Rent control is a widelytalked-about issue in California. This government program was created in response to California’s high rental and housing costs. The main purpose of this directive is to regulate the amount landlords can charge for a certain rental property.
The Costa-Hawkins Rental Housing Act of 1995 was originally put in placetolimit rent control policies imposed by certain cities and municipalities in California. Under this state law, landlords were also allowed to raise the rent on their units once a tenant vacates it.
Many tenant activists and labor unionsspoke up in opposition to this ruling and pushed for better and stronger tenant protections. As a result, the state legislature passed the Tenant Protection Act.
What is the Tenant Protection Act?
The Tenant Protection Act of 2019 (AB 1482) is a new bill that puts a 5% limit on annual rent increases for buildings that are more than 15 years old. Also covered by this act are single-family homes owned by large corporations. Smaller “mom and pop” home rentals are excluded from the said rent cap.
This new law also affects landlords when evicting a tenant. According to the Tenant Protection Act, landlords must provide a “just cause” for the eviction. Among the government-approved reasons are failing to pay rent, breaching the rental housing agreement, and inflicting damage to the rental property.
The Tenant Protection Act will take effect from January 1, 2020, until January 1, 2030.
What this means for rental property owners
I would recommend rental property owners or those seeking to invest in a rental property not to shy away from areas where this law is in/will take effect. In fact, statewide rent control policies can still provide rental property investors with good returns and a steady income if they take heed of the rules.Moreover, it allows for more community diversification as there will be more people who can afford to live in California given the more stable rental rates.
Learn more about California’s new rent control law and how it affects you as a rental property owner.Call 818.903.8088 today or send an email to ed@edkoenig.com.You may also get in touch with me here.