Sacramento, CA · Member since 2014 · 513 posts · 319 votes
7y
@stephaniechiramberro, I think the this action by the California legislature will result in the following:
- Landlords who had previously been reluctant to raise rents on good tenants will now do so every year without fail. Installing a new tenant at a higher market rent may be preferable to landlords who once feared the possibility of unit becoming vacant due to rent increase.
- Application process will likely become more stringent for screening tenants which may include, requiring higher credit scores and/or lower debt to income ratios, in depth rental reference checks, and income verifications.
- Leases will be longer with more restrictions and requirements such as mandatory renter's insurance and tenants paying all utilities. Landlords may remove option of automatic renewal to month to month once lease term expires. There is no strong incentive to keep the tenancy going past a year.
- Landlords may lower or increase security deposit from the standard equal to 1 month's rent.
- Cosmetic improvements may be restricted to exterior of home. Landlords may only approve necessary repairs to satisfy City and County codes.
- More landlords will move into the short-term rental market
I'm sure other landlords out there can add their own predictions. I am glad that most of our rentals are already getting market rent.
Sacramento, CA · Member since 2014 · 513 posts · 319 votes
7y
@stephaniechiramberro, I think the this action by the California legislature will result in the following:
- Landlords who had previously been reluctant to raise rents on good tenants will now do so every year without fail. Installing a new tenant at a higher market rent may be preferable to landlords who once feared the possibility of unit becoming vacant due to rent increase.
- Application process will likely become more stringent for screening tenants which may include, requiring higher credit scores and/or lower debt to income ratios, in depth rental reference checks, and income verifications.
- Leases will be longer with more restrictions and requirements such as mandatory renter's insurance and tenants paying all utilities. Landlords may remove option of automatic renewal to month to month once lease term expires. There is no strong incentive to keep the tenancy going past a year.
- Landlords may lower or increase security deposit from the standard equal to 1 month's rent.
- Cosmetic improvements may be restricted to exterior of home. Landlords may only approve necessary repairs to satisfy City and County codes.
- More landlords will move into the short-term rental market
I'm sure other landlords out there can add their own predictions. I am glad that most of our rentals are already getting market rent.
Real Estate Broker · Los Angeles, CA · Member since 2018 · 300 posts · 146 votes
7y
In addition, we will see less development of housing, increasing the rate of cost as investors shy away from California, and look to build in other markets for better returns. Think Atlanta, Austin, Florida, Vegas, Arizona, etc.
Rental Property Investor · Olympia, WA · Member since 2014 · 777 posts · 744 votes
6y
@Ned Carey This doesn’t have anything to do with logic or tenant benefit. This is ideologically driven. They are working to turn housing into a “human right” and therefore only the government can adequately meet the need. It is the same play they did with health care ...and we know how well that worked.
Investor · San Jose, CA · Member since 2012 · 61 posts · 40 votes
6y
the CA rent control law doesn't apply to single family homes and others
but if it does, selling the property doesn't allow eviction
note that if you don't raise the rent to the maximum every year, it's a use it or lose it
in other words, let's say in year 1 you are allowed to raise rent 5% but choose not to raise at all
then in year 2, you are allowed to raise rent 5% - you cannot raise rent by 10% (5% from year 2 and year 1)
it's a use it or lose it system
in my actual and anecdotal experience, in a use it or lose it system, the majority of people use it which means raise the rent the maximum you can every year or you lose it
As mentioned SFR's are not included so no issues there. If you were to sell for example, a tenant occupied duplex I believe you can give the tenant notice to vacate however the owner would be responsible for "relocation expenses" which is the sum of one months rent. the clause which I believe this falls under is "If you are removing the property from the rental market".
In my opinion most investors will stray away from the multi family housing properties and begin to purchase SFR's as they are not impacted which will drive the SFR sales market up higher. In return the price of multi family will be affected.
Oakland, CA · Member since 2019 · 5 posts · 0 votes
6y
As I read it, you are allowed to raise the rent by 5% PLUS the cost of living each year, or 10%, whichever is less. Not so bad, in my opinion. I think we ought to focus on what the law actually says and how we can best deal with it. Here is the link. CA Rent Control
As I read it, you are allowed to raise the rent by 5% PLUS the cost of living each year, or 10%, whichever is less. Not so bad, in my opinion. I think we ought to focus on what the law actually says and how we can best deal with it. Here is the link. CA Rent Control
Are we supposed to use National or California inflation rates? There is a huge difference.