California AB 1157 aka the "Affordable Rent Act" Would Actually Cause Rents To Go Up . . . A LOT (2 Viewers)

[SkyChief]

As the saying goes . . . "Stupid is, as stupid does." This expression means that we can expect stupid people to say and do stupid things. Case in point: California lawmakers, who are proudly the stupidest collective body of lawmakers in the country, have predictably misnamed their absurd Rent-Control bill.

What AB 1157 will do:

•Authorizes Permanent Price Controls On Single-Family Homes, ADUs, and Condominiums. This bill would lower property values and discourage new housing construction, exacerbating California’s housing crisis.

• Targets Small Property Owners, Hitting Them The Hardest. Nearly 40% of California’s rental housing is owned by small “Mom & Pop” housing providers.

• Would Lead To Higher Market Rents. By discouraging new housing construction and pushing small housing providers out of the market, this bill would drive up market rents, hurting working families.

• Ignores Multiple Voter Mandates AGAINST Statewide Rent Control. California voters have rejected statewide rent control three times, most recently last year where every county in the state voted NO on statewide rent control.

• Limits annual rent increases to only 2%, which doesn't even keep up with inflation.

Here are the things that AB 1157 won't do:

• Does NOT provide funding for affordable housing or a requirement that it be built.

• Does NOT provide specific provisions to reduce rent.

I own a few rental properties in southern California. Most of our tenants haven't seen a rent hike in 8 years. If this nutty bill passes, I will definitely hike rents the absolute maximum amount (2%) without any thought. It will be automatic annual rent hikes for ALL our tenants.

I have friends who also own multiple rental units, and they have expressed the same sentiments.

This bill (AB 1157) is poison, and it would ultimately result in higher rents for renters. It's possibly the dumbest bill I have seen from the nincompoops in Sacramento.

 

[Maidenrules29]

So from what I'm understanding is this will mainly affect people who may own a second home and are renting it out to make a little bit of money. And this bill keeps their property value artificially low and prevents them from raising rent more than 2% on their tenants? It sounds like a slippery slope. It goes against the whole idea of real estate and the american dream of home ownership.

 

[SkyChief]

So from what I'm understanding is this will mainly affect people who may own a second home and are renting it out to make a little bit of money.

AB 1157 applies to everyone and anyone who rents property - - even people who rent out rooms in their primary residence (ADU).

And this bill keeps their property value artificially low and prevents them from raising rent more than 2% on their tenants? It sounds like a slippery slope. It goes against the whole idea of real estate and the american dream of home ownership.

Agreed, but the key take-away is that the 2%/year cap means that rental property owners cannot keep up with inflation. This cap is what will decrease property values, and the cost of rental housing would go UP, because it discourages new housing, and people who rent units will get automatic annual rent-hikes, whereas before AB 1157, many renters haven't seen their rent increased in years.

This atrocious bill would force owners of rental units to hike rents the maximum allowed by law. Annual rent hikes would be essentially guaranteed.

 

[Noodlegawd]

As the saying goes . . . "Stupid is, as stupid does." This expression means that we can expect stupid people to say and do stupid things. Case in point: California lawmakers, who are proudly the stupidest collective body of lawmakers in the country, have predictably misnamed their absurd Rent-Control bill.

What AB 1157 will do:

•Authorizes Permanent Price Controls On Single-Family Homes, ADUs, and Condominiums. This bill would lower property values and discourage new housing construction, exacerbating California’s housing crisis.

• Targets Small Property Owners, Hitting Them The Hardest. Nearly 40% of California’s rental housing is owned by small “Mom & Pop” housing providers.

• Would Lead To Higher Market Rents. By discouraging new housing construction and pushing small housing providers out of the market, this bill would drive up market rents, hurting working families.

• Ignores Multiple Voter Mandates AGAINST Statewide Rent Control. California voters have rejected statewide rent control three times, most recently last year where every county in the state voted NO on statewide rent control.

• Limits annual rent increases to only 2%, which doesn't even keep up with inflation.

Here are the things that AB 1157 won't do:

• Does NOT provide funding for affordable housing or a requirement that it be built.

• Does NOT provide specific provisions to reduce rent.

