California Senate Sends Rent Cap Deal To Assembly, Where Its Fate Is Less Certain

The California Senate has voted for a bill that would enact a statewide rent cap.

The measure, AB 1482 by Asm. David Chiu (D-San Francisco), would limit rent increases over any year-long period to 5 percent plus inflation — with a 10 percent maximum. It also requires landlords to show “just cause” in order to evict tenants after their first year.

It contains a deal announced late last month that’s backed by many tenant and business groups and the California Apartment Association but opposed by the California Association of Realtors.

Senate Majority Leader Bob Hertzberg (D-Van Nuys) helped negotiate the deal. He called it “carefully balanced” — and important.

“How many households are spending most of their income just to have a roof over their head?” he asked. “It is true when they say the rent is just too damn high!”

And Senate President pro Tem Toni Atkins (D-San Diego), who took a rare step in presenting the bill herself, said California’s housing affordability crisis has gone unaddressed for far too long.

“Because of the political realities and the constraints that each of us feel from different directions, we’ve had a hard time completely addressing this problem,” she said, later adding that “it’s not every day where you’re able to get tenant groups and business interests to come together and compromise on getting some significant relief to renters.”

But Sen. Mike Morrell (R-Rancho Cucamonga) slammed the legislation as a “violation of property rights.”

“You know, a person works, sweats and toils, and they make a little money. Then they invest in an apartment building or a house, and government over-regulates that,” he said. “That’s disturbing to me.”

And Sen. Andreas Borgeas (R-Fresno) argued the bill’s 10-year sunset should be a shorter one.

“Maybe it would be more prudent if this legislation had some safety valves in it — more so than exist right now,” he said.

The measure contains a rolling 15-year exemption for new construction, so that apartments constructed in the future would not fall under the rent cap until 15 years after they’re built. 

Landlords who rent a small number of single-family homes would also be exempt. But the rent cap would apply to those with a large portfolio of single-family home rentals, such as real estate trusts, corporations and limited liability companies.

The bill would take effect on January 1, 2020, and expire after 10 years.

The measure passed on a party-line vote of 25-10, with four Democrats and one Republican abstaining. It now moves to the Assembly, where its passage is seen as more difficult but still likely.

Gov. Gavin Newsom has vowed to sign it if it reaches his desk.