California Rent Control Bill Withdrawn by Lawmaker

The measure would lower the yearly allowed rent hike to 2 percent plus inflation, with a maximum of 5 percent. Owners said it will discourage new housing.

An apartment building with an available unit in San Francisco on June 9, 2023. Justin Sullivan/Getty Images

California’s newest legislation to lower the statewide rent control cap and increase tenant protections was pulled by its author on April 29.

AB 1157, named the Affordable Rent Act by Assemblyman Ash Kalra, faced strong opposition from landlords and apartment owners. Kalra announced on Tuesday he had withdrawn the measure and expects to reintroduce it next year.

“I am grateful my colleagues on the Assembly Housing Committee acknowledged the pressing need to take action to support tenants statewide and stabilize the rental market,” Kalra said in a statement. “However, the robust debate coupled with subsequent discussions with Judiciary Committee members signaled more time is needed to work on the bill.”

The California Apartment Association, which represents more than 13,000 members, welcomed the news.

“This outcome reflects the power of a coordinated effort between [the association’s] lobbying team and our members,” said Tom Bannon, chief executive officer for the California Apartment Association, in a statement on Tuesday.

According to the association, thousands of rental housing providers wrote letters to lawmakers, and more than 150 came to the Capitol to oppose the bill in person.

“Their voices, combined with strategic advocacy from our government affairs team, played a key role in halting this damaging legislation,” Bannon said.

Kalra’s rent control bill was passed last week by the Assembly’s Housing and Community Development Committee. The legislation would lower the state’s yearly rent-hike cap from 5 percent plus inflation, which cannot exceed 10 percent annually, to 2 percent plus inflation, with a maximum increase of 5 percent allowed each year.

“Housing is a human right, and we must do what we can to help keep people in their homes,” Kalra told the Assembly committee at the April 24 hearing.

Kalra, a San Jose Democrat, also included a provision that would make the state’s Tenant Protection Act of 2019 permanent. When the original rent control law was enacted six years ago, it had a 10-year limit.

State law allows cities and counties to impose a lower cap.

According to the lawmaker, 35 cities and counties have passed different rules for stabilizing rents, which Kalra said has created a “hodgepodge” of laws.

California is home to about 17 million renters—or 44 percent of the state’s population—making it the second-largest rental market in the United States, according to the California Budget & Policy Center.

According to the nonpartisan think tank Public Policy Institute of California, the state’s rental share is topped only by New York’s rental market, which houses 46 percent of its population.

Kalra’s proposed legislation would remove the state’s existing exemption for single-family homes and make them subject to the rent cap.

San Diego renter Tammy Alvarado told committee members that she and her family rent a single-family home that is not covered by the state’s rent control laws.

“It seems so unfair,” Alvarado said.  

A house is available for rent in Los Angeles on March 15, 2022. Mario Tama/Getty Images

The California Apartment Association—a statewide trade group for apartment owners, investors, and developers—testified against the measure.

“Rent control discourages new housing, does not resolve supply, and it exacerbates affordability,” said Debra Carlton, executive vice president of the association, quoting from a legislative analysis of the bill.

She added that single-family homeowners who currently rent their properties to families would not be able to do so if lower caps were passed.

California voters rejected a similar statewide rent control law last year when 60 percent of them voted against Proposition 33.

An available home in Los Angeles on Feb. 1, 2017. Justin Sullivan/Getty Images

The proposition aimed to repeal a state law prohibiting rent control on single-family homes and apartments completed after Feb. 1, 1999.

The proposition was pushed by the group Housing Is a Human Right. It was the third attempt to pass the statewide Justice for Renters Act.

In anticipation of the possible passage of Prop. 33, multifamily housing permits dropped from 60,000 in 2023 to 30,000 in 2024 after the measure qualified for the ballot, according to the California Apartment Association.