The Rental Affordability Act

The People of the State of California do hereby ordain as follows:

Section 1. Title

This Act shall be known and may be cited as the “Rental Affordability Act.”

Section 2. Findings and Declarations

The People of the State of California hereby find and declare the following:

(a) More Californians (over 17 million people) are renting housing than ever before. According to the State’s figures, home ownership rates in California have fallen to their lowest level since the 1940s. One quarter of older millennials (25-34 years of age) still live with their parents. (U.S. Census Bureau)
(b) Rental housing prices have skyrocketed in recent years. Median rents are higher in California than any other state in the country, and among all 50 states, California has the 4th highest increase in rents.
(c) As a result of rising rental housing prices, a majority of California renters are overburdened by housing costs, paying more than 30% of their income toward rent. One-third of renter households spend more than 50% of their income toward rent.
(d) According to the National Low-Income Housing Coalition, a Californian earning minimum wage would have to work 92 hours per week in order to afford renting an average one-bedroom apartment.
(e) Families faced with housing insecurity are often forced to decide between paying their rent and meeting other basic needs, which negatively impacts their health outcomes. Workers suffering from unstable housing and a deterioration in their health struggle to keep their jobs, pushing them into poverty and homelessness.
(f) Labor unions, such as the California Teachers Association, the California Nurses Association and Service Employees International Union (SEIU) have made affordable housing a priority for their members. Teachers in California’s urban centers are paying 40% to 70% of their salaries on housing and many are being forced to live an hour or more from their jobs to afford a home.
(g) Even though the state represents only 12% of the total U.S. population, California is home to 22% of the nation’s homeless population. (California Department of Housing and Community Development)
(h) According to a 2018 study in the UCLA Anderson Forecast, there is a strong link between higher median rents and the number of people living on the streets or in temporary shelters. When combined with individual at-risk factors, less affordable housing markets contribute to an increase in homelessness.
(i) Homelessness is a major public health issue. People who are homeless are 3 to 4 times more likely to die prematurely and are more likely to contract communicable diseases, according to the National Health Care for the Homeless Council.
(j) The Centers for Disease Control and Prevention warn that vulnerable populations face lower life expectancy, higher cancer rates and more birth defects when they are displaced from their homes due to gentrification of their neighborhoods.
(k) The increased cost of housing is worsening traffic congestion and harming the environment by forcing commuters to live farther away from their places of employment, increasing commute times. A report by the Pew Charitable Trust noted that the number of Californians who commute more than 90 minutes each way increased by 40% between 2010 and 2015; the increase is a direct result of the lack of affordable housing near jobs.
(l) A growing body of evidence suggests that stabilizing rents can bring broad- based benefits to renters, the state’s economy, the environment, and its public services.

Section 3. Purposes and Intent

The People of the State of California hereby declare the following purposes and intent in enacting this Act:

(a) To allow California's cities and counties to develop and implement rent control policies that ensure renters can find and afford rental housing in their jurisdictions.
(b) To improve the quality of life for millions of California renters and reduce the number of Californians who face critical housing challenges and homelessness.
(c) To stem the tide of evictions and displacement affecting communities across California.
(d) To allow a city, county or city and county to exercise any local law controlling the rental rates for residential property provided that it has been at least 15 years since the property received its certificate of occupancy.
(e) To allow local laws to control rental rates following a vacancy while permitting a landlord to increase the rental rates on a vacated unit by no more than 15% over the subsequent three years in addition to any other increase allowed under a local ordinance.
(f) To exempt the owners of one or two residential dwellings from any local rental control law.

Section 4. Section 1954.50 of Chapter 2.7 of Title 5 of Part 4 of Division 3 of the Civil Code is amended to read:

1954.50. This chapter shall be known and may be cited as the Rental Affordability Act.

Section 5. Section 1954.52 of Chapter 2.7 of Title 5 of Part 4 of Division 3 of the Civil Code is amended to read:

