California lawmakers weaken plans to protect tenants from big rent hikes and evictions

Reporting from Sacramento —  An effort to temporarily protect California tenants from steep rent hikes cleared a major hurdle in the Legislature on Wednesday, even as other measures meant to insulate renters from the state’s rising housing costs continue to fall short at the Capitol.

A bill to cap annual rent hikes statewide at 7% plus inflation cleared the Assembly this week, but only after its supporters agreed to limit the policy to just three years. A companion measure to prevent landlords from evicting their tenants without first providing a reason failed when legislators did not take it up for a vote before this week’s deadline for it to pass the Assembly.

California’s rising housing costs are leaving too many renters vulnerable to eviction with nowhere else to go, said Assemblyman David Chiu (D-San Francisco), author of the rent cap measure, Assembly Bill 1482. 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 analysis by UC Berkeley’s Haas Institute for a Fair and Inclusive Society.

“We have millions of Californians that are one rent increase away from being forced out of their homes for decades,” Chiu said. “They are our neighbors. They are our co-workers. They are our brothers and sisters. They are our grandmothers.”

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Chiu’s bill faces a mid-September deadline to pass both houses of the Legislature.

The effects of AB 1482, however, might be limited. Though it includes language aimed at preventing landlords from evading a rent cap by evicting tenants instead, the provision, known as “just cause,” is not as strong as what was in the failed anti-eviction measure, Assembly Bill 1481.

“I believe we need to have the just cause protections that are embodied in AB 1481,” Chiu said.

After AB 1481 did not get a vote Thursday, its authors, Democratic Assemblymen Tim Grayson of Concord and Rob Bonta of Alameda, said they might try to advance the policy by amending Chiu’s bill while it’s under consideration in the Senate.

Landlord groups and the California Assn. of Realtors have been the largest opponents of both efforts. They were the biggest contributors to an $80-million campaign last year to defeat a ballot initiative that would have allowed cities and counties to implement more stringent forms of rent control. And they’ve argued that restricting the ability of landlords to increase rents would diminish incentives for developers to build housing needed to remedy a shortage of available homes. Opponents of the rent cap bill echoed that argument.

“This is a disincentive for people to build,” Assemblywoman Melissa Melendez (R-Lake Elsinore) said. “And what we need is to build.”

But backers of the measures say they are trying to prevent sticker shock for renters while also ensuring that developers and landlords continue to invest in apartment construction. Oregon passed a similar effort this year to prevent rent gouging and require listing a cause for evictions, the first such statewide plan in the country.

Under AB 1482, landlords would not be able to increase rents by more than 7% plus the regionally adjusted consumer price index set by the federal government. Had the bill been in place for Los Angeles last year, the maximum rent increase would have been 9.7%. The rent cap does not apply to developments built within the last 10 years and exempts landlords who own 10 or fewer single-family homes. The bill would not change existing rules for those living in rent-controlled apartments.

AB 1481 would have required a landlord to provide a cause in writing for evicting tenants after they’ve lived in a property for a year and allowed renters to try to address problems before their removal. Landlords could still evict tenants for failure to pay rent, nuisances or similar reasons. If landlords want to move into the property, intend to remodel it or are seeking eviction for other circumstances that are not tenants’ fault, property owners would in most cases have had to provide relocation assistance. It too wouldn’t have applied to landlords who own 10 or fewer single-family homes.

Some of those provisions had yet to be incorporated into the bills and reflect concessions that Chiu agreed to make while his measure is debated in the Senate. The rent cap bill previously would have limited annual rent hikes to 5% plus inflation and would have been in place for 10 years. But last week, the Realtors association sent memos to lawmakers saying it would oppose the rent cap and anti-eviction bills without a host of changes, including the length of time the measures would be in effect.

On Wednesday evening, Chiu agreed to limit the timeline to just three years, and the measure cleared the Assembly shortly after.

The bill aligns with Gov. Gavin Newsom’s call for the Legislature to pass measures that would provide more stability for renters — albeit stability that is now temporary.

“The governor is pleased that work continues on advancing legislation that protects against rent gouging,” Newsom spokesman Nathan Click said in a statement issued after the vote on AB 1482. Click did not immediately respond to a request for comment after the anti-eviction bill failed Thursday.

That bill’s demise was the latest in a string of defeats for lawmakers and activists who had been pushing for more renter protections. California’s rent control rules are guided by the Costa-Hawkins Rental Housing Act, which prevents cities and counties from imposing rent control on single-family homes or apartments built after 1995, among other prohibitions. The law also froze rent control rules in cities, including Los Angeles, that had policies before Costa-Hawkins took effect.

AB 1482 doesn’t propose changes to Costa-Hawkins. A separate bill written by Assemblyman Richard Bloom (D-Santa Monica) would have allowed local governments to control rents on properties more than 20 years old with exemptions for smaller landlords, but it was shelved before a committee hearing.

Hours before that decision, Newsom’s chief of staff, Ann O’Leary, told renter activists that the governor had lobbied lawmakers on the committee to advance the bill. But that wasn’t the case, and she later called them to apologize, according to a report in Politico.

Even if the rent cap bill makes it through the Legislature, it’s not likely to be the end of the debate on renter issues. The principal backer of last year’s rent control initiative, the L.A.-based AIDS Healthcare Foundation, has filed for another potential statewide ballot measure in 2020.

Michael Weinstein, the president of the organization, has said he would not pursue an initiative if lawmakers reached a deal on renter protections. But he has criticized the current effort — before the changes agreed to this week — as too weak to provide stability for tenants.

Chiu, the rent cap bill’s author, said the three-year timeline in his legislation ultimately won’t be enough.

“I suspect that in three years we will not have solved the housing crisis completely and we will likely need to revisit this,” he said.