Gov. Gavin Newsom signed two bills into law last week that are meant to address the housing/homeless crisis. One caps rent increases in multi-family structures, the other limits public hearings on developments.
SB 330 creates more certainty for developers constructing new housing units, by permitting no more than five public hearings to approve a proposed housing development if the development is consistent with local planning, zoning and design requirements.
Additionally, upon granting housing development approval, local governments will be prohibited from increasing local permitting fees throughout the project’s development, which will create more certainty in the entitlement process.
It also streamlines the local permitting process for five years in cities whose populations exceed 5,000 residents and where rents exceed 130 percent of the national average.
Finally, it labels California’s housing crisis a “housing supply crisis.”
“The California Association of REALTORS® and the more than 200,000 real estate agents and brokers we represent thank Gov. Gavin Newsom for signing SB 330, a major step in addressing California’s housing shortage. We were proud to strongly support Sen. Skinner’s bill because it recognizes the true severity and urgency of our state’s housing crisis,” said C.A.R. President Jared Martin.
“SB 330 will increase the housing supply by reducing the barriers to housing development. It labels our housing shortage exactly what it is: a housing supply crisis. This law will create certainty in the development application and permitting process to streamline building new housing units.
“C.A.R. applauds Sen. Skinner for her relentless focus on solving California’s housing crisis. She is serious about increasing the housing supply and understands that the future of California is at stake if we fail to build more housing. We look forward to continuing to work with lawmakers and the governor next year to build on the momentum to increase the housing supply.”
AB 1482 Caps Rent Increases
Newsom also signed into a law last Tuesday a bill which will cap rent increases across the state. Assembly Bill 1482 will limit annual rent increases to 5 percent plus inflation and bans landlords from evicting people for no reason, meaning they could not kick people out so they can raise the rent for a new tenant.
The bill was not supported by C.A.R., which stated that the association “is disappointed by the passage of Assembly Bill 1482, which moves California toward statewide rent control. Throughout the debate, REALTORS® advocated for a balanced solution that protected renters and respected the rights of property owners. While several of our recommendations were included in AB 1482, including the exemption of single-family homes and condominiums, the final bill did not do enough to increase the supply of affordable rental housing.”
The law doesn’t take effect until Jan. 1, 2020, but it would apply to rent increases on or after March 15, 2019, to prevent landlords from raising rents just before the caps go into place.
Newer Buildings, SFH Exempt
The law runs through 2030. It does not apply to housing built within the last 15 years. It also does not apply to single family homes, except those owned by corporations or real estate investment trusts. It does not cover duplexes where the owner lives in one of the units.
California and Oregon are now the only places that cap rent increases statewide. Oregon capped rents at 7 percent plus inflation earlier this year.
California’s rent cap is noteworthy because of its scale. The state has 17 million renters, and more than half of them spend at least 30 percent of their income on rent, according to a legislative analysis of the proposal.
Rent Caps Becoming a Trend
Several cities in the Southland already have similar rent cap laws in place.
The city of L.A.’s Rent Stabilization Ordinance allows landlords to increase rent by only 3 percent every year for rent-controlled units built before 1979. In August, Culver City approved an ordinance which sets an annual 3 percent cap on rent hikes for apartment complexes built before Feb. 1, 1995.
In March, the Inglewood City Council passed an emergency ordinance which temporarily puts a cap on how much landlords can increase rent on their tenants in older buildings.
And last November, the L.A. County Board of Supervisors approved a temporary ordinance which limits rent hikes to 3 percent per year on certain apartments in unincorporated areas.
C.A.R. stated that the organization will “remain steadfast in our commitment to overcome California’s historic housing supply and affordability crisis.”
“We look forward to working with the Newsom administration and California Legislature to fight for homeownership because providing housing is critical to Californians.”