Governor Gavin Newsom Changes Rental Rules for LA Mansions After Wildfires
In a move to address the housing crisis following the devastating wildfires in Los Angeles, Governor Gavin Newsom recently issued an executive order that includes temporary changes to rent regulations for specific properties. The order aims to strike a balance between protecting tenants from exorbitant rent hikes and ensuring that rental units, particularly large mansions in affluent neighborhoods, remain available on the market.
The Background
The post-fire ban on major rent increases across Los Angeles has now been adjusted to accommodate houses with four or more bedrooms in zip codes with high rental costs. This modification, part of a comprehensive executive order by Governor Newsom, was prompted by concerns raised by landlords, real estate agents, and housing experts regarding the impact of emergency rental restrictions on the availability of high-end properties in areas like Pacific Palisades.
Amidst the housing crisis exacerbated by the wildfires, many residents who were displaced found themselves struggling to secure new accommodations. Governor Newsom, along with Attorney General Rob Bonta and Los Angeles Mayor Karen Bass, had repeatedly warned landlords against taking advantage of the situation by imposing unreasonable rent hikes. In response to reports of landlords exploiting desperate tenants, online watchdog groups have emerged to monitor rental listings for any illegal practices.
Current Regulations
Under the state’s emergency declarations, landlords are prohibited from increasing rent by more than 10% in most cases. However, for rental units that have not been on the market for at least a year, making it difficult to establish a baseline rent increase, the cap is set at a maximum of 60% above the area’s fair market rate. This rate is determined based on data collected by the Department of Housing and Urban Development.
In affluent neighborhoods where the fair market rate is significantly lower than the actual rental value, the existing regulations have posed challenges for landlords and prospective tenants alike. Real estate agents, such as Russell Grether from Malibu, have highlighted the discrepancy between the capped rent and the market demand, making it difficult for property owners to list their homes at competitive rates.
Governor Newsom’s recent order seeks to address some of these concerns by modifying certain aspects of the rent cap rules. While easing restrictions on one front, the order also tightens regulations on lease agreements exceeding one year to prevent landlords from circumventing the rent caps. These temporary measures are scheduled to expire on March 8, providing a window of opportunity for stakeholders to adapt to the changing rental landscape.
Expert Insight
Ben Christopher, a housing policy reporter for CalMatters, emphasized the significance of Governor Newsom’s executive order in addressing the housing challenges faced by residents in Los Angeles. Christopher’s reporting has shed light on the impact of rental regulations on the availability of housing stock in the aftermath of natural disasters like wildfires.
By striking a delicate balance between protecting tenants from exploitative practices and ensuring that rental properties remain accessible in high-demand areas, Governor Newsom’s intervention marks a crucial step in stabilizing the housing market post-disaster. As residents continue to navigate the challenges of finding suitable housing, these temporary rent rule changes offer a glimmer of hope in a time of uncertainty.
Ben Christopher covers housing policy for CalMatters. His favorite reporting assignment so far: Touring the various two- and three-story structures that have sprouted up across San Diego under the regulatory…
