What Properties Will be Affected?Once the bill is signed into law by the governor, rent increases will be capped at five percent + CPI (
Consumer Price Index) over the course of any 12-month period or 10%, whichever is lower. As a result, we estimate an additional 2 million more apartments throughout the state will be subject to these new rent controls. However, the law will
exempt single-family
homes as well as any buildings constructed within the last 15 years. Owner-occupied duplexes will also be exempt.
Rental Caps and Evictions
We believe along with with the five percent plus CPI rental cap each year, AB1482 will also make it more difficult for tenants to be evicted. In fact, our understanding is that a building owner will now be required to prove
“just cause”
before being allowed to move forward with an eviction. For example, unless an owner can show the tenant is failing to pay rent or is doing something of a detrimental nature, it will be increasingly difficult to evict a tenant without facing possible legal action.
Relocation Fees
In addition to having their rent increases capped at five percent annually, many property owners have told us they are also concerned about having to pay relocation fees. These fees, which will be equal to one month’s rent for a tenant, will be required to be paid by property owners if they evict tenants from a building in order to construct condominiums or make renovations to the existing building. Also, since the new eviction protections will make it more difficult to evict tenants who have lived in a property for at least one year, building owners tell us they fear it may become harder to attract high-quality tenants to their properties.
Is the Law Permanent?
While the law will be in effect for well over a decade, that does not mean it is necessarily written in stone permanently. According to the law’s specifics, as drafted by the Assembly, the law could conceivably expire as of January 1, 2030, if lawmakers do not vote to extend it. However, from what we have heard from various property owners, realtors, and others who are heavily involved in the state’s housing market, it is unlikely the law would be allowed to expire.
The Defeat of Proposition 10
As we have heard from many landlords on this issue, many have expressed regret about the defeat of Proposition 10. This bill, defeated one year ago, would have allowed cities and counties to expand rent control laws based on the needs of individual areas. However, by now having to abide by state law, many property owners tell us they have little if any freedom to do with their properties as they see fit. As a result, they firmly believe real estate development within the state will be severely limited, which could lead to unforeseen problems in other areas in future years.
Why it sucks for renters
We fear that this new law will promote
property owners
to raise the rent the maximum amount allowed each time they can. Many Landlords and property owners choose not to raise rents for fantastic tenants very often. The residents or tenants in smaller apartments will not be able to sustain seven to eight percent increases each year. Unfortanilty cost of living increases, and minimum wage do not increase to match. This will likely mean that many residents on the lower rents will begin to struggle.
Due to the many restrictions, a landlord will now be faced with the passage of this new law, and it will be more critical than ever before to rely on a property management firm that can do a great job at an affordable price. With our continued commitment to customer service and ability to provide a realm of services for many different types of properties, building owners will be more determined than ever to call on us to keep their profits high and their evictions low. Give us a call today to chat. 530-410-6085
Other bits and pieces
There are a few other bits and pieces within this bill that a Property Manager & or Landlord should know and understand. In the next few weeks, we will create a cheat sheet that you are welcome to circle back around and download. As always we will you success in your Landlording adventures and are always here to chat if you have questions. Want to read the entire Bill??? If so you can find it at this link.
AB-1482 Tenant Protection Act of 2019 
