Statewide bill capping rent increases to 5% annually heads to governor’s desk

California lawmakers sent Gov. Gavin Newsom legislation Wednesday capping rent increases,  as the nation’s most populous state struggles with an affordable housing and homelessness crisis. Assembly members voted 46-22 to limit annual rent increases at 5% plus inflation.

The cap expires in 2030 and would not apply to housing built within the last 15 years and single-family homes not owned by corporations or trusts. Also exempt are duplexes where the owner lives in one unit.

“They sent me the strongest package in America. These anti-gouging and eviction protections will help families afford to keep a roof over their heads, and they will provide California with important new tools to combat our state’s broader housing and affordability crisis,” the governor said in a statement.

Democrats posed the vote as a moral imperative to counter rent gouging and keep the poor and elderly in their homes. Democratic Assemblyman Richard Bloom of Santa Monica noted that lawmakers are separately considering legislation making it easier for people to live in their cars:

“If that doesn’t underscore where we are with this housing crisis and the need to protect tenants and build more housing … then I don’t know what does,” he said.

Republicans countered that Democrats who control California’s government created the problem by passing restrictive development and environmental laws. The debate came days after Trump administration officials visited sprawling homeless encampments in Los Angeles.

Long Beach recently tried to address its housing cost issue by passing an ordinance that would require landlords to provide relocation assistance to tenants that were forced out by rent increases over 10% in a one-year period or if the tenant was in good standing but was issued a notice to vacate for remodeling. The ordinance took effect in August but the statewide bill, if signed by the governor, could cut allowable increases by half.

However, it’s unclear how the bill approved by the legislature would impact Long Beach. The bill includes clauses that allows local ordinances to supersede the state bill if its deemed to be more protective than the one approved by the Assembly, Wednesday evening.

It also leaves open the door for municipalities to pass future ordinances that are more restrictive than the rent caps and just-cause provisions laid out by the legislature, but not less restrictive.

A call to the Long Beach City Attorney’s office to clarify which law would take precedent was not immediately returned.

A section of the bill states that local ordinances would take precedent over the statewide bill expected to be signed by the governor if it’s deemed to be “more protective.”

Long Beach’s ordinance could meet that threshold in some cases because its relocation assistance pay-outs could exceed the state bill’s marks. The state law would require a payout equal to one month’s rent while Long Beach’s ordinance calculates the payout based on average rents in the area which could result in some tenants being provided larger relocation payments than required by state law.

However, the state law refers to local ordinances that include just cause eviction protections, something not included in the Long Beach ordinance, as a precursor for the local ordinance to take precedent.

That section of the bill leaves it up to the local government to find that its ordinance is more protective than the state law.

Jason Ruiz contributed to this report. 

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