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California’s Governor Signs Rent Control Law Amid Growing List of Jurisdictions Seeking to Address Housing Affordability

  • October 11, 2019

CA Gov. Newsom signs Rent Control Bill

California Governor Gavin Newsom (D) on October 9 signed into law a statewide rent cap of 5 percent plus inflation, along with enhanced tenant eviction protections.  California is now the third state in the nation – amid a growing list of other jurisdictions – to enact rent control laws in an attempt to address housing affordability problems.  (LA Times and Gov. Newsom website, Oct. 9 and Roundtable Weekly, June 21)

  • California’s law (AB 1482) is set to expire in 10 years – unlike New York, which permanently increased New York City rent control measures in June, while allowing other areas in the state to implement the policy.  In Oregon, a permanent statewide rent cap of 7 percent plus inflation was enacted in March. (Axios, Oct. 9 and NMHC interactive national map)
  • In a state of nearly 40 million people, California’s rent control measure could affect an estimated 8 million residents of rental homes and apartments. (Realtor Magazine, Sept. 12).  The 5% rent increase cap would not apply to housing built within the last 15 years or to single-family homes that are not corporate-owned.  (LA Times, Oct 8 and Curbed Los Angeles, Oct 10)
  • Gov. Newsom signed 18 other bills this week to address California’s housing affordability crisis, including measures to encourage construction of accessory dwelling units (ADUs), which encompass the renovation of existing garages into affordable housing. (KABC-TV, Oct. 10 and Newsom website, Oct. 9)
  • An interactive national map by the National Multi Housing Council (NMHC) details the trend in how various state capitals are attempting to address affordable housing through rent control measures. 
  • The rent control movement is partially influenced by a loose network of local activist groups that continue to organize successful efforts in some of the nation’s largest cities and states, according to an Oct. 3 article in The Real Deal.
  • "Although they are well-intended, we know from decades of experience that rent control regulations distort markets, create shortages, and depress business investments.  They often harm the communities they seek to help," said Jeffrey D. DeBoer, President and CEO of The Real Estate Roundtable. "Policy makers should avoid rent control measures and rather seek solutions that grow America's residential stock, to enable our communities to provide safe and decent housing for low-income families and the teachers and first-responders in our workforce."

In June, the White House established a Council on Eliminating Regulatory Barriers to Affordable Housing, chaired by Housing and Urban Development (HUD) Secretary Ben Carson. (White House Executive Order, June 25).  The council includes members from across eight federal agencies who will analyze how federal, state, and local regulations impact the costs of developing affordable housing and the economy.  It will also recommend ways to reduce regulatory burdens at all levels of government that hinder affordable housing development. (White House Fact Sheet, June 25)

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