California is one step closer toward having statewide rent control. An expanded version of an “anti-rent gouging bill” cleared its first senate committee late Tuesday night.
“We have to recognize some people are hurting in our economy,” said Senator Hannah-Beth Jackson (D-Santa Barbara), who chairs the senate judiciary committee.
The bill was heard by the committee Tuesday afternoon during a marathon session, but because several committee members were absent, it didn’t get the votes it needed until shortly before midnight. Several Los Angeles advocates, including a rep for Mayor Eric Garcetti and organizers with ACT-LA, were at the Capitol in Sacramento to register their support.
AB 1482 will have to be vetted next by the senate appropriations committee. If it ultimately approved in the full Senate (it already passed the Assembly) and signed into law by Gov. Gavin Newsom, it would make it illegal for property owners to raise rents more than 7 percent, plus the Consumer Price Index, in one year. The CPI averages about 2.5 percent in California. Homes constructed in the past 10 years would be exempt, and the law would expire in 2023.
AB 1482 now also includes a provision that would only allow landlords to evict tenants with “just cause,” originally part of another bill, AB 1481, that did not clear the Assembly before a key legislative deadline in May. Examples of just cause include failing to pay rent, causing a nuisance, and “criminal activity by the tenant on the premises.”
The rent control element would have the largest impact on cities that don’t already have rent control laws. But renters in cities that do have local rent control laws—including the city of Los Angeles—could benefit, too, according to a new analysis from the Terner Center for Housing Innovation at UC Berkeley.
The report estimates AB 1482 would impact 4.6 million households statewide, protecting them “from unsustainable rent increases, at least in the short term.”
The Terner Center zeroed in more closely on 10 communities, including three with rent control laws: Fruitvale and West Oakland, the Mission in San Francisco, and Boyle Heights in Los Angeles. In those areas, it determined the bill would extend rent control provisions to 31,212 residential units.
That’s because AB 1482 would apply to rental units that are not already covered by local rent control policies. In Los Angeles, for example, units built after October 1, 1978 are not covered by the local rent control law. Under AB 1482, units built in Los Angeles between 1978 and 2009 would be covered.
The California Apartment Association and the California Association of Realtors are fighting the bill, calling rent control a “decades-old failed policy.”
“Our biggest concern is we don’t make a bad problem worse by scaring off development in California,” said Debra Carlton, a California Apartment Association spokesperson.
California has vastly underbuilt housing for years, and it’s one of the reasons why the cost of renting is so expensive.
Over the last decade, an average of less than 80,000 homes have been built in California annually, according to the state’s housing department. A 2016 report from McKinsey Global Institute finds that California ranks 49th out of all 50 states in terms of per capita housing construction.
Opposition groups have already hashed out a compromise with lawmakers to water down the bill, raising the rent cap from 5 percent, as originally proposed, to 7 percent.
The Terner Center says that amount is high enough that it would “not curtail new [housing] production.”
“I believe landlords should have room to operate at a reasonable profit,” Jackson said Tuesday. “This bill as amended… gives landlords plenty of room to raise rents, some might argue too much room.”
Comments
This was my big concern w/Weiner’s approach to NIMBYism… opens the door to all kinds of ill-concieved (albeit well meaning) local land use decisions at the state level. Maybe the door was already wide open, I dunno. But top down, one-size fits all policy from Sacramento is just a piss-poor way to plan communities.
By corner soul on 07.10.19 10:25am
I think it is impossible to look at the housing crisis we are in, and say that the prevailing method of planning communities (i.e. on the local level, where game theory results in no community voluntarily taking on the burden of producing sufficient housing) is NOT an objectively piss-poor way.
Why do we expect this crisis to get better without changing how things are done? Local governments have proven themselves time and time again unwilling or unable to responsibly wield their power to direct development. Like a teenager who never changes the oil in the car and keeps crashing it, it is time to take the keys away.
By Greyvagabond on 07.10.19 10:36am
Fair point.
And I have no problem with the state applying pressure on cities that fail to reform exclusionary zoning (specifically cities that are creating high paying jobs without allowing workforce/multi-family housing.) But I would prefer they allow cities more leeway to shape how that looks in their community (within reason.)
It’s a sticky issue for sure. Not sure anyone has all the answers… and you’re right that the status quo is simply not working at the moment.
By corner soul on 07.10.19 10:41am
Agreed Corner. This is turning into a communist state
By Wackyone1968 on 07.10.19 10:55am
Well in my experience, conservatives enjoy meddling with the market just as much as liberals do. They just pursue different policies (exclusionary zoning vs. rent control — tomato, tomato.)
By corner soul on 07.10.19 11:10am
turning into? california’s FAR more extreme than real deal communist countries.
i’m not joking when i say the government’s LESS involved with my business (!!!) and my personal life here. i have a thousand times more freedom, and can basically do whatever i want.
By Lascivious Cumquat on 07.15.19 9:08am
Its possible just the threat of something like SB50 will change some city behavior.
By Greyvagabond on 07.10.19 11:12am
Excellent point!
Bernie Sanders seems to operate on the same plane. Propose a bold agenda, and you may never get it through (but you can still re-shape the conversation in your favor.)
