Overview
LACBOR stands with California Association of REALTORS in Opposing AB 1482!
August 30th, 2019
Issue Background
Under current law, unless a local government has enacted rent control, there is no statewide cap on rent. Additionally, current law allows landlords to end a tenancy without cause when a lease expires.
As introduced, AB 1481 and AB 1482 – previously combined into one bill, AB 1482 - would have established a rent cap of 5% plus regional CPI, as well as “just cause” evictions after 6 months of tenancy, through 2030 on all rental properties; required relocation assistance up to 3 months when a tenant is evicted under specified conditions; and included insufficient vacancy decontrol language.
Per our agreement reached with the author and the sponsors, AB 1482 would have established a rent cap of 7% plus regional CPI, as well as “just cause” evictions after 12 months of tenancy, through 2023; limited relocation assistance to 1 month when a tenant is evicted under specified conditions; exempted single-family homes owned by a natural person, an LLC, or in a trust; and contained sufficient vacancy decontrol language. As proposed to be amended contrary to our agreement, the bill would revert back to its original rent cap of 5% plus regional CPI and last for a decade until 2030.
Why C.A.R. is OPPOSING AB 1482
AB 1482 negatively impacts small property owners. For example, the bill does not allow for “pass throughs” for repairs, such as a broken HVAC system or leaky roof. A small property owner has no way to offset these repair costs and is unable to absorb such costs under such restrictive rent caps. As a result, small property owners may decide to their pull units off rental the market rather than be forced to limit rents to such a degree. Small property owners will also be discouraged from entering the rental market, leaving a greater concentration of ownership in the hands of large corporate entities.
Under current law, unless a local government has enacted rent control, there is no statewide cap on rent. Additionally, current law allows landlords to end a tenancy without cause when a lease expires.
As introduced, AB 1481 and AB 1482 – previously combined into one bill, AB 1482 - would have established a rent cap of 5% plus regional CPI, as well as “just cause” evictions after 6 months of tenancy, through 2030 on all rental properties; required relocation assistance up to 3 months when a tenant is evicted under specified conditions; and included insufficient vacancy decontrol language.
Per our agreement reached with the author and the sponsors, AB 1482 would have established a rent cap of 7% plus regional CPI, as well as “just cause” evictions after 12 months of tenancy, through 2023; limited relocation assistance to 1 month when a tenant is evicted under specified conditions; exempted single-family homes owned by a natural person, an LLC, or in a trust; and contained sufficient vacancy decontrol language. As proposed to be amended contrary to our agreement, the bill would revert back to its original rent cap of 5% plus regional CPI and last for a decade until 2030.
Why C.A.R. is OPPOSING AB 1482
AB 1482 negatively impacts small property owners. For example, the bill does not allow for “pass throughs” for repairs, such as a broken HVAC system or leaky roof. A small property owner has no way to offset these repair costs and is unable to absorb such costs under such restrictive rent caps. As a result, small property owners may decide to their pull units off rental the market rather than be forced to limit rents to such a degree. Small property owners will also be discouraged from entering the rental market, leaving a greater concentration of ownership in the hands of large corporate entities.
- AB 1482 discourages the creation of rental housing. Establishing restrictive rent caps and “just cause” eviction standards creates a disincentive for developers to build rental housing.
- AB 1482 doesn’t address the core cause of the housing affordability crisis, which is the lack of supply. As other legislation designed to increase the housing supply languishes in the Legislature, AB 1482 not only doesn’t increase the supply, it discourages the provision of rental housing.
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