I own a few rental properties in southern California. Most of our tenants haven't seen a rent hike in 8 years. If this nutty bill passes, I will definitely hike rents the absolute maximum amount (2%) without any thought. It will be automatic annual rent hikes for ALL our tenants.

I have friends who also own multiple rental units, and they have expressed the same sentiments.

This bill (AB 1157) is poison, and it would ultimately result in higher rents for renters. It's possibly the dumbest bill I have seen from the nincompoops in Sacramento.

More regulations on people who own existing properties, but no thoughts about reducing regulations for people who want to build new ones.

Emblematic of the disease of the left.

 

[BitterPill]

AB 1157 applies to everyone and anyone who rents property - - even people who rent out rooms in their primary residence (ADU).

Agreed, but the key take-away is that the 2%/year cap means that rental property owners cannot keep up with inflation. This cap is what will decrease property values, and the cost of rental housing would go UP, because it discourages new housing, and people who rent units will get automatic annual rent-hikes, whereas before AB 1157, many renters haven't seen their rent increased in years.

This atrocious bill would force owners of rental units to hike rents the maximum allowed by law. Annual rent hikes would be essentially guaranteed.

It is already old hat, and you didn't even know:

CAA derails AB 1157 rent control measure for rest of 2025

The California Apartment Association has successfully derailed legislation that sought to impose stricter statewide rent caps and broader eviction controls, halting the proposal for the rest of 2025. Less than…

caanet.org

Now I am suspicious of your claim to own rental properties in California.

 

[SkyChief]

It is already old hat, and you didn't even know:

CAA derails AB 1157 rent control measure for rest of 2025

The California Apartment Association has successfully derailed legislation that sought to impose stricter statewide rent caps and broader eviction controls, halting the proposal for the rest of 2025. Less than…

caanet.org

It stalled. This means that it won't go on the ballot this year. But it will certainly go on the ballot at some point. Never underestimate the stupidity of California lawmakers. These are (collectively) the dumbest lawmakers in the country.

Now I am suspicious of your claim to own rental properties in California.

Then just pretend that I don't own any rental properties. That's harmless.

You do you.

 

[Phys251]

As the saying goes . . . "Stupid is, as stupid does." This expression means that we can expect stupid people to say and do stupid things. Case in point: California lawmakers, who are proudly the stupidest collective body of lawmakers in the country, have predictably misnamed their absurd Rent-Control bill.

What AB 1157 will do:

•Authorizes Permanent Price Controls On Single-Family Homes, ADUs, and Condominiums. This bill would lower property values and discourage new housing construction, exacerbating California’s housing crisis.

• Targets Small Property Owners, Hitting Them The Hardest. Nearly 40% of California’s rental housing is owned by small “Mom & Pop” housing providers.

• Would Lead To Higher Market Rents. By discouraging new housing construction and pushing small housing providers out of the market, this bill would drive up market rents, hurting working families.

• Ignores Multiple Voter Mandates AGAINST Statewide Rent Control. California voters have rejected statewide rent control three times, most recently last year where every county in the state voted NO on statewide rent control.

• Limits annual rent increases to only 2%, which doesn't even keep up with inflation.

Here are the things that AB 1157 won't do:

• Does NOT provide funding for affordable housing or a requirement that it be built.

• Does NOT provide specific provisions to reduce rent.

I own a few rental properties in southern California. Most of our tenants haven't seen a rent hike in 8 years. If this nutty bill passes, I will definitely hike rents the absolute maximum amount (2%) without any thought. It will be automatic annual rent hikes for ALL our tenants.

I have friends who also own multiple rental units, and they have expressed the same sentiments.

This bill (AB 1157) is poison, and it would ultimately result in higher rents for renters. It's possibly the dumbest bill I have seen from the nincompoops in Sacramento.

Instead of singling out California for the housing cost crisis, what's YOUR solution?

 

[SkyChief]

Instead of singling out California for the housing cost crisis, what's YOUR solution?

I don't pretend to have any solution. My only claims are that AB 1157 is stupid, and will do exactly the opposite of what it is intended to do (which is to make housing more affordable to renters).

If AB 1157 passes, Rental prices WILL go UP. Also, voters in EVERY county (58) in California overwhelmingly oppose statewide rent-control.

