Gov. Newsom Signs Rent Control Bill; Launches Statewide Rent, Housing Tour

By Dennis Kaiser

California Governor Gavin Newsom kicked off a statewide tour on Tuesday at the same time he approved a series of bills designed to tackle the state’s housing affordability crisis. In Oakland, the Governor signed the nation’s strongest statewide renter protection package and a number of other bills to address the rising costs of rent and housing.

AB 1482 by Assemblymember David Chiu (D-San Francisco) creates a statewide rent cap and eviction protections that are critical to combatting California’s housing and cost-of-living crisis. The legislature passed the bill last month.

Gov. Newsom led off a press conference citing a Martin Luther King Jr. quote saying, “We are bound together by a web of mutuality.” With that as the backdrop, he added California continues to fall short on the promise of the Golden State for all. Newsom noted the state is among the wealthiest, yet also has a high poverty rate. He cited the high cost of living, primarily due to housing costs, as the “issue that defines more issues than any other issue in this state,” said Newsom, calling housing the common denominator to issues in state.

“We have a lot more work to be done,” he said. “This is one of the three pieces. This is about protection, but we have to be honest about preservation. And then yes, we have to address the issue of production in the state of California. We need to build more damn houses,” said Newsom.

“This is a profoundly important moment,” Newsom noted. “The fact that we are leading the nation in trying to meet this moment is a point of pride and it is a point of principle that we need to continue this kind of energy to focus on increasing that supply.”

Newsom predicted other states will follow California’s lead, too. “We created the capacity of belief, now we know this can be done. You’re going to see this happing in states all across the country, not just one or two states,” he said. “There’s no doubt in my mind this is a movement afoot all across this country. It may be mostly acute in California, but is not unique, this affordability crisis in our nation.”

Chiu said the bill saves eight million California renters who were one step away from eviction or homelessness. Though he agreed there’s much work left to be done to build millions of units needed to address housing shortages.

AB 1482 caps annual rent increases at 5% plus the rate of inflation — currently about 8% — for much of the state’s multifamily housing stock. The bill also includes “just cause” eviction policies to qualified California housing.

The bill’s rent cap will mainly affect properties that are 15 years of age or older, contain two units or more, and are not already subject to local rent control ordinances. The legislation, however, will not interfere with local rent control laws, which remain under the purview of the Costa-Hawkins Rental Housing Act. The legislation also doesn’t apply to single-family homes, townhouses and condos, except when owned by corporations or REITs. It also will exempt duplexes when one unit is occupied by the owner.

“The Legislature this year dealt with tenant protections and unconscionable rent increases,” said Tom Bannon, CEO of the California Apartment Association (CAA). “Now, we must get very serious about passing legislation that’s going to develop housing quickly. And I’m really hoping that all the tenant groups will be as adamant about new construction as we are.”

CAA’s top executive said California can make significant inroads on housing production next year by approving Senate Bill 50, which would allow higher-density multifamily housing near transit and employment centers, and by reforming the California Environmental Quality Act, reducing fees and creating incentives to build.

“There’s a cloud now over whether people will invest in rental housing,” Bannon said. “The only way you’re going to remove that cloud is if in fact California, the state legislature and city councils make a decision that new housing is a priority. And currently, it’s not.”

On Wednesday, Gov. Newsom will continue his rent and housing tour with planned stops in San Diego and Los Angeles.  He’s also expected to sign a number of bills aimed at boosting housing production across the state.

For comments, questions or concerns, please contact Dennis Kaiser