New state law protects renters from some rent hikes, evictions
Many people will remember Tuesday, Oct. 8, 2019, as an historic day. It was the day that Gov. Gavin Newsom gave thousands of renters in California a gift that would change the way they lived.
Newsom signed into law Assembly Bill 1482, handing Californians some of the strongest protections against rent hikes and evictions in the nation.
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But legislators are quick to say it’s not rent control but rather an “anti-rent gouging” law that will also protect against unjust evictions.
Long fight in Concord
For four years, the Concord City Council has been barraged with stories of unjust evictions, exorbitant rate hikes and families being displaced by landlords who “terrorized” residents, says Betty Gabaldon, president of the newly formed Concord Tenants Union.
She says she’s heard stories of apartment landlords putting a resident’s furniture out on the street or turning off utilities with a 24-hour eviction notice. She relocated from Concord to a smaller apartment in Walnut Creek when her landlord raised her rate to three times what she was paying.
When the council refused to enact any rent control ordinances, Gabaldon and her group just got louder. The tenants union was born with the help of Raise the Roof, an organization that promotes tenants’ rights.
Assemblyman Tim Grayson (D-Concord) was on the Concord council when it turned away rent control. Now he is one of the co-authors of AB 1482, led by Assemblyman David Chiu (D-San Francisco).
“I got a little more education on the subject,” Grayson says. “Plus, I saw first-hand what was happening in Concord.”
He relays a story about a couple that faced eviction from their Concord apartment so the landlord could “jack up the rate.” The couple moved to far East County to find a place they could afford.
“They were great tenants,” he says. “They kept up their home, but suddenly they were forced to leave their community. It wasn’t fair.”
Concord Councilman Edi Birsan calls himself the “lone wolf” champion of a rent control ordinance in Concord.
“It’s tragic to see people have to take their kids out of schools, leave their faith community, their lives and set up shop somewhere else – if they’re lucky enough to find something,” Birsan says.
The details of AB 1482
The new state law is designed to address all of the issues expressed by the advocates and politicians. It will cap annual rent increases at 5 percent plus the rate of inflation – currently 2-3 percent – for much of the state’s multifamily housing stock. The bill also will apply “just cause” eviction policies to qualified housing across California.
Just as importantly to some, landlords will need specific reasons for why they want a tenant out, such as failure to pay rent on time or dealing drugs from an apartment. Landlords who want to convert a unit into a condo or move a family member in will have to offer more than one month’s rent to the displaced tenant for relocation help.
Half of all California renters – more than 3 million households – spend more than 30 percent of their income on rent, meeting the federal government’s definition of “rent-burdened.”
“These anti-gouging and eviction protections will help families afford to keep a roof over their heads, and they will provide California with important new tools to combat our state’s broader housing and affordability crisis,” Newsom said when the Assembly passed the bill last month.
Expanding on Costa-Hawkins
The legislation will take effect in January 2020 and sunset in 2030. It will affect 2.4 million apartments, estimates the Terner Center for Housing Innovation at UC Berkeley. The law doesn’t address single-family homes.
According to Cal Matters, many apartment renters live in cities that already have local controls but they aren’t eligible for them. A state law passed in 1995, known as Costa-Hawkins, bans cities from expanding rent control to units built after 1995 and in some cities limits control to units built well before then. In Los Angeles, for example, rent control can apply only to units built before 1978.
AB 1482 applies to all eligible California rental units built at least 15 years ago, meaning units built as recently as 2005 would be subject to rent caps.
Widespread support
There was some concern that the law would discourage building in California. However, the California Building Industry Association – the premier lobbying group for California developers – said it would not oppose the bill after it exempted new construction from the rent cap for 15 years.
“This required some heavy lifting, but it was an intense collaborative effort between politicians, tenant advocates, the California Apartment Association and other stakeholders,” Grayson notes.
Clayton Councilwoman Julie Pierce, a former vice president of the Association of Bay Area Governments, sees the bill as a step in the right direction even though there is minimal impact in her city.
“We don’t have large apartment complexes owned by a single landlord. The law for the most part in Clayton simply limits the increases in rent to 5 percent plus the CPI, which is about 3.5 percent this year, keeping annual rent increases to less than 10 percent.
