It marks a victory for renters who say they are being priced out as rents rise, though many renters and social justice groups likely want an even stricter proposal. Democratic Assemblyman David Chiu of San Francisco, the bill's author, had made numerous concessions to the real estate and development industries to even get the bill to the state Senate.
While the new deal is in renters' favor by lowering the allowable rent increase from 7% to 5%, it changes the exemption for newer properties from those built within the last 10 years to within the last 15. The rent caps would sunset in 2030. The cost of inflation would be determined on a regional basis, meaning it could be a different percentage in San Francisco than in the Central Valley.
The proposal still needs to clear the state Legislature, which adjourns for the year in two weeks. But it is likely to pass now that the California Apartment Association and California Building Industry Association have agreed not to fight it, Newsom's office said.
"The bill will protect millions of renters from rent-gouging and evictions and build on the Legislature's work this year to address our broader housing crisis," Newsom, Chiu, and legislative leaders said in a statement.