Governor Gavin Newsom signed a new resolution into law on Tuesday that may have long-term impacts on California rental market. The bill limits annual rent increases to five percent plus the cost of inflation. Advocates of the law saw the new law will help protect tenant rights and counterbalance rental prices that have skyrocketed for years. Opponents, on the other hand, say the rent cap could hurt supply in a market that's already short on housing. Wherever you come down on the law, it's likely to have a significant impact on the way rentals are managed over the next few years.
Scott Safadi of Cal Bay Property Management urges landlords not to make any rash decisions. It's true that many San Francisco landlords opted to covert their units into owner-occupied spaces when rent control was first put in place there. Demand, however, remains high throughout the Bay Area, giving owners the chance to cherrypick their ideal tenants.
The true impact of this new law can't be predicted. So long as area colleges keep turning out new graduates and Silicon Valley tech companies keep creating jobs, though, the housing shortage will continue to be a challenge for renters. There's one thing most Californian's can agree upon: more housing is needed across the state.
This law may directly impact property owners' strategies for rent increases moving forward. Cal Bay Property Management can help landlords understand their property's context in the overall market and how to employ rent increases in the wake of the new law.
-- Scott Safadi, Cal Bay Property Management