 

[Phys251]

I don't pretend to have any solution. My only claims are that AB 1157 is stupid, and will do exactly the opposite of what it is intended to do (which is to make housing more affordable to renters).

If AB 1157 passes, Rental prices WILL go UP. Also, voters in EVERY county in California overwhelmingly oppose statewide rent-control.

Make it much harder for localities to oppose high-density development. NIMBYs are a key contributor to housing costs.

 

[BitterPill]

It stalled. This means that it won't go on the ballot this year. But it will certainly go on the ballot at some point. Never underestimate the stupidity of California lawmakers. These are (collectively) the dumbest lawmakers in the country.

Then just pretend that I don't own any rental properties. That's harmless.

You do you.

To be on the ballot, it would need to first become a proposition.

Do you actually live in California?

 

[SkyChief]

Make it much harder for localities to oppose high-density development.

Exactly, and this would drive property values down. Lowered property values would discourage new home development because developers would see a much lower profit margin.

Developers would simply choose to build in a state with less regulation and restrictions.(which is basically ALL of them).

NIMBYs are a key contributor to housing costs.

Insanely high Property taxes and other taxes are the main factors making rental housing so expensive in California. When our Property taxes go up, we pass that cost on to our tenants in the form of rent hikes.

 

[Phys251]

Exactly, and this would drive property values down. Lowered property values would discourage new home development because developers would see a much lower profit margin.

Developers would simply choose to build in a state with less regulation and restrictions.(which is basically ALL of them).

There has to be a balance between supply-demand and regulations. Local regulations tend to be a problem, however.

Insanely high Property taxes and other taxes are the main factors making rental housing so expensive in California.

Other states such as Texas have high property taxes, but I don't see conservatives whining about real estate prices in Texas, when they are getting quite high.

How local rules fuel high housing costs in 11 Texas cities

Texas desperately needs more and denser housing to keep up with demand. But zoning restrictions get in the way, a Texas Tribune analysis found.

apps.texastribune.org

 

[BitterPill]

There has to be a balance between supply-demand and regulations. Local regulations tend to be a problem, however.



Other states such as Texas have high property taxes, but I don't see conservatives whining about real estate prices in Texas, when they are getting quite high.

How local rules fuel high housing costs in 11 Texas cities

Texas desperately needs more and denser housing to keep up with demand. But zoning restrictions get in the way, a Texas Tribune analysis found.

apps.texastribune.org

According to taxfoundation.org, California's effective property tax ranked 32 in 2023 with Illinois at 1 being the highest and Hawaii at 50 the lowest:

Property Taxes by State and County, 2025

Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones...

taxfoundation.org

 

[ttwtt78640]

There has to be a balance between supply-demand and regulations. Local regulations tend to be a problem, however.



Other states such as Texas have high property taxes, but I don't see conservatives whining about real estate prices in Texas, when they are getting quite high.

How local rules fuel high housing costs in 11 Texas cities

Texas desperately needs more and denser housing to keep up with demand. But zoning restrictions get in the way, a Texas Tribune analysis found.

apps.texastribune.org

Local governments (in Texas) have a vested interest in having rising property (assessed) values, since they get the majority of their revenue from property taxation.

We own our (952 sq. ft.) manufactured (mobile) home, but rent the 1/2 acre lot it sits on (currently for $600/month). After our homestead and senior exemptions, our last annual property tax bill was under $68.

 

[What if...?]

So from what I'm understanding is this will mainly affect people who may own a second home and are renting it out to make a little bit of money. And this bill keeps their property value artificially low and prevents them from raising rent more than 2% on their tenants? It sounds like a slippery slope. It goes against the whole idea of real estate and the american dream of home ownership.

Being a landlord for retirement income is new since I was a kid. “Peasants for pensions”

Renting was what you did because you couldn’t afford a mortgage. Now rent is somebody else’s mortgage, insurance and profit.

Hedge funds are buying all the entry level homes out from under folks who saved for years. With the stated intent to turn those homes into rentals.

Renting for life is more profitable that letting the cattle get ahold of some capital.

 

[slavablueberryjam]

Instead of singling out California for the housing cost crisis, what's YOUR solution?

