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Bill to Reduce California Rents by 25% Using Coronavirus Crisis as Opportunity to Erode Property Rights

‘AB 828 is a ruse when it comes to foreclosures or any assistance to the owners it burdens’

By Katy Grimes, April 17, 2020 10:05 am

The California Apartment Association reports a new legislative proposal using COVID-19 as the reason, would force every rental property owner in California to reduce rents by 25%.

AB 828 by Assemblyman Phil Ting (D-San Francisco) is a gut and amend bill, using the government-created crisis as an opportunity to erode property rights in California.

“AB 828 by Assemblyman Phil Ting ignores the robust rent and eviction controls already in place statewide. It provides no assurances that landlords can collect rent, remove problem tenants, or get a fair hearing in the court system.”

AB 828 denies equal justice to housing providers by:

  • Forcing landlords to reduce rents by 25% — even if a tenant cannot show a COVID-19 hardship or need.
  • Allowing the courts to set rents and change rental agreements already in place.
  • Assuming every tenant is facing a COVID-19 hardship and must be compensated for it.
  • Protecting nuisance tenants. The bill does not require tenants to answer an unlawful detainer complaint.
  • Mandating that rental property owners demonstrate an economic hardship to collect the contracted rent.

This gross violation of private property rights “is an unfair attempt to allow the government and the courts to give reduced rent to all tenants even if they have face no economic hardship, and it provides safeguards for landlords.”

The CAA response sums it up correctly:

“In Violation of the State and Federal Constitution, AB 828 Forces a 25 Percent Reduction in Rents – In our current pandemic, after property owners have gone months without rent, AB 828 takes away additional rent owed by the tenant by requiring the courts to impair existing contractual obligations, in violation of the state and federal constitution, and mandate a rent reduction of 25 percent. We must remember that owners are already facing the following: a statewide halt on evictions of all types; a state of emergency that caps rents; local measures that freeze rents and provide extended deferrals of unpaid rent; and state and local rent control laws that, in some cases for years, have limited rent increases to less than inflation. Small property owners, owners in strict rent control jurisdictions, and owners who offer affordable housing will be especially harmed by this rent reduction. And it’s important to note that, in general, many owners have already voluntarily forgiven or reduced rent because of this crisis.”

“AB 828 is a ruse when it comes to foreclosures or any assistance to the owners it burdens.”

Read the letter CA Apartment Association sent to Assemblyman Ting.

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57 thoughts on “Bill to Reduce California Rents by 25% Using Coronavirus Crisis as Opportunity to Erode Property Rights

  1. I am OK if the cost of :
    my mortgage
    my property taxes
    my insurance
    any repair service
    my gardener
    is reduced by 25%
    Fair is fair!!!

      1. Actually, Michael, it would cause your property taxes to go up. The flood of apartment buildings that would be placed in foreclosure would drastically reduce the value of apartments, but not single family residences. The county and the state will still want to get their money from somewhere so they would seek a bond to cover costs. They’ll say it’s for the schools so voters will vote on it. Up go your taxes, without any increase to values.

    1. YES. drop the cost of living in Kalyfornia by that amount and I MIGHT move back. Otherwise, Gel Hair and his thugs are simply destroying property rights and they have no authority to do that with a law. Put all the property up for sale and evict the renters..So there !~!!
      Make it all condos’ that the renters can then BUY !!! at market prices.

      1. I am a disabled veteran on a very limited service connected disability and mu landlord raised my rent in July 2019 10% and is now raising it again during the pandemic another 10%. My landlord is trying to profit off of the pandemic and natural disasters by charging Bay Area rental prices in rural Mendocino county her justification was she wants her rentals to be equal to San Fran and Bay Area counties she is a slum lord just like jerod Kushner these types of slumlords should be fined and the press should put up there pictures and identify there greed. I support a 25 % percent reduction

    2. LOS ANGELES RENTS HAS GONE UP 65% (national average is 36%) IN LAST 10 YEARS.
      Totally support 25% rent deductions under AB 828 for the following reasons:
      1. Lowest interest rate in 50 years.
      2. The average effective property tax rate in California is only 0.77%. (prop. 13)
      3. Low labor cost (undocumented workers)
      4. CA is among the highest rents in USA
      5. Low utility cost (Mild California weather).
      All these are benefiting the landlords.
      Results: VERY VERY rich landlords!
      Tenants suffer!

      1. You forget a lot of first generation landlords mostly are losing money for there properties. Mortgages are more expensive then your rent typically. Less maintenance, months of no tenents, income is taxed. The list goes on.

