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Addressing Affordability in California

California Governor Gavin Newsom recently reached a deal on legislation that would cap how rapidly rents can rise. Mercury News reports that the deal caps annual rent increases at 5%, plus inflation, with a maximum of 10% per year. 

The bill still must be approved by both houses of the Legislature. The bill, authored by San Francisco Democratic Assemblyman David Chiu, is similar to the one initially proposed by Chiu, he said in an interview.

“We are in the most intense housing crisis in our state’s history,” he said. “We have millions of Californians who are living paycheck-to-paycheck and are one rent increase away from being forced out of their homes and becoming homeless.”

He added, “This bill will protect millions of Californians from egregious rent increases and predatory evictions, while providing landlords and the rental housing industry with the opportunity to make a fair rate of return.”

Some real estate groups, such as the California Association of Realtors, have expressed opposition to the bill, while others say that they will not oppose it.

“The proposed version of (the bill) headed to the senate floor will not incentivize production of rental housing or help more people find an affordable place to live,” California Association of Realtors President Jared Martin said in a statement. “It discourages new rental housing, which is why C.A.R., representing more than 200,000 real estate agents and brokers across California, strongly opposes it.”

Other bills advanced in California to address housing shortages and prices, including ones to streamline the approval process for projects that comply with local zoning rules, to make it easier to build on surplus public land and to remove barriers to in-law units.

“We need to move forward on all fronts simultaneously to address the production of 3.5 million units of new housing, the preservation of affordable housing and the protection of millions of tenants,” Chiu said. “As soon as this session is done, we will be back at it, looking for the most significant ideas to accomplish all of these simultaneously.”

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.

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