Legislators Weigh Rent Cap In California

Speaker 1: 00:00 Rent is on the rise in San Diego outpacing the average income. Now there's legislation that would stop landlords from raising rent more than five to 10% in one year. It's called assembly bill 1482 and if the governor signs it, it'll be state law. Philip Molnar has been covering this for the San Diego Union Tribune. Phillip, welcome. Thank you so much for having me. As things stand right now, how much can a landlord increase rent by what a renter seeing? Well, a landlord right now, legally speaking in San Diego county where we have no form of rent control, can raise rent as much as they want once you're signing a new lease. So they could increase that 100% 200% but what we're actually seeing is as of about last week, rents have increased in San Diego County on average, about 2.7% in a year. You know, that's almost with inflation. So that isn't so bad. However, we do always hear a lot of horror stories about, you know, a landlord raised my rent 100% and now I'm out on the street and there are those stories which are really compelling and just seemed to just pop up the time. Speaker 1: 01:11 Ah, so under this proposed legislation, how would rent increases be calculated? So under Assembly bill 1482, uh, the way it would work is you're not allowed, a landlord would not be allowed to raise rent more than 5% a year plus the rate as inflation. But so the overall, the landlord really couldn't raise rents in San Diego county more than like 7.2% Korean to current inflation numbers in a given year. It's kind of rare that we kind of, you know, on average of the entire county, it's not often that you see nowadays a 7% rent in a year, although we do hear about it happening. But on average though, in 2015 is when there was some very high rent hikes going on. And in the third quarter of 2015 rents for everybody on average increased 7.5% so there is some precedent that if this passes, it could slow down rent increases that we've seen in the recent history of San Diego County. Speaker 1: 02:10 And so why do proponents of this legislation think this is a necessary step for affordable housing in California? So basically we've seen a lot of, um, effort to try and increase housing in California that hasn't quite panned out. And so the, the issue with that is there isn't a lot of homes to go around and everybody, all the politicians that keep coming out of that keeps saying, oh, we're going to build more houses, we're going to build more housing, don't do rent, glue, troll, don't do rent control. But the problem for people that are, that want this bill is that, look, that housing hasn't been built and this has been going on for years and we're still suffering. So we really need to put something in place right now to stop these rent hikes before we're all ending up on the street is what they would say. Speaker 1: 02:56 And so people who don't want to see this bill, um, make it into law. Say this is a form of rent control and this cap will actually stand in the way of efforts to create more affordable housing. Can you explain their argument? The idea is if you put any type of rent control or limit on rent, rent cap, whatever you want to call it, a developer was not going to want to be possibly building that next big apartment is structure that would house like 400 people and if you're slowing the increase of construction for any area in San Diego County, the argument is that's going to make rents higher for everybody. And if you have that, you know, people are going to be fighting for more rent, a higher rent and those poor people, you're trying to help with this rent control bill, they're going to just be end up suffering because you know there's not going to be enough housing to go around and you're going to make a problem that it hurted me and bad. Speaker 1: 03:53 Worse. Is that a viable argument from what we've seen? I Dunno. I've been hearing that for a really long time and year after year, things don't really seem to change that much locally. I mean we're, we're told that, you know, if, uh, you know, these, these people that bring the rent control bill, they're told that, oh, you can't possibly do this because it's going to slow construction and everyone's going to be in so much trouble and rents are gonna go up. But we haven't seen a substantial increase in building in San Diego County even as these rent control measures fail either in legislation or voters voted dial like this past November, San Diego County. As far as housing units goes, for the last three years, it's been pretty much flat, just under 10,000 units. And you think our population here is growing by since the year 2000 on average, around like 28,000 a year. Speaker 1: 04:46 So I mean there's definitely a disconnect with how many people our population is growing. It was how many housing units we have and what's next for us simply bill 1482. Okay. So it passed a committee yesterday morning. Quite easily. Acids, the assembly, it goes on to the Senate and all of this stuff really needs to happen by like mid summer. So we're talking about kind of a quick turnaround after it goes through its Senate committees and passes the Senate hypothetically, then it would go to Gavin or nuisance desk where he would sign it. Now what is kind of rare about this particular assembly bill is after a pass the initial housing committee, um, they actually, uh, give it or Newsome issued a statement in which he said that basically he was looking forward to signing a rent protection package. Now what I'm told is this is kind of rare that the governor would actually step in and say this at this stage in the process, I'm looking forward to signing something. Speaker 1: 05:39 It's actually looking like this might be one of those rare ones that makes it through all the way to the governor's desk. But we could be wrong with rent control last year, an effort to expand it or even just allow rent control in California for a lot of places that that lost by like 60% the voters. Uh, but there was like a multimillion dollar push from these big corporate landlords that have properties throughout California, and they just did everything they could to stop it. So we'll see if they stand in the way. This one, there's a whole lot of stuff that could happen behind the scenes in the next few months. All right. I've been speaking with Philip Molnar residential real estate and business reporting for the San Diego Union Tribune. Philip, thanks so much. Thank you for having me. Speaker 2: 06:26 Yeah.