      2. 1. Most landlords already have a very low interest rate
        2. Tax rate is already factired in rent price
        3.you are encourage illegal activity
        4.everyone in the world wants to live in California’s high rent comes with a high mortgage payment + insurance + taxes + money for repairs.
        5. Many renters pay their own utilities.

      3. I agree with you, Mike. California rent and home payments are unnecessarily high. Families suffer the most from this. We can’t afford a 3 bedroom to live in LA, but my husband works there. So I live in another state with our kids, while my husband travels home once a month for a weekend to visit us. It is really hard on our family, and we want to live together again. But we can’t until our income increases substantially- and we’ve been working toward this for years. My husband is in the film industry… so him finding work in another state is very unlikely- though we have tried numerous times. California housing has gone out of control and is abusing the citizens of the state. It is unfair and unjust. This is the point where the government needs to step in and protect the people from an abusive industry.

        And I don’t understand why Katy Grimes is salty about the regulations being put on landlords in the middle of a horrific world pandemic and severe economic crisis. Our nation is suffering. People are jobless. You want them to be homeless too! You state “most” of the landlords are waiving rent. But right now risk of ending up without a place to live is severely high, people need protection and shelter. We need to protect more than just some of our citizens. California isn’t “taking advantage” of this opportunity to set you all in line. This should have been done a long time ago. It’s seriously just the last straw and somebody finally decided to take a stand. Landlords are ruining economic possibilities for families in California, and I seriously don’t know why it took them this long to step in and stop the financial abuse!

        Sorry for my frustration… it’s just that this author is painting everything in such a self serving light. Residing California are suffering. Take a step back and look at the whole picture.

          1. I am assuming you are one of those realtors/ landlords complaining about this reduction. Well same logic, if these investment doesnt make sense then dont buy a property and expect income.

        1. I’m a tenant and I would agree with this bill if everything is lowered by 25%, including property taxes for the rental properties, mortgage, state congress/assembly salaries and expenditure… Ting should set example to cut his own salary by 25%.

      4. Yup. And most people complains are the realtors that make the house prices so high now they dig themself into this hole and it will get bigger for them

      5. Mike, as an example of how your idea’s are misguided. I own a house (that I rent it to tenants), I break-even on the rent, only if I don’t have any maintenance or repairs and have no vacancies for the entire year. If I do have either, then I have a yearly loss. If I have to reduce the rent by 25%, I will be losing 25% or more per month. In addition, since I can’t have positive rental cash-flow with my existing mortgage, I will not be able to sell the house for enough to cover my existing mortgage. It’s just loss complied upon loss. I know many people in the same situation.

    3. I like your suggestions. You work hard, manage credit, buy property and then in return you don’t get anything but you have to reduce your rent on the property you loosing couple hundred.

    4. Well said, Alain. I agree with you except that it would also reduce your bottom line by 25%, and even that is not fair. You provide 100% of the service you contracted to provide, you deserve contracted compensation.

  2. I will be happy to reduce my tenants’ rents but they have to reduce property taxes and utilities as well

  3. This is very “Trumpian baloney”. Ting knows this is d.o.a., and likely will not get out of committee.
    The question: what does he really want?..It is maddening that even with the world dealing with Covid 19…. that Ting would resort to this type of chicanery.

  4. It’s a long time goal to make apartments public housing by draconian rent control, rent strikes, liberal landlord/tenant laws.

    Generally , after wars and highly disruptive economic times social welfare/justice advances are aggressively proposed….the latest round are Green New Deal, Guaranteed Minimum Monthly Income, Living Wage for any job, iron clad shutdown of independent contractors, free college, open borders, neutering law enforcement.

    You’re about to see amazing change attempts in states by radical governors eroding property rights, private contracts, police protection, health/welfare, religious beliefs, private education.

  5. Tenants are not the only ones suffering from COVID 19. The property owners are also victims of COVID 19. How can they take from one victim to help the other victim. The tenants have an option to move to a smaller home if they can’t afford the rent, but the owners are stuck with the mortgage amount. Mortgage companies are only giving mortgage relief for 3 months. On the 4th month, most of them are demanding 4 months mortgage. They don’t want to look out for the owners, but want to protect the tenants.

    1. Landlords should then consider getting a real job instead of exploiting their tenants to pay for their mortgages and lifestyles 🙂 Grocery stores are in need of assistance right now. Nobody is forcing landlords to hoard excess property.

      1. Exactly. I am landlord too but most these people complaining are realtors the real estate prices and now their investment is not making as much.

