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that is personally devastating.
• With a long-term resident base in rent- controlled apartments, neighborhoods are safer and more stable.
RENT CONTROL IN CALIFORNIA
In the simplest sense, “rent control” in California refers to city or county ordinances controlling the rent amount that landlords may charge. Rent control laws typically specify a maximum percentage by which landlords can increase rent (for example, 5%), as well as corresponding limits on the frequency of increases, as explained below. The yearly percentage by which landlords can raise rent is sometimes represented as a percentage of or in relationship to the annual Consumer Price Index (CPI).
The California Tenant Protection Act (Assembly Bill 1482) went into effect on January 1, 2020. Assembly Bill 1482 limits rent increases for qualified units in California to either 5% plus the change in the regional consumer price index (CPI) or 10% of the lowest rent charged in the 12 months preceding the increase, whichever is smaller. Additionally, rent may only be increased twice in 12 months (subject to the rent “cap”). Assembly Bill 1482 does not supersede more stringent city and county rent regulations, although it may apply to units that they don’t cover.
PROPERTIES IN CALIFORNIA SUBJECT TO RENT CONTROL
Ordinary rental units, such as apartments within a complex, are subject to rent control legislation. However, not all California rentals are subject to rent regulation. The Costa-Hawkins Rental Housing Act of 1995 exempts from rent control single-family homes, condominiums, or multifamily properties constructed after February 1, 1995, and properties that have been built after a local ordinance’s effective date. The Costa-Hawkins Rental Housing Act also provides for “vacancy decontrol” of rent-controlled units, which means that when tenants vacate, landlords can raise rents to market levels (voluntarily or after being evicted for rent nonpayment or other lease infraction).
Owner-occupied buildings with no more than three or four units (depending on local regulations), short- term rentals (think Airbnb), government-subsidized tenancies (except in Berkeley and San Francisco) and detached (“granny”) units that could not sell separately from the main house are all exempt from rent control.
EVICTIONS IN RENT CONTROL AREAS
A tenancy usually terminates when a fixed-term lease expires or when a landlord or tenant in a month-to- month lease gives notice of termination. In either instance, a landlord has the legal authority to order a tenant to remove the rental without providing a reason (but cannot do so if the cause is retaliation for the tenant having exercised a tenant right or for a discriminatory reason).
For rent control to work, landlords must limit their rights to evict. Otherwise, they might evict prospective tenants prepared to pay higher rents. Most rent control ordinances demand “just cause”— reasonable grounds—for eviction. Just a few examples of just cause eviction provisions include:
• Failing to pay rent or having unauthorized roommates engage in illegal or forbidden activities such as drug dealing, disrupting neighbors (e.g., causing a nuisance), or damaging property—violating a significant term of the lease.
• The landlord wishes to move into the unit themselves
• The landlord wants to renovate the property thoroughly. (Landlords, in this case, may be required to provide tenants with a comparable unit or the option to re-let the refurbished unit at the same rent after the project is completed.)
Property owners who violate these restrictions often face stiff civil and criminal penalties. However, as a property manager, you can offset fixed rent by charging your utility bills separately per unit using Livable’s Ratio Utility Billing software. Call us and learn how you can set up a RUBs program to offset the rising utility cost in your rent-controlled buildings!
For more than a decade, Livable has been helping multifamily owners recover utility costs and increase the value of their investments through conservation. To find out how Livable can save you money, check out http://www.livable.com/apn/ or call (877) 789- 6027.
Livable’s Ratio Utility Billing System (RUBS) can track, analyze, and bill back for many services. Depending on the market that can include water, sewer, gas, internet, electricity, landscaping and MORE. To find out how Livable can save you money, check out http://www. livable.com/apn/ or call (877) 789-6027.
APARTMENT MANAGEMENT MAGAZINE - MAY 2022
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