Proposed statewide rent cap bill: What does it mean and is it enough?

How much does this bill cover, and are local measures to address the housing crisis still necessary?

You can view the most recent version of the bill here, but bellow is our quick summary:

The short answer: Yes, local housing initiatives would still be necessary, even if AB-1482 passes in 2020.

There are two parts of the bill to look at. The first is a set of just-cause tenant protections that will apply indefinitely. The second is a rent cap that would apply for ten years before being automatically repealed. Neither part of the bill can override local ordinances that provide stronger tenant protections or stricter rent control.

The just-cause eviction protections would affect most tenants in the state of California who have lived in their rentals for more than 12 months. The bill will require landlords to cite specific just causes for eviction and termination of a lease. This includes things that are the fault of the tenant, such as defaulting on rent, dangerous or criminal activity, and failing to correct consistent problems that are a nuisance to others. If it’s something the tenant can fix, landlords are required to give tenants an opportunity to correct the problem before eviction.

The bill would also allow landlords to terminate leases for reasons that are not the fault of the tenant, such as the landlord personally wanting to occupy the rental or have their immediate family occupy the rental, deciding to demolish or substantially remodel the property, or the property being determined unfit for habitation by a government agency. When a tenant is evicted for one of these causes, the landlord must pay the tenant one month’s worth of their rent to help them find new housing.

Notable exceptions to these protections include buildings less than 15 years old, dormitories, rentals that share a kitchen or bathroom with a landlord’s primary residence, and certain single-family houses with specific clauses in their lease.

©2018 National Low Income Housing Coalition http://www.nlihc.org/oor . Fair Market Rent = Fair Market Rent.
Source: NLIHC calculation of a weighted-average HUD fair market rent. Affordable rent for average renter wage is based on BLS
QCEW, 2016, adjusted to 2018 dollars. Other rents are based on HUD Income Limits and and Social Security Administration, 2018.

The rent caps provided in this bill are set to be automatically repealed in 2030. Until then, the bill would require landlords to only increase rent once per year, with a maximum increase of 5%+the percentage increase in cost of living, with a maximum total increase of 10% a year.

Some tenants have had their rent increased 56% or more in two months when the property changed hands to new landlords. Others have had their leases terminated when they were in good standing with little recourse. Near the Del Norte BART, an apartment complex with six units is forcing out tenants one unit at a time.  New investors are remodeling units and offering them back to tenants at rates no longer affordable- displacing long term residents. 

AB-1482 would have certainly provided protections to many of these tenants who were displaced from our community, however, it will not protect them from corporate sweep of property for investment.  

Is it enough?

AB-1482 doesn’t simply cap the rent at a 5% annual increase. Instead, the cap is 5%+ the percentage cost of living increase of the area according to the Consumer Price Index (or 10%, whichever is lower). According to the Bureau of Labor Statistics, the cost of living increase has averaged at 3.22% a year in the San Francisco-Oakland-Berkeley area over the last five years. AB-1482 allows a 5%+the percentage increase in cost of living, which means that for areas experiencing intense growth, a more realistic take on the maximum rent increase set by this bill is around 8%.

Wages in the Bay Area have not been keeping up with the cost of living increases. According to a survey by the state’s Employment Development Department, between 2014 and 2019 the average annual wage in the Oakland-Hayward-Bekeley area has increased an average of only 2% per year. This increase has not even been keeping up with the increases in cost of living across the Bay Area, and certainly does not account for a 5% rent increase on top of that. AB-1482 would still allow housing costs to eat up a greater and greater percentage of the average person’s income. 

The average rent for a two bedroom unit in El Cerrito increased from $1,838 in April 2014 to $2,352 in April 2019, according to rentjungle.com. That’s a 27% increase across five years, averaging at 5.4% a year. Had most El Cerrito landlords increased their rent at the proposed 5%+percentage cost of living each year, rent rates in the city would actually be the same or higher on average.

The good news about this bill is that it would put a stop to sudden and dramatic rent hikes and many unfair evictions. While it doesn’t address the underlying trend of rising rents, it would put a stop to the worst rent price gouging, and the just cause eviction requirements are drastically needed. Creating a statewide baseline of protection is critical for many tenants who live in cities like El Cerrito, where no tenant protections exist.

The bill AB-1482 is a step in the right direction, but it is not a complete solution

In addition to these basic protections, local communities concerned about the displacement of their current residents must carefully look at the local conditions and make policy based on these local conditions. When residents are forced out for no fault of their own, will the tenant relocation protections be sufficient to keep people from moving into their cars or the streets? If someone is already on the streets, how can they get back into secure housing? The answers to these questions will depend on what other options are available, who they are designed for, and who is brought to the table when discussing solutions to our housing crisis. How we can increase the amount of safe, affordable, and accessible housing available to members of the El Cerrito community? 

Stay updated on this issue and more by following El Cerrito Progressives on Twitter and Facebook

Immediate Call to Action: Call now and ask for YES vote on #AB1482, the anti-rent-gouging bill! Other tenant organizers are in the Capitol this week meeting in person, calls will help.

Priority:

916-319-2004 or extension 2022, 2028, 2037, 2041, 2045, or 2072


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