California follows Oregon and New York as the third state to institute renter-protective, former a domain of city governments. Washington is considering following suit. (In April, Colorado failed to overcome rent-control bans.)
For this state’s eight million renters in a one-million-unit shortage, The Mercury News reports that
[they’re] about to receive some of the nation’s strongest protections against rent hikes and evictions. And the primary advocacy group for California landlords is okay with that.
State legislators on Wednesday passed AB 1482, a bill from Assemblyman David Chiu, D-San Francisco, which limits annual rent increases to 5 percent plus the rate of inflation. The bill also requires landlords to provide a “just cause” for evicting tenants and, in some circumstances, pay for tenants to relocate.
Gov. Gavin Newsom lobbied fiercely for the bill in recent weeks, arguing that the measure is necessary to combat the state’s twin gentrification and homelessness epidemics. Half of all California renters — more than 3 million households — spend more than 30 percent of their income on rent, meeting the federal government’s definition of “rent-burdened...”
SmartCitiesDive.com linked to AB-1482 Tenant Protection Act of 2019: tenancy: rent caps for most tenants. Some provisions go into effect January 1, 2020, the rest July 2020. Last July, Gov. Newsom
signed off on the budget — which he proposed in January with about $1.8 billion to address housing and homelessness — after legislators further amended it with provisions to improve housing capacity and affordability.
Newsom stressed that cities deemed not in compliance with a state law establishing housing goals will face fines ranging from $10,000 to $100,000 per month. That happened following his legal action against Huntington Beach for the city's alleged refusal to comply with state affordable housing requirements.
This isn’t conventional rent control.
Over a dozen California cities already have conventional forms limiting annual increases more than this bill does. “Mom&Pop”-owned single-family dwellings, duplexes or similar where the owner occupies one, and room-mate/house-mate situations, mostly aren’t regulated by this bill, and new construction is exempted for 15 years. And the bill doesn’t stop landlords from further hiking rates for a new tenant when the previous one leaves...
...a provision called “vacancy control” often associated with how rent control worked decades ago in places like Santa Monica and Berkeley … a minority of California renters will enjoy real savings from the new law [with] those who do benefit ... likely to be low-income and thus most vulnerable to rent hikes.
Some opponents of the California legislation argue that the measure could backfire: Landlords, they say, may treat the rent cap not so much as a limit on what they can charge but as a benchmark for what they should charge. Especially if they fear future unanticipated costs or having to take a tenant to eviction court.
Big property operators are equipped to build many kinds of costs into how they operate, and weather the risks of hiking the rent the maximum allowable. Small-owners doesn’t the means for those costs and risks, so, there’s a concern that small-owned rental properties will trickle away, leaving big owners consolidating yet more.
Another decrease in availability may come with owners converting rentals to occupier-owned units anywhere they think it’ll be less costly or safer for them.
The “just cause” eviction provisions are controversial.
Read the details if you’re likely to need to know them. An owner is required to give advance written notice citing specific no-fault or at-fault documented causes that the bill allows for the kinds of renting/leasing situations the bill covers.
Basically, for No-fault eviction, the bill tells the owner how to calculate and pay financial reparation to assist the tenant getting relocated and details what are no-fault just-causes, e.g.: the owner or her/his spouse/domestic partner, or parents’, g’parents, children, or g’kids moving in (that possibility has to be specified in rental agreements July 2020 onward in order be cite-able); removal of the unit from the rental market; owner complying with a govt order or ordinance that involves the tenant having to leave; intent to demolish or substantially renovate critical elements of the unit, etc.
Basically, at-fault just-cause relieves the owner of financial obligation help to the tenant relocate, and depends a lot on documented tenant violations of the Civil Code of Procedure, Criminal Codes, and Health & Safety codes,
Default on paying rent ■ A continuing violation of a material term of the lease after notice was issued to correct it. ■ Maintaining, committing, or permitting maintenance or commission of a Civil Code-described nuisance. ■ Committing waste as the Civil Code describes it. ■ Refusing to execute a written lease extension/renewal comparable to the previous one (&compliance with this act) after that one expires. ■ Unlawful or criminal activity in the unit or common areas of the units, or threat of it or toward the property or an owner or agent of it. ■ Assigning or subletting if it violates the lease. ■ Refusing to allow the owner legally allowed or legally required entrance to the unit. ■ Employee, agent, or licensee of the owner refusing to vacate after termination of that job. ■ Failing to vacate by date & time specified after providing written offer or notice of intention to end the rental agreement. ■ etc.
