Housing News

California lawmakers passed a rent cap four years ago to safeguard tenants from rent increases but in doing so, they exempted hundreds of thousands of units reserved for the state’s poorest renters. 

Low-income housing is built using public subsidies which have already imposed rent ceilings on developers and property owners. Besides this, California also has more than 350,000 privately owned low-income housing units which are built with federal tax credits. The residents of these units are witnessing an increase in their rents. 

A law known as the Tenant Protection Act passed in 2019 prohibits landlords from increasing the rent by more than a certain amount which is 10% this year. The main aim of this was to guarantee some stability to tenants. 

The 53-year-old mechanic received a letter from his landlord in spring, notifying him of a rent increase from $1,828 to $2,138, which amounts to a 17 percent hike. He resides in a two-bedroom apartment in San Jose that was funded in 2006 through low-income housing tax credits and designated for renters with incomes below the local average. While there is a rent ceiling in place, the apartment is not subject to other state or local restrictions on the rate of rent increase.

It’s been more than 2 decades he has been living in this apartment and the rent increases have been $50 a year. But the rent increases have now become higher. He revealed that rent eats up nearly half of what he earns in one month and he needs to pick up extra work on Sundays as well to cope with the rising rent. 

Consequently, the mechanic along with the other residents went to the landlord and protested against the rent increases. 

All private market tenants are not subjected to the state’s rent cap. In cases where state or local rent regulations do not apply, there are generally limited restrictions on rent increases in affordable housing units. As long as the rent remains below the federal maximum limit, property owners have the freedom to raise it by any percentage and as frequently as they prefer.

But advocates said that the solution won’t be as simple as adding a rent cap. Some activists are urging the state to come up with local restrictions.