Rent Cap Law Doesn’t Bode Well
Newly Passed Provisions to Change Rules of the Game for 40 Percent of California Households
Laura Bode, executive for the Santa Barbara Rental Property Association, said California’s new rent-cap law is not as alarming as the recently passed just-cause eviction provisions. These will fundamentally change the rules of the game for 40 percent of California households.
Bode — addressing the Radius Economic Forecast breakfast held at the Hilton Santa Barbara on Tuesday — noted the new rent-cap law would allow landlords to increase rents by 8.25 percent this year, well beyond what most landlords would ordinarily seek. Her real concern, she said, was that the new just-cause eviction laws will make it more expensive for landlords to terminate tenancies of renters for a host of no-fault reasons. In those cases, she said, state law will require landlords to pay tenants up to one month’s rent as relocation assistance.
In Santa Barbara, she added, the City Council is considering provisions that could make some relocation assistance payments as high as $13,000. The council has not settled on a formula yet and nothing has been adopted. Bode suggested these new rules might spark a stampede from S.B.’s traditional mom-and-pop landlords — who’ve typically charged below-market rents, she said, to keep their units full — out of the business. They, in turn, Bode suggested, would be institutional investors more aggressive about maximizing their bottom lines.
