California Lawmakers Push to Lower Rent Cap, Expand Protections. Property Owners Are Worried

A few months before the 2020 pandemic hit, lawmakers approved sweeping statewide protections against evictions and rent increases. Now, a group of legislators wants that law to go further.

On Wednesday, Assemblymember Ash Kalra, D-San José, announced a new bill, AB 1157, dubbed the “Affordable Rent Act,” that would expand the 2019 Tenant Protection Act to more renters, lower the amount rent can increase each year and make those changes permanent by removing a 2030 sunset date.

“For many, the rent just keeps rising by the maximum allowed by state law,” Kalra said at a press conference unveiling the bill. “Areas that were once considered affordable are no longer affordable to the average working-class tenant. Rent is an issue in every corner of this state.”

The bill is one of a handful of proposed legislation aimed at strengthening tenants’ rights. As renters continue to make up almost half of the state’s population and are more likely than residents of most other states to spend almost a third of their income on housing costs, tenants’ rights groups say the Affordable Rent Act could help protect millions of renters from displacement.

“As a renter in a non-Tenant Protection Act-protected home — a single-family home — I really need this thing to pass,” said Democratic Assemblymember Alex Lee of Milpitas, a co-author of the bill. “We’re in a deficit, and I don’t want to ask for a raise, so I need to pay my rent too.”

But several real estate and property owner groups are concerned it could make the rental market less attractive for a landlord to enter or stay in and they say it undermines the compromise they struck with tenants’ groups in AB 1482, the Tenant Protection Act.

The California Apartment Association, the California Building Industry Association, California Association of Realtors and other groups sent a letter (PDF) to Kalra on Tuesday voicing their opposition.

“The law struck a careful balance, aiming to prevent rent gouging while protecting California’s efforts to increase housing production,” said Debra Carlton, executive vice president for state and government affairs for the California Apartment Association. “AB 1482 was intended as a temporary, 10-year measure, allowing time for the Legislature to focus on enacting long-term, pro-housing policies.”

AB 1157 builds off the 2019 law by lowering the annual rent increase from a maximum of 10% to a maximum of 5%. In the years since the law has been in effect, inflation has increased and the amount landlords can raise rents has crept closer to 10%.

The 2019 law also requires landlords removing a unit from the rental market to pay relocation assistance to evicted tenants and to have a “just cause” to evict a tenant. While it covers most renters living in multi-family units, it includes exemptions for those living in single-family homes, duplexes and granny flats, among other housing types and living situations.

The new bill would remove most of those exemptions.

“Stable rents keep communities whole — when people can stay, they build roots, sustain lasting connections and contribute to local economies,” said Rae Huang, a senior organizer with tenants’ rights coalition Housing Now! “Our elected leaders must step up and act now to protect tenants and ensure that all Californians have a place to call home.”

Rent control has been a recurring point of debate across California, as it has repeatedly appeared on local and statewide ballots. Last November, voters shot down Prop 33, which attempted to repeal the Costa-Hawkins Rental Housing Act. The 1995 law limits how local governments can impose rent control laws. In her letter to Kalra, Carlton pointed to multiple studies showing that rent control can discourage landlords from placing units on the market and stymie housing construction.

At the press conference, Karla acknowledged that argument but said immediate action is needed while affordable housing is built.

“I agree that we do need to build more housing, but we also need to focus on how we keep families from being displaced,” Kalra said. “The number one thing we can do to prevent homelessness is not building housing — it’s keeping people in their homes so they don’t become homeless.”