Explaining the unintended negative consequences of rent control for renters in San Diego

SAN DIEGO (KUSI) – California will become the second state in the nation to pass a statewide rent cap, after Oregon.

The law limits rent increases to 5% each year plus inflation until Jan. 1, 2030. It bans landlords from evicting people for no reason, meaning they could not kick people out so they can raise the rent for a new tenant. And while the law doesn’t take effect until Jan. 1, it would apply to rent increases on or after March 15, 2019, to prevent landlords from raising rents just before the caps go into place.

California’s rent cap is noteworthy because of its scale. The state has 17 million renters, and more than half of them spend at least 30% of their income on rent, according to a legislative analysis of the proposal.

But California’s new law has so many exceptions that it is estimated it will apply to 8 million of those 17 million renters, according to the office of Democratic Assemblyman David Chiu, who authored the bill Newsom signed.

It would not apply to housing built within the last 15 years, a provision advocates hope will encourage developers to build more in a state that desperately needs it. It does not apply to single family homes, except those owned by corporations or real estate investment trusts. It does not cover duplexes where the owner lives in one of the units.

And it does not cover the 2 million people in California who already have rent control, which is a more restrictive set of limitations for landlords.

Senior Advisor for SVN Vanguard, Jarrett Smith, explained the negative effects of rent control on Good Morning San Diego.

RELATED STORY: Governor Newsom signs law capping rent increases at 5% each year