Smaller landlords in Butte County say proposed law would be a problem for them
By Ken Magri
In Chico, more than 57% percent of residents are considered cost-burdened, spending 32.2% or more on rent, according to a recent study by Harvard University. Now, a bill is aiming to take action on behalf of Butte County tenants and renters across the state through curbing unreasonable rent hikes.
Assembly Bill 1157, also known as The Affordable Rent Act, is the creation of Democratic Assemblymember Ash Kalra, who represents East San Jose and parts of the Central Valley. By tackling the state’s historically consistent rise in rental costs, Kalra’s bill seeks to expand the safeguards put into the 2019 Tenant Protection Act by lowering the percentage cap on these annual increases.
“With renters making up roughly half of the state’s population, California must take every step to help keep families from being displaced, keep workers near their jobs, and ensure no one is pushed into homelessness due to a substantial rent increase,” said Assemblymember Kalra during a rally at the state capital.
How high is the rent?
Because of the current housing crisis, demand for rentals in California is high while the supply is low. Landlords can impose rate hikes as often as the current law will allow and still find willing renters.
Households that need to spend 30% of their budget on the rent are considered“cost-burdened.”Three quarters of California renters earning $75,000 or less annually are cost-burdened, says the US Census Bureau.
Over half of all California renters fit into this category. Almost one third are“severely cost-burdened,” meaning that over 50% of their income goes to rent, according to a 2024 Harvard University study.
How would AB1157 work?
The current law allows an annual 5% plus inflation increase, or a 10% increase, whichever amount is less. AB 1157 proposes to lower annual rent increases to 2% plus the current rate of inflation. AB1157 also makes permanent the 2019 Tenant Protection Act which was designed to end in 2030.
Chico’s North Valley Property Owners Association (NVPOA) is a group of small family-owned housing providers opposing the bill. As individual landlords, AB1157 doesn’t work from their non-corporate standpoint.
“The bill would impose permanent, overly restrictive rent caps and eviction rules on nearly all rental properties—including single-family homes,” said NVPOA Board President Matt Depa. “These changes will drive small property owners out of the market, reduce the supply of affordable housing, and ultimately hurt the very renters the bill aims to help.”
But AB1157 is not a comprehensive rent-control bill, and doesn’t target mom & pop landlords, according to Assemblymember Alex Lee, a Democrat from the South Bay Area who signed on as a co-sponsor.
He told rally attendees that large corporate landlords frequently raise rates by taking advantage of what he called “a Swiss Cheese approach” in the 2019 Tenant Protection Act, utilizing enough loopholes to nullify the law’s original intentions and make AB 1157 necessary.
“All these holes they punch in the law, those are the corporate landlords,” said Lee.
Corporate property buyers like Blackstone Group and Progress Residential purchase single-family homes and apartment complexes in bulk by securing lower interest rates and making higher all-cash offers. As News & Review reported in February, they typically target entry-level properties to shut out individual buyers, hoping to turn them into renters.
Assemblymember Kalra agreed with Lee, calling corporate landlords “an amorphous kind of entity” that AB1157 could put into check “because they’re not going to check themselves.”
“Corporate landlords really focus on their balance sheet, trying to maximize as much profit as possible,” Kalra told News & Review. “They don’t deal with human interaction and what it means to actually rent a home. Their focus is on making as much as they can for their portfolio.”
Students in Chico need rental relief
Sixty percent of Chico’s housing units are rentals, according to CityData.com, and a significant portion of those tenants are Chico State students. While the university has 2,250 dormitory units available for them, the campus population averages over 13,000 per semester.
At the California State University level, housing takes up an average of 53% of a student’s budget, while 28% goes to tuition and fees.
Affordable student housing is so scarce in college towns that a few California universities delayed their plans for growth due to limited availability, according to a 2021 hearing by the California State Assembly.
Inexperienced students unaware of tenants’ rights often feel the immediate pressure of finding a rental. A recent article in the University of Wisconsin’s Badger Herald identified tactics that landlords commonly use on such renters, like creating a false sense of urgency to sign a lease, then bickering later about details in the lease’s wording.
