State Lawmakers Renew Push for Rent Control Expansion

Legislation to limit rent increases statewide and allow California cities to implement their own rent caps was unveiled at the state Capitol on Thursday.

Undeterred by voters’ overwhelming rejection of rent control expansion last year, Democrats in the Legislature are pushing forward to protect California renters facing skyrocketing prices.

"The crisis has not, is not, and will not go away until we act in various ways and that’s what this package is all about," said Assemblyman Richard Bloom, D-Santa Monica. "We have to get beyond what happened in the past and really sit down and get into serious negotiations."

Nearly a third of California renters spend a majority of their income on shelter, according to the California Budget & Policy Center.

None of the newly-unveiled bills go as far as Proposition 10, the November ballot measure which would have completely repealed the Costa-Hawkins Rental Housing Act.

That landmark law blocks California cities from expanding rent control on buildings built after 1995, and freezes in place local rent control ordinances in places like San Francisco and Los Angeles, where only units built before the late-1970's are rent controlled. Costa-Hawkins also bans rent caps on single-family homes and condominiums, and allows landlords to boost the rent to market rate once a tenant moves out, known as vacancy decontrol.

Proposition 10 was rejected by 59 percent of voters, and received a majority of votes in only two counties: San Francisco and Alameda.

This year's rent control bill, Assembly Bill 36, would allow cities to expand rent limits to buildings ten years and older, along with condos and single-family homes.

It would exempt single-family homes owned by landlords who own fewer than three buildings.

Proponents stressed that their bills could change during what Assemblyman Bloom described as "ongoing negotiations" with supporters and opponents of rent control expansion.

"I wouldn’t use the word negotiate," said Debra Carlton, Senior Vice President of Public Affairs for the California Apartment Association, which represents landlords and has opposed past rent control efforts. "I think we’re going to listen to what they have to say and then we’ll take it back to our leadership. It will be interesting to see if we can find some middle ground at all."

"These bills cannot get in the way by scaring off development in California or we won’t solve the true problem which is lack of housing," she added.

Carlton said the Apartment Association would hold off on taking official positions until some key details emerged in the bills.

For example, legislation to address "price gouging" by capping rent increases in areas without rent control does not specify what the cap will be.  Assembly Bill 1482 would set the limit at an unknown percentage above the Consumer Price Index, a common measurement of inflation.

"For those 15 million Californians not covered by rent control, this bill would for the first time create some rent certainty, allowing tenants to plan for their futures and removing the risk of unexpected rent increases," said Assemblyman David Chiu, D-San Francisco, the bill's author.

The Coalition to House the Bay Area, known as CASA, a group that drew up a set of regional housing solutions, recommended a rent cap at CPI plus five percent. That idea was denounced  both by the Apartment Association and tenant groups. Earlier this year, Oregon enacted a statewide cap of CPI plus seven percent.

As part of the rent package, lawmakers are again attempting to establish a statewide "just cause" policy. Assembly Bill 1481 would require that landlords list a specific reason for evicting a tenant, like failure to pay rent.

The assembled lawmakers were optimistic that rental protections will make more progress than in 2018, when just cause protections were voted down on the Assembly floor, and changes to Costa-Hawkins failed to advance out of committee.

"It’s significant for me that in my five years of serving on the Assembly Housing committee, this is the first time this many legislators have stood together to say ‘We need to protect tenants," said Chiu, who chairs the committee.

For one, both sides of the rent control debate are likely leery of another expensive battle at the ballot box. The campaigns for and against Proposition 10 raised more than $100 million combined.

Reforms like a "rolling date" that gradually makes buildings eligible for rent control is likely to be more politically acceptable for certain Democrats than the wholesale changes proposed in Proposition 10.

Assemblywoman Buffy Wicks, D-Oakland, whose opposition to Proposition 10 became a major issue in her 2018 campaign, voiced support for the rent protections introduced on Thursday.

She also unveiled legislation, Assembly Bill 724, which would create a statewide rental registry to track units.

And Wicks pointed to comments made by Governor Gavin Newsom in his State of the State address, when he asked legislators to "get me a good package on rent stability this year and I will sign it."

"Well, we are going to bring him a package," Wicks said. "That is our goal, that he can sign on, so that we can protect the renters that we care about deeply in our community."

The Apartment Association's Debra Carlton said she viewed the governor's pledge to sign "a good package" as not superseding another Newsom pledge — to accelerate housing construction in the state.

"We will interpret that as not interfering with his desire to making sure that we solve the long-term problem," said Carlton. "We still have a large group of legislators that just don’t agree with the concept of rent control, so quite frankly it’s yet to be seen."