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and spells out what the owner is allowed and required to do to meet the letter of the law for the eviction to be legal.
Even among developers & others on the ownership side of the equation, opinions differ on whether this bill does or doesn’t look likely to discourage new construction.
The National Multifamily Housing Council —a WashDC-based owner advocacy organization— speaks of the bill as rent control, and points to lack of provisions supporting new construction, concluding that AB-1482 therefore makes “building more housing across a range of price points harder to do.”
Some recommendations of The California Assn of Realtors, were included in the bill, which it acknowledged while agreeing it doesn’t support increased/new construction of affordable housing.
According to the MercuryNews, this concern is legit, despite the 15-year exemption on new-built rental properties.
While California apartment builders generally forecast annual rent increases of 2 to 3 percent when lining up financing for their projects, the flexibility to raise rents to what the market can bear helps persuade investors to plow money into the often uncertain and time-consuming process of building new housing.
L.A. and Oakland are two among the cities hardest hit.
Also tech hubs like San Francisco and Seattle, grappling with how to provide increased affordable housing.
In June 2019, the Los Angeles Homeless Services Authority released a report finding a 16% increase in the city homeless population there since 2018, part of a county-wide 12% increase, despite 2018 having seen a slight drop in numbers since 2017. In 2018, 9200 people —23% percent of the total that year— were -first-timers to homelessness.
This past July, Mayor Garcetti spoke at the Unified Homelessness Response Center on last year's $20 million investment in Skid Row, heart of the Angeleno homelessness crisis, and announced that funding a major expansion of ReFresh Spot, the area's personal & healthcare hub, as part of another $124 million allocated from the state budget, a 46% increase from last year.
...The center will quadruple in size, "increasing the number of washers, dryers, and drinking fountains, and adding new community spaces for Skid Row residents...
Other L.A. work In June alone included contact with over 1,200 homeless individuals, 500 "comprehensive cleanups" near homeless encampments; and the removal of over 1,300 tons of solid waste.
In Oakland, where Kaiser Permanente has several decades of presence and a $900 million national consolidation headquarters project in development, the healthcare giant promised several million dollars to create and preserve stable, affordable housing there, including “a plan to end homelessness for more than 500 Oakland-area residents over the age of 50”, and the purchase and renovation of a 41-unit housing complex, which may balance the gentrification effect of the new HQ. Oakland is one among 15 communities KP has committed to receiving $3 million to fight chronic homelessness; half of the communities receiving money are in California, the state with 9.1million of KP’s total national 12.2mil. (KP faces a possible October union strike nationally of 80,000+ workers, the majority likewise in California.)
Health and homelessness are two closely tied topics [key Social Determinants of Health] and poor health is both the result of and cause of homelessness, according to the National Coalition for the Homeless. Housing insecurity and homelessness affect health in a number of ways. The most obvious is that not having shelter from the elements is detrimental. ...Homelessness also causes stress [for example, in not feeling safe causing loss of sleep] which affects mental and physical health…. Homeless people also suffer [in terms of] nutrition, personal hygiene and first aid care, all of which contribute to [their] being more prone to premature death. Plus, rising health care costs are prohibitively expensive for homeless and low-income individuals.
was “embraced” by Gov. Newsom in his public comments:
about strengthening the rent cap bill… [SB-330] would limit many of the tools [which] developers say cities use to stymie new housing.
[Dan Dunmoyer, head of the California Building Industry Association — the premier lobbying group for California developers — which announced it would not oppose the rent cap bill after it exempted new construction for 15 years] says Skinner’s [bill] is a step in the right direction, but he admits it wasn’t the big boost to housing production that developers had hoped for, considering Newsom’s audacious goal of 3.5 million new housing units by 2025….
...“Fifteen years is a balance of what is doable for attracting capital. Anything less than that just makes it harder to bring investors to California...”