You may have heard there is a group circulating an initiative that will likely appear on the November 2018 ballot in the City of Sacramento to enact rent control and just cause for eviction. Are you new to the topic and have questions about how this works and what it entails? We have the answers for you!

Rent Control
    Rent Control is a limit on how much a landlord can raise rent in any given period of time and is implemented and set by a local government entity or through voters in a ballot initiative. The exact parameters of this rent control limit are set by the ordinance (law) establishing rent control.
    The proposal being circulated in the City of Sacramento limits rent increases each year between 2% and 5% per year, based on the Consumer Price Index.

Just Cause for Eviction
    Just cause for eviction limits the reasons a landlord can evict a tenant to a specified set of reasons outlined in the ordinance. The specific reasons can vary slightly from ordinance to ordinance. If a landlord needs to evict a tenant, they have to first serve a notice to the tenant detailing what action needs to be corrected, then they have to wait a period of time before they can evict. This creates a situation in which tenants who are creating problems for their neighbors, or even doing illegal activity, cannot be immediately evicted. This can put the neighborhood at risk.
    Current California Law allows for vacancy decontrol, meaning when a tenant leaves the landlord can increase rent to current market rate for the next tenant. Under current law, a landlord is not required to offer a tenant an extension to their lease.
    In local jurisdictions that have just cause for eviction, it is standard that a landlord must offer tenants an extension to their lease unless they can show “cause” – one of the stated reasons for getting rid of a tenant. And unless a tenant decides to leave on their own accord, it is standard under just cause for eviction that “vacancy control” would apply, meaning a landlord cannot increase rent to market rate on the next tenant.
    The proposal being circulated in the City of Sacramento would limit a landlord’s ability to evict a tenant to these reasons:
  • Failure to Pay Rent
  • Breach of Rental Housing Agreement
  • Nuisance
  • Illegal Use
  • Failure to Give Access
  • Necessary Repairs Requiring Vacancy
  • Owner Move In
  • Withdrawal of the Unit from the Rental Market
  • Demolition
    In the instances when a landlord needs to remove a tenant from a unit for:
  • Necessary Repairs Requiring Vacancy
  • Owner Move In
  • Withdrawal of the Unit from the Rental Market
  • Demolition
    The landlord will be required to pay relocation fees to the tenant, these fees begin at $5,500 and can exceed $8,500.

Elected Rent Board
    Government intervention, such as rent caps, take staff to oversee and implement. Cities with rent control and just cause for eviction typically have a rent board and local government staff that oversee rental housing. These individuals make the determination as to exactly how much landlords are allowed to raise rent each year.
    The Measure being circulated in the City of Sacramento would establish an elected rent board that has no limit on the amount of money those elected can earn by serving on the rent board. There are also no limits in the campaign contributions they can accept in their campaign for the rent board. The only other local jurisdiction that has an elected rent board throughout California is Berkeley, other cities appoint members to serve on the rent board.
    The first rent board will set unlimited fees on landlords to fund needed operating expenses of the rent board.
    It is anticipated an elected rent board in the City of Sacramento would require at least 20 new city employees, in addition to the elected board members. Considering the costs of administering rent boards in other cities, we anticipate a rent board in the City of Sacramento would likely cost $5 million per year.
    The rent board will determine how much landlords are allowed to raise rent between the 2% and 5% limit set in the ordinance. The rent board has the power to lower rent for specific tenants if they deem it necessary.
    The rent board will oversee disputes between landlords and tenants, and will have the power to subpoena personal information and emails as they determine necessary.
    In the event a landlord must pay a tenant relocation fees, the rent board will determine the exact amount of relocation owed from the landlord to the tenant, and can increase those costs outlined above as the rent board deems necessary.

Caylyn Wright, SAR Government Affairs Director