.
- Does not supersede any existing rent control laws/tenant protections. So cities can still create more restrictive laws under Costa-Hawkins.
- Gov. Gavin Newsom, who brokered the deal that led to its passage, pledged to sign the bill in a statement issued immediately after the vote. The rent caps would take effect Jan. 1.
- The legislation does not change the rules for tenants already under rent control rules in Los Angeles, San Francisco and other cities across the state. But more than 2 million additional apartments in those cities and elsewhere in California will be covered by some limitation on annual rent increases, according to an estimate by UC Berkeley’s Terner Center for Housing Innovation.
- The cap does not apply to apartments built within the last 15 years. In addition, single-family home rentals are exempt unless they’re owned by corporations or institutional investors.
- The bill also limits the ability of landlords to evict tenants without documented lease violations after a renter has lived in an apartment for a year.
- A landlord who wants to convert a building to condominiums or make substantial renovations to units could evict tenants but would have to pay relocation assistance equal to one month’s rent.
NMHC continues to push back against these counter-productive policies, as evidenced by the NY Times story highlighting our views. In addition, read NMHC President Doug Bibby’s statement.
As a reminder, resources are available at www.nmhc.org/rentcontrol or www.growinghomestogether.org.
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- Real Estate Industry Letter on Rent Control to FHFA Director Sandra Thompson