September 2024 Blog

Salinas Rent Control

On September 5^th The City of Salinas voted to move forward with a new rent control and tenant protection ordinance, which was developed to address rising rent prices and provide additional security for tenants. The key elements of the proposed ordinance include:

1. Rent Stabilization: The ordinance would cap annual rent increases at 2.5% to 3%, significantly lower than the current legal limit of 10%. Some advocacy groups are pushing for a 2% cap to better align with the income levels of many residents, particularly those in lower-income jobs like agriculture, where wages are insufficient to meet escalating rent costs.
2. Just Cause Eviction: Landlords would only be able to evict tenants for specific reasons, such as failure to pay rent, violation of lease terms, or if the landlord needs to take the property off the market for renovations or personal use.
3. Anti-Harassment Protections: The ordinance also includes provisions to prevent tenant harassment, ensuring that landlords cannot use intimidation tactics to push renters out in favor of raising rents.

This ordinance affects about one-third of the city’s rental properties, excluding units exempted by state law (like single-family homes and newer developments).

This move by Salinas signals a trend that may influence nearby cities like Monterey to implement similar rent control measures. With rising housing costs throughout Monterey County, other municipalities may look to Salinas as a model for stabilizing housing markets while balancing landlord interests.

You can prepare homeowners for the possibility of new regulations, urging them to stay informed and consider how rent caps might affect long-term investment strategies and operating costs.

*There have also been a slew of proposed changes in the legislature that would effect rental properties. California Apartment Association is a large advocacy group that often advocates for fair business practices between landlords and tenants in a state that often favors tenants rights over landlord rights. Below is a list of the bill proposals, some of which have been stopped in their tracks, and some of which are still pending on the Governors desk:

During the recently concluded legislative session, the California Apartment Association (CAA) successfully advocated for laws beneficial to the rental housing industry, while also halting several proposals that could have severely impacted housing providers.

Here’s an overview of some of the bill proposals that would have harmed the rental housing industry, all of which failed to pass.

Unsuccessful Legislation That Would Have Harmed Rental Housing Providers

• AB 2187 (Bryan) – Office of Tenants’ Rights: This proposal aimed to create the Office of Tenants’ Rights and Protections, a costly initiative that would not have included provisions for assisting or informing property owners.
• AB 2216 (Haney) – Pets: Initially, this bill would have required landlords to allow tenants to keep common household pets without charging pet rent or a security deposit. Following CAA’s objections, the bill was revised to apply only to properties with 16 or more units, allowing landlords to charge pet rent for additional pets and impose a security deposit cap of 50% of the first month’s rent, up to $1,000. The revised bill also permitted owners to require liability insurance and establish rules for pet owners. Despite the amendments, the bill did not advance.
• AB 2230 (Bennett) – Unfair Practices: This bill sought to enact the Residential Housing Unfair Practices Act of 2023, which would have made certain actions concerning rental housing illegal. CAA opposed the bill, arguing it promoted a misleading narrative that blamed the housing industry for the housing crisis. The bill was criticized for being overly broad and for potentially encouraging frivolous lawsuits, delaying developments, and eliminating projects. It did not receive a hearing.
• AB 2304 (Lee) – Unlawful Detainer Masking: This proposal would have extended unlawful detainer “masking provisions” to cover cases involving over $35,000 in back rent or damages, shielding them from public view and credit reporting. Due to CAA’s opposition, the provision was removed from the bill.
• AB 2384 (Wilson) – Public Pool Telephones: This bill would have required apartment complexes with swimming pools to install emergency phones near the pool deck, an initiative sponsored by a company selling these phones.
• AB 2785 (Wilson) – Interest on Security Deposits: The bill proposed requiring landlords to pay tenants interest on their security deposits if placed in interest-bearing accounts. It also required landlords to accept reusable screening reports, refund screening fees for non-selected applicants, and cap screening fees at $50. The author agreed to withdraw the bill.
• AB 2930 (Bauer-Kahan) – Automated Decision-Making Tools: This bill would have required landlords and property managers using automated decision tools (such as credit reports or rent-setting algorithms) to conduct an “impact assessment” to ensure no illegal discrimination occurred. It also allowed tenants to challenge the use of credit reports. CAA raised concerns about the implications for housing providers.
• SB 1154 (Hurtado) – Price Algorithms: This bill aimed to ban rental pricing algorithms and authorized the Attorney General to investigate violations. It required businesses with revenue exceeding $5 million to disclose the use of pricing algorithms, defined as computational processes using data, machine learning, or AI to set prices.

Rental Housing Bills Awaiting the Governor’s Approval

CAA also successfully pushed for significant amendments to several bills that, if signed by the governor, will impact rental housing practices. Here are those key bills:

• AB 2347 (Kalra) – Evictions: This bill extends the tenant’s response time to eviction notices from five to ten days but shortens the time frame for a demurrer motion, reducing potential delays in the eviction process.
• AB 2493 (Pellerin) – Screening Fees: Originally, this bill would have prohibited landlords from charging multiple screening fees within 30 days if a tenant applied for multiple units owned by the same landlord. After CAA’s objections, the bill was amended to allow landlords to charge screening fees if applications are processed in the order they’re received and the first qualifying applicant is approved for tenancy. It also requires landlords to provide their screening criteria in writing.
• AB 2801 (Friedman) – Security Deposits: This bill was significantly amended due to CAA’s opposition. It now requires landlords to take and share photos of the unit before move-in, after move-out, and before/after any repairs, along with the security deposit disposition form. The bill clarifies that landlords cannot charge for carpet cleaning or repairs unless necessary to restore the unit to its original condition.
• SB 611 (Menjivar) – Fees & Military Security Deposits: Initially, this bill addressed advertising concerns. Following amendments, it now prohibits landlords from charging fees for rent or security deposit payments made by check. Additionally, it sets guidelines for higher security deposits for military personnel, requiring these deposits to be returned within six months under certain conditions. The bill also prohibits landlords from charging fees for delivering notices.

For a complete list of CAA-lobbied bills, visit www.caanet.org.