Sacramento Adopts Local Rent Control Bill as California Mulls Statewide Policy

City advocates say rent control needs a statewide solution.

Tenant advocates in California faced a setback last year with the failure of Proposition 10, a state ballot measure that would have allowed cities to expand rent-control policies to more types of housing by repealing the Costa-Hawkins Rental Housing Act. But even with the law still in place — Costa-Hawkins prevents cities from extending rent control to condominiums and townhouses and apartment units built after Feb. 1, 1995 — some cities are creating new rent-control laws and enacting rent freezes. Meanwhile, advocates are hopeful that the California legislature will approve a bill that would limit annual rent increases across the state.

Last week, the City of Sacramento approved an ordinance that would cap annual rent increases for most properties and extend a limited set of eviction protections to tenants across the city. The bill, called the Tenant Protection and Relief Act, would prevent landlords from raising rents in a given year by more than 6 percent plus the Consumer Price Index (CPI), which last year in Sacramento was around 2.5 percent. Regardless of the inflation rate, annual rent increases cannot surpass 10 percent under the law. Tenants who stay in a certain unit for at least one year will also get new eviction protections: Landlords will be barred from terminating or not renewing leases unless tenants fail to pay their rent or otherwise break the terms of the lease.

Sacramento City Councilmember Steve Hansen, who helped create the policy, says that during the recession that began in 2008, almost no housing was built in the city. But in recent years, Sacramento has seen an influx of people because of its high quality of life and an exodus of people who can no longer afford the cost of housing in the San Francisco Bay Area, Hansen says. A lot of new housing is being built in Sacramento now, but there’s not enough affordable housing for everyone who needs it, and the city declared an emergency homeless shelter crisis last November.

“I think we’ve all come to understand that helping tenants who are vulnerable is a very important measure in the interim until we get more supply,” Hansen says.

Hansen says he first began talking with the mayor and city council colleagues about an anti-rent-gouging policy in the spring of 2018. Over the course of the last year, Hansen says the council has heard from tenants whose rents have increased 20 or 30 percent overnight, and learned about significant increases when multifamily buildings are sold. He believes that stricter rent-control policies can depress housing supply, but the 6-percent-plus-inflation cap is “an endeavor to fix the problem.” The council may still decide after a few months that 5 percent or 7 percent is a better cap, he says. The law sunsets after five years, meaning the council will have to revisit it one way or another.

The ordinance was approved with just one dissenting vote, according to The Sacramento Bee, but it remains controversial. Hansen notes that on the one hand, many landlords were opposed to the bill, and on the other some tenants’ advocates believe it doesn’t go far enough. In the last few years, a range of advocacy groups in the city came together in a coalition called Housing for Sacramento. The coalition ended up supporting the ordinance, but some groups split, and are continuing to push for a ballot measure that would implement a stricter form of rent control, with a 5 percent cap on annual rent increases and more comprehensive tenant protections. The groups that split from the coalition include the Sacramento chapter of the Alliance of Californians for Community Empowerment (ACCE), the Sacramento Democratic Socialists of America, and SEIU Local 1021, according to Jovana Fajardo, the lead organizer with ACCE in Sacramento.

“We fight for low-income families of color, so we knew that the families we fight to protect are not going to be the ones protected by this temporary proposition,” Fajardo says.

The ballot measure is in a kind of limbo. Hansen says that the leaders of the Housing for Sacramento coalition agreed to pull it back after the council reached a compromise over the new ordinance. But the groups that split off still believe it has to go on the ballot this year or next, Fajardo says. A charter amendment with stricter guidelines is a more permanent way to address the issues, she says — the new ordinance may give tenants a sense that they’re protected, but the ballot measure would go much further.

Hansen believes the ordinance is a better solution.

“That [charter change] process is so cumbersome and so expensive and so infeasible,” Hansen says. “We need to be adaptive … If we’ve overshot the mark we need to reevaluate, or if we’ve undershot the mark we need to reevaluate, and an ordinance like we did [last week] answers to that.”

Meanwhile, both Hansen and Fajardo are hoping that the state legislature will pass Assembly Bill 1482, which would cap annual rent increases in most apartments at 7 percent plus inflation. A recent report from the Terner Center for Housing Innovation at UC Berkeley found that the bill would cover at least 4.6 million California households. And the restrictions would likely make a difference for tenants, the report says. The report looked at 10 areas as case studies to measure the potential impact of the bill, and nine of those areas had at least one year in the last decade in which median rents rose by more than 10 percent year over year.

Before Sacramento passed its ordinance, only 15 cities in California had some kind of rent control on the books. (Also last week, in Culver City in Los Angeles County, officials implemented a one-year rent freeze while they consider a more permanent rent-control policy.) The state needs to prevent rent gouging across the board, says Fajardo, whose group helped draft AB 1482.

“I think some of the coalition partners believe this is a step forward in that this is a win, and they can fight for stronger protections later,” Fajardo says. “But what we’ve seen in our years of organizing is that you push for the strongest protections locally.”

This article is part of Backyard, a newsletter exploring scalable solutions to make housing fairer, more affordable and more environmentally sustainable. Subscribe to our weekly Backyard newsletter.

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Jared Brey is Next City's housing correspondent, based in Philadelphia. He is a former staff writer at Philadelphia magazine and PlanPhilly, and his work has appeared in Columbia Journalism Review, Landscape Architecture Magazine, U.S. News & World Report, Philadelphia Weekly, and other publications.

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