Signed by Governor Gavin Newsom

Vote Smart's Synopsis:

Vote to concur with senate amendments and pass a bill that establishes caps for rental increases.

Highlights:

• Prohibits an owner of residential property from, over the course of any 12-month period, increase the gross rental rate of a dwelling or a unit more than 5 percent plus the percentage change in the cost of living, or 10 percent, whichever is lower (Sec. 3).

• Specifies that on January 1, 2030, this act is repealed (Sec. 4).

• Prohibits the owner of a residential real property from terminating the tenancy of a tenant who has continuously and lawfully occupied a residential real property for 12 months,  without just cause (Sec. 2).

• Requires the owner of a residential property to state in a written notice to the tenant of the termination of tenancy (Sec. 2).

• Defines “just cause” as either of the following (Sec. 2):

• At-fault just cause, which is either a default in rent payment or a breach of a material term of the least; or

• No-fault just cause which includes any of, but not limited to, the following:

• Intent to occupy the residential real property by the owner or their spouse, domestic partner, children, grandchildren, parents, or grandparents;

• For leases entered into on or after July 1, 2020, cause can only apply if the tenant agrees in writing to the termination, or of a provision of the lease allows the owner to terminate the lease if the owner, their spouse, domestic partner, children, grandchildren, parents, or grandparents unilaterally decides to occupy the residential real property.

• Requires that if an owner issues a notice to terminate a tenancy for no-fault just cause, the owner must notify the tenant of the tenant’s right to relocation assistance or rent waiver, and if the owner decides to waive the rent for the final month of the tenancy, the notice must state the amount of rent waived (Sec. 2).

• Requires that the amount of relocation assistance or rent waiver will be equal to one month of the tenant’s rent that was in effect when the owner issued the notice to terminate the tenancy (Sec. 2).

• Specifies that if a tenant fails to vacate after the expiration of the notice to terminate the tenancy, the actual amount of any relocation assistance or rent waiver provided will be recoverable as damages in an action to recover possession (Sec. 2)

• Specifies that exemptions to this act the following types of real properties or residential circumstances, including but not limited to, the following (Sec. 2):

• Transient and tourist hotel occupancy;

• Housing accommodations in a non-profit hospital, religious facility, extended care facility, licensed residential care facility for the elderly, or an adult residential facility;

• Dormitories owned and operated by a higher education institution or a kindergarten and grades 1 through 12 inclusive school;

• Housing accommodations in which the tenant shares bathroom or kitchen facilities with the owner who maintains their principal residence at the residential real property;

• Single-family owner-occupied residences, including a residence in which the owner-occupied rents or leases no more than two units or bedrooms;

• A duplex in which the owner occupied one of the units as the owner’s principal place of residence at the beginning of the tenancy, so long as the owner continues in occupancy; and

• Housing that has been issued a certificate of occupancy within the previous 15 years.

• Specifies that a local ordinance adopted before September 1, 2019 that is less protective to renters than this act will not be enforced (Sec. 2).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill with amendments that establishes rental caps.

Highlights:

• Prohibits an owner of a residential real property in the state from increasing the rental rate for that property in an amount greater than 5 percent more than the lowest rental rate in effect for the immediately preceding 12 months plus the percentage change in the cost of living (Sec. 1).

• Requires the total rental rate increase to not exceed 10 percent within any 12-month period (Sec. 1).

• Specifies that these rules do not apply to housing that has been issued a certificate of occupancy within the previous 10 years (Sec. 1).

• Requires the Department of Housing and Community Development to report to the legislature on the effectiveness of this program on or before January 1, 2030, and the report must include the impact of the rental cap on the housing market within the state (Sec. 1).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that establishes rental caps.

Highlights:

• Prohibits an owner of a residential real property in the state from increasing the rental rate for that property in an amount greater than 5 percent more than the lowest rental rate in effect for the immediately preceding 12 months plus the percentage change in the cost of living (Sec. 1).

• Requires the total rental rate increase to not exceed 10 percent within any 12-month period (Sec. 1).

• Specifies that these rules do not apply to housing that has been issued a certificate of occupancy within the previous 10 years (Sec. 1).

• Requires the Department of Housing and Community Development to report to the legislature on the effectiveness of this program on or before January 1, 2030, and the report must include the impact of the rental cap on the housing market within the state (Sec. 1).

Full Bill Text