AB 1482 Provides Historic Step Forward for Tenants
When it comes to meaningfully addressing the state’s housing crisis in 2019, California’s Democratic leadership has thus far profoundly failed (see “Democratic Leaders Fail California”). But this conclusion could change.
Governor Gavin Newsom announced last week that he is strongly backing Assemblymember David Chiu’s AB 1482, which imposes statewide rent caps and just cause eviction. Newsom said a rent cap bill is “long overdue in California.” He wants to tighten the bill’s current 7% plus inflation cap, which still allows annual increases of over 10%.
Governors normally do not publicly support legislation at this stage unless they believe it will pass. Having hitched his own political clout to AB 1482’s passage, Newsome will get major credit for the win. But a defeat coming on the heels of the shelving of SB 50 would send an even stronger message that Democratic legislators are not swayed by the Governor.
That AB 1482 even survived is a tribute to David Chiu, who never gave up. When Assemblymember Rob Bonta’s AB 1481 just cause eviction measure was tabled, Chiu shifted its provisions to be part of his AB 1482 rent cap measure.
Incredible as it seems, California could see a major tenant bill enacted this year.
The Importance of AB 1482
In Generation Priced Out: Who Gets to Live in the New Urban America I describe why high housing cost cities need rent caps and just cause eviction laws to maintain racial and economic diversity. Unfortunately, over forty states ban such laws. That’s why I recommend in the book that cities use density bonuses to create such protections (in exchange for building more units developers voluntarily agree to rent control and just cause protections).
It’s wrong for an owner to force a family or individual to leave their home for no reason. Landlord groups seem to agree. Their chief argument against just cause laws is that they are not needed because landlords have no incentive to evict without cause (some also argue that it increases eviction costs to prove nuisance cases but such examples are extremely rare).
Rent Caps Too Weak?
Chiu’s original AB 1482 capped rent increases at 5% plus inflation instead of the current 7%. It has been weakened in other ways to survive and some—like Michael Weinstein’s AIDS Healthcare Foundation—now oppose the bill.
Such opposition is truly foolish.
Nearly all tenant groups as well as broader housing groups like California YIMBY back AB 1482. They realize that while a 10% rent raise can cause displacement, a 50% or 100% increase or more guarantees a family must move. A rent cap deters speculators needing a quick turnaround to get either vacancies or steep rent hikes. A cap also gives a family who can weather the 10% hike at least a year to find new housing before they are hit by another 10% raise they potentially cannot afford.
San Francisco’s original rent control law guaranteed 7% rent hikes. And as I describe in Generation Priced Out, there were loopholes galore for landlords to get higher raises. Incredible as it now seems, the original San Francisco rent law allowed 100% rent increases or more if the tenant did not file a petition to challenge the excessive raise; the 1979 law created an incentive for landlords to at least try illegal hikes to see if they could get away with it!
But as bad as San Francisco’s 1979 law was, it did keep a lot of tenants in their homes. And it laid the groundwork for stronger protections.
That’s what California landlords are afraid of with AB 1482. They can live with 10% rent hikes but do not want a San Francisco situation where landlords only get what they are entitled to by the outside economy: 60% of the Consumer Price Index.
That’s why one of the concessions Chiu had to make was that AB 1482 sunsets in three years. Nevertheless, AB 1482 would be a huge victory for renters. It’s possible that in three years the Legislature will vote to remove just cause protections from millions of California tenants, but that will prove a hard vote for legislators.
What do California Democrats Believe?
In 2019, Oregon’s legislature reversed its rent control and just cause ban and passed a statewide rent cap and just cause eviction law. New York’s legislature greatly strengthened New York City’s rent control law and shifted control of the law from the state to the city.
California, the state with the worst affordability and the bluest state legislature, needs to follow this path. With a Democratic Governor backing AB 1482 and a Democratic super-majority in the Legislature, a California Democrat Party that walked the talk on economic fairness would pass the bill in a heartbeat.
But the California real estate industry has the same vice grip over California Democratic legislatures that the NRA has over GOP U.S. Senators. In both cases the actual merits of legislation are not important; instead, it’s all about sticking to the real estate/NRA line.
I may have participated in more ballot measures to strengthen rent control and just cause eviction laws than anyone. These protections are lifesaving for many tenants. It’s time for California Democrats to protect the state’s tenants by enacting AB 1482.
Randy Shaw is Editor of Beyond Chron and Director of the Tenderloin Housing Clinic. He is the author of Generation Priced Out: Who Gets to Live in the New Urban AmericaFiled under: Bay Area / California