Governor Gavin Newsom signed AB 1482 Tuesday afternoon, which will enact statewide rent control starting in 2020.
The new law, which Newsom calls “the nation’s strongest statewide renter protections,” will restrict landlords from raising rents more than 5 percent plus the local cost of inflation per year. On average, the formula results in an average of a 7 percent increase per year. The law will require rent increases exceeding the cap to be rolled back to what the tenant was paying on March 15, 2019 starting in January 2020. Landlords will also require “just cause” to evict a tenant, such as failure to pay rent.
The passing of AB 1482 is considered by Californians to be controversial because of proposition 10, the Local Rent Control Initiative, which recently failed to pass in the November 2018 election with 59.4% voting no, noting Downey’s 58% against the same proposition.
Recently, residents of Eden Roc Apartments in Downey had their rent increased by as much as 40 percent. many concerned residents commented during a city hall meeting that their rent was increased from $1100 to $1500, a 36 percent increase. Tenants affected by similar recent rent hikes will have their rents readjusted to a maximum of 5 percent plus inflation.
According to TownCharts.com, approximately 49 percent of Downey residents rent homes in Downey as of 2018.
AB 1482 will only affect those living in multi-family properties. Single-family residences will not be covered under the new law.
Local property owner Frank Ngo expressed some concerns over the new law. “The last time I raised the rent for my tenants was probably 2 years ago and 5 years before that. They are good tenants and they take care of the property. I had to do some repairs to the roof before the heavy rain and some family moved into an empty room, they understood. Now I feel like I will have to raise the rent by the maximum allowable or I will lose it [the 5 percent increase].”
Ngo added that many property owners are consulting with property management companies to update rental agreements to protect themselves before the law goes into effect in January.
Ngo added, “This law hurts everyone. As a landlord, I have the pressure that if I don’t increase rent every year I will lose it; the difference of me raising the rent by $100 per month for 5 years or $500 once on the 5th year is huge. If I raise it by $100 per year the tenant will end up paying thousands more over time. I have had good tenants who turn bad, now I will not be able to get rid of them easily and the neighbors will have to suffer.”
The table below illustrates how 7 percent on a $1,500 rent compounds over 6 years, the comparison described by Ngo.
| Year | 7% Increase | Rent | Cost Per Year | Increase | Rent | Cost Per Year |
| 1 | 0 | $1,500 | $18,000 | 0 | $1,500 | $18,000 |
| 2 | $105.00 | $1,605 | $19,260 | 0 | $1,500 | $18,000 |
| 3 | $112.35 | $1,717 | $20,608 | 0 | $1,500 | $18,000 |
| 4 | $120.22 | $1,837 | $22,051 | 0 | $1,500 | $18,000 |
| 5 | $128.64 | $1,966 | $23,594 | 0 | $1,500 | $18,000 |
| 6 | $137.64 | $2,103 | $25,246 | 500 | $2,000 | $24,000 |
| 6yr. Total | $128,759 | $114,000 |