CA bill aiming to protect tenants by lowering rent cap strikes chord with property owners

SAN FRANCISCO (KGO) -- A cap on yearly rent increases throughout the state could soon be lowered from 10% to 5%.

"This bill was first signed into law in 2019 and ran into effect in 2020. And, although we thought at the time we felt that it would help the rental crisis, the reality is that with the cap at 10%, as we have seen over the last six years it has gotten worse for renters, so that is not good enough," said California Assemblymember Ash Kalra.

Kalra's AB 1157 advanced out of the state Assembly's Housing Committee on Thursday. Now it's moving forward to the next committee.

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"People from Silicon Valley, Los Angeles are moving further inland to Bakersfield, Fresno, Stockton, Sacramento--and rent into those places have gone up as much as 60% to 70% in the last five years. We are seeing now what used to be just a Bay Area, Los Angeles problem is a statewide problem," said Assembly member Kalra.

AB 1157 looks to protect tenants across the state. Along with the 5% cap, the bill includes single-family home rentals and removes the 2030 sunset date of the original legislation, making it permanent. Small property owner groups say their members feel targeted.

"Really disappointed that this was able to be passed along. We believe that the voters have already spoken several times and most recently in this past election about provisions around statewide rent control. This is another attempt to throttle that and undo what was presented and approved on all sides back in 2019," said Derek Barnes, CEO of the East Bay Rental Housing Association.

On Thursday, 160 property owners were in Sacramento to protest AB 1157.

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"The message they brought is that the bill hurts small property owners. It's harmful. It targets small property," said Charley Goss with the SF Apartment Association. "The cost of operating rental housing in California are going up every year. Insurance is going up 30% every year. Our garbage rates are proposed to go up 30% over the next three years."

These groups want the state to focus on building more housing and not pushing small properties out. Housing advocates say this change is needed to prevent more Californians from ending up homeless.

"I have clients who have received $500 increase, and it's not just one client. It's a building that receives that rent increase and many of those clients couldn't afford and had to move out of the city," said Ramon Bonifacio, tenant counselor at SOMCAN. "We can't really protect our tenants if the law in the state is not helping them."