Record inflation could mean steep rent hikes for California tenants this month

Some California tenants could see their rent increase by up to 10% starting this month – the highest rate allowed under state law – due to ballooning inflation.

As of Monday, landlords can hike the rent on certain apartment units by up to 10% under Assembly Bill 1482, a state law passed in 2019 that limits annual rent increases to 5% plus the percentage change in cost of living or 10%, whichever is lower. The law, titled the Tenant Protection Act of 2019, was passed to limit rent-gouging across the state.

The law does not apply to all properties in California – units constructed within the last 15 years are not covered, nor are certain single-family homes and condos. This means that as of this year, the 10% increase applies to apartment complexes built before 2007 that are not under other local rent control protections.

With inflation reaching 40-year highs, many regions in the state qualify for the cap to be set at 10%, meaning some California renters could see a big rent increase starting this month. That has heightened concerns for tenant rights groups, fearing it could push some renters out of their homes.

"We have grave concerns about rent hikes when around 1.5 million California tenants are behind on their current July rent according to the U.S. Census," Shanti Singh, communications and legislative director for Tenants Together, told The Center Square in an email. "Even before COVID, landlords deliberately used prohibitive rent hikes as a form of free eviction, knowing a tenant who could not cover the increase would simply leave.

"We've seen these rent hikes continue through the pandemic via our statewide tenants' rights hotline, as a means for landlords to skirt eviction protections and force tenants out of their homes."

The law, however, does not replace local rent control set in place by cities. Several California cities – particularly in the Bay Area and Los Angeles County – have rent control rules in place. For example, in the city of Los Angeles, apartments built before October 1978 are subject to rent control, which accounts for about 653,000 units, according to Tenants Together.

Though the law allows rent increases of up to 10% starting this month, several factors contribute to rental rates, Joshua Howard, executive vice president of local public affairs for the California Apartment Association, told The Center Square in an emailed statement.

"Just because state law allows a rent increase of up to 10% does not mean that every landlord will issue a 10% increase," Howard said. "Many factors determine rental rates, including the current rental market dynamics, changes in a housing providers' operating expenses and local rent control laws that might be more restrictive than AB 1482."

In the previous year, when changes in the cost per living were not as high, allowed rent increases prior to Monday ranged between 8.6% to 9.1%, according to Mike Nemeth, director of communications for the California Apartment Association.

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