“Many college students are already struggling and often have to choose between groceries and rent,” said Astrid Morales, a former student at the University of California, Merced who supports AB 1157 and spoke at the rally.
Morales earned a Bachelor’s degree in Political Science while in Merced and now works as the membership organizer for the non-profit PowerCA Action, an election engagement organization. She told News & Review that students in college towns often have to settle for subpar apartments and sudden rent hikes.
“When I was a college student, finding a safe, affordable place to live felt like navigating a maze full of predatory landlords, misleading leases and skyrocketing rental fees,” said Morales. “In Merced and the Central Valley, greedy corporate landlords take advantage of vulnerable, struggling students and working class families for a profit.”
Morales said she relied on food assistance, canned ravioli from the discount store and reselling her Christmas gifts to afford one of the places she rented during college.
California’s middle-class needs rent relief too
“For the people who are landlords, the money you want can’t always be paid,” said Scout Huang Concannon, a 10-year old resident of Los Angeles who spoke at the rally. “The price makes everything worse. Families and friends face impossible choices, needing food and medicine, but also shelter,” she said, holding up a petition endorsing AB 1157 signed by her fourth grade classmates.
Amy Hines-Shaikh spoke at the rally on behalf of UNITE HERE Local 11, a workers union representing over 32,000 hotel, restaurant, airport, sports arena, and convention center workers. She mentioned those thousands of workers who must commute for hours into metro Los Angeles from outside towns where the rent is more affordable.
“Workers at some of the nation’s largest and most profitable hospitality employers report being forced to sleep in their cars between shifts because of the difficulty of making the long commute home safely,” said Hines-Shaikh.
Can AB1157 get passed in the California legislature?
It takes an average of 8-9 months for a California bill to become law, depending on the amount of opposition and/or urgency, according to pluralpolicy.com, a non-profit bill-tracking organization.
Opponents of the bill include the California Apartment Association (CAA), whose executives sent a letter to Kalra’s office the day before the rally, saying the problem comes from a low supply, not high prices.
“California faces a housing supply crisis—not a pricing crisis caused by rental housing providers,” stated the CAA letter. “Policies like AB 1157 that penalize property owners while ignoring the core issue of housing scarcity will only worsen our problems. This fact has been demonstrated by decades of research and supported by the voters over and over again,” said the letter.
But proponents of AB1157 argue that the 2019 Tenant Protection Act needs to be updated because its annual 10% increase allowance outpaces wage growth and makes rent less affordable with each successive year.
“If AB1157 goes through, I think it will be a clear sign to the governor that this is what the people want,” said Kalra. “We need to act now to provide more relief for California renters.”
The costs to landlords has increased exponentially with each insurance rate hike, utility increases and laws that keep them from evicting tenants who don’t pay or trash the property. Focusing on only one area of the issue is never going to solve it.
pigs and greed landords/slumlords are..pigs period they know it to..rent and housing is essential..one way ticket for these slumbags….to hell.
Everything is getting more and more expensive for landlords. The price to refurbish,clean and maintain units has skyrocketed. Utility prices have dramatically increased and insurance, if you can get it, has doubled and more. Landlords are lucky if they can 3% on their total investment and in many cases don’t make any profit at all. Cure all these problems for land owners and rents can come down.
The article says the law will only affect corporate landlords but never mentions how that will be accomplished.
This problem is one where ALL involved have to make adjustments – learn new methods— and more.
We need education directed towards;
Landlords, tenants, Student tenants, elder tenants and families. WE need to ALL hear and WE all need to be taught the SAME thing.
If you do YEARLY basic repairs and then the other repairs when YOU’RE supposed to – you should not have a bit bite out of the ‘budget’.
How about THE landlords work with the engineering/ contractors school to have ‘hands on’ help at less cost for repairs???
We don’t need a 10% rise in RENT yearly. There is NO cost of living raise, yearly.
WE have had a HUGE overbuild for people who make $125,000 + a year. There have NOT been homes built for those who can afford it. It’s been shown that MOST Chico homeowners highest home purchase is $250,000 THAT’S the high.
So let’s sit down and tackle this from all perspectives. Let’s bring in a better understanding of the positions and what that role is