To address California’s urgent housing problem, state legislators passed the “Tenant Protection Act” in 2019, providing tenants with more stability by limiting rent increases and tightening eviction conditions. However, advocates for the homeless have found that many tenants are still in a vulnerable position.
California Senate Bill SB567, effective since April 1st, builds upon the 2019 legislation, further expanding protections for tenants and imposing heavy penalties on landlords violating rent increase limits.
Introduced by State Senator María Elena Durazo, the new bill is called the “Homelessness Prevention Act.” It stipulates that any eviction without “fault, just cause” when property owners plan to move in themselves or need tenants to vacate for significant renovation will face significant obstacles.
Under SB567, property owners must move in themselves or have family move in within 90 days of requesting tenant relocation, and they must use the property as their primary residence for at least 12 months.
The law also specifies that if a landlord requests a tenant to move out due to demolition or major reconstruction but does not begin or complete the work, the property must be returned to the tenant at the original rent.
Furthermore, landlords must provide written notice to tenants outlining details of major renovations or demolition, estimated repair times, and copies of necessary permits.
SB567 also regulates rent increases. Supporters of the bill point out that even tenants protected by the “Tenant Protection Act” may face annual rent increases of up to 10%. According to State Bill AB1482, rent increases are capped at 5% plus local inflation rates, or 10% of the lowest gross rent charged in the 12 months prior to the rent increase, whichever is lower.
SB567 mandates that landlords who charge rents exceeding the maximum permissible rent will face civil lawsuits, and tenants have the right to claim three times the excess as compensation.
Supporters of the new law argue that continued rent increases often lead individuals and families to face homelessness.
A study by the U.S. Government Accountability Office in 2020 found that for every $100 increase in median rent, homelessness rates increase by 9%.
Durazo stated, “Too many tenants are facing unfair evictions due to loopholes in existing laws and rent increases that exceed the affordability of California’s working-class residents.”
The bill was jointly proposed by the Alliance of Californians for Community Empowerment, California Rural Legal Assistance Foundation, Leadership Counsel for Justice and Accountability, PICO California, Public Advocates, and Western Center on Law and Poverty.
Zillow’s 2018 study indicated that in communities where residents spend more than 32% of their income on rent, homelessness rates grow rapidly.
The Service Employees International Union – California State Council stated, “Gaps in just cause protections allow landlords to evict long-term tenants, raise rents to unsustainable levels, and many vulnerable individuals have been left unprotected in the years following the passage of AB1482 amid challenges such as the pandemic, economic downturn, and high inflation.”
The Southern California Rental Housing Association believes that AB1482, a ten-year legislation crafted through careful negotiations, is continuously being weakened, making it harder for property owners to effectively manage their properties.
The California Apartment Association stated, “Proposals to rewrite AB1482 claiming the need for stricter rent caps and legal cleanup ignore the substantial work previously done. AB1482 is a significant legislative feat that does not need amendments.”
SB567 alters the process for California property owners to evict tenants, posing new challenges and regulations for flippers and investors planning extensive renovations or property flips.
In addition to SB567, Governor Gavin Newsom recently signed AB12, which will take effect on July 1st.
This law, proposed by Democratic Assembly Member Matt Haney of San Francisco, prohibits landlords from requiring deposits exceeding one month’s rent.
“Despite rent increases, laws regarding deposits have seen little change since the 1970s,” Haney said. “This new law is a simple and wise change that will have a significant impact on the affordability of housing for California families, while also addressing landlords’ need to guard against potential risks.”
Opponents of the bill argue that if landlords cannot collect enough security deposits to cover potential damages, more landlords may choose to exit the market.