One of the biggest cities in California, San Diego’s rules and regulations for rent control have been changing constantly, especially with the introduction of AB 1482. Distinguishing the specific laws for different properties and areas has become increasingly complex. So, this guide is here to help you with all the key aspects and laws that might affect your rental home in San Diego.
Understanding What Is Rent Control?
Rent control is a set of legislations or regulations restricting the amount by which landlords can increase rents on residential properties. The aim is to protect tenants from significant and arbitrary rent hikes, ensuring that housing remains affordable.
AB 1482 came into effect on January 1, 2020, and has implications for multifamily units aged over 15 years. The age threshold adjusts annually, affecting properties built in or before a specified year.
The following properties are exempted from AB 1482.
- Properties under more restrictive rent control ordinances.
- Owner-occupied accommodations with shared facilities.
- Single-family homes and condos owned by individuals, not corporations or real estate trusts.
- Housing with affordability restrictions recorded in a deed or agreement.
- New constructions within the last 15 years.
- College dormitories.
- Owner-occupied duplexes with one unit as the owner’s primary residence.
- Specific transient occupancies and nonprofit facilities.
AB 1482 imposes rent caps for affected properties, as explained below.
Annual rent increases cannot exceed 5% plus the change in the cost of living, capped at 10% in total. Landlords are limited to two increments over 12 months.
Just Cause Eviction
- Just Cause termination becomes effective statewide after 12 months of continuous tenancy. In cases of occupancy changes, Just Cause applies after 24 months.
- It extends its influence to both month-to-month tenancies and renewals of fixed-term leases.
- This eviction is done under two categories: At-Fault Terminations: The reasons for this termination are:
- Non-payment of rent
- Lease violations
- Criminal activity
- Lease breaching
- Unlawful purpose
- Vacate failure No-Fault Terminations: The reasons for this termination are:
- Owner move-in,
- Withdrawal from the rental market,
- Government-issued habitability orders
- Intent to demolish or substantially remodel
Regarding No-Fault terminations, landlords must provide a relocation payment equal to one month’s rent, regardless of the tenant’s income. This payment must be made within 15 days of serving the notice, with the option to waive the last month’s rent.
SB 91 (Senate Bill)
Senate Bill 91, effective since February 1, 2021, acknowledges the challenges posed by the COVID-19 pandemic and provides relief for tenants and landlords.
A key facet of SB 91 is its influence on rent control, specifically applying the just-cause eviction provisions outlined in AB 1482 to all properties. While it adopts just-cause eviction reasons from AB 1482, it doesn’t incorporate other aspects of the AB 1482 bill, focusing on eviction provisions.
The San Diego County Board of Supervisors introduced an eviction ban in early May 2021, which brought in a set of measures and rules.
- Stops almost all evictions unless a tenant poses a safety threat.
- Landlords can’t issue notices to vacate, and specific properties in the county have rent caps.
No matter if the notice has already been given, it’s no longer valid due to this ban. During the ban, the just cause provisions outlined in AB 1482 or the San Diego Just Cause ordinance will no longer be applicable.
Governed by Penal Code Section 396, California’s stance on price gouging extends tenant protections, particularly during states of emergency. The law imposes a 10% limit on rent increases for a specified period following the declaration of a state of emergency. This restriction applies whether the unit remains occupied or becomes vacant.
Even if a property falls outside AB 1482 provisions, there are constraints on rent hikes as long as the emergency order remains in effect in California.
Like any regulatory framework, rent control policies in San Diego have advantages and disadvantages for landlords and tenants. Let’s have a look at some of them.
Advantages of Rent Control For Tenants
Stability and Predictability
- Tenants under rent control enjoy a more stable and predictable housing situation.
- The regulations set a cap on rent increases, ensuring their housing costs won’t experience sudden and significant spikes.
Protection from Excessive Increases
- Rent control protects against excessive rent increases that could lead to financial strain for tenants.
- By limiting how much landlords can raise rents, tenants are shielded from sudden and unaffordable changes in their monthly housing expenses.
Just Cause Evictions
- Many rent control policies include just cause eviction provisions, ensuring that landlords can only terminate a tenancy for specific valid reasons.
- This protection enhances tenant security, preventing arbitrary or unjust evictions.
Disadvantages of Rent Control For Tenants
Quality of Housing
- Rent control could create a disincentive for landlords to invest in maintaining or upgrading rental properties.
- With limited ability to increase rents to cover improvement costs, landlords may choose to defer maintenance, which impacts housing quality over time.
Limited Rental Options
- In areas with strict rent control, landlords may not offer rental properties. This makes it challenging for individuals to find suitable and affordable housing.
- Strict rent control measures can lead to market distortions and potentially create imbalances in the housing sector.
Advantages of Rent Control For Landlords
Stable Rental Income
- Rent control can provide landlords with a stable and consistent rental income. It prevents rapid fluctuations and ensures a gradual adjustment of rental prices.
- This stability is particularly beneficial during economic uncertainties or market downturns when landlords can rely on a steady rental income.
- With the stability brought by rent control, landlords may experience longer-term tenancies. This reduces turnover costs and creates a more predictable rental environment.
- Long-term tenancies result in less frequent vacancies, which ultimately reduces the costs and efforts associated with finding new tenants regularly.
Reduced Administrative Burden
- Rent control contributes to a reduction in administrative burdens.
- Landlords operating under rent control often deal with fewer lease negotiations, as existing tenants are more likely to stay.
Also Read: Section 8 in San Diego: How it works?
Disadvantages of Rent Control For Landlords
Limited Profit Potential
- Landlords operating under rent control regulations often face restrictions on the amount they can increase rents.
- In areas where demand is robust and market rates are high, landlords may be unable to capitalize on the total economic value of their properties. This limitation on profit potential can impact their ability to generate optimal returns.
Maintenance and Upgrades
- Rent control can create a financial dilemma for landlords, especially when considering property improvements or upgrades.
- The restrictions on raising rents may make it challenging for landlords to recover the costs associated with significant maintenance projects or modernizing their properties.
Wrapping it up, rent control in San Diego isn’t as straightforward as it sounds. But we hope this blog has helped you understand its complexities, as these rules are essential for tenants and landlords to stay in the loop.
However, not all homes are covered by these rules, so it’s crucial to know the details. You can hire a property management professional from Sunset PM for free rental analysis.
- How much rent can a landlord increase in San Diego?In San Diego, landlords are bound by rent control regulations, and they can’t hike up the rent by more than 10% total or 5%, along with the percentage change in the cost of living—whichever happens to be lower—over a span of 12 months.
- What is the Tenant Protection Act (AB 1482)?AB 1482 is a statewide rent control law in California that came into run on January 1, 2020. It mandates landlords to provide a “just cause” to terminate a tenant, but it does not cover all rental units, and there are exemptions based on several factors.
- How many times are landlords allowed to raise the rent in California?In California, landlords can’t raise the rent more than once a year. This rule is set by the Tenant Protection Act (AB 1482) and local rent control rules. Clear communication with tenants is vital. Landlords should be transparent about planned rent increases and provide ample notice to ensure compliance with applicable laws.