California Enacts Statewide Rent Control, Additional Policies on November Ballot
California recently became the second state in the U.S. (following Oregon) to enact statewide residential rent control with the Tenant Protection Act of 2019.
Another measure—the Rental Affordability Act—has been placed on California’s statewide ballot in November and would effectively allow local jurisdictions to implement stricter forms of rent control, including "vacancy control."
More broadly, the multifamily industry is facing softer market conditions from the economic fallout of COVID-19. Disruption of capital markets—in particular, reduced investor activity and tighter loan underwriting—has added worries for owners and investors, making it more difficult to offset the effects of rent-control legislation.
This Research Brief from CBRE explores the dynamic rent control situation, impacts to the multifamily investing landscape and more aggressive rent-control and related policy measures being considered.
Tenant Protection Act of 2019 At-A-Glance
- Effective January 2020
- Caps annual rent increases at 5%+ inflation
- Applies to 15+-year-old properties
- Impacts 8 million of California's 17 million renters*
*According to the California Legislative Analyst's Office