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California’s de facto rent control bill passes Assembly

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“We have millions of Californians that are one rent increase away from being forced out of their homes,” said David Chiu

An extremely low-angle photo of the dome of the Capitol building in Sacramento. Photo via Wikimedia Commons

San Francisco-based Assemblymember David Chiu’s anti-rent gouging bill, AB 1482, passed the California Assembly on Wednesday ahead of its deadline.

When Chiu introduced the renter protection legislation in March, he avoided the phrase “rent control,” instead framing the bill as a limit on price gouging.

If passed, AB 1482 would sharply limit how much California landlords may raise rents each year. Under the version of the bill now on file in the legislature, the rules would be as follows:

Until January 1, 2030, prohibit an owner of residential real property from increasing the rental rate for that property in an amount that is greater than five percent plus the percentage change in the cost of living, as defined, more than the lowest rental rate in effect for the immediately preceding 12 months, subject to specified conditions.

The bill would exempt from these provisions deed-restricted affordable housing, dormitories, housing that has been issued a certificate of occupancy within the previous ten years, and housing subject to a local ordinance that imposes a more restrictive rent increase cap than these provisions.

However, the bill has changed significantly as it made its way through the Assembly. The version passed this week allows for hikes of up to seven percent plus inflation (not to exceed ten percent in all) instead of five. And instead of lasting until 2030, it would only be in effect for three years.

AB 1482 passed 43-31 on Wednesday evening.

During the proceedings Chiu said, “We have millions of Californians that are one rent increase away from being forced out of their homes.”

Ahead of the vote, the California Apartment Association warned lawmakers that the bill “would create a huge disincentive to invest in rental housing at a time when California so desperately needs more homes.”

Assemblymembers opposed to Chiu’s plan echoed this opinion, but the last-minute addition of the three-year time limit won over enough fence sitters for the bill to pass.

Chiu was upbeat on social media after the vote but made no statement except to thank the bill’s supporters.

One party that decried the vote was LA-based AIDS Healthcare Foundation’s (AHF) housing campaign, Housing Is a Human Right, whose spokesperson lamented AB 1482’s passage via email hours later.

Though initially supportive, the global nonprofit argued that too many compromises “watered down” Chiu’s original protections and that the new law might inadvertently drive rent hikes.

“There is a real danger that many landlords will see the rent cap as a new floor, handing tenants ten percent rent increases year after year,” said AHF Director René Christian Moya in an emailed statement.

She also said that the bill does nothing to address rent control limitations directly. AHF has a new ballot measure to expand rent control set for a vote in 2020.

In San Francisco, “the annual allowable increase amount effective March 1, 2019 through February 29, 2020 is 2.6 percent” on units built before June of 1979, according to the SF Rent Board. But there’s no limit on rent hikes for units built in the past 40 years.

Chiu’s bill would not apply to units created in the past ten years, but would cap rent increase at ten percent or less for homes built from 1980 through 2008. He now faces a September deadline for getting the legislation through the California Senate and to Gov. Gavin Newsom’s desk.