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How Is Sacramento’s New Rent Control Going To Affect Landlords?

Many of our property owners have heard about rent control coming to Sacramento and asked for more information – so we are sending this update to all of the owners we manage properties for.

rent-control-regulations-sacramento-ca

Rent values have increased by up to 40% over the past 5 years and homelessness has increased dramatically too – so there has been tremendous political pressure to enact some kind of rent control.

In response to that pressure, the Sacramento City Council recently passed a new rent control measure (The Tenant Protection and Relief Act) that will cap rent increases and limit evictions for some renters in some properties of certain renters.

Here is what property owners of rental properties need to know:

What properties are impacted?

  1. Only properties in the CITY of Sacramento (not the County or any surrounding cities or counties).
  2. Only duplexes and Apartments built before 2/1/95 (Condos and single family homes are exempt).

What are rent increases limited to?

  1. As of July 1, 2019, a landlord cannot increase the rent by more than 6% plus CPI – but not to exceed 10%.
  2. Rent cannot go up more than once a year.
  3. Exception: New tenants are not subject to the same rent limitations.

What protections does the ordinance provide tenants?

  1. After living in a unit for more than a year, a Landlord must renew and cannot terminate a rental housing agreement.
  2. Exceptions include but are not limited to: Failure to pay rent, breach of rental agreement, criminal activity and failure to give access, Owner or their immediate family need to move in.

Who will pay to administrate the new rent control measure?

  1. The property Owner.
  2. The annual, per unit administrative cost is not yet known.

What are the penalties for noncompliance?

  1. Failure to comply with the ordinance may make the landlord subject to sanctions, civil actions and/or administrative penalties.

Does this measure have a sunset clause?

  1. Yes.  It expires on Dec. 31, 2024.

 

John Tiner’s thoughts on the topic of rent control:

While I am always opposed to rent control, this measure impacts a very limited number of properties we manage, and it provides reasonable boundaries.

My greater concern is the concept that, “As goes the city of Sacramento, so goes the County of Sacramento followed by surrounding cities/counties.”  That is what has happened with the property inspection programs:  They started with Sacramento City a few years ago and now include Sacramento County, Elk Grove, Rancho Cordova, and most recently, Citrus Heights.  I ask that all our property owners take an active role in opposing rent control whenever possible.

Rent control is a Band-Aid on the real housing problem which is a large lack of supply of affordable housing compared to the demand.  The better way to address affordable housing is to drop the cost of permits and fees for builders of affordable housing while reducing the regulations that make it cost-prohibitive to build.

However these issues develop over the years ahead, Tiner Properties is committed to staying within compliance for all rental laws for the properties we manage.

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