“I see this as more an ‘anti-gouging’ law,’ ” Pierce says.
Grayson stresses that it’s not a rent control law. “We are only addressing the egregious landlords who are exploiting renters,” he says. “They were contributing to the terrible homeless problem we have in the state.”
Grayson says the bill will spur production of housing. “We are creating jobs. The main thing is to create places where people can live, work and play,” he says, citing the area around the Pleasant Hill BART station as an example. “In Concord, we have to do that with the Naval base. It will be disastrous if we only put houses in the development.”
Coping with Concord’s ‘bad apples’
An analysis by UC Berkeley and Zillow found that a minority of California renters will enjoy real savings from the new law, but it’s mainly those who are low-income and most vulnerable to rent hikes.
Tenant advocates like Gabaldon are cautiously optimistic about the new law. “We’ll see if the city enforces the law,” she says.
“Most of the landlords in Concord are great,” Birsan says. “It’s just about 20 percent who are exploiting their tenants, and most are corporations. Most of the landlords are little guys who want to keep their tenants happy.”
That’s a sentiment shared by landlord Blaine Carter. He owns a four-plex on Carlton Drive and was opposed to AB 1492. “I’m afraid (AB 1482) will push us further downhill in our housing crisis,” he says.
But he agrees with Birsan that a “few bad apples” have given landlords a bad rap. “Most of the landlords are regular Joes, like me,” Carter says. “Many people think Concord landlords are evil and greedy, even racist. Well, that’s not true.”
Carter said he used all his savings to fix up “a dump,” and now it’s a nice place to live. He says he has tenants who have stayed there 15, nine and six years, plus a newer tenant. “We all take pride in ownership,” he says.
Still, he was opposed to AB 1482 because he sees it as rent control.
“Studies have shown that rent control artificially keeps prices down, creating a lack of supply which ultimately drives up housing prices,” Carter says. “I get what Newsom and they all are doing, but they are acting emotionally. We need housing in California, and hopefully this won’t drive developers away. I hope it works, but history says it won’t.”
He says he considers his real estate investment like any business. “If I bought a mercado or I sold vacuums or furniture, no one would tell me how much I could charge. There has to be compromise.”
New affordable housing
Concord Mayor Carlyn Obringer is also opposed to any city-sponsored rent control or rent stabilization ordinances.
“I’ve always said that any sort of rent stabilization needed to come from the state, so I’m hopeful about 1482,” she says. “This doesn’t target individual homes, but big institutional investors.”
Obringer and Councilman Tim McGallian were targets of a tenants’ rights protest last month that got heated. But the mayor says that the new law addresses the things that tenant advocates like Gabaldon and her family were protesting.
“There are parameters set up for just cause evictions, as well as rent increases,” says Obringer, adding that the council will meet in early 2020 to “tie up loose ends related to the law.”
She is excited about the possibility of more affordable housing in Concord. “We finally demolished the old Blockbuster and have a building pad ready to go,” she says.
She is also encouraged by the new affordable housing complex to be built on Galindo Street. Some of the cost comes from city coffers earmarked for affordable housing. The Galindo complex will be geared toward seniors, veterans, disabled tenants and even the homeless.
“We’ve been talking about building more affordable housing,” Obringer says. “Now we’re putting our money where our mouths are.”
Pierce sees a need for more affordability in Clayton as well. “We live in a town where making $60,000 a year is ‘low income,’ ” she says. “We’re talking about our teachers, grocery clerks, others who are working hard to make a living. We need a wide array of options.”
Clayton city staff is reviewing a 91-unit, three-story senior housing project on Marsh Creek Road. They are still working with the developer, and the plan has not yet gone to the Planning Commission.
Obringer’s preference for Concord would be to have an affordable housing partner like Bridge or Eden Housing to develop more projects near transportation.
“Housing is probably the most challenging issue in the city, because it’s about people. When people have to move, kids have to leave their friends, you lose your community.”
She also says that Concord is one of only four cities in the nine-county Bay Area that offers a multi-family housing inspection program. “We have city inspectors go in every two years, or more frequently if needed.”
As for AB 1482, she, like most others, hope it succeeds not only in maintaining community but spurring more and better housing in Concord.