California lawmakers approved a statewide rent cap on Wednesday covering millions of tenants, the biggest step yet in a surge of initiatives to address an affordable-housing crunch nationwide.
Under the new law, landlords will only be able to raise the rent for an existing tenant by five percent after inflation, annually for a ten year period.
This means a landlord cannot raise rent to an unreasonable amount, but some landlords and realtors are concerned the newly passed bill will do more harm than good. The measure, affecting an estimated eight million residents of rental homes and apartments, was heavily pushed by tenants’ groups. In an indication of how dire housing problems have become, it also garnered the support of the California Business Roundtable, representing leading employers, and was unopposed by the state’s biggest landlords’ group.
The bill also tightens the rules for landlords to evict tenants.
A greater share of households nationwide are renting than at any point in a half-century. But only four states — California, Maryland, New Jersey and New York — have localities with some type of rent control, along with the District of Columbia. A coalition of tenants’ organizations, propelled by rising housing costs and fears of displacement, is trying to change that.
Nationally, about a quarter of tenants pay more than half their income in rent, according to the Joint Center for Housing Studies at Harvard University. And California’s challenges are particularly acute. After an adjustment for housing costs, it has the highest state poverty rate, 18.2 percent, about five percentage points above the national average, according to a Census Bureau report published Tuesday.
Homelessness has come to dominate the state’s political conversation and prompted voters to approve several multibillion-dollar programs to build shelters and subsidized housing with services for people coming off the streets.
Despite those efforts, San Francisco’s homeless population has grown by 17 percent since 2017, while the count in Los Angeles has increased by 16 percent since 2018. Over all, the state accounts for about half of the country’s unsheltered homeless population of roughly 200,000.
That bleak picture — combined with three-hour commutes, cries for teacher housing and the sight of police officers sleeping in cars— is prompting legislators and organizers to propose ever more far-reaching steps.