AB 1482 Brings California One Step Closer To Rent Control

Proposition 10, the latest attempt at statewide rent control in California was defeated during the November 2018 election.

Sadly, the defeat of Prop 10 didn’t last for long since our elected officials immediately started 2019 with new measures to accomplish their goal of statewide rent control including AB 1482.

What Is AB 1482?

If it’s signed into law by Governor Gavin Newsom, AB 1482 will make it illegal for landlords and property owners in the State of California to raise rents here more than 7 percent plus the Consumer Price Index in one year.

The bill has been controversial from the start because opponents feel that it will stop investors and builders from wanting to build more housing in California while supporters of the bill feel that it gives landlords room enough to operate at a reasonable profit.

Will rent control help California? If history is any indicator of the results that come from rent control then the answer would be no.

California has a major housing shortage and ranks 49th out of all 50 States when it comes to per capita housing construction (2016 McKinsey Global Institute Report) so if AB 1482 is signed by the Governor this will only create another obstacle that will make it less desirable for builders to creating new housing in California.

Why Is Rent Control Bad for California?

There’s no denying that rents are high in California but having statewide rent control will only make maters worse because it’s going to be responsible for making the “Golden State” less desirable for real estate investors to build new housing here.

In 1999, just days before the world was going to end with Y2K, Forbes magazine published an article called “The Dumbest Ideas of the Century,” which included a list of the 10 worst economic ideas of the 20th century. Rent control was second on the list. “Here we have a policy initiative that has done huge damage to cities around the globe. It is very hard today to find an economist supporting rent control,” the article stated. Damage to cities, indeed, but damage to low- and middle-income renters most of all.

Source – Multifamily Executive

Contact GoldenWest Management

To learn more about AB 1482 and how it will affect California, or to speak with us about our property management services, contact us today by calling (866) 545-5303 or click here to connect with us online.

 

GoldenWest Management
Investment Property Solutions
CA LIC# 071791904

California Legislate News – Learn more About the Laws Affecting Landlords and Rentals

After Proposition 10 was defeated in the November 2018 elections many landlords thought that the battle over rent control in California was over but sadly that’s not been the case.

The defeat of Prop 10 only put the battle on “pause” as our elected officials in California went back to the drawing board to create more legislation that will bring statewide rent control to the Golden State in one way or another.

Here’s a breakdown of the laws that will make the rental market tougher for landlords in California if they are approved.

AB-330 – Legislation That Will Increase Court Fees for Most Landlords

With AB-330, select courts across California would appoint attorneys for tenants who aren’t able to afford legal representation when they come to court for landlord-tenant or other civil issues.

Even though the goal of AB-330 is also to provide victims of domestic violence with a court-appointed attorney, the reality is that the cost of this bill will be astronomically high, especially for landlords who live in rent-controlled areas, and are not able to raise rents to keep up with their rising costs.

AB-1482 – Rent Control Comes Back

Besides AB-330, another bill to be on the lookout for in California is AB-1482. This bill seeks to cap rents across the Golden State at 5% plus the cost of living and it would nullify Costa Hawkins, the 1995 rent control act.

If it reaches his desk, Governor Newsom has promised to sign any rent control legislation so we can count on the battle over this contentious issue reaching a fever pitch in the coming months.

Sadly, if AB-1482 is approved it’s projected that we will see a further decline in rental housing construction in California because there will be fewer companies that would build here due to rent control.

The problem with affordable housing in California doesn’t just have to do with high rents, it has everything to do with supply and demand. If there are fewer properties available for rent this will naturally increase the cost of the housing supply that’s left.

Landlords across California should call their elected representatives to protest these bills and stay on top of the efforts to enact statewide rent control because it’s already a reality in Oregon and if owners, landlords, and tenants don’t continue to fight it, we could see statewide rent control here sooner rather than later.

Contact GoldenWest Management

To learn more about what’s happening with rent control in California, or to speak with us about our property management services, contact us today by calling (866) 545-5303 or click here to connect with us online.

 

GoldenWest Management
Investment Property Solutions
CA LIC# 071791904