Governor Gavin Newsom talks housing in his new budget plan
Landlords and realtor groups earned a win in the California Capitol this week after lawmakers shelved a bill to restrict evictions and amended another to limit caps on rent.
The Assembly adjourned on Thursday without taking up Assembly Bill 1481, which would have established a “just cause” eviction law in California, prohibiting landlords from evicting tenants unless they violate the terms of their lease or fail to pay rent. On Wednesday, the chamber narrowly passed Assembly Bill 1482, which caps “egregious” rent increases.
Assemblymen Rob Bonta of Alameda, Tim Grayson of Concord and David Chiu of San Francisco significantly changed their measures in an attempt to win over opposition.
The three Democrats sought to negotiate a last-minute deal with the California Association of Realtors this week. The group dropped its opposition to the rent cap measure after winning major concessions from a coalition of tenant advocate groups.
The California Apartment Association and the California Chamber of Commerce argued that without changes, the rent-cap measure would discourage construction of rental housing at a time when California sorely needs more homes.
AB 1482 would now limit rent increases to 7 percent plus inflation, up from 5 percent in a former version of the bill. The legislation would also sunset after three years — less than a third of its original time frame — and now exempts owners who rent 10 or fewer single family homes.
“These bills did not help address California’s housing problems,” said Alex Creel, the association’s vice president of governmental affairs. “(Realtors) negotiated amendments to benefit landlords and tenants and are pleased that, through working with the bill authors, legislators and other organizations, the bills will be amended to address our concerns.”
But some worry that a rent cap that high would give landlords license to raise rents more than they would otherwise. The average rent increased nearly 2 percent in Sacramento from 2018 to 2019.
“If they have a license now to raise the rent (7 percent), they will because they don’t want to be left behind,” said Assemblywoman Blanca Rubio, D-Baldwin Park. “I’m really cautious about how we vote today because it’s going to price low-income folks out of housing because they know ... they won’t be able to afford the increase every year.”
Chiu said AB 1482 is not rent control, but does protect tenants against extreme rent increases while also “allowing landlords to make a fair return on investment.”
But the failure of the eviction bill “creates an enormous loophole,” Chiu said, continuing that “it’s critical the two policies come together.”
After a two-week sprint to meet a deadline to pass bills from their original chambers, the three lawmakers attributed their defeat on the eviction bill to fatigue and skepticism.
For some members, Bonta said, the rent cap measure was already “a heavy lift,” and passing another controversial measure just wasn’t in the cards.
“AB 1482 moving yesterday was historic, unprecedented,” Bonta said. “But today wasn’t the day to get enough votes to get AB 1481 to off the floor.”
Though the stakeholders said they found compromise, the revisions reveal the powerful influence Realtors maintain in the Capitol halls as California seeks to address an ongoing crisis of housing affordability and homelessness.
“We’ve made one compromise after another. We’ve been giving and giving and giving,” said Amy Schur, campaign director with Californians for Community Empowerment, in the lead-up to the vote. “We have ceded to one demand from (the Realtors) after another. If the realtors are this unwilling to allow tenant protections to advance, the ball is squarely in the court of the legislators, the governor and the speaker.”
The Keep Families Home coalition released a statement following passage of the rent cap measure, saying its “grassroots effort” faced “one of the largest lobbying campaigns in the state.”
The three Democrats said their priority is getting that bill through the Senate and to Gov. Gavin Newsom’s desk. But they said they’ll also try again on eviction regulation this year or next.
“The session is not over,” Grayson said. “Delayed a few months? Possibly. But it’s not dead, it’s not over. I promise you, rest assured, this subject will come up again.”