By corner soul on 07.10.19 11:16am
Why is people believing that they are entitled to move here and live in West Hollywood and Santa Monica at discount rents, because they feel they are too good to live in the Valley or Mid City, a "crisis"? Why is it that their pretentiousness and desire to live above their means a "crisis" that we native Californians have to pay for?
By Steve Neman on 07.11.19 2:14pm
Okay Steve, we get it.
By LosFeliz$ean on 07.11.19 2:23pm
Actually no, you will never get it your entitlement gets in the way
By Transplant Trash on 07.14.19 8:46am
I mean, it’s not like the valley or mid-city are especially cheap neighborhoods these days. It’s pricey all over LA.
By corner soul on 07.11.19 10:04pm
Nonsense, there are cities outside of Los Angeles city limits that are more affordable. Lazy millennials feel entitled to live in places like Silver Lake and Santa Monica on the cheap
By Transplant Trash on 07.14.19 8:47am
As always, these bills seem to be drafted with absolutely ZERO input from actual renters. Among the draconian practices that are not mentioned are 1)multiple rent increases within a single year for month-to-month renters 2) Rent Control calculated at a graduated scale based on length of tenancy and 3) Extremely quick expiration dates for proposed legislation, which provides little or no lasting relief.
Los Angeles is a renter’s city, meaning that landlords will ALWAYS be able to profit handsomely; meanwhile renters are at the complete mercy of management companies who incorporate their fees into rent structures, adding distance between renters and landlords. Additionally, the so-called ‘American Dream’ of home ownership is all but obliterated when rent prices consume 80% or more of even decent incomes. Legislators at the community, city and state level simply MUST listen to the voices of those actually suffering from the great burden of simply providing a roof over their heads!
By winghop on 07.10.19 10:28am
BS. What the heck are you renting if it takes 80% of your income? After taxes, that’s essentially all of someone’s income.
Using real facts. An average one bedroom is $1360k ($16k annually) and a two bedroom in LA is $1750 ($21k annually) per Curbed’s earlier article this year. Median household income is $60k. Median household size is 2.8. Each bedroom per unit can easily house at least two ppl.
Being generous and using the two bedroom. $21k/$60k is 35% of a median household income which is borderline okay.
Factoring in the average LA household size. This likely equates to about a 50/50 split of one bedrooms and two bedrooms. ($16k + $21k)/2=$18.5k $18.5k/$60k is ~30%.
In other words, rent is relatively affordable in Los Angeles.
By Constituents on 07.10.19 2:08pm
On top of this rent in LA is increasing SLOWER than inflation (CPI).
Rent increased 2.9% in LA county. CPI for the LA area is 3.1%
By Constituents on 07.10.19 2:13pm
Median income is actually $69k+ in LA county now; not $60k. So all of this talk about housing being unaffordable is mostly baloney.
Seems to me ppl are using too much Instagram and Facebook and thinking their lives should always be glamorous.
By Constituents on 07.10.19 5:30pm
Median income in the city of Los Angeles (where your median rents are) is about $54k. Though we are the state’s primate city, there also exist other cities that will be subject to this proposed state law.
By LosFeliz$ean on 07.10.19 6:57pm
Average rents for Los Angeles County are $1,707 and $2,181 for 1 and 2 br respectively.
https://la.curbed.com/2019/2/4/18210857/los-angeles-rental-prices-2019-average
By LosFeliz$ean on 07.10.19 7:05pm
The data is problematic; it comes from different sources and different time periods. Using government census data which collects both. It shows that about 28.7% of median income is used towards rent which is far below the 50% of income benchmark to define severely rent burdened or even the artificial "30% rule".
($1302*12)/$54,501
Both rent and income have both grown since the censuses, with the latest reports showing that rent is increasing slower than inflation (CPI) and wage growth.
https://www.census.gov/quickfacts/fact/table/losangelescitycalifornia/HSG860217
https://www.huduser.gov/portal/pdredge/pdr_edge_featd_article_092214.html
http://www.hcd.ca.gov/grants-funding/income-limits/state-and-federal-income-limits/docs/Income-Limits-2019.pdf
https://www.bls.gov/regions/west/news-release/employmentcostindex_losangeles.htm
https://la.curbed.com/2019/2/4/18210857/los-angeles-rental-prices-2019-average
By Constituents on 07.13.19 2:52am
No biggie. People mix up the city and county regularly. You just made an error, it’s okay.
By LosFeliz$ean on 07.13.19 8:23am
What a crock. Talk about being full of holes. WTF is this: "Homes constructed in the past 10 years would be exempt"
WHY? This is the same kind of stupid, arbitrary exclusion that punishes certain property owners and renters today. Buildings built before 1978 (if I remember correctly) are already rent-controlled. So… now we’re pasting on another half-assed bill for 1979-2009 buildings?
By DavidGurney on 07.10.19 4:11pm
Exactly…..rent is one of the largest expenses in a persons life and it is an unregulated business.
Its out of control..
By ByeByeLA on 07.10.19 7:30pm
You think housing is an unregulated business? Where… on Mars?
By corner soul on 07.11.19 7:31am
unregulated?
LMFAO!
By Lascivious Cumquat on 07.15.19 9:21am