This story originally appeared in The Center Square.
Landlords across the state of California face new limits in how much they can increase the rent of their tenants.
Under Assembly Bill 1482, the California Tenant Protection Act of 2019, landlords are prohibited from increasing their rental rate more than 5% plus the rate of inflation, or 10%, whichever is lower, over a 12-month period.
The new statewide cap came into effect on Aug. 1 and will last until July 31, 2027.
“Rent control in general is an extremely bad idea,” Steven Greenhut, director of the Pacific Research Institute’s Free Cities Center, told The Center Square in an interview. “It’s a form of price control, and price controls always suppress supply.”
The maximum rent increase in the San Francisco area is 8.8%. In the Los Angeles area, the maximum rent increase is 8.7%. The maximum in the Riverside area is 8.1%, according to the attorney general’s office.
The maximum increase in the San Diego area is 8.2%. Down from 8.8% the year before, the San Diego area is the only area that is seeing a lower rate than the year prior.
Greenhut attributed the decrease in rent in San Diego to a “building boom.”
“The answer is to build more housing and to make it easier to build housing,” Greenhut said. “San Diego has seen a building boom, and that’s how you reduce rents, through competition and increasing the supply.”
All other counties are limited to an 8.6% increase.
Housing built within the last 15 years, duplexes where the owner occupies one of the units, and single-family homes and condos, if they are not owned by corporations and tenants are served with a written exemption notice, are exempt from the rent increase laws.
Some counties and cities have their own additional rent stabilization laws beyond the statewide caps, which further limit the increase landlords can charge renters.
In the City of Los Angeles, landlords can only increase rent by up to 100% of the change in the Consumer Price Index. The maximum increase is 8% and if the change is less than 3%, the rent may be increased up to 3%, which was the limit this past year.
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