California Renter Protection Bill Signed By Governor

Tuesday, October 8, 2019

Law will protect renters from large rent increases and unfair evictions in historic expansion of tenant protections

 

Oakland, CA--A renter protection bill authored by Assemblymembers David Chiu (D-San Francisco), Rob Bonta (D-Oakland), Timothy Grayson (D-Concord), and Buffy Wicks (D-Oakland) was signed into law by Governor Gavin Newsom today. Assembly Bill 1482 will cap annual rent increases in California and give renters added eviction protections.

“This is a historic victory for renters who are struggling to make it in California,” said Assemblymember Chiu. “Millions of California renters are just one rent increase or eviction away from experiencing homelessness. These protections are long overdue and will hopefully bring renters some peace of mind and stability.”

“Together, we have made history with the signing of this landmark legislation,” said Assemblymember Bonta. “AB 1482 constitutes the strongest set of tenant protections in the history of California. No longer will millions of families face outrageous rent increases and unfair evictions. AB 1482 is the result of many people working tirelessly to advance these vital protections. And we are not finished. The power of this amazing coalition will continue to drive forward additional progress and protections for California’s tenants.”

“Hardworking families should not be forced to suffer while we work towards the ultimate goal of increasing our housing supply and building our way out of this crisis,” said Assemblymember Grayson. “Today we delivered housing security to millions and finally made it clear that Californians who rent are no less deserving of having a stable roof over their head.”

"In the midst of an unprecedented housing crisis, AB 1482 brings much-needed relief and stability to renters in our state,” said Assemblymember Wicks. “It provides stronger protections to keep families in their homes — protecting them from the most egregious of rent increases and unjust evictions. AB 1482 is a major victory for renters in California!”

It is estimated that roughly 8 million California renters will receive new protections under the law, representing the largest expansion of tenant protections in recent memory.

AB 1482 will cap annual rent increases in California to the Consumer Price Index (CPI) plus five percent. CPI varies by metro area, but it averages roughly to 2.5 percent in California. Thus, under the cap of CPI plus five percent proposed in AB 1482, annual rent increases will be capped to approximately 7.5 percent throughout the state. Rent increases can not exceed 10 percent under the law.

Additionally, the law will give tenants “just cause” protections, prohibiting a landlord from evicting a tenant without showing a reason for the eviction in an effort to prevent discriminatory, arbitrary, and retaliatory evictions. Protections will only be in effect after a tenant has lived in a unit for more than 12 months and will be limited to those rental units also subject to the limit on rent increases.

The law will sunset after ten years and exempt new rental units that are up to fifteen years old so that new housing production is not stifled. AB 1482 will also exempt all single family homes and condominiums that are not owned by corporations or real estate investment trusts.

Tenants have been hit especially hard by California’s housing crisis. Skyrocketing rents and an increase in evictions have led to mass displacement and a severe homelessness crisis. Many see protecting tenants from eviction and displacement as key to stemming California’s homelessness crisis.

Over 80 percent of California’s 17 million renters do not have access to stable and affordable housing. Over half of California renters are rent-burdened, meaning they spend over 30 percent of their income on rent, and one-third of renters spend over 50 percent of their income on rent. 160,000 families appear in eviction court annually.

While egregious rent increases are a serious issue for renters and have been widely documented, data sourced from the Bureau of Labor Statistics shows that rent increases above the cap enacted in AB 1482 are actually outside of the norm and represent true rent gouging. The data reveals that the cap of CPI plus five percent is twice that of the median annual rent increase. Further, capping rents at that level will still allow landlords to generate a healthy profit from rental properties.

The State of Oregon recently passed similar laws to protect tenants from unfair evictions and limit annual rent increases. UC Berkeley’s Terner Center for Housing Innovation has also identified a rent cap and just cause eviction protections as key policies to alleviate California’s housing crisis. Recent analysis from the Terner Center suggests that AB 1482 will not stifle housing production in California.

AB 1482 was sponsored by a broad coalition of tenant advocates, equity organizations, labor unions, pro-growth housing activists, and business groups.

The law will take effect on January 1, 2020.

 

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