Author Topic: Rent control advances in California, L.A. County  (Read 946 times)

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Offline momopi

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Rent control advances in California, L.A. County
« on: September 11, 2019, 09:50:29 AM »
https://www.ocregister.com/2019/09/10/rent-control-advances-in-california-l-a-county/

Rent control advances in California, L.A. County

The Senate approved Assembly Bill 1482, followed by the county's approval of permanent rent control

By JEFF COLLINS | JeffCollins@scng.com | Orange County Register
PUBLISHED: September 10, 2019 at 7:26 pm | UPDATED: September 11, 2019 at 6:31 am

Separate tenant protection measures advanced in Sacramento and downtown Los Angeles on Tuesday, Sept. 10, with the Senate approving a measure that would impose a form of rent control throughout the state and county leaders adopting permanent rent control for unincorporated areas.

The state Senate voted 25-10 to approve Assembly Bill 1482, the so-called “anti-gouging” measure that seeks to cap rent hikes statewide at 5% plus inflation, up to a maximum of 10% a year.

If the Assembly votes to approve Senate amendments and Gov. Gavin Newsom signs the bill into law as expected, the “Tenant Protection Act of 2019” would apply to all California apartments and some rental houses and condos that are at least 15 years old.

In Los Angeles, the county Board of Supervisors voted 5-0 Tuesday to enact permanent rent control in unincorporated parts of the county, capping rents at the rate of inflation, up to a maximum of 8% a year.

The county vote comes exactly a year after the board enacted a 3% temporary rent cap.

The supervisors also voted unanimously to allocate $2 million from Measure H funds to phase in legal assistance programs for low-income tenants facing court-ordered evictions.

Similar arguments resounded from both the Kenneth Hahn Hall of Administration and the state capitol 384 miles to the north: Rapidly rising rents are a major factor in California’s homelessness crisis.

“There is a clear and unmistakable link between our unaffordable housing market and homeless crisis,” Supervisor Mark Ridley-Thomas said in a statement issued after the county vote.

Regular working people are being displaced, added state Sen. Nancy Skinner, D-Berkeley: “They are now in their cars or on couches or in the streets.”


What do the two measures do? And how would they affect each other?

Here’s an explainer:

How do AB 1482 and the county measure affect each other?

The two measures overlap, with the county rent control measure taking precedence when its cap is lower than the state maximum. But the state’s Costa-Hawkins Act limits county rent control to apartments built before February 1995, or 24 years old this year.

AB 1482 would apply to apartments that are at least 15 years old. Over time, exempt (or newer) buildings will be subject to AB 1482 provisions once they’re 15 years old.

What else would AB 1482 do?

It would expand the rent cap to houses and condos owned by corporations or real estate investment trusts, or REITs. It also would roll back any rent hikes enacted above the cap after March 15, 2019.

It also would create “just cause eviction” provisions. Those provisions would ban landlords from ordering tenants in good standing to move unless the landlord intends to occupy the unit, demolish or “substantially remodel” it or take it off the rental market.

Owner-occupied duplexes would be exempt from rent caps, and landlords would be allowed to increase rents to market rates after a tenant moves out.

What are the current limits?

Landlords in non-rent controlled areas can raise rents as much as they want so long as they give 30-days notice for increases under 10% and 60-days notice for increases of 10% or more.

Why do supporters call it an “anti-gouging” measure?

Current law forbids merchants from gouging consumers after a disaster declaration, limiting price hikes to 10%, including rents. Senate Democrats likened the state’s housing crisis to an emergency, saying AB 1482 seeks to prevent rent gouging while allowing reasonable rent hikes.

How long will AB 1482 be in effect?

The law would expire Jan. 1, 2030.

How did the measure change?

An earlier version set the rent cap at 7% plus inflation but applied to all apartments at least 10 years old or older, rather than 15. The rent caps also would have applied to more houses and condos.

What are the details of the LA county rent control law?

The maximum increase would be:

8% if the Consumer Price Index increases by more than 3%
3% if the CPI increases 1-3%
2% plus inflation if the CPI increases less than 1%
Zero if the CPI decreases 2% or more
Where will it apply?

In unincorporated L.A. County, affecting more than 100,000 renters, county officials said.

Just nine of L.A. County’s 88 incorporated cities have adopted some form of tenant protections, including the city of Los Angeles, Beverly Hills, Santa Monica and West Hollywood. In the past year, Inglewood, Pasadena, Glendale, Long Beach and Culver City adopted new tenant protections.

Supervisors Sheila Kuehl and Hilda Solis called on the other 79 cities to enact rent control during a Tuesday rally.

“Three million out of the 10 million L.A. County residents are living with no rent protection at all,” Kuehl said. “They’re at the mercy of an increasingly unaffordable rental market.”

What were the main arguments for rent control?

