SACRAMENTO — One of the only bills left standing in this year’s push for affordable housing in the legislature has cleared another hurdle but the anti rent-gouging effort has undergone some changes.
Assembly Bill 1482 would put a 5% (plus inflation) cap on annual rent increases, with a 10% maximum increase. That’s lower than the 7% threshold lawmakers had previously negotiated amid strong resistance from the real estate and development industries.
An estimated one-third of California renters spend over half their income on rent.
According to Zumper, an apartment rental site, five of the most expensive rental cities in the country are in California.
Friday, after AB1482 passed the Assembly Appropriations committee, Governor Gavin Newsoms’ Office announced an agreement with bill author Assembly member David Chiu to amend the law in hopes of giving it a smoother path to passage.
Noe Hernandez says he has concerns about a one size fits all approach but thinks allowing the costs of inflation to vary across regions could address that.
“I think that would be a better way to do it, depending on the city,” Hernandez said.
Regardless of inflation, the maximum year to year rent increase would be 10%, still unaffordable in some people’s eyes.
“If they get that from their jobs, most people don’t even get that five percent increase,” landlord Jill Powell said.
Powell tells FOX40 she has rented out over a dozen properties in California and as a landlord she sees steep rent hikes as counter productive.
“Because you’re going to have different renters coming in and then the cost of turnover is tremendous,” Powell explained. “So, I’d rather have someone consistently living there then them increasing it 10% and them moving out.”
Another amendment addresses new construction.
California needs to build about 180,000 new homes each year to meet demand for its nearly 40 million people. But the state has averaged 80,000 new homes in each of the past 10 years, according to a report from the California Department of Housing and Community Development.
Some have concerns that a cap on rents will discourage developers from building new properties.
Single-family homes, not owned by large corporations are also exempt from the current version of AB1482.
Th bill heads to the Assembly Rules Committee next week. From there it would need to pass the full Senate and be approved with amendments by the full Assembly by September 13.