California CRE News In Your Inbox.
Sign up for Connect emails to stay informed with CRE stories that are 150 words or less.
California Senate Set to Hear Rent Control Bill
A California bill aimed at applying rent control across the state is set to receive its first hearing in the state Senate. The Senate Judiciary Committee will consider AB 1482 by Assemblyman David Chiu, D-San Francisco on July 9th.
The proposed bill would apply rent control to all types of housing in every city and county in California. The bill surfaced despite the overwhelming defeat of Proposition 10, a statewide rent control bill on last November’s ballot.
The California Apartment Association remains opposed to the bill, despite several amendments promised by Chiu, including:
– Increasing the annual cap on rent increases from CPI plus 5% to CPI plus 7%, the same cap adopted by Oregon.
– Exempting owners with 10 or fewer single-family homes.
– Sunsetting the bill in three years, but with the option to renew.
Had Chiu not agreed to these amendments, the bill would have died on the Assembly floor, notes the CAA’s Mike Nemeth. “The California Association of Realtors, however, responded by lifting its opposition. And with the Realtors neutral, AB 1482 received enough votes to advance to the Senate,” he says.
Chiu has not yet incorporated the amendments into his bill, but will likely do so in early July. Regardless, Nemeth points out the legislation still lacks assurances that future legislatures won’t lower the annual cap on rent increases. “To bring stability to the marketplace, CAA has urged Chiu to lock that cap in place and prohibit new rent control laws. The author has declined to do so,” notes Nemeth.
“Moreover, allowing rent control on buildings as new as 10 years old would reduce, if not eliminate, new rental housing,” he says.
CAA argues, facing a cap subject to change, investors could take their money out of state or apply it to other ventures. California’s housing shortage, meanwhile, will worsen. CAA continues to advocate for legislation that would increase California’s housing stock, not stifle it, says Nemeth.
For comments, questions or concerns, please contact Dennis Kaiser
