Concord, California

A bill to cap annual rent increases statewide at 7% plus inflation cleared the California Assembly this week after author Assemblyman David Chiu (D-San Francisco) agreed to limit the policy to three years, down from an original 10-year proposal with a lower 5% cap. A companion bill, AB 1481, which would have required landlords to state a cause before evicting tenants, failed to get a vote before the Assembly deadline, though its authors say they may try to fold similar protections into Chiu's bill in the Senate.

The rent cap exempts newer construction and small landlords owning 10 or fewer single-family homes, and does not alter existing rent-controlled units or the Costa-Hawkins Act. Landlord groups and the California Association of Realtors, which helped defeat a 2018 rent-control ballot initiative, oppose the measures, arguing they discourage housing development. Backers, including Gov. Gavin Newsom, say the changes are needed to protect millions of cost-burdened renters. Advocates warn a weakened bill could revive a 2020 ballot initiative push by the AIDS Healthcare Foundation.