California moved closer to enacting statewide rent caps on apartments and some rental houses after the state Senate voted 25-10 on Tuesday, Sept. 10 to pass the so-called “anti-gouging” rent bill.

Assembly Bill 1482 would limit rent increases to 5% a year plus inflation, up to a maximum of 10%.

The Assembly could take the measure up again Wednesday to vote on Senate amendments, with Friday the last day to pass state legislation. Gov. Gavin Newsom’s approval is likely since he was a key player in the compromise that led to the current version of the bill.

The California Apartment Association, which represents large corporate apartment owners, agreed not to oppose the bill during last-minute talks. But amendments adopted in the past 1½ weeks alienated another ally, the California Association of Realtors, which ended up opposing the legislation.

Ten out of 11 Senate Republicans voted against the measure with Orange County Republican John Moorlach abstaining. Four Democrats also abstained.

Senate President Pro-Tem Toni Atkins, D-San Diego, praised Assembly Housing Committed Chair David Chiu for working with various stakeholders “to thread a very, very thin needle” leading to the bill’s survival.

California follows in the footsteps of Oregon, which passed a similar rent cap earlier this year. If AB 1482 passes and is signed into law, Atkins said, “it will be the strongest renter protection law in the country.”

If approved, the measure would affect all apartments in the state that are at least 15 years old. Houses and condos owned by corporations and real estate investment trusts, or REITs, that are 15 years old or older would also be subject to the rent caps.

The measure also provides “just cause eviction” protections for tenants who have lived in their rental for at least a year, meaning a landlord can’t order renters following terms of their lease to move out unless the owner plans to move in, demolish or renovate the unit or stop renting it out.

The law would expire automatically in 2030.

The measure would not affect rent limits in local jurisdictions with existing rent control laws.

Owners who share a home with their tenants or owner-occupied duplexes would be exempt from the caps. Landlords would be allowed to increase rents to market rates after a tenant moves out, with the 5% caps kicking in after a new tenant moves in.

The state Senate debated the measure for more than two hours as the Los Angeles County Board of Supervisors voted to reinstate rent control permanently in unincorporated parts of the county. The L.A. County plan calls for rent to be capped at the rate of inflation, up to a maximum of 8% a year. Lower maximums would be imposed if inflation falls below 3% a year. The county has had a temporary 3% rent cap on apartments at least 24 years old or older for the past year.

In both Sacramento and Los Angeles, rent-cap advocates argued tenant protections are needed to stem the rising tide of homelessness in the state.

“A question that keeps many of our constituents up at night is how will I stay in my home after the next big rent increase,” Atkins said. “And many of these renters are faced with the impossible choice between a roof over their families’ head or paying for basic necessities like food and medicine. Unless you live in one of 15 cities with rent control, there’s absolutely no protection afforded to you if your landlord wants to raise your rent by 50, 100% or kick you out altogether. Those stories are real.”

All it takes is a large, unexpected expense to put regular working people on the brink of homelessness, added Sen. Nancy Skinner, D-Berkeley. “They are now in their cars, or on couches or on the streets,” she said.

Senate Democrats likened the state’s housing crisis to an emergency or natural disaster, saying provisions akin to existing anti-gouging laws that take effect following fires or floods are warranted.

“This housing crisis that we are in should also trigger that kind of cap to protect millions of renters,” Atkins said. “AB 1482 is not rent control.”

Republican lawmakers, however, argued AB 1482 will make the housing crisis worse by discouraging developers from increasing the supply of housing in the state, creating competition between landlords. The measure will devalue rental properties, forcing most developers to invest in other states, while leading to more homelessness and renters leaving the state, argued Sen. Jeff Stone, R-Temecula.

AB 1482 “will enact the most severe rent control measure our state has ever seen,” Stone said, noting the rent caps come as Los Angeles rental property owners are struggling to pay for earthquake retrofitting.

“There are other places they can go and not have their investment hamstrung,” said Stone. “We must pass legislation that encourages housing development. … There’s a right way to do it and a wrong way to do it. Limiting the supply of housing is the wrong way to do it.”

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Election 2020: A breakdown of California’s 12 ballot propositions Senate Democrats agreed that increased homebuilding is an essential part of the solution. But that alone is insufficient when tenants are facing displacement because of rent hikes as high as 100-200%. Democrats, and even one Republican, argued that caps at 5% plus inflation should give landlords sufficient leeway to cover their expenses, while the ban on caps for buildings newer than 15 years should provide enough inducement for developers to build new housing.

“Job Number One is keeping people stable in the housing they have right now,” argued Sen. Scott Wiener, a San Francisco Democrat who chairs the Senate Housing Committee. “That’s how we protect them from homelessness. … Renters are getting dramatic rent increases. Doubling and tripling. That is not how you keep people stable in their housing.”

“It’s true,” added Bob Hertzberg, D-Van Nuys, “when they say the rent is too damn high.”