There might be a limit on how much a landlord can raise your rent if new legislation is signed by the governor.

An Assembly bill from a San Francisco Democrat would stop landlords from raising rent more than 5 to 10 percent in a year. It’s not exactly the type of rent control that many activists want, but it may stop some of the more extreme rent hikes endured by many San Diegans.

The legislation, AB 1482, passed through the Assembly’s Housing and Community Development Committee last month. It will be heard Wednesday by the Appropriations Committee, where it could go on to a vote in the full Assembly. If it passes, it would go to the Senate and then the governor’s desk.

Under the bill, a landlord would be prevented from raising rents 5 percent plus whatever the rate of inflation was the previous 12 months (as measured by the Consumer Price Index). The CPI rate for San Diego metro was 2.2 percent for the year in March 2019, so a local landlord could not raise rates more than 7.2 percent.

Given the current rate of inflation, if a San Diegan rents an apartment for $1,200 a month, the landlord could not increase the monthly rate more than $86 in 12-month period.

It does not seem like the legislation will have a gigantic effect on San Diego County at the moment. Asking rents are up 2.7 percent in a year, said real estate tracker CoStar.

Assemblyman David Chiu, the author of the bill, said the point of the legislation is to protect renters who are at risk for homelessness, or who are not able to provide for their families, after a big rent increase. He calls the legislation an “anti-rent-gouging” bill, as opposed to “rent control.”

“Most of California, 17 million tenants, don’t have safe and secure affordable housing” he said Tuesday. “In recent years, we’ve seen rent increases of not just 10 or 25 percent, but 50, 100, 200 percent rent increases.”

Chiu said his bill has it roots in the state’s anti-price gouging law that prohibits raising the price of goods and services more than 10 percent after an emergency has been declared, typically a natural disaster. He said the state is undergoing a type of emergency now with record numbers of homeless and affordability issues.

The business community is largely opposed to the bill, with much of the support coming from organized labor and tenants rights groups.

So far, the California Association of Realtors, California Chamber of Commerce and California Apartment Association are opposed. In support: ACLU of California, California Teamsters and Housing California.

Molly Kirkland, public affairs director for the Southern California Rental Housing Association, said it opposes the bill because of concern that the benchmark — 5 percent plus inflation — would be lowered in the future.

“Our concern is that will be chipped away over time,” she said.

Similar to concerns with other rent control bills, opponents have argued a limit on rent increases would make developers not want to build more apartments. That lack of new housing, they argue, would end up hurting low-income people trying to find affordable places to live.

“For me, it is rent control by a different name,” said Borre Winckel, CEO of the Building Industry Association of San Diego. “The net effect, if such a bill were to become law, is reduced construction.”

Chiu said his legislation is not rent control because it would still allow for increases. He said the roughly 7 percent increases means a property owner can still get a return on investment while still protecting renters from substantial hikes.

Source: SDuniontribune by Phillip Molnar