Increasing housing costs and shortage of inventory have been the topic of conversation across the state. It isn’t surprising that a statewide rent control bill that would impose rent control and “just cause” eviction policies won passage in the Senate Judiciary Committee in July.
The bill as proposed by Assemblyman David Chiu would cap annual rent increases at 7 percent plus the consumer price index. A similar bill was passed in Oregon.
Opponents state that such a policy would exacerbate the already problematic housing shortage. The bill would apply in all jurisdictions even in those where voters and local elected leaders have rejected rent control.
The bill exempts units less than 10 years old as well as single-family homes where the owner does not own more than 10 units in their personal name. California Apartment Association (CAA) asked Assemblyman Chiu to lock the 7 percent plus CPI and to prohibit future rent control laws from reducing the cap.
CAA warned senators that threats of statewide rent control would affect investments in the state. CAA sited 1) projects with several hundred units slated for southern California were moved to other states 2) after Oregon’s adoption of the statewide rent control law, investments in multi-family housing fell by 38 percent compared to the previous year.
In addition to rent control, AB 1482 was recently amended to include “just cause” eviction. With just cause eviction controls, landlords must prove a specified cause with the testimony of third-party witnesses. This burden of proof often makes it difficult, if not impossible, to end the tenancies of nuisance residents. Rent control and just cause combine to make AB 1482 a serious threat to California’s housing goals.
Governor Newsom has called for the construction of 3.5 million new housing units by 2025, an average of 500,000 new units a year. California has built an average of 80,000 homes per year over the past decade, falling short of the desired 150,000 units. For AB 1482 to become law it must pass the Senate Appropriation Committee and Senate floor before passing review of amendments in Assembly and get governor approval.