EVERYTHING YOU NEED TO KNOW about the New California Rent Control Law

A photo by Jakob Owens.


Here’s how California’s rent control law will work

Gov. Gavin Newsom signed Assembly Bill 1482 this afternoon, enacting rent control in California, when “no one thought this could be done.”

He signed the legislation—which is designed to guard tenants against the most “egregious” rent hikes—as part of a press conference and housing tour in Oakland.

Once the law is in effect on January 1, the state will begin to regulate how much Californians’ rent can increase every year, limiting it to 5 percent, plus the local rate of inflation. The rules, however, will vary for cities that already have rent control laws. The measure will expire in 2030 (unless lawmakers vote to extend it).

Newsom has said that with AB 1482, California will boast the “nation’s strongest statewide renter protections.” Today, he thanked dozens of activists for their tenacity in advocating for a slate of new policies designed to help renters in California, which has the second highest poverty rate in the nation and a growing homeless population.

“Millions of California renters are just one rent increase or eviction away from experiencing homelessness,” said the bill’s author, Assemblymember David Chiu (D-San Francisco). “Just because someone rents doesn’t make them any less worthy of having a stable home.”

Chiu and others have refrained from referring to the measure as rent control. That’s likely because many economists say it can make problems worse for renters in the long run by cutting into landlords’ profits and encouraging them to get out of the rental business.

Many experts also say California—and especially Los Angeles, the third most unaffordable metro region in the U.S.—needs to prioritize building more housing to bring down costs.

leslie-jones-1415633-unsplash“It is unfortunate that political expediency won over a comprehensive housing solution that will actually move the state closer to the Governor’s goal of creating 3.5 million new housing units,” California Rental Housing Association president Sid Lakireddy said in a statement.

As researchers at UC Berkeley’s Terner Center for Housing Innovation cautioned in a July report, “guarding against excessive rent increases alone is not enough to address California’s housing crisis.”

They ultimately concluded that AB 1482 could help protect tenants from extreme rent increases. But they also encouraged lawmakers to come up with policies that would preserve affordable housing—and encourage builders to produce more of it.

In the end, they say the positive impacts of AB 1482 will hinge on public awareness of the new rules and effective enforcement. To that end, a breakdown of how the law will work is below.

Would my apartment be rent-controlled?

That depends on where you live. If you reside in a city that does not already have a local rent control law and your rental is at least 15 years old, the answer is most likely “yes.”

The state law would exempt buildings constructed in the last 15 years. That’s a rolling date, meaning units built in 2006 would be covered in 2021, units built in 2007 would be covered in 2022, and so on.

What types of buildings would be impacted?

Rent control would be applied mostly to apartments and other multi-families buildings—with some exceptions—along with some single-family homes.

Condos and single-family homes would be exempt, unless owned by a corporation or real estate investment trust. Duplexes where the owner lives in one of the units would also be exempt.

How much would my rent go up?

If you live in a city that does not already have a local rent control law, rent increases would be limited to 5 percent, plus local inflation, but could never exceed a total of 10 percent.

For example, if you’re renting in Redondo Beach, which does not have its own local rent control law, and you pay $1,550 per month for rent, and Los Angeles County metropolitan area’s inflation rate is 3.8 percent, your landlord could raise your rent as much as 8.8 percent, a monthly increase of $136.40.

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To help tenants whose landlords might have gone on a rent hiking binge in anticipation of AB 1482 passing, the law would be retroactive to March 15, 2019. Whatever amount you paid as of that date is that amount by which the increase would be based.

How much is inflation?

The rate of inflation will be tied to the Consumer Price Index in each metropolitan area. In Los Angeles County, it averaged 2.5 percent from 2001 to 2018.

Which communities have local rent control laws?

In Los Angeles County, the cities of Santa MonicaWest HollywoodBeverly HillsCulver CityInglewood, the city of Los Angeles, and unincorporated neighborhoods of Los Angeles County have local rent control laws.

What if I live in a city that already has rent control?

For the most part, the rules would not change. AB 1482 would not override local rent control laws. However, it would cover units that are not already covered by local rent control laws.

For example, in the city of Los Angeles, the local rent control law only applies to buildings constructed before 1978. Several hundred thousand newer units that opened in the nearly three decades from 1978 to 2005 would be covered under AB 1482.

So, in the city of Los Angeles, if you live in a building that opened before 1978, your rent would be capped under the provisions of the city’s law (it’s 4 percent this year.) If you live in a building that opened after 1978 and is at least 15 years old, your rent would be capped at 5 percent, plus inflation.

