Renters in many regions of California face considerable obstacles in securing access to affordable rental properties. High rental prices, pro-landlord governmental regulations and a ban on rent control on buildings constructed after 1995 have all had a significant impact on the supply of properties and the associated real estate market conditions.
Given the lack of occupant diversity triggered by the dominance of wealthy renters and real estate developers in rental properties, rent control policies are being reconsidered in many affected regions in California. In particular, in Los Angeles and Northern Californian cities, laws that limit the amount of rent that landlords can charge long-term occupants are being presented for legislative consideration. For example, a rent control ordinance was slated to become effective on September 4 of last year in Richmond, California, and would have been the first rent control regulation in over 30 years in the state. The legislation was preempted just prior to its effective date by a real estate interest group that obtained enough signatures to shelve the bill. The ordinance contained additional pro-tenant provisions, including a requirement that landlords demonstrate just cause to evict tenants.
In some cities, such as San Jose, existing rent cap legislation has effectively limited the supply of available housing for low-income residents. The rent cap rules in San Jose allow landlords to raise the rent by eight percent after one year or by 21 percent if they have not increased the rent in the previous two years. The implementation of the Costa-Hawkins Act renders these caps applicable only to housing constructed after 1979. In San Jose, that accounts for only 15 percent of residential units. In San Francisco, which arguably maintains the strongest rent control policy, significant loopholes have diminished the availability of affordable housing. One such tactic allows landlords to evict a tenant to temporarily occupy the property, and then sell it to a higher paying tenant, usually a real estate developer.
Two ballot measures in San Francisco in November 2015 attempted to combat this crisis: the first was a suspension on luxury condominium construction in the Mission District and the second was regulations on short-term rental websites that enable landlords to remove long-term rentals from the marketplace. Both measures were defeated.
Contact Shane Coons at 949-333-0900 or visit www.ShaneCoonsLaw.com to learn more about his practice and the services he offers to clients.