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Proposal for Statewide Rent-Cap in California Gets Revised

Posted by Admin on May 21, 2019
| Location, Real Estate, San Jose News
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A bill that would put a limit on steep rent increases throughout the state of California has undergone some revisions. Proponents of the bill have made some concessions  in an effort to get it passed as the May 31st deadline fast approaches, reports the Mercury News.

Assembly Bill 1482 would allow annual rent increases of no more than 5 percent plus the rate of inflation throughout the state. While the 5 percent rent cap amount is still in place, lawmakers have now agreed to sunset the law after 10 years should it be passed. In addition, the law will no longer apply to properties that were built within the past decade. This latter change is a rolling exemption that would not longer apply once the building becomes 10 years old.

With the exception of newly constructed buildings, the statewide rent cap would apply to nearly every rental in California that is not already rent-controlled. This includes apartments, as well as rentals such as single-family-homes and condos, that may have been previously exempt from rent control. The law would apply even in cities and counties that never had rent control.

At the recent Southern California and Central Valley BizFed meeting in Sacramento, California Assemblyman David Chiu, D-San Francisco, said, “The housing crisis is in every corner of the state. Just as the bill gives renters stability, we are providing landlords stability as well by including a sunset date in the bill.”

“We also want to be sure that this legislation does not deter housing production, so we will be exempting new housing units up to 10 years old,” Chiu added in a follow-up statement.

Assemblyman Chiu calls the proposed bill an effort to stamp out “rent gouging.”

He and other supporters of the bill have until May 31st to get the support they need in the State Assembly to get the bill passed.

Despite California’s housing crisis, these types of bills, which favor renters, are historically difficult to pass in the Legislature. Property owners and other California real estate stakeholders argue that these types of policies can actually hurt development and add to the housing shortage.

Last month, a bill to relax decades-old restrictions on local rent control policies – Assembly Bill 36 – never even got to the first committee vote stage.

Another proposal submitted last year that would make it more difficult for landlords to evict tenants who are adhering to their lease agreements and faithfully paying their rent lost by a wide margin.

Yet, tenant advocates say rent caps will not be as effective without eviction protections.

The California Apartment Association, which advocates for property owners, is opposed to the bill. Their concern is that the rent cap might be lowered even more over time.

In the California State Assembly, Democrats now hold more than three-quarters of the seats. But some of these Democrats are from districts that were represented by Republican Assembly members in the past. Time will tell is this bill get through the Legislature unlike others in the past that did not.

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