Gavin Newsom, top Democrats strike deal to cap rent hikes in California

California Gov. Gavin Newsom and top Democrats announced Friday evening that they have reached an agreement to place limits on how much landlords can increase a tenant’s rent each year.

The compromise offers a stronger path forward for Assembly Bill 1482, which cleared a key budget committee earlier on Friday.

According to Newsom’s office, the proposed deal would cap annual rent increases at 5 percent plus inflation. It would be in effect through 2030, though it wouldn’t apply to housing built in the last 15 years. That 15-year threshold is a rolling deadline, according to Newsom’s office. The existing bill from Assemblyman David Chiu, D-San Francisco, called for a 7 percent cap plus inflation for just three years.

Earlier this month, Newsom said at a Los Angeles event that he’d like the bill go further to prevent price-gouging.

Chiu’s office expects the changes to be reflected in his bill when it is considered in a rules committee next week. It must then go to the floor of the Senate and return to the Assembly — where it has already cleared on a narrow 43-vote majority. While there’s no guarantee it will clear both chambers and reach Newsom’s desk by the Sept. 13 deadline for this year’s legislative session, the agreement makes the path forward substantially easier.

Business and housing groups, including the Bay Area Council, California Association of Realtors and California Apartment Association, have criticized the bill, saying it is not a viable solution to address the state’s ongoing affordability crisis. Other critics, including the AIDS Healthcare Foundation, have argued Chiu’s bill does not go far enough.

The apartment association said it no longer has a position on the bill.

“We applaud the governor and the legislative leadership for temporarily finding a solution for tenants,” the group said in a statement. “Now, we must get serious about moving forward on production, which is the only way we address our housing crisis.”

Newsom – along with Chiu, Senate leader Toni Atkins and Assembly Speaker Anthony Rendon – announced on Friday, “We have come to an agreement on a series of amendments to AB 1482 that would create strong renter protections. The bill will protect millions of renters from rent-gouging and evictions and build on the Legislature’s work this year to address our broader housing crisis.”

According to Newsom’s office, the proposed deal will not change the state’s Costa Hawkins Rental Housing Act, which bars local governments from imposing rent control on apartments built since 1995. The deal also requires property owners to prove they have “just cause” when evicting a tenant who has lived there for more than a year.

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Bryan Anderson is a political reporter for The Bee. He covers the California Legislature and reports on wildfires and transportation. He also hosts The Bee’s “California Nation” podcast.