What Does California’s New Rent Control Bill Really Mean?
BAKERSFIELD, California — The Golden State just passed Assembly Bill 1482, a rent control bill intended to help ease tensions produced by the escalating housing crisis across California. The housing crisis has to do with the affordability and availability of homes to 39 million-plus people residing in California. With this new law in place, landlords across the state can only raise their rents annually for existing tenants by five percent after inflation within ten years. Therefore, this law should prevent landlords from raising their rents to hefty amounts, which should ease cost burdens on residents.
Arguments Against The Rent Control Bill
However, some landlords argue that the new bill will add more fuel to the proverbial fire. While some property owners welcome the law, Kevin Oliver, a local landlord, remains stressed out. He claims that he doesn’t know how else to cover rental expenses.
Landlords like Oliver believe that rent control laws will cause some investors to conduct business elsewhere to turn a profit.
According to a quote pulled from Bakersfield Now Eyewitness News, “As landlords,” Oliver said, “I have to look at my bottom line to be able to run a profit.” Assembly Bill 1482 also makes rules more strict regarding tenant eviction. According to a report by Bakersfield Now Eyewitness News, “4,282 evictions were filed in Kern County in 2018, according to the Kern County Superior Court Civil Division. But in 2019, there have only been 2,690 eviction filings so far.”
Many small owners, in Kern County for example, already provide affordable housing and don’t consistently raise the rent; moreover, proponents of the bill fear that once property owners realize that they won’t have the option to increase their rent substantially down-the-line, they will fight back by raising rent more often and in small spurts, instead of one, large raise.
Support For The Rent Control Bill
Governor Gavin Newsom will sign AB 1482 into law sometime this month. Supporters of the bill celebrate its potential to help the people who remain priced out of their communities. Nevertheless, some landlords are grappling with what this financially means for them. Ultimately, the way in which property owners across the state respond to this bill will determine the bill’s success in protecting residents who are grappling with California’s housing market crisis.
Before the bill goes into effect, landlords of non-controlled units can evict long-term tenants from their units. They can even demand eviction, within 60 days, without an official reason. As long as the reason doesn’t break the lease. But starting Jan 1, 2020, landlords covered by AB 1482 will need a just cause. A just cause is a nonpayment of rent or damage to a unit. These just causes will become necessary to remove renters who lived in their units for at least one year.
AB 1482 wasn’t hailed as the best solution to fix the housing crisis in California. However, it was put forth as a small way to stop price gouging and no-fault evictions. Price gouging and no-fault evictions essentially gut communities out to make way for higher-income households.
Backers of the bill within the real estate industry remain optimistic. For example, Debra Carlton, a Senior Vice President of Public Affairs for the California Apartment Assn., expressed that her affiliates wanted to improve affordability for renters and limit financial setbacks for property owners, essentially helping both sides.
According to a recent report by the LA Times, “Carlton said that landlords who quickly remove low-rent tenants are doing what is, “unconscionable.”
Only Time Will Tell
Both renters and property owners see benefits and disadvantages to the Golden State’s new rent control bill. Only time will tell whether such a law is effective at relieving California’s housing crisis or exacerbating the problem further.