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GeorgeB

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Posts: 646
Reply with quote  #1 
https://la.curbed.com/2019/8/1/20744755/assembly-bill-1482-rent-control-los-angeles-california


larrywww

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Posts: 2,375
Reply with quote  #2 
I didn't notice the thread, but I agree this is REALLY IMPORTANT---Thanks for posting it.

Here is what I said in the other thread:


The truly odd thing is that the recent actions to impose a 5% cap (plus cost of living ) on rent increases may do more to depress real estate than all the gloom and doom predictions. But that issue may be handled in another thread since I haven’t really analyzed this new development I am informed that the California legislature will consider passing this law on 9/13. Among other provisions is a just cause requirement to evict tenants that would make it more difficult to evict tenants. And rental increases since 3/15/2019 may be nullified. Needless to say none of this is good news. Although I hear that the new rules only apply to properties constructed before 2004. Again I haven’t reviewed the law. The summary above was sent to me. Actually I hear that single family rentals are exempt unless owned by a corporation and possibly other entities but this would apply to apartments so this is a huge deal. The newspapers say this law may not pass, so stay tuned. They mentioned in the La Times that this bill was considered dead on arrival in the legislature until the current governor resurrected it. It’s amazing to think that by virtue of a signed law apartments are going to be less valuable and this with very little warning. I imagine that apartment owners maybe wish they had sold before the new law went into effect but they had very little warning. I would be interested to see how much this affects the value of California apartments, especially since it will be effective for more than a decade---it would sunset on January 1, 2030.  (The original version would have sunset in 3 or so years). Also is it going to be harder to finance these type of purchases

A lot of unanswered questions
I have read that if an investor owns 10 or fewer homes then they are not covered, at least under some circumstances. Anyone who owns 11 or more houses is not going to be happy IMHO though I would seek a legal opinion before doing anything drastic.  And, who knows---maybe it won't pass.  One silver lining---all those hedge funds that bought houses will be covered----Welcome to California.  (I never liked those guys---neither did Bruce Norris).

Some commentators have expressed the opinion that the law's impact may be limited since in alot of counties rents are relatively flat anyway----given the healthy rent increases that have already occurred.  But the "just cause" limitation on ending a tenancy is also a serious hassle---meaning it will be difficult to get rid of problem tenants.  And the landlord is also required to pay a relocation fee of one month's rent in order to get the tenant to leave---regardless of the tenant's income.  So, I definitely think this law is going to have an impact on landlords.  Statewide rent control is NOT something you can easily ignore---I do NOT think it makes any sense to underestimate its impact.

I also hope there is a backlash against the current governor for making such an abrupt decision with so little prior notice.

But I am going to be interested in seeing if it passes---most articles think it WILL be passed and almost treat it as fait accompli, as if the California Legislature has already embraced this bill.
larrywww

Senior Member
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Posts: 2,375
Reply with quote  #3 
The rent control bill has cleared the Senate. 

https://ktla.com/2019/09/10/rent-control-bill-with-smaller-cap-on-increases-approved-by-california-senate/


Now it is headed to the Assembly, which if it passes, will likely be enacted into law since the governor has already come out in favor of the bill.

Things are NOT looking good for defeating it, the vote in the Senate was NOT close.   One thing that I found surprising was that the California Apartment Association has NOT come out against it---they claim to be neutral----I guess on the theory that they couldn't defeat it---and the theory that there could be even worse versions of rent control.  The most important special interest that is opposing the bill is Calif Assn of Realtors---given the abrupt announcement in the bill's favor it does NOT appear there is enough time to organize in opposition to it.





larrywww

Senior Member
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Posts: 2,375
Reply with quote  #4 
The legislature approved rent control yesterday, Governor says he will sign it.
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