California Rent Control

16 Replies

@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.

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.

I didnt realize the law is effective already - they didnt want landlords proactively raising rent or evicting tenants

Updated about 1 year ago

My mistake, governor hasnt signed yet - this ny times headline made me think it passed https://www.nytimes.com/2019/09/11/business/economy/california-rent-control.html

@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.

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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.

Originally posted by @Stephanie Chiramberro :

What do you think about rent control passing in California? What do you think will be the repercussions?

 I think you should get out, unless you want to bring that crap here, then stay there. 

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

Originally posted by @Ellen Diamond :

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.