A California bill would limit housing security deposits to one month’s rent

A proposal making its way through the California Legislature would cap the amount landlords can charge for rental housing security deposits, a move supporters say would make stable housing more affordable and accessible. 

Currently, landlords can ask for security deposits of up to two months’ rent for an unfurnished apartment and three months’ rent for a furnished apartment.

Assembly member Matt Haney (D-San Francisco)’s AB 12 would limit all security deposits to one months’ rent.

Haney argues the bill would lower barriers for housing as costs have skyrocketed. He said the median rent in California has increased 35% since 2000, while median renter household income has risen only 6% during the same period.

“Higher rents result in higher security deposits,” he said. “Under current California law, every renter can be required to pay up to three months’ rent for the security deposit. This law was put in place in 1977 and hasn't been changed substantially in three decades."

Rental housing and realtor groups oppose the bill, arguing a three-month security deposit helps landlords recoup costs for damage.

“Further limiting a property owner's ability to financially cover property damage or unpaid rent is an unfair imposition for rental housing providers,” the California Apartment Association wrote in opposition to the bill.

Haney said in more expensive cities like Los Angeles and San Francisco, a three-month security deposit for a one-bedroom apartment could get as high as $8,000 or $10,000, a number he said “can be as much as a down payment on a house in many parts of the country.”

The San Francisco Democrat founded and chairs an unofficial Renters’ Caucus in the Legislature this session.

He noted a dozen other states including New York, Alabama, Massachusetts and others have similar caps and that California already limits housing security deposits to one months’ rent for veterans.  

“There’s no reason not to extend this same protection to every renter in the state,” Haney said. “It doesn’t take away a landlord’s ability to hold their tenets accountable. They can still recover any damages in court” and set their own rental prices.

The California Association of Realtors said the bill provides no flexibility for small landlords, a complaint Haney said he would work on as the bill moves through the Legislature.  

The bill passed the Assembly floor Monday by a party-line vote of 51-14. Most Republicans voted against the bill, though none spoke against it on the floor.