Rent-Capping Bill in Sacramento Not Likely to Dampen Push for Pasadena Rent Control

Local rent control advocates argue that 5 percent per year rent cap is still too great, citing study which shows such an increase in major cities produces thousands of new homeless

Published : Wednesday, September 4, 2019 | 4:42 AM

Pasadena rent control initiative supporters in May, 2018 campaigning for a rent control initiative which failed to qualify for the ballot. This year, the backers are forging ahead with a second attempt, in spite of potential state bill which appears to backstop at least some of their goals. Image via Facebook

UPDATED  The potential passage of a state bill capping annual rental increases and requiring landlords to show cause for eviction has not dampened the enthusiasm of backers supporting an initiative for rent control in Pasadena.

That’s because the local group readying a rent control initiative to amend the city charter says the one in Sacramento doesn’t have much to do with the other in Pasadena.

The deal reached Friday by Gov. Gavin Newsom and lawmakers would beef up Assembly Bill 1482 to cap rent increases in California at 5 percent plus inflation annually for ten years. If passed, the bill would also require landlords to provide a reason before evicting a tenant. The cap would not apply to units built within the last 15 years.

The bill was introduced by Assemblymember David Chiu (D- San Fran.), who entitled it an “anti-rent gouging” and entirely avoided any reference to “rent control.”

Allison Henry, spokeswoman for the Pasadena Tenants Justice Coalition, said that if the bill passed her group would still forge ahead with its rent control voters initiative for Pasadena. The group intends to collect enough signatures op place a measure on the November 3, 2020 ballot.

“It’s not statewide rent control,” she said of AB 1482. “It’s anti-rent gouging. It merely seeks to cap what are considered egregious rent increases.”

Among other features, explained Henry, a true rent control measure usually establishes a rental board which landlords can petition for upward rental adjustments beyond the cap.

The Coalition Henry represents consists of the Pasadena Tenants Unions, Socialist Scientists of Pasadena, Democratic Socialists of America/LA, Affordable Housing Services, and American Civil Liberties Union of Southern California.

She said its efforts locally will involve a measure that is more stringent than the one making its way through Sacramento.

Jennifer Kwart, a spokeswoman for Assemblyman Chiu, said that, under the latest legislative draft of AB 1482, the exemption for units of new construction has been extended from 10 years to 15 years.

Chiu’s measure originally provided an exemption for units with 10 or fewer family units. That has been struck from the bill, according to Kwart, in lieu of single family homes not owned by a corporation or a real estate investment trust.

Duplexes in which an owner occupies one of the units would also be exempt from the proposed law.

A prior version of the bill qualified the renters’ rights as kicking-in after a 12-month tenancy, but that has been changed to 24 months in the case where a roommate has been added to the lease.

The proposed rental cap, Henry said, “is still close to 8 percent and is much higher than the 3 percent Los Angeles County is considering for unincorporated areas, or even Inglewood, which is considering a flat 5 percent.”

The 8 percent figure is simply too high, said Henry, who produced a recent study by the realty website “Zillow” demonstrating that in some cities — including L.A., New York, Seattle and Washington D.C. – a rent increase of 5 percent across the board would result in 2,000 new homeless people.

Leon Kachoon, spokesman, Foothill Apartment Association, said the group was not ready to make a position statement on the bill.

“I will say that some of our membership, which is older, feel that if it passes, it won’t go away,” explained Kachoon. “I’m told that is what happened in Los Angeles with rent control. That it was passed as a temporary measure, but then didn’t go away.”

The measure being taken up by the legislature would “sunset” after 10 years, according to Kwart.

The California Realtors Association (CAR) holds considerable sway in the state capitol. The group is against the AB 1482 proposal and urging its members to get on the horn and let their representatives in the legislature hear about that opposition.

“CAR has been working with the bill’s proponents for several months with a common purpose,” the group said in an Aug. 30 statement, “to achieve a balance promoting tenant protections and private property ownership… Because our consensus language was not included, we will be opposing.”

The realtors’ group said the bill does not “incentivize production of rental housing or help more people find an affordable place.” The measure CAR said, actually discourages new rental housing.

Paul Little, President and Chief Executive Officer of the Pasadena Chamber of Commerce, commented Friday that “Under Costa-Hawkins, they can only apply this to 30-plus-year-old buildings, since it is de facto rent control.”

The 1995 Costa–Hawkins Rental Housing Act (“Costa–Hawkins”) prohibits cities from establishing rent control over certain kinds of residential units, such as single-family units, and newly constructed apartment units.

“It won’t incentivize building new rental housing,” Little added. “People in the affected apartments get a nice entitlement, and developers will opt to build condos, not apartments.”

“Right now, the bill is in the Senate Rules Committee,” Kwart explained. “After that, it’ll go to the Senate floor and then the Assembly floor, and then, hopefully, to the governor’s desk.”

State Sen. Anthony Portantino (D) and Assemblyman Chris Holden (D) were queried for comment but did not respond.

Portantino voted to pass the bill from the Senate Appropriations Committee that he chairs, on two occasions, but that was a different bill.

Holden voted for the bill on the Assembly floor May 29, but again, it was a different measure than what the Senate Rules Committee will see Sept. 4.