What else is in the bill?

Equally as important as the rent cap, renter advocates say, is a provision that would require landlords to show “just cause”—such as failure to pay rent—when evicting tenants. That would end the ability that landlords have now, in most parts of the state, according to CalMatters, to evict tenants without giving an explicit reason.

For tenants who have lived at the property for at least one year, landlords would have to give the renter the opportunity to “cure” the violation. Other examples of just cause include violating the terms of a lease and committing a crime on the property.

If a landlord wants to convert the rentals to condos or “substantially” remodel the property, they would have to pay relocation fees equal to one month of rent.

These rules would not apply to cities with their own local just cause laws, including Santa Monica and Glendale.




NEW BILLS: California in-law units could be cheaper, easier to build


FROM THE MERCURY NEWS: Several bills sitting on Gov. Gavin Newsom’s desk would cut red tape and bring more in-law flats to backyards and garages across the state.

The Legislature has sent the governor measures with major changes to state laws governing granny flats, cutting permit fees, allowing more units on large properties and granting limited amnesty to existing units.

The measures would also grant enforcement power to the Department of Housing and Community Development, or HCD, to flag city codes hindering the construction of auxiliary dwelling units, known as ADUs.

The governor has until Oct. 13 to act on the bills. Lawmakers are optimistic the measures will be signed.

photo-1517685025977-5839072a34abThe measures come as the state grapples with a persistent housing shortage, estimated to be up to 3.5 million homes, condos and apartments. Dramatic proposals to attack the backlog — including more permissive zoning, higher density allowances and streamlined local approval — fell short in this year’s legislative session.

While demand remains strong, adding homes and apartments has been a challenge. New building permits slumped in the past 12 months.

Lawmakers and housing advocates say ADUs can offer a quick, relatively low-cost way to add apartments to a region pinched for affordable housing. Lawmakers from the Bay Area and Los Angeles have taken the lead in easing granny flat restrictions.

State Sen. Bob Wieckowski, D-Fremont, author of one of the reform bills, said the measures would give cities more incentive to approve the auxiliary units. “It’s another means of creating new housing,” said Wieckowski.

Wieckowski and Assemblyman Phil Ting, D-San Francisco, authored proposals in response to homeowner complaints that the process is often too complicated and expensive in their cities. Residents also complained cities were making it difficult to build.

Ting’s effort, AB 68, increases the number of ADUs allowed on a property. A single-family home  would be allowed two units, one up to 800 square feet and another up to 500 square feet. Multiple units would be permitted on properties with multifamily units.

The measure also cuts a municipality’s permitting deadline from 120 to 60 days. It curbs local authority, banning city ADU ordinances from imposing minimum lot sizes for construction, requiring parking replacement and other building-size restrictions. It gives the housing department and the Attorney General more authority to police local codes.

City governments and community organizations fought the measures, saying the increased traffic, cramped parking and demand on services by new residents can overwhelm neighborhoods.

The Cities Association of Santa Clara County opposed Ting’s bill, saying it would “incentivize operating the property as a commercial enterprise and could have the unintended effect of large-scale investors purchasing many single-family homes and adding ADUs, thus operating more like a property management company.”

Wieckowski’s bill, SB 13, continues the overhaul of ADU regulations he initiated in 2016. It eliminates impact fees for units smaller than 750 square feet, and restricts fees on larger units to 25 percent of the city’s rate.

The bill allows owners of noncompliant units — typically older apartments built under different codes — to request a five-year delay in enforcement as long as the unit poses no immediate health or safety risks. The delay would allow owners to improve units over time to meet more modern standards.


It also provides an incentive to cities to permit ADUs, by allowing municipalities to count the units toward their state-mandated housing goals.

Another proposal limiting homeowner association’s ability to restrict ADU construction already was signed by Newsom.

Housing advocates say the measures could expand the supply of much needed affordable housing. Matt Lewis, spokesman for California YIMBY, said the cost of permits and fees have driven many homeowners away from their construction plans.

Lower fees and more permissive local rules will encourage more property owners to build small, affordable units, he said. “We’re potentially looking at a golden age of granny flats.” 

Wieckowski said the changes were in response to concerns heard from homeowners across the state in public hearings and panels.

“A homeowner has no idea what these regulations and roadblocks are with their city,” he said. In the future, he added, ADU permitting should be routine and completed in one day. “That should be a 10-minute gig.”




LA’s Median Home Price Stands at $619K in August


The market remains relatively flat, but some price points are still competitive, agents say (FROM CURBED LA)

Homebuyers hoping for prices to come down amid a recession might need to keep on waiting (or give up hope).

