Rents in California Are Surging At Record Rate!
Posted on 28-07-2022 11:21 AM
A new report from Bloomberg has highlighted the way that rents across America are increasing at record rates. They note that the amount of units occupied by renters rose by around 500k in the second quarter which is the largest annual increase since 1993 (according to the data from RealPage) in addition to occupancy hitting a new record of 96.9
In the past, tenants across California could have seen an email posted on their doors, stating that they will be getting a massive rent hike in August. 1. There's something that is familiar in the form of inflation.
Landlords can raise the rents on millions of apartments across the state by up to 10% from next month. It's the highest annual increase allowed under the state law that was passed just a few years ago, which was designed to safeguard tenants from being kicked away from homes because of excessive rent increases.
The law limits the annual increase in rent at 5 percent and an inflationary amount that differs depending on the region in California. In the early years when this law came into force the maximum allowable increase was between 5.7 percent and 9.9%. (It's been 8.6 percent for Los Angeles this year and 8.8 percent for the Bay Area, to give two examples.)
Beginning next month since inflation is high, each region of the state is able to meet the requirements that the cap be fixed at 10% increase in rent.
According to Shanti Singh, who is a spokesperson for the state-wide tenant advocate group Tenants Together, the high allowable rent hike is a new element of anxiety for renters struggling with health-related and economic issues throughout the pandemic, not to mention their own rising inflation pressures. The estimated 1.5 million California households were in debt on rent in according to a U.S. Census Bureau survey that was released on Wednesday.
"A 10% increase in rent could make a significant difference in the financial stability of a family," Singh said.
However, Dan Yukelson, head of the Apartment Assn. from Greater Los Angeles, said landlords are being hit by rising costs for appliance maintenance and have to contend with numerous local and state policies which have slowed the evictions and rent increases in the course of the pandemic.
This is the fine print. The 10% rent allowable increase is only applicable to apartments that were constructed prior to 2007 and are not in compliance with local rent control regulations. In the 22 local jurisdictions with rent control laws -including Los Angeles, San Francisco and San Jose among them -the rent increases allowed are lower for the apartments that are covered by those laws. (Tenants Together has compiled a an alphabetical list of cities with rent control which is available here.)
Within the City in Los Angeles, for instance apartments constructed prior to the month of October in 1978 -- almost three-quarters of the rental stock in the city are within the definition of rent controls. With the introduction of regulations in the early days of the epidemic landlords aren't allowed increase rents for tenants of these apartments for any reason at all.
If you reside in a residence in California built prior to 2007, you could be eligible for anti-price-gouging laws which limit rent increases to a maximum of 10% in a calendar year in declared states of emergency. Contact the city you live in to find out whether these regulations are applicable to you.