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California Governor Gavin Newsom and the state’s legislative leaders reached an agreement on legislation to limit rent increases.

On Friday, Gov. Newsom, Senate President pro Tempore Toni Atkins, Assembly Speaker Anthony Rendon and Assembly member David Chiu agreed on a series of amendments to AB 1482 to provide strong protections for renters.

State leaders agree on a 5 percent cap on rent increases

The Governor and the legislative leaders agreed to limit rent increases at 5 percent plus inflation annually for ten years across the state. They also agreed to include a provision in the legislation requiring landlords to provide a reason before evicting a tenant.

Originally, Assembly member Chiu proposed in the legislation to cap rent increases at 7 percent plus inflation or 10 percent whichever is lower.

In a statement, Gov. Newsom and the legislative leaders said, “The high cost of housing and rising rents are preventing California families from getting ahead. These steep housing costs drive inequality and threaten to erode California’s economic growth.”

“That’s why we are pleased to announce we have come to an agreement on a series of amendments to AB 1482 that would create strong renter protections. The bill will protect millions of renters from rent-gouging and evictions and build on the Legislature’s work this year to address our broader housing crisis.”

California Realtors Association opposes AB 1482

AB 1482 still needs the approval of the California Legislature. Some observers suggested that the legislation could face hurdle since the California Association of Realtors (CAR), which has a strong influence on the Capitol, opposes it.

In a statement, the association said it has been working with the bill’s proponents for several months with a common purpose — to achieve a balance promoting tenant protections and private property ownership. California tenants and property owners deserve nothing less. Because our consensus language was not included, we will be opposing AB 1482.”

Additionally, CAR cited that last year, “voters in 56 of California’s 58 counties rejected a statewide ballot measure that would have dramatically expanded rent control without respecting property rights.” Both voters and realtors want a balanced solution on the issue.