Rent Control Passes in the CA Legislature

The Tenant Protection Act of 2019, Assembly Bill 1482, by Assemblymen David Chiu (D-San Francisco), Rob Bonta (D-Oakland), Timothy Grayson (D-Concord), and Assemblywoman Buffy Wicks (D-Oakland), was just passed by the Legislature and is on Gov. Gavin Newsom’s desk. Newsom has indicated that he will sign AB 1482, even as it was watered down in scope to get it passed.

Assembly Bill 1482, was largely inspired by a similar law in Oregon.

The original version of AB 1482 proposed a limit on annual rent increases by landlords of 5 percent, plus the federally reported increase in California’s consumer price index. It also had a sunset clause of 2030, to sweeten the pot.

Assemblywoman Melissa Melendez (R-Lake Elsinore) addressed this in Assembly debate Wednesday: “The voters said NO to rent control last election. So today the legislature signaled they couldn’t care less about the will of the voters, and passed rent control anyway.”

The voters said NO to rent control last election. So today the legislature signaled they couldn’t care less about the will of the voters, and passed rent control anyway. #CaDeservesbetter MM pic.twitter.com/VHDtUXvK0d

— Melissa Melendez (@asmMelendez) September 12, 2019

The California Association of Realtors and many other business groups, who said it would discourage housing construction in a state with a huge housing shortage, appear to have been duped by Assemblyman Chiu. He got opponents to agree to concessions that were so significant that most critics took a neutral stand on his bill, including Realtors.

It now limits rent increases to 7 percent plus consumer price index inflation, and sunsets in 2023 instead of 2030, bill analysis and KTLA reported. It also doesn’t apply to housing projects built in the last 10 years or to landlords renting 10 or fewer units.

The bill doesn’t apply to housing units in areas where local rent-control laws are in place and puts no limit on how much rent can be increased after a tenant moves out.

“Governor Newsom during his gubernatorial campaign pledged to bring 3.5 million new housing units online by 2025,” the CalChamber reported. “To achieve this, California must quintuple its current rate of production to produce about 500,000 new homes annually. Only twice since 1954 have developers built more than 300,000 homes in a year. The highest year on record is 1963, when 322,018 home permits were issued.”

In February, at his State-of-the-State address, Gov. Newsom dodged the words “rent control” instead using “rent stability.”  Newsom said after Proposition 10, the rent control initiative, failed in the last election, “the pressures on vulnerable renters didn’t go away. We need new rules to stabilize neighborhoods and prevent evictions, without putting small landlords out of business. I want the best ideas from everyone in this chamber. Here is my promise to you, get me a good package on rent stability this year and I will sign it.”

Gov Newsom issued a statement Wednesday declaring victory: “In this year’s State of the State address, I asked the Legislature to send me a strong renter protection package. Today, they sent me the strongest package in America. These anti-gouging and eviction protections will help families afford to keep a roof over their heads, and they will provide California with important new tools to combat our state’s broader housing and affordability crisis. I would like to thank Assembly Speaker Rendon, Senate President pro Tempore Atkins, Assemblymember Chiu and the bill’s co-authors for passing this legislation, as well as the broad coalition of stakeholders whose persistence allowed this bill to move forward.”