1954.52. (a) Notwithstanding any other provision of law, an owner of residential real property may establish the initial and all subsequent rental rates for a dwelling or a unit about which either of the following is true:
(1)  It has been issued its first residential certificate of occupancy within fifteen (15) years of the date on which the owner seeks to establish the initial or subsequent rental rate.
(2)  (A) It is alienable separate from the title to any other dwelling unit or is a subdivided interest in a subdivision, as specified in subdivision (b), (d), or (f) of Section 11004.5 of the Business and Professions Code, and the owner is a natural person who owns no more than two residential dwelling or housing units.
(B)  This paragraph does not apply to either of the following:
(i) A dwelling or unit where the preceding tenancy has been terminated by the owner by notice pursuant to Section 1946.1 or has been terminated upon a change in the terms of the tenancy noticed pursuant to Section 827.
(ii) A condominium dwelling or unit that has not been sold separately by the subdivider to a bona fide purchaser for value. The initial rent amount of the unit for purposes of this chapter shall be the lawful rent in effect on May 7, 2001, unless the rent amount is governed by a different provision of this chapter. However, if a condominium dwelling or unit meets the criteria of paragraph (1) of subdivision (a), or if all the dwellings or units except one have been sold separately by the subdivider to bona fide purchasers for value, and the subdivider has occupied that remaining unsold condominium dwelling or unit as his or her principal residence for at least one year after the subdivision occurred, then subparagraph (A) of paragraph (2) shall apply to that unsold condominium dwelling or unit.
b) Subdivision (a) does not apply where the owner has otherwise agreed by contract with a public entity in consideration for a direct financial contribution or any other forms of assistance specified in Chapter 4.3 (commencing with Section 65915) of Division 1 of Title 7 of the Government Code.
(c) Nothing in this section shall be construed to affect the authority of a public entity that may otherwise exist to regulate or monitor the basis for eviction.
(d) This section does not apply to any dwelling or unit that contains serious health, safety, fire, or building code violations, excluding those caused by disasters for which a citation has been issued by the appropriate governmental agency and which has remained unabated for six months or longer preceding the vacancy.
(e) In accordance with California law, a landlord's right to a fair rate of return on a property shall not be abridged by any local charter provision, ordinance, or regulation enacted by a city, county, or city and county.

Section 6. Section 1954.53 of Chapter 2.7 of Title 5 of Part 4 of Division 3 of the Civil Code is amended to read:

1954.53. (a) Notwithstanding any other provision of law, and except as provided in Section 1954.52 and in subdivision (b) of this section, a city, county, or city and county may by local charter provision, ordinance, or regulation control the initial and all subsequent rental rates for residential real property.
(b) In any jurisdiction that controls by charter provision, ordinance, or regulation the initial rental rate of a dwelling or unit, if the previous tenant has voluntarily vacated, abandoned, or been evicted pursuant to paragraph (2) of Section 1161 of Code of Civil Procedure, the owner of the dwelling or unit shall be permitted to establish the initial rental rate for the vacant or abandoned dwelling or unit provided that the initial rate established pursuant to this subdivision, in combination with any increases in the rental rate during the subsequent three year period, is no greater than 15 percent more than the rental rate in effect for the immediately preceding tenancy. Any increase in the initial rental rate permitted by and established pursuant to this subdivision may be in addition to any increases in rental rates otherwise authorized pursuant to local law.
(c) Nothing in this section shall be construed to affect any authority of a public entity that may otherwise exist to regulate or monitor the grounds for eviction.
(d) Subdivision (b) of this section does not apply to any dwelling or unit if all the following conditions are met:
(1)  The dwelling or unit has been cited in an inspection report by the appropriate governmental agency as containing serious health, safety, fire, or building code violations, as defined by Section 17920.3 of the Health and Safety Code, excluding any violation caused by a disaster.
(2)  The citation was issued at least 60 days prior to the date of the vacancy.
(3)  The cited violation had not been abated when the prior tenant vacated and had remained unabated for 60 days or for a longer period of time. However, the 60-day time period may be extended by the appropriate governmental agency that issued the citation.

Section 7. Liberal Construction

This Act shall be broadly construed to accomplish its purposes.

Section 8. Amendment and Repeal

Pursuant to Article II, Section 10, Subdivision (c), of the California Constitution, the Legislature may amend this Act to further its purposes by a statute passed in each house by roll call vote entered in the Journal, two-thirds of the membership concurring, signed by the Governor. No statute restricting or eliminating the powers that have been restored by this Act to a city, county, or city and county to establish residential rental rates shall become effective unless approved by a majority of the electorate.

Section 9. Severability

If any provision of this Act or the application thereof to any person or circumstances is held invalid, that invalidity shall not affect other provisions or applications of the Act which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

Section 10. Conflicting Measures

If this Act and any other measure addressing the authority of local government agencies to establish residential rental rates shall appear on the same statewide election ballot, the provisions of the other measure or measures shall be deemed to be in conflict with this Act. If this Act receives a greater number of affirmative votes than another measure deemed to be in conflict with it, the provisions of this Act shall prevail in their entirety, and the other measure or measures shall be null and void.