New Legislation 2019 Includes “Just Cause”

Summary of New Legislation, AB 1482, Presented by RHN

Rent Increases:

Cap of 5% + cost of living (CPI) or 10%, whichever is the lower of the gross rental rate, over the course of any 12-month period.

No more than 2 increments in any 12-month period.

Just Cause

  • At Fault

Nonpayment of rent

Violation of the lease after being issued a written notice to correct

Committing or permitting a nuisance

Committing waste

Upon termination of a lease (after Jan 1, 2020), and receipt of a written request from owner, tenant refuses to execute a written extension or renewal of the lease with similar provisions.

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Proposed New Laws for 2019

California Legislation

When Prop 10 was defeated we thought legislators would back off and we could relax for a while. Not so. In fact, the legislators have been quite busy. Here’s the latest list of proposed bills to watch.

AB 36 would allow rent control to be imposed on multifamily buildings 10 years old or older and on single family homes. This means some of the protections small owners have under Costa Hawkins would be removed.

AB 1482 would cap rent increases statewide. The percentage to be used for the cap has yet to be determined. Oregon recently passed a similar bill. This proposal is being touted as an anti-gouging cap.

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Duplex Owners Are Trapped in San Jose

Owners with only one rental unit may be facing rent contol in San Jose.

We’ve had this discussion several times and yet, some of our San Jose City Council members keep bringing it back to the table. The question they keep asking is, should duplexes be added to the TPO (Tenant Protection Ordinance)?

Many duplex owners (including me) purchased our property years ago with a plan. The plan was to rent out one side and live in the other. Due to the cost of housing in San Jose, the rented side did not pay the mortgage. In fact, in the beginning an owner did well to receive even so much as a third of the property costs. But as time went on and rents went up the percentage got closer to being a shared cost. If an owner worked at paying down the mortgage over the years, they could possibly refinance with little or no mortgage when the time came for them to retire. For a number of owners with no company retirement or pension, this is the best scenario they could hope for.

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Reversing Costa Hawkins will not help the housing crisis

Our state legislature has made several unsuccessful attempts to reverse Costa Hawkins. Perhaps the reason they’ve failed to reverse the ruling is the unintended consequences that would result from such a dramatic change. Often with good intentions our representatives pass knee-jerk legislation to pander to a moment of emotional outcry.

Clearly the need for more affordable housing is a pressing issue, not just for California but for several highly populated states. Cities with large populations and low unemployment rates are most affected by the lack of housing. For every article we read on residents leaving the bay area for more affordable lifestyles there’s an article on yet another big company (Apple, Google, Amazon, etc.) buying up real estate for future sites to expand their work force. Currently, many bay area cities already have a unemployment rate of less than three percent.

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