Nationally Watched Rent Control Bill Passes First Test in California Senate
Golden State Edges Closer to Joining Oregon, New York With Statewide Regulation
California moved a step closer to becoming the third state in the nation to pass a statewide annual cap on rent increases, a regulation picking up steam as a housing shortage and homelessness deepens in parts of the country amid a record economic expansion.
Assembly Bill 1482, which also prohibits landlords from evicting tenants without showing "just cause," authored by San Francisco Democrat David Chiu cleared the state Senate Judiciary Committee by a 6-1 vote shortly before midnight Tuesday after a meeting that started in the afternoon was prolonged because several committee members were absent.
The bill, which has already passed the Assembly, now moves to the Senate Appropriations Committee and must clear the full Senate, go back to the full Assembly for a concurrence vote and be signed by Gov. Gavin Newsom to become law. Its movement in the legislature of the nation's most populous state is being watched by apartment owners across the country for signs of whether it will be changed or approved as is and spread to other regions of the United States.
Dozens of people spoke to the committee, including members of Alliance of Californians for Community Empowerment, which supports the legislation as necessary to protect families against unjust evictions and rent increases amid rapidly rising housing costs in California. The California Apartment Association and other real estate groups told the committee excessive regulation would drive rental housing builders out of the state.
Debra Carlson, spokeswoman for the California Apartment Association, which represents the state's rental housing industry, countered that the bill is unnecessary because "owners who are doing the right thing by their tenants" won't violate the provisions of AB 1482.
"Our biggest concern has always been that we don’t make a bad problem worse by scaring off development in California," Carlson told the committee. "Providing new supply is the only way of providing protection for both current and future tenants. We don’t want developers to go to other states."
Anya Svanoe, communications director for housing advocacy group Alliance of Californians for Community Empowerment, also known as ACCE, applauded the committee’s vote.
"With double digit increases in homelessness across the state and thousands of families living just one rent increase away from displacement, AB 1482 makes important progress in creating much needed stability for Californians suffering in this housing crisis," Svanoe said. "It will take decades to build the amount of housing we need, and in the meantime, it is unethical and inhumane for families to be pushed onto the streets by rent gouging and arbitrary evictions by those looking to take advantage of a constrained housing market."
California has the worst crisis of homelessness in the nation, accounting for almost a quarter of the country's population of people without homes at roughly 130,000, according to 2018 figures from the U.S. Department of Housing and Urban Development. Rising rents and limited development are largely blamed for contributing to the increasing problem. Some state officials estimate the state to be short by about 4 million homes to keep up with population demand.
Other states are grappling with similar issues and seeking similar solutions. Oregon became the first state in the country to pass rent control in February this year and it was followed by New York last month.
But since Oregon’s adoption of a 7% rent cap and announcements that the cap may be moved lower, multifamily investment has decreased 38% in the state,Carlson said.
Chiu, who added the eviction protections to his bill in late June, applauded the advancement of the bill, saying in a statement that as the homelessness crisis worsens, "it is crucial we take steps to keep families in their homes."
"This legislation will protect renters from egregious rent increases and predatory evictions while still allowing landlords to turn a profit. Today’s vote shows there is strong momentum in the legislature for increasing protections for California renters."
Sasha Graham with the Alliance of Californians for Community Empowerment, also known as the Housing Now Coalition, told the committee Tuesday that in 2014, a new landlord that purchased the apartment building she had been living in for 10 years and raised her rent by $1,000 a month.
"Even though the new landlord had increased my rent, that was not enough," Graham told the committee this week. "They wanted us out of the property, and they wanted to flip it."
Graham said she received a 20-day no-cause eviction notice, and following a chain of events that included the loss of her job, she and her son became homeless for three years.
"It is not enough to prevent rent gouging," Graham said. "We must also protect families from being arbitrarily evicted when they have done nothing wrong."