Late Tuesday afternoon, Governor Gavin Newsom signed a new law that would limit rent increases for some people over the next ten years. This, like many recently signed by Newsom, are aimed at combating the state’s current housing crisis.
The law, which will be in effect from January 1, 2020 to January 1, 2030, caps rent increases at 5% plus inflation. In addition, the law also prohibits landlords from tenant eviction without cause, which makes it so landlords cannot kick out a tenant to raise the rent for a new tenant. While the law doesn’t go into effect until the beginning of the year, it does apply to increases made on or before March 15, 2019, to prevent landlords from raising rates before the law goes into effect.
While California currently has an estimated 17 million renters, the bill itself will probably only apply to about 8 million of them. The bill does not apply to housing built within the last 15 years to encourage more development, nor does it apply to single family homes unless they are owned by corporations or real estate trusts. It also does not apply to duplexes where the owner live in one of the units.
The law will also not apply to counties who already have rent control in place like Los Angeles and San Francisco, which tend to have more restrictive set of limitations on landlords. However, most of these were put into place prior to 1995, due to a state law banned any new rent control policies since then.
