Bill to Expand Rent Control in California Stalls in Legislature

A for-rent sign hangs off a fire escape in San Francisco, a city known for its steep rents and strict rent control rules. (Justin Sullivan/Getty Images)

An effort to ease statewide rent control restrictions stalled in the state Capitol Thursday, with lawmakers opting instead to advance a more moderate bill to prevent large-scale rent increases.

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The shelving of Assembly Bill 36, which would have allowed cities to cap rents on older units and some single-family homes, marks the latest defeat for the statewide movement to limit rent hikes.

A bill to allow a more drastic expansion of rent limits failed in its first legislative committee last year. And in November, a ballot measure with similar aims — Proposition 10 — was defeated by nearly 60% of voters.

The latest effort, AB 36, would have allowed, but not required, cities to place rent caps on units more than 20 years old, and on single-family homes owned by landlords who own more than 10 buildings. The bill was withdrawn by its author, Assemblyman Richard Bloom, D-Santa Monica, shortly before its consideration before the Assembly Housing and Community Development Committee.

The controversial bill would have amended the nearly 25-year-old Costa-Hawkins Rental Housing Act, which prevents California cities from placing rent control on single-family homes and condominiums, and on any units built after 1995.

A separate measure, AB 1482, which was advanced Thursday by the same committee, would cap yearly rent increases at 5% plus the rate of inflation for the estimated 15 million California renters not covered by rent control.

"What this cap does is protect the most egregious increases in rent," said Assemblyman David Chiu, D-San Francisco. "It provides a sense of certainty and stability."

Hundreds of landlords and renters crammed a small hearing room in the state Capitol to voice their opinions on the bill. Landlord groups, opposed to the legislation, argued that the bill could lead to tighter restrictions on rent increases in the future.

"Our concerns are not as much about this current bill, but the future temptation and demands that the Legislature will face to lower the (cap)," said Debra Carlton, senior vice president of public affairs with the California Apartment Association. "AB 36 is something that would have been much more extreme. There was no way that there could be support for moving more units under a strict form of rent control, when next to it you had Mr. Chiu's bill."

In February, Oregon passed the first bill in the country to combat "rent gouging," placing a limit on rent increases at 7% plus inflation.

Assembly members Brian Maienschein, D-San Diego, and Sharon Quirk-Silva, D-Fullerton, both moderates, helped swing the vote in favor of AB 1482. In supporting the bill, they asked that Chiu add language to make sure that the rent cap remains consistent in future years.

"If the bill comes to the floor without additional types of assurances, I would reserve my vote as a no vote," Quirk-Silva said.

Dozens of tenant activists attended the hearing after spending the previous night camped out in Gov. Gavin Newsom's office, pushing him to support both renter bills.

"I am grateful that members of the Assembly voted today to continue moving forward on one piece of the housing affordability solution — creating a renter protection package," Newsom said in a statement.

Meanwhile, another push is underway to put rent control back on the ballot. The AIDS Healthcare Foundation, a backer of Proposition 10, filed an initiative last week to allow the statewide expansion of rent control with hopes of getting the measure on the 2020 ballot.

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