Rent is a delicate subject and has taken on increasing importance since the onset of the pandemic. With people losing their jobs and unable to afford their rent, governments have had to step in to alleviate the issue. However, aside from the pandemic, rent has been a sticky issue as the prices have continued to rise over inflation. Fortunately, one state where rents have always been high has introduced rent control measures designed to enable the most vulnerable to afford a place to live. This post will discuss everything you need to know about California’s recent rent control law.
What Is California’s Rent Control Legislation?
Renters account for little about half of California’s massive population. Californian cities have become some of the most costly in the nation as rents have continuously climbed over the previous 20 years. Rents are soaring, while middle-class employment is vanishing, forcing low- and middle-income Californians out of the cities or perhaps out of the state altogether. In order to sustain its demographics and tackle its housing issue, the state is resorting to new rent control laws. While some form of rent control has been in place for decades, landlords are now governed by AB 1482, a two-fold policy aimed at addressing the issue. This policy limits rent increases over time and restricts landlords from evicting tenants without justification. However, there is more nuance to these points than meets the eye.
Limiting Rent Increases
The maximum yearly rent increase allowed under AB 1482 is 5% plus a local cost-of-living correction of no more than 5%, for a total increase of 10%. The law is applied retroactively. But landlords are not limited in how much they can raise the rent if they rent to a new tenant.
Protection From Unjust Eviction
Although AB 1482 doesn’t preclude landlords from evicting their tenants, they must provide just cause for doing so. This is to make it as fair as possible for both parties involved, and some of the legal reasons allowed under the act include several umbrella terms, including:
- At fault: These reasons include not paying rent, damaging the property, or performing criminal actions within the property. Nevertheless, in most cases, the landlord must provide adequate time for the tenant to rectify the issue before evicting them.
- No-fault: As the term suggests, these cover a range of points where no one is at fault, but the landlord has good reason to evict the tenant. It may be due to the landlord moving in themselves or if renovation or demolition of the property is required. If the landlord wishes to invoke the no-fault clause, they must provide their tenant a relocation fee, which is usually equivalent to one month of the rent they charge.
AB 1482 Is A Tort Law, Not A Criminal Law
It should be noted that this new act is not based on criminal law. This means that if a tenant feels aggrieved, they must initiate a civil case against their landlord. Furthermore, the act will only last until 2030, when it is set to expire, unless legislators choose to extend it.
Are There Any Exemptions?
Although the law covers all residential units, some exemptions apply:
- New homes up to 15 years old aren’t included in the law.
- Duplexes as long as the landlord occupies at least one unit.
- Single-family dwellings (unless owned by a REIT).
What Is Rent Control?
Rent control is a regulation that limits the amount of rent increase on the property. It can be implemented in different ways and for various reasons. It was meant to protect renters from rising rents when it was first introduced. Nowadays, it is applied to prevent displacement and keep people who are already living in a city from being pushed out by rising rents. Rent control legislation varies by country and state, but generally, it limits the amount that landlords can increase the rent every year.
Why Is It So Important?
Rent control is essential because it helps protect tenants’ rights who are being exploited by landlords. These policies have been shown to affect housing affordability and apartments availability positively. They aim to assist lower-income households in affording housing by ensuring that they cannot be evicted without good cause. Furthermore, they can stop city centers from becoming over-gentrified and losing their unique characteristics.
In California, rent control laws are some of the toughest in the nation and are meant to keep the most vulnerable sheltered. AB 1482 is the most recent example and seems to be having the intended effect.