Learn about how rent control affects the landlord-tenant relationship.
If you live in a major metropolitan area in California, chances are you have run into the term “rent control”. The west coast has long been a popular relocation locale and California metropolitan areas are growing at staggering rates. California has seen an incredible population and development increase in recent years. While these increases can mean big gains for big businesses, it is often at the expense of middle income and low income renters.
Companies like Air BnB have put additional pressure on the rental market as investors are taking properties that used to be rental units and positioning them as short term vacation rentals instead, removing viable rental properties from an already scarce rental market.
The fact is, in areas like San Francisco and Los Angeles, it can be very difficult to find rental housing, especially at an affordable rate. Thankfully, legislators in many areas foresaw the need to protect renter’s rights and instituted rent control laws.
What is Rent Control?
Generally speaking, rent control or rent stabilization consist of the ordinances that limit or prohibit rent increases and the procedures a landlord must follow to increase a tenant’s rent or to evict a tenant. Because rent control is adopted and enforced by local municipalities, there is no standard definition of rent control; each community can write their own rent control laws. Rent control usually applies to properties of 2 units or more. Each community’s ordinance is different.
For example, some ordinances require “just cause” evictions. Under these ordinances, the landlord must state and prove a valid reason for terminating a month-to-month tenancy. A landlord cannot terminate a lease for the sole purpose of renting it to another tenant at a higher rate. Other cities do not have this requirement.
About Rent Increases
Most rent control laws will specify regulations regarding rent increases. Some cities have boards that have the power to approve or deny increases in rent. Other cities’ ordinances allow for a certain percentage increase in rent each year.
Because of recent changes in State law, all rent control cities now have “vacancy decontrol.” This means that the landlord can re-rent a unit at market rate when the tenant moves out voluntarily or when the landlord terminates tenancy for non-payment of rent.
Is Rent Control a New Idea?
No! Many rent control laws were initiated in the 70s as a response to the rapid increase of rental rates in metropolitan areas. Local authorities determined that if increases were allowed to continue, many people would be unable to pay their rent and displacements would occur. These hardships disproportionately affected senior citizens and persons with fixed or low incomes. Rent control laws were instituted to protect tenants from unreasonable rent increases while also recognizing the landlord’s need to have sufficient rental increases to cover maintenance, increased cost of operations, and to encourage capital improvements.
Many communities today are looking to adopt new rent control regulations where previously there were none. In California, the technology boom in Silicon Valley has created something of a housing crisis where speculation and development have been driving people out of their homes. Communities are seeing a rapid increase in population and struggling to maintain a balance between safeguarding current residents and encouraging economic development.
What Areas Are Rent Controlled in California?
Many communities in California have been successfully operating under rent control laws for years. The following is a partial list as local regulations are subject to change. Contact your local housing administration to find out if your area is subject to rent control.
- Beverly Hills
- East Palo Alto
- Los Angeles
- Los Gatos
- Palm Springs
- San Francisco
- San Jose
- Santa Monica
- Thousand Oaks
- West Hollywood
What is Rent Control NOT?
Unfortunately there is a misconception that rent control is allowing the government to set the rental rate of a property. The fact is, a landlord can set the rental rate of a vacant unit to any amount. This can mean market rate, below market rate, or even higher than market rate. The restrictions regulate the amount and/or frequency of rental increases, and protection against arbitrary evictions (in most cases).
Is My Community Rent Controlled?
A rent control ordinance may change the landlord-tenant relationship in other important ways besides those described here. Contact your local housing officials to find out if you live in a city with rent control. You can also find out about rent control ordinances (if any) in your area at your local law library or by requesting a copy of your local ordinance from the city or county clerk’s office. Some cities may even post information about their rent control ordinances on their website.