My solution would be to start building large amounts of high rises that are specifically geared towards high density housing. California is really beautiful. It's housing situation is not.

 

[slavablueberryjam]

Being a landlord for retirement income is new since I was a kid. “Peasants for pensions”

Renting was what you did because you couldn’t afford a mortgage. Now rent is somebody else’s mortgage, insurance and profit.

Hedge funds are buying all the entry level homes out from under folks who saved for years. With the stated intent to turn those homes into rentals.

Renting for life is more profitable that letting the cattle get ahold of some capital.

That is why this bill helps those that have a lot of capital to buy homes. That said, you should see homes in said home state.

 

[What if...?]

I don't pretend to have any solution. My only claims are that AB 1157 is stupid, and will do exactly the opposite of what it is intended to do (which is to make housing more affordable to renters).

If AB 1157 passes, Rental prices WILL go UP. Also, voters in EVERY county (58) in California overwhelmingly oppose statewide rent-control.

Many people I know are seeing 10% rent increases every year. That’s the “peasants for pensions” model.

Financial advisers recommending folks get rental properties. Which reduces homes available for sale, which drives up housing costs. Which justifies rent hikes. Folks are literally paying as much in rent in two or three years as the house cost when new 50 years ago.

It’s not sustainable. But end stage capitalism is gonna hurt everybody not playing “who can be the richest most powerful person in the world”.

Buckle up! It’s gonna suck!

 

[Gatsby]

California will try anything to avoid building more housing. No rent-control scheme is too ridiculous, convoluted, or economically illiterate for California. But God forbid they actually let people build stuff on their own land.

A couple years ago I was feeling encouraged that maybe California was turning a corner when they passed a bunch of YIMBY legislation in short succession. But since then they've mostly let NIMBYs continue to tie it up in the courts so not much has actually gotten built. I've concluded that even when California passes good laws, they are less interested in the outcome than they are in looking like they're doing something about the problem.

California is a good example of how a monolithic Democratic state should NOT be run...and if Democrats are smart they will learn from this failure and try to figure out what they did wrong so that this doesn't replicate elsewhere.

 

[Uncensored2008]

As the saying goes . . . "Stupid is, as stupid does." This expression means that we can expect stupid people to say and do stupid things. Case in point: California lawmakers, who are proudly the stupidest collective body of lawmakers in the country, have predictably misnamed their absurd Rent-Control bill.

What AB 1157 will do:

•Authorizes Permanent Price Controls On Single-Family Homes, ADUs, and Condominiums. This bill would lower property values and discourage new housing construction, exacerbating California’s housing crisis.

• Targets Small Property Owners, Hitting Them The Hardest. Nearly 40% of California’s rental housing is owned by small “Mom & Pop” housing providers.

• Would Lead To Higher Market Rents. By discouraging new housing construction and pushing small housing providers out of the market, this bill would drive up market rents, hurting working families.

• Ignores Multiple Voter Mandates AGAINST Statewide Rent Control. California voters have rejected statewide rent control three times, most recently last year where every county in the state voted NO on statewide rent control.

• Limits annual rent increases to only 2%, which doesn't even keep up with inflation.

Here are the things that AB 1157 won't do:

• Does NOT provide funding for affordable housing or a requirement that it be built.

• Does NOT provide specific provisions to reduce rent.

I own a few rental properties in southern California. Most of our tenants haven't seen a rent hike in 8 years. If this nutty bill passes, I will definitely hike rents the absolute maximum amount (2%) without any thought. It will be automatic annual rent hikes for ALL our tenants.

I have friends who also own multiple rental units, and they have expressed the same sentiments.

This bill (AB 1157) is poison, and it would ultimately result in higher rents for renters. It's possibly the dumbest bill I have seen from the nincompoops in Sacramento.

And this is the entire purpose of the bill;

Targets Small Property Owners, Hitting Them The Hardest. Nearly 40% of California’s rental housing is owned by small “Mom & Pop” housing providers.

The large rental developers have already bought the Assemble to allow them to destroy single family housing by building massive rental complexes in the middle of residential neighborhoods. Now they are using the bought and paid for Assembly to put their competition out of business.

