As California becomes the second state to cap residential rent increases statewide, renters who live in the Golden State may want to prepare for higher housing costs nonetheless.
On Tuesday, California Gov. Gavin Newsom, a Democrat, signed a rent control law that will only allow landlords to increase rents by 5% plus inflation each year until 2030. The law will retroactively apply to increases on or after March 15, and it will also ban landlords from evicting tenants without cause.
California’s law won’t apply to single-family homes, unless they are owned by corporations or real estate investment trusts, or to duplexes if the owner lives in one of the units. It is estimated the law will cover 8 million of California’s 17 million renters.
Earlier this year, Oregon became the first state in the country to pass a law that mandated statewide rent control. In Oregon, rent increases are limited to 7% plus inflation each year. Similar to the California law, the Oregon legislation also banned no-cause evictions, which landlords could have used to circumvent the rent caps because they are allowed to increase rents by more than the capped amount when they’re signing with a new tenant.
Unlike Oregon though, California also has multiple cities with their own rent-control regulations in effect, including Oakland and Los Angeles, many of which are more strict than the statewide rule.
Most states have laws that actively prevent municipalities from creating their own rent control mandates, according to the National Multifamily Housing Council, a trade group that represents the owners of apartment buildings. While New York does not have a statewide rent control policy in the vein of California’s and Oregon’s, it does have a law that allows individual cities to create their own policies.
Advocates of rent control in Oregon and California promoted the policy as a solution to the affordable housing crisis in both states. California recently came under White House scrutiny for its homelessness crisis — it has more people living on the street than any other state in the country, and the high cost of housing is one of the main culprits behind that trend.
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