      2. Hahaha I totally agree. Its amazing how entitled some feel to money. I invest in the stock market… I earned the money I put in there just like most landlords worked for their rental properties. If the stock market goes down, I lose money but it would be super dumb of me to rely solely on my investments as income… because that’s not how life works.

  6. Just another reason why I have purchased property out of state and I am planning my exodus. Even though this thing is DOA, if you throw enough 💩 at the wall, eventually some of it sticks!

  7. I am a tenant living in Los Angeles and I believe it’s only fair that they lower it by 25% but if you’re going to go and do that yes and I believe that the owners of the property should get a 25% lower on their mortgage or whatever their paying everyone struggling right now

    1. Sonnya,
      Banks are not going to say, “Gee that was nice of you to lower rents, we will reduce your debt by 25%” That’s not in the bill and banks don’t give money away. And believe me, the county and state are not going to lower property taxes and water bills! FYI most property owners work on a profit margin far below 25%, some as low as 4%. With a 25% reduction in revenue, owners would have a NEGATIVE income, not a 25% reduction of income. So, how is this “fair”? I have always helped any tenant who was having a hard time but bills like this make me lose the love. They also worsen the housing shortage because no one will want to invest in apartments anymore. As a renter in L.A. you should give that some thought.

  8. AB-828 sends “Ting”les down my spine as radical elected representatives with no regard for the U.S. Constitution continue to abuse and violate their “Oath of Office”. Obviously Assemblyman Tingles doesn’t “Recall” putting his hand on a bible and swearing to uphold the U.S. Constitution…he’s probable never even read it…now he needs to be “Recalled” for disregarding the “Law of the land”. Maybe the Pacific Legal Foundation could send him a pocket constitution so after his “Recall” he will have plenty of time to read it! BTW…Thanks Assemblyman Tingles for helping to wake the people up. We needed this!!!

  9. Listen…they have nowhere to turn, the little guy is leveraged to the gills in short term debt due to high levels of credit card and installment debt. Throw in high rents or mortgage payments……

    Easily half of California workers are ravaged or ruined in a period of 4-6 weeks..

    And it looks like things might look good for relaxation in August-November!

    1. Just an observation,

      There is no such thing a property rights except that you are free to take possession of a building and land.

      The U.S. Constitution only says that upon government take over you are required to be compensated. But market regulations are not government control. There is no Constitutional right to a guaranteed profit.

      And finally under this crisis, the government was never the cause of, the current national and state “state of emergency” the courts have established suspensions on the use of “takings” as a unconstitutional act.

      There was always a large risk in this business because it was expecting infinite demand and high profits. This was unrealistic and the investors were well aware of their exposure.

      1. Rental housing is a commodity just like everything else that is bought and sold. Are you saying the government should be able to artificially lower the price on commodities?. Where would it end? Let’s say your a barber and the government tells you that now you must charge $15 for what used to be a $20 haircut. Is that fair? It’s not about property rights or any of the other stuff you mentioned.. It’s about the free market being manipulated by the government but only in one area (cost of rents) while not also considering/lowering the cost it takes for the landlord to bring that rental to market and make a small profit. The margins landlords make on most rentals purchased these days are only about 5-7% so the margins are already very thin. Lowering rents by 25% would bankrupt a lot of people who invested their hard-earned money into something that should not be able to be manipulated in that manner.

  10. All of a sudden, my rentals all need extensive remodeling and will be taken off the market for at least six (6) months, which is the “magic number.” Dear Tenant: You have 60 days to get out and move on.

  11. Hey California, when are you going to wake up? You “Democrats” elected all of these morons, including the most hated woman in America, Nancy Pelosi, Adam Schiff, Maxine Waters, Gov. Newscum, and this newly emerged idiot Phil Tingaling. You can’t elect these assholes and then complain about them. Get them all out of office.

  12. I am a tenant and I would like to buy rental income property in the future but this puts a halt to my plans. Why would I want to buy and support this economy with such stupid law makers. I’d rather move to another state and invest there instead of California. How can we call come together and fight these idiots in office.

  13. This is nuts. I live in Pacifica. We voted down Measure C regarding rent control in 2016. Then in 2018, there was a movement to repeal Costa Hawkins which was also voted down state wide.

    Then this sneaky group coerced the state and govenor to throw away the public votes and instituted STATE WIDE rent control starting in 2019/ Jan 2020.

    Now, here only 4 months into 2020 and now this crap of 25%reduction.

    My mortgage company is NOT reducing, nor offering deferment. I don’t see taxes going down. Sewer, water. Garbage have only gone up and up.

    Those of us providing affordable housing are Mom & Pops… getting hosed! Where are the bleeding hearts for me? I could use a reduction as I look for a new job… and who’s hiring so I can make enough to subsidize others?