While median home prices in Los Angeles County dipped in August after a record-setting July, they’re up year-over-year. A new report from CoreLogic pegs the median price of a home at $619,000 in August, a 0.7 percent increase from August 2018.

Homes sold for $500,000 or more accounted for 70 percent of all sales last month, up from 68.2 percent in August of last year. Overall, however, sales are sluggish year-over-year; 443 fewer homes sold last month compared to the year prior, according to CoreLogic.

“Some buyers no doubt remain parked on the sidelines, concerned about the possibility of buying near a price peak, and affordability remains a challenge for many,” says CoreLogic analyst Andrew Page.

But that’s not translating to lower prices, and some price points, especially the $800,000 to $1.7 million range, remain competitive, according to local Real Estate Agents.

Buyers, says the consensus, “better be including a dear-seller letter, and they better be prepared for multiple offers.”

Still, the Los Angeles housing market has slowed considerably since last year—when home prices were climbing as much as 8 percent annually.

In the very high-end market, properties with “aspirational” price tags are selling for “what buyers know to be real value of the market,” giving an example of a home on the Bird Streets that was asking $25 million but was scooped up for $15 million. Many are using the word Stabilization to describe the current local atmosphere.  



U.S. Existing-Home Sales Rose in August

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FROM THE WALL STREET JOURNAL: Sales of previously owned U.S. homes rose in August, adding to recent modest signs of recovery in the housing market.

Existing-home sales rose 1.3% in August from the previous month to a seasonally adjusted annual rate of 5.49 million, the National Association of Realtors said Thursday. That was the strongest pace of sales since March of last year. Economists surveyed by The Wall Street Journal expected sales to fall 1.1% last month.

Over the past year, sales in August were up 2.6%, the second month of growth following 16 straight months of year-over-year declines.

“Just perhaps we may have turned a corner for good in terms of home sales, which had been underperforming in relation to jobs, mortgage rates and other factors,” said Lawrence Yun, the trade group’s chief economist. July’s sales were unrevised at a 5.42 million annual rate.

venice2Thursday’s data suggests a recovery could be under way in the housing market, which has struggled for more than a year despite low mortgage rates and a strong labor market.

Last week, 30-year fixed mortgage rates averaged 3.56%, down from close to 5% in November, according to Freddie Mac.

“Having the mortgage rate low for several consecutive months is enticing buyers back into the market,” Mr. Yun said.

That may also be encouraging builders. New-home construction climbed 12.3% in August from the previous month, rising to the highest level in a dozen years, the Commerce Department said Wednesday.

A shortage of homes for sale has been pushing up prices and making it difficult for new buyers to get a foothold, Mr. Yun said. The median sales price in August was $278,200, up 4.7% from a year ago. That was the 90th consecutive month of year-over-year price increases. There was a 4.1-month supply of homes on the market at the end of August at the current sales pace.

Purchases of previously owned homes account for most of U.S. homebuying. 




TV producer Shonda Rhimes sells Hancock Park home for about $7.2 million


FROM THE LA TIMES:  Television producer and screenwriter Shonda Rhimes, whose scores of credits include “Grey’s Anatomy” and “Scandal,” has sold her home in Hancock Park for a little over $7.166 million, records show.

The 1920s traditional-style home, set on a leafy half-acre lot, first came up for sale in October 2018 for $9.995 million. It had been listed for $8.5 million since May, according to the Multiple Listing Service.

Stock Los FelizOwned by Rhimes since 2010, the 8,300-square-foot house has coffered ceilings, crown molding, scaled formal rooms and a formal entry with a hand-stenciled floor. The chef’s kitchen opens to the den. There are fireplaces in the library, family room and living room.

A total of six bedrooms and nine bathrooms includes a multi-room master suite complete with dual baths, two walk-in closets and a separate study. Another bedroom, formerly another office, is where Rhimes penned screenplays for many of her hit shows.

Outside, the tiered backyard has a grassy lawn and steps leading up to a swimming pool and pool deck. A detached cabana sits near the pool area. A smattering of mature sycamore and elm trees fill the front yard.

Rhimes, 49, is the producer behind such popular television hits as “Private Practice,” “How to Get Away With Murder” and “Station 19.” In 2017, she agreed to a multi-year development deal with streaming service Netflix.

The exact sale price was $7,166,250.

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(Photos in this article are STOCK IMAGES, not images of sold home) 

DIRECT: 323.762.2561
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