In both Sacramento and Los Angeles, rent-cap advocates argued tenant protections are needed to stem the rising tide of homelessness in the state, saying over half of the state’s tenants are “rent-burdened.”

While streamlining the homebuilding process is needed, “we cannot build our way out of this crisis fast enough,” said Skinner, the Berkeley Democrat.

What were the main arguments against?

Rent control will backfire, increasing the housing crisis by discouraging developers from building more housing. Living conditions will worsen because landlords won’t have the revenue to maintain buildings properly.

“We must pass legislation that encourages housing development,” said Sen. Jeff Stone, R-Temecula. “ … There’s a right way to do it and a wrong way to do it. Limiting the supply of housing is the wrong way to do it.”

Offline USCTrojanCPA

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Re: Rent control advances in California, L.A. County
« Reply #1 on: September 11, 2019, 01:55:58 PM »
At some point, rent control will come into Orange County as well.  Honestly, I rarely raise the rent for good tenants that make it easy on me so this wouldn't effect my rentals at all.  I typically adjust the rent back towards the market rate when my tenants move out and I bring a new tenant in.
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Offline moc

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Re: Rent control advances in California, L.A. County
« Reply #2 on: September 11, 2019, 02:36:37 PM »
At some point, rent control will come into Orange County as well.  Honestly, I rarely raise the rent for good tenants that make it easy on me so this wouldn't effect my rentals at all.  I typically adjust the rent back towards the market rate when my tenants move out and I bring a new tenant in.

We rented for over ten years before buying our first home. This is how the best and most reasonable landlords we had handled things. Unfortunately the big management companies don't operate like this. Here in Irvine TIC is no exception. We had annual rent hikes with them that I'm pretty sure exceeded 2-3% (and don't get me started on pet rent).

Offline misme

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Re: Rent control advances in California, L.A. County
« Reply #3 on: September 11, 2019, 03:10:50 PM »
can anyone confirm if rental SFRs and condos not owned by corporations (i.e. owned by mom and pop landlords) are exempt from this bill?
What about LLCs owning rental houses and condos (technically a corporation, even if really its an LLC controlled by one individual)--are those affected by AB 1482?

It seems like this law, along with the bill to prohibit landlords from not accepting section 8 vouchers (or discriminating against vouchers as a source of income ) is a big deterrent to small time landlords.





Offline Compressed-Village

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Re: Rent control advances in California, L.A. County
« Reply #4 on: September 11, 2019, 03:39:45 PM »
At some point, rent control will come into Orange County as well.  Honestly, I rarely raise the rent for good tenants that make it easy on me so this wouldn't effect my rentals at all.  I typically adjust the rent back towards the market rate when my tenants move out and I bring a new tenant in.

We rented for over ten years before buying our first home. This is how the best and most reasonable landlords we had handled things. Unfortunately the big management companies don't operate like this. Here in Irvine TIC is no exception. We had annual rent hikes with them that I'm pretty sure exceeded 2-3% (and don't get me started on pet rent).

The best and most responsible individuals should deserve a non increase into their renewal of rent or at most 2 or 3 % every other year. Rent increase can be justify with rising in cost of living. Expenses, cost of up keeping and along with taxes does not stand still. It moves up every year. 

Offline lnc

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Re: Rent control advances in California, L.A. County
« Reply #5 on: September 12, 2019, 10:49:47 AM »
can anyone confirm if rental SFRs and condos not owned by corporations (i.e. owned by mom and pop landlords) are exempt from this bill?
What about LLCs owning rental houses and condos (technically a corporation, even if really its an LLC controlled by one individual)--are those affected by AB 1482?

It seems like this law, along with the bill to prohibit landlords from not accepting section 8 vouchers (or discriminating against vouchers as a source of income ) is a big deterrent to small time landlords.

Yes,  SFR rentals own by individuals, not corporate, are not affected.

https://www.latimes.com/california/story/2019-09-11/california-renters-relief-legislation-gavin-newsom-rent-cap
Quote
The legislation does not change the rules for tenants already under rent control rules in Los Angeles, San Francisco and other cities across the state. But more than 2 million additional apartments in those cities and elsewhere in California will be covered by some limitation on annual rent increases, according to an estimate by UC Berkeley’s Terner Center for Housing Innovation. The cap does not apply to apartments built within the last 15 years or single-family home rentals unless they’re owned by corporations or institutional investors.

Offline daedalus

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Re: Rent control advances in California, L.A. County
« Reply #6 on: September 12, 2019, 09:51:13 PM »
Thank goodness.  I was wondering what a fair annual rent increase % was.  Now I know, and it's much more than I would have raised it on my own!

Offline momopi

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Re: Rent control advances in California, L.A. County
« Reply #7 on: October 08, 2019, 04:26:38 PM »

https://www.latimes.com/california/story/2019-10-08/california-rent-cap-tenant-protections-signed

California will limit rent increases under bill signed by Gov. Gavin Newsom

Beatrice Sandoval holds up sign during the L.A. County Board of Supervisors meeting as the board voted to extend a temporary cap on rent increases through 2019.

