21 Oct Rent Control Is Back
AB 1482 rent caps and just cause eviction passed the State Legislature on September 11th, 2019 and has been signed by the Governor on October 16, 2019. This also included no pass through, for improvements, onto the tenants. Proposition 10, version 2.0 signatures gathered and is pending verification.
As stated in the article “How Rent Control Laws Hurt Tenants,” by Steven Greenhut, California is about to get a real world lesson in how rent control laws can’t solve a housing crisis alone, | In this article, Steven articulates several key points regarding this new legislation. We will likely see a trend in that landlords will no longer maintain the properties to the high standards they did in the past and we will see an increase in deferred maintenance. Additionally, landlords and builders will exit the market and turn apartments into condos, which will create an even greater shortage of rentable units. For those that continue to rent to tenants, they will no longer have the luxury of increasing rents to their highest at the right time, but instead will need to increase rents to their maximum yearly, creating more friction between landlords and tenants.
The significant downside is for landlords who have kept their rents under market to retain great tenants, as they it will be more challenging for them to catch up to the market through typical rent increases. Now, more than ever, is the right time to secure a property management company who will ensure you and your assets remain complaint during these ever changing times.
There is a new group of investors who are buying motels and hotels and turning them into low cost apartment housing. Additionally, some savvy investors are buying mobile home parks and modular homes for the same purpose, as they realize there is a large pool of government funding to pay the rents to these landlords in support of their tenants who qualify for these state funded programs. Yes, our tax dollars will go to these great causes until the funds run out. At which time, these landlords will need to determine what they will do with these properties.
There are many additional ways we can work to help our communities dealing with the rise of homelessness and lack of mental illness support. We need to fund programs dedicated to supporting those in need and help them to transition into a long-term solution and improve their overall situation. Additionally, employers need to look for new ways of thinking of teams and offices, for example allowing staff to telecommute, so that they can live in affordable housing areas and still be employed by the firms of their choice.
During this information age and with the rise of AI and robotics changing virtually every industry, there are endless possibilities to improve our current situation regarding these key issues. We need to focus on “Moon-Shot Goals” and fund them, which will give rise to a better future for us all.
Contact us today for a free property management assessment and action plan for your properties!