Southern California landlords are currently on edge with concerns that their property may lose value if California decides to implement statewide rent control. Landlords in the southland with below market rates have been raising prices before more rent control laws kick in. AB 1482, the “anti-rent gouging bill”, has already passed the Assembly and now is making its way through the senate appropriations committee. If the bill is then signed into law by Governor Gavin Newsom, then landlords will be prohibited from raising rent prices more than 7% (including the average 2.5 Consumer Price Index) a year.
Centennial Advisors managing partner, Justin White, says smaller landlords have to have a strategy as laws keep changing.
"You've got to now change your strategy because if you continue to do that or if you continue to operate that way over the last 6 - 9 months, you could potentially be stuck with rents that are significantly below market."
He tells KFI's Corbin Carson that doing this ruins the value of the property.
"There's certainly some concern of being trapped into a building that has really low rent that you cannot increase the way you could before or you cannot get out problem tenants the why you could before."
He added that, "Owners have less control once somebody is in the unity and have to be more proactive in order to manage the buildings as easily as possible.
Landlords offering below market rent have to decide now if they want to be stuck with that rate for the foreseeable future," White adds.
Supporters of rent control measures say that something has to be done to address the housing crisis. Several cities have already implemented variations of rent control.
AB 1482 will also prohibit landlords from evicting tenants without "just cause." This would include tenants who cause a nuisance, fail to pay rent, and display any criminal activity on the premises.