    1. The 1% wanna vacuum up all the rentals from the mom and pop owners, I constantly get mail for instant cash offers.

  14. Ridiculous …why not just legislative that the state of Calif will pick up 100% of all rental, mortgages , leases and Baskin Robins ice cream cone purchases ( OK a pork barrel insert.. but have you seen how expensive a waffle cone with two scopes is!!!). Just divert the high speed rail billions…this is a time of immediate action… Calif needs to re-prioritize these funds ..State can later pass a new tax or raise the % on an existing one to get the money back.

    1. Does the law allow, For the rental home to be sold?… I would ask the tenants to vacate, within reason. and pay them to move out , with , one free months rent? I would ask them to vacate and then sell, if the law allows… …meanwhile , everybody else will be selling…

  15. This is outrageous. any petitions against Ting I can get on the bandwagon. He needs to be removed and this ab828 voted down. This will not be good for renters either once mom/pop is gone, high rents from conglomerates will ensue.

  16. They won’t reduce taxes. They already said they are going to have to raise taxes. Our governor is running this state like a Hitler. Using all this as a money grab. Take a look at the state it is going down hill under the democratic control. People need to open their eyes. They like to keep people down and control them. They havent been affected by this. They are all drawing their salaries. It’s crazy. Playing in peoples fear. No one will build in this state. It is becoming a third world state. People need to watch more than mainstream TV and open their eyes.

  17. This is a totally unfair attempt to reduce rent to all Residents even if they face no economic hardship, and it provides no safeguards for Landlords. If it passes it will throw Housing providers into severe hardship, which will lead to a decline in new properties being developed, as well as many letting their properties fall into a state of disrepair because they won’t be able to afford to keep them up. When that happens everyone suffers. If passed the end result will be Investment Capital for new housing fleeing and avoiding California, which means it will be pushing away the potential for new housing stock to be added to the State – which is needed. I have been working in the multi-family housing business since 1986 and have owned property in San Diego, Las Vegas and Phoenix. I have seen first-hand how 25% reductions in rent work out (2007-2011) and the devastating short and long term affects they have on the market. This is NOT the answer.

  18. I am a struggling landlord the ones you don’t hear very much about I depend on my rent to pay my mortgage, taxes, insurances etc. If rents are lowered 25% then it seems only fair that mortgages, utilities, taxes and insurances also be lowered 25% otherwise, and I’m sure I am not the only one I could be in danger of losing said home and my future retirement income. These are trying times for everyone!

  19. The Elite and Wealthy Property Manager and Owners don’t get to complain. You all receive tens if not hundreds of thousands of dollars yearly to pay your mortgages and still get a good piece of the cake to buy your Mercedes and Teslas. Many people are in good standing and have never missed a timely payment, but when all of a sudden a catastrophic worldwide event takes place, can’t even give people the opportunity to still make payments lowered or not.

    1. Yeah cus these are greedy ass realtors/ landlords drives up california property price. They just mad cus their investment is not making as enough right now.

  20. Here in Los Angeles where it has become increasingly difficult for landlords to even have a legitimate voice in dealing with tenant issues. I can’t imagine what it would like if a law now governed their having to reduce their rents 25%. I have a client who is essentially selling two properties due to having gotten nowhere in over 18 months in dealing with the Housing and Community Investment Department in attempting to resolve an issue where he and his wife have literally been terrorized by a late & non-paying, nuisance tenant. If cities and state and federal governments are going to start mandating rent abatements, they should be prepared to start subsidizing landlords. In LA where due to high prices, it is often difficult to find deals that even pencil out without having to put 50% down. You decrease rents by 25% and property owners won’t even be able to make the modest return on their investment the same housing authority says they have the right to earn.

  21. Ab828 is unfair to the small property landlords. Please consider who helps to pay the annually increasing
    property tax, insurance, maintenance, repair, and utilities? Who pays the mortgage?
    Please do not forget the small property landlords are the hard working people too and
    they have their right to earn what they got.
    The rental property owner is in a very difficult situation since the rent control has been established in SF.

    1. Hard working? They just bunch of tour guys that show houses and drives up the real estate price. They the one make all our property and insurance high. Thats their business not their home. we are going through crises. Take the loss.

  22. My property is being held hostage by newsome and a tenant that is not honoring our lease contract that stated the lease expired on “x” date. Now I can’t evict this trespasser because the commie CA governor. I’ll probably lose the house; should I mail the keys to Newsome? Property rights in California have been destroyed, never again will I invest in the state I was born/raised and spent 30+ years in.

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