If you own rental property in California, you were likely feeling a little nervous when Proposition 10 hit the ballot last November. The ballot initiative would have repealed the Costa Hawkins Rental Housing Act. Once that act was off the books, California cities would have much more freedom to impose rent control options.
Only, it’s not quite over yet. While the initiative failed to pass, California Gov. Gavin Newsom is still looking for ways to make housing more affordable. What does that mean as a California landlord?
Capping the Speed of Rent Increases
Newsom seems most interested in capping how fast landlords can raise the rent. Right now, California is relatively lax on rent increases. You can’t raise the rent during the term of the lease if the lease is more than 30 days in length, but that’s about it. Otherwise, you are relatively free to increase the rent as much as you want, unless the property is in a rent-controlled area, such as West Hollywood or Los Angeles.
Under Newsom’s leadership, this could change, and that’s not the only change he’s planning to make. Newsom is ready to confront the housing shortage.
Confronting the Housing Shortage
Rents wouldn’t be as high as they are if there wasn’t such a big housing shortage in California. Newsom is also taking on the housing shortage in an effort to provide more affordable homes for those in need. This is a huge task, but he does have a plan in place.
He intends to start with regional goals for housing and will use financial consequences to ensure those regions meet them. For instance, if a region doesn’t meet a goal, Newsom has warned that he’ll cut off transportation aid that the region would normally receive from California’s newly imposed gas tax.
Newsom also plans to make it easier to get housing projects off the ground. From fast-tracking new developments, so they aren’t held up during the California Environmental Quality Act process, to reducing local fees, he intends to make it easier for developers to build homes. As a landlord, that means you could pick up more property and collect more rent. Just remember that there is a great need for housing, so you’ll likely have lots of applicants. Utilize free tenant screening, so you end up with someone who will pay rent and treat your property with respect. That will make your job so much easier.
Who Will Do the Work?
Newsom has lots of people excited about the aspect of solving the housing crisis, but there is still one issue.
The state doesn’t have nearly enough construction workers to tackle this huge undertaking. Some have called for the governor to make changes to the education system so it’s more welcoming to construction workers, plumbers, and other tradespeople. If not, look for people to hit the road and move to California. There could be lots of job openings there soon. That means you could come across even more potential tenants.
Protect Your Property and Yourself in California
Rental properties are an excellent way to make money in California, but you need to protect yourself and your investment. Free tenant screening that includes a background check for tenants is an excellent way to protect your investment. Screen potential tenants before offering them the property. Then, use free landlord forms to collect the information you need, so you can welcome your new tenant.