Here’s How California’s Rent Control AB 1482 Law Works

There’s nothing new about California’s housing problems for most of its residents. For decades, California has been struggling to provide affordable housing options for its growing populace and prevent illegal rent hikes.

Add that to the increasing number of homeless people and an 18.2% poverty rate, the second-highest country-wide; it places significant pressure on California’s residents. In an attempt to relieve residents of this pressure, Governor Gavin Newsom recently signed AB-1482, which places a cap on rent increases.

While this tenant protection act doesn’t affect everyone per se—there are exceptions, it’s estimated that more than 8 million residents will be affected. With millions of tenants in California just one eviction notice or rent hike away from being homeless, it’s about time the problem was addressed.

Whether you’re a landlord or tenant, you must understand Assembly Bill 1482 to remain compliant or should the need arise, to assert your rights.

Related: Is Home Ownership Worth It? The Pros and Cons of Renting vs. Owning

What is the AB-1482 Tenant Protection Act of 2019?

Assembly Bill 1482—shortened to AB-1482 or the Tenant Protection Act of 2019, was a bill passed into law by Gov. Newsom. The law took effect on 1st January 2020, and it limits rent hikes to a maximum of 5% each year, not including the local inflation rate per year.

Ultimately, the Tenant Protection Act was passed to protect tenants against exponential rent increases.

Additionally, landlords are not allowed to increase the rent more than two times in any year, provided the sum of the increases doesn’t exceed the rent cap per year. Assembly Bill 1482 also requires the lessor to provide “just cause” whenever they terminate a rental agreement, e.g., “Not paying rent.”

That being said, the law doesn’t apply across the entire state. AB-1482 provisions only apply to California cities without rental control laws and aim to expand on them in cities that already do.

Major CA Cities and Their Maximum Allowable Rent Increase Rates

It’s worth noting that any rent hikes past March 2019 are subject to the Tenant Protection Act and may not go beyond the maximum allowable rent increase rate, as shown below. The table below shows the maximum rent increase rate for major cities in California as per AB 1482.

The Tenant Protection Act allows for a 5% increase in rent, plus the local CPI or Consumer Price Index.

That said, if there’s a provision for a lower rent cap by local laws, then you’re not subject to AB-1482 but are still subject to rent control laws of your county.

  • Los Angeles 3.34% CPI + 5% base = Max rate of 8.34%
  • San Francisco 4.01% CPI + 5% base = Max rate of 9.01%
  • San Diego 2.21% CPI + 5% base = Max rate of 7.21%
  • Sacramento 3.34% CPI + 5% base = Max rate of 8.34%
  • San Joaquin 3.34% CPI + 5% base = Max rate of 8.34%
  • Fresno 3.34% CPI + 5% base = Max rate of 8.34%

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Will My Apartment Be Rent Controlled?

 Alt text: Landlord talks with new tenants about rent control documents

The rent-increase cap strongly affects landlords with properties older than fifteen years and in cities that don’t currently have local rent control ordinances. That means that properties built within the past 15 years will not be subject to the Tenant Protection act.

What’s more, AB-1482 provides exemptions for owner-occupied single-family homes as well as households where the owner and occupant rents out a maximum of two rooms or units not owned by trusts or corporations.

This means that it will affect you if you’ve already registered a limited liability company to lease out your home. Owner-occupied duplexes are also not subject to the bill.

That said, it does have a rolling compliance date. Simply put, buildings currently exempt from AB-1482 will be subject to it after 15 years are over.

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What Type of Buildings Will Be Impacted?

Alt text: Apartments and other buildings in San Francisco

AB 1482 rent control ordinance will mostly apply to normal rental units such as apartments and other multi-family buildings, but there are a few exceptions.

According to the Costa-Hawkins Rental Housing Act of 1995, buildings built after the law was passed, condominiums, and single-family homes are not subject to local rent-control laws.

The act also has provisions for rental units, i.e., “vacancy decontrol”; this allows landlords to increase the rent after a tenant moves out—after eviction for failure to pay or voluntarily, to reach market levels.

Some of the other buildings that are exempt from rent control ordinances include:

  • Short-term rent-controlled units like AirBnB,
  • “Granny” or detached units that can’t be sold separately from the main house,
  • Government-subsidized buildings; excluding those in San Francisco and Berkeley, and
  • Owner-occupied buildings with a maximum of three to four units—as per local laws.

How Much Will My Rent Go Up?

For those of you living in cities without rent-control regulations, then you will be subject to AB-1482 law.

That means that rent increases can’t exceed 5%, plus the local inflation rate, the sum of which should not exceed 10%. For instance, if you’re living in city that doesn’t have local rent regulations, e.g., Redondo Beach, LA, paying a monthly rent of $1,600 and the local inflation rate is, say 3.3%, then AB-1482 allows your landlord to increase rent by as much as 8.3 % which translates to an extra $133 every month.

And to protect tenants from landlords who might have gone on a rental hike spree in anticipation of the signing of the Tenant Protection Act, the law is retroactive from 15th March 2019, which means that whatever amount your rent was as of the retroactive date will be the basis of any rent-increases.

How Much Is Inflation?

The inflation rate is connected to the CPI, i.e., the Consumer Price Index for each metropolitan in the state. For example, LA County has held an average CPI of 2.5% for a major part of the past two decades, but as of writing this, the applicable CPI for Orange and LA counties hovers around 3.3%.

What if I Live in a City That Already Has Rent Control?

As we’ve already mentioned, the Tenant Protection Act doesn’t supersede local rent control ordinances. That said, rent-controlled units not already subject to local rent regulations will be subject to AB-1482.

What Do I Do if My Landlord Violates the Law?

Unfortunately, Assembly Bill 1482 doesn’t have provisions for enforcing or reporting. Tenants are advised by Assembly Member David Chiu to get in touch with a legal aid organization or lawyer if they have reasonable suspicion that their landlords have violated AB 1482.

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Alt text: Two homeowners sit on a sofa and shake their landlord’s hand

While we’ve done our best to compile all the necessary information on AB-1482, we’ve not exhausted it. To learn more about how California’s rent control AB-1482, be sure to check out California’s tenant’s rights, eviction regulations, and landlord’s rights and responsibilities. And if you’re looking for a new home to co-own, make sure to check out our services at Cher.

Related: How Co-Borrowing Improves Your Chance of Mortgage Approval