 

[ALiberalModerate]

There has to be a balance between supply-demand and regulations. Local regulations tend to be a problem, however.



Other states such as Texas have high property taxes, but I don't see conservatives whining about real estate prices in Texas, when they are getting quite high.

How local rules fuel high housing costs in 11 Texas cities

Texas desperately needs more and denser housing to keep up with demand. But zoning restrictions get in the way, a Texas Tribune analysis found.

apps.texastribune.org

Average home price in Houston: $267,854
Average home price in Dallas: $311,280
Average home price in Austin: $522,717
Average home price in San Antonio: $252,434

Average home price in Los Angeles: $978,157
Average home price in San Diego: $1,026,680
Average home price in San Francisco: $1,301,388
Average home price in San Jose: $1,521,021

Median Household income Texas: 79k
Median Household income California: 95k

Median incomes are higher in California, but the after tax income is much closer to incomes in Texas. I am no fan of Texas politics, but it is a state that has kept it's permitting and regulations in check enough for home building to meet demand. In contrast, California has not. In terms of disposable income, would you rather be a software engineer earning $160k a year in Houston Texas, or one earning $189k a year in the Bay Area?

 

[Gatsby]

Instead of singling out California for the housing cost crisis, what's YOUR solution?

1. Build lots and lots more housing.
2. Upzone cities or entire counties. Especially the Bay Area, Los Angeles County, Orange County, and San Diego County.
3. Ban SFH zoning statewide. (California, to its credit, already did this, but NIMBYs are still tying it up in court.)
4. Allow mixed-use buildings up to 5 stories tall everywhere, in any city or county where the cost-of-living is at least 2x the national average.
5. Stop allowing environmental review laws and historic preservation laws to be used as a weapon to prevent new housing from being built.

California makes it extremely difficult to build anything. And even on the occasions where they pass good housing reform laws, like #3, they still manage to trip over their own dicks because they include a bunch of bureaucratic procedural garbage that ensures it will never actually be implemented.

 

[ALiberalModerate]

California will try anything to avoid building more housing. No rent-control scheme is too ridiculous, convoluted, or economically illiterate for California. But God forbid they actually let people build stuff on their own land.

A couple years ago I was feeling encouraged that maybe California was turning a corner when they passed a bunch of YIMBY legislation in short succession. But since then they've mostly let NIMBYs continue to tie it up in the courts so not much has actually gotten built. I've concluded that even when California passes good laws, they are less interested in the outcome than they are in looking like they're doing something about the problem.

California is a good example of how a monolithic Democratic state should NOT be run...and if Democrats are smart they will learn from this failure and try to figure out what they did wrong so that this doesn't replicate elsewhere.

Exactly. If you want to look at a well ran blue state, look at Minnesota or Colorado. California is terribly governed.

 

[ttwtt78640]

Instead of singling out California for the housing cost crisis, what's YOUR solution?

Move to Texas.

 

[phoenix2020]

1. Build lots and lots more housing.
2. Upzone cities or entire counties. Especially the Bay Area, Los Angeles County, Orange County, and San Diego County.
3. Ban SFH zoning statewide. (California, to its credit, already did this, but NIMBYs are still tying it up in court.)
4. Allow mixed-use buildings up to 5 stories tall everywhere, in any city or county where the cost-of-living is at least 2x the national average.
5. Stop allowing environmental review laws and historic preservation laws to be used as a weapon to prevent new housing from being built.

California makes it extremely difficult to build anything. And even on the occasions where they pass good housing reform laws, like #3, they still manage to trip over their own dicks because they include a bunch of bureaucratic procedural garbage that ensures it will never actually be implemented.

I don’t know where in the area you currently live but at least in South Bay and San Jose, there are large apartment complexes popping up everywhere. These are all large, 4-6 level relatively high density units.

At the San Jose town hall with our Mayor that I attended a couple of weeks ago, this obviously came up. His frustration was that the city was regularly approving projects, but funding would falter because such complexes are expensive and the developers get cold feet about whether the juice will be worth the squeeze. He mentioned this is a clear pattern so they are focusing more on zoning for duplex, triplex units and the like that up density and create more housing without as high an up front capital cost.