On Tuesday, Gov. Gavin Newsom signed a bill to implement statewide renter protections.(Al Seib / Los Angeles Times)

By LIAM DILLONSTAFF WRITER

OCT. 8, 2019 3 PM

OAKLAND —  Millions of Californians will for the first time have new safeguards against large rent increases after Gov. Gavin Newsom signed legislation on Tuesday capping annual rent hikes for the next decade. The new protections come as major metropolitan regions across the state have seen double-digit increases in their homeless populations and residents have in recent polls cited homelessness and housing problems as the most pressing issues facing the state.

Newsom hailed Assembly Bill 1482 as the nation’s strongest statewide renter protection measure, saying that tenants deserved relief from the state’s soaring housing costs, which have threatened the ability to stay in their homes.

Under the new law, most yearly rent increases over the next decade will be limited to 5% plus inflation and tenants will receive protections against being evicted without cause.

California is the third state to have passed a significant expansion of renter protections this year. Oregon approved a statewide rent cap of 7% a year plus inflation, but unlike California, its law won’t expire in 10 years. New York legislators boosted existing rent controls in New York City and allowed other communities in the state to implement the policy.

The law’s signing also comes less than a year after California voters decisively rejected a ballot initiative that would have allowed cities and counties to impose stricter rent controls in their communities. Newsom, who opposed that initiative, subsequently called on lawmakers to pass measures that would provide some stability for tenants, leading to Tuesday’s action.

Some 9.5 million renters — more than half of California’s tenant population — are burdened by high rents, spending at least 30% of their income on housing costs, according to a recent estimate by UC Berkeley’s Haas Institute for a Fair and Inclusive Society.

Had the rent cap been in place this year, rent increases in the Los Angeles area would be limited to 8.3% while those in San Francisco would have been capped at 9%.

There are a number of exceptions to the law’s new rules. The rent cap will not apply to apartments built within the last 15 years or single-family home rentals unless they’re owned by corporations or other institutional investors.

Limits on rent increases will not change for those currently living in rent-controlled apartments. But the new rules extend protections for renters living in newer complexes in cities with rent control. In Los Angeles, for instance, rent control limits increases to about 3% or 4% per year for those living in apartments built before October 1978. Tenants in buildings constructed between that time and 2005 will now see any increases to their rent capped under the new law.

The law, which will take effect on Jan. 1, also prohibits landlords from evicting tenants who have lived in an apartment for a year without proof of documented lease violations.

About 2.4 million California households will be affected by the new rent cap in addition to those who live in single-family home rentals that meet the law’s requirements, according to an estimate by UC Berkeley’s Terner Center for Housing Innovation.

While the new law allows for rent increases that are much higher than average wage growth, renter advocates argue it will prevent sudden surges at levels that could drive people from their homes. An analysis of rental listing data by real estate website Zillow found about 6.7% of the properties statewide in the company’s database last year were subject to rent increases that exceeded the cap.

Landlord groups and real estate industry allies spent about $80 million opposing last year’s initiative, but the coalition became divided as the rent cap measure wound its way through the Legislature.

A version of the rent cap that would have limited annual increases to 7% plus inflation for three years squeaked through the state Assembly in the spring. That came despite resistance from the California Apartment Assn., the state’s largest landlord organization. At the time, the California Assn. of Realtors was not opposed to the measure.

But three months later, Newsom brokered a deal that made the cap stronger, resulting in the legislation signed Tuesday. The stricter measure came alongside an agreement from the apartment association that it would drop its opposition — the Realtors, whose prior agreement had been shredded, then spoke out against the changes.

Apartment association representatives said the group changed its mind because its members were worried the rent cap bill would pass without their input. They also hoped that the rent cap’s passage would remove some of the energy behind another potential rent control initiative.

The Los Angeles-based AIDS Healthcare Foundation is currently collecting signatures for a measure to appear on the November 2020 statewide ballot that would, among other changes, limit how much a landlord could increase rents when a new tenant moves in — something now prohibited under state law. Michael Weinstein, the foundation’s president, opposed the rent cap legislation because he believed its protections were inadequate.

Some landlords and economists have warned there could be potential negative consequences to the new law, including the possibility that property owners might increase rents up to the cap out of fears that such hikes would be limited in the future.

Landlords are currently allowed to raise rent by more than the cap. But starting Jan. 1, they would have to reduce rent to a rate in place on March 15 of this year, plus the allowable increase.

“Just cause” eviction protections aren’t subject to such a rollback provision. Tenant groups are concerned that landlords will exploit that gap in the law to remove residents who pay below-market rent before the law takes effect in January.

In addition to the rent cap bill, Newsom also signed legislation Tuesday that bars landlords from rejecting prospective tenants solely because they hold federal Section 8 housing vouchers.

 

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