Editorial: Gavin Newsom wants to stop rent gouging. Will lawmakers finally stand up for tenants?

Thanks to a last-minute intervention by Gov. Gavin Newsom, California lawmakers have been given a second chance on one of the most important housing bills this session: a proposal to temporarily cap rent increases and require that landlords show “just cause” before they evict a renter.

They shouldn’t squander this opportunity.

California has a housing shortage that was decades in the making, and the solution is to build more homes for people at all income levels. But it will take many years to build enough homes to catch up with demand and stabilize prices. And there are plenty of renters today who are one steep rent increase or unwarranted eviction away from upheaval and even homelessness.

Assembly Bill 1482 would provide some temporary relief, if it can survive heavy opposition from real estate interests.

The bill’s author, Assemblyman David Chiu (D-San Francisco), faced such fierce resistance from powerful property owners groups earlier this year that he was forced to gut key pieces of the bill just to keep some modest tenant protections alive.

Then Newsom got involved. Although the governor had said shortly after taking office that he was committed to enacting tenant protections this year, he’d stayed on the sidelines through much of the legislative session as a number of major housing bills got derailed or defanged. But with the clock winding down, he jumped in to help strike a deal with landlords and tenant advocates to strengthen AB 1482.

The turnabout is remarkable. The new version of the bill would be the strongest rent control law in the country, capping annual rent increases at 5% plus inflation for 10 years. The cap would be about 8% this year at the current level of inflation. Oregon recently capped rents at 7% plus inflation, or roughly 10% this year.

AB 1482 would apply only to buildings more than 15 years old, which should help preserve developers’ incentive to build much-needed new homes. Unlike existing law in California, which exempts single-family homes from rent control, AB 1482 would cap rents in single-family homes if they are owned by corporations or real estate investment trusts. That’s in response to the growing number of Wall Street investment companies that have bought up single-family houses and have become large-scale landlords with, advocates say, a shareholder obligation to keep raising rents.

The bill also seeks to prevent landlords from driving out tenants just in order to jack up the rent; it would do so by requiring “just cause” — such as failure to pay rent or a lease violation — to evict tenants who have lived in a building for at least a year.

Temporary rent caps and just-cause eviction laws are common-sense measures that provide stability for renters in a booming real estate market. Lawmakers cannot abandon renters again. They have a second chance to help Californians cope with the housing crisis.