Under a New Law, California Will Cap Rent Increases

Wall Street Journal writer Alejandro Lazo reported this week that, “California will cap rent increases under a new law signed Tuesday by Gov. Gavin Newsom, the most significant piece of housing-related legislation in a year that also saw the shelving of a measure to relax zoning and spur more construction.

“The Democratic governor has said the rent caps and tenant protections are necessary to help people being squeezed out of their homes. The law limits annual rent increases at 5%, plus the rate of inflation, and adds some barriers for landlords seeking to evict people.

“Before signing the measure at a ceremony in Oakland, Calif., Mr. Newsom said the law wouldn’t be enough to contain the state’s housing woes.”

The Journal article stated that, “More than half of California renters are considered burdened, paying more than 30% of income for housing, including utilities, according to estimates by the Joint Center for Housing Studies of Harvard University.”

Mr. Lazo added that, “The statewide median home price hit a record high of $617,410 in August, according to the California Association of Realtors, reaching $627,690 in Los Angeles County and $1.6 million in San Francisco. That compares with a national median home price of $278,200, according to the National Association of Realtors.”

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