Governor Newsom Signs Bill Protecting Low Income Renters

Sacramento (Calif.)—Yesterday, Governor Gavin Newsom signed Assembly Bill 846, authored by Assemblymember Mia Bonta (D-Oakland), which protects renters living in affordable housing buildings financed through the Low Income Housing Tax Credit (LIHTC) program from rent gouging. AB 846 requires the California Tax Credit Allocation Committee (CTCAC) to adopt regulations, on or before June 30, 2025, to establish a limit on annual rent increases for tenants in existing LIHTC properties.

“We are gratified that five years after passage of the Tenant Protection Act–the strongest anti-rent gouging law in the nation–all tenants living in LIHTC properties will finally have the same protections from exorbitant rent increases as tenants in market-rate properties,” said Anya Lawler, Policy Advocate for the California Rural Legal Assistance Foundation. “The public subsidy that funds LIHTC units is supposed to provide housing stability for low-income renters. This bill gets us another step closer to delivering on that promise.”

The Tenant Protection Act (TPA) of 2019 limited rent increases in many rental properties in California to 5% plus CPI, with a maximum increase of 10%, but it does not cover deed-restricted affordable homes, including properties assisted through the LIHTC program. Earlier this year, CTCAC adopted a rent cap on LIHTC properties going forward that is equivalent to the TPA’s cap, but this left thousands of families in “grandfathered” existing affordable homes unprotected from rent gouging. AB 846 requires CTCAC to apply a cap to existing properties, ensuring that all LIHTC tenants have the same protections from exorbitant rent increases.

“As someone living in ‘affordable’ LIHTC housing, I feel very lucky in some ways,” said John Geoghegan, a resident at the Villas at Hamilton, a LIHTC-financed senior affordable housing complex in Marin County. “But at the same time, seniors like myself are on fixed incomes that cannot absorb year-over-year rent increases. When we’re not given the same protections and regulations as other renters, that means we lose our basic needs, like food and necessary medications, in order to keep a roof over our heads. This is not just a problem for myself and my 139 neighbors–people who want to remain in the community that they’ve grown up in, worked in for decades, raised families in, and paid taxes in. This is a problem for all low-income seniors across the state, and for anyone that’s concerned about the growing silver tsunami of seniors forced into homelessness in the only place they’ve known as home. But these rent hikes are not a pinch for us–they are an amputation.”

“We thank Governor Newsom for signing AB 846, our author, Assemblymember Mia Bonta, and her staff, and our co-sponsors at the California Rural Legal Assistance Foundation and the Western Center on Law and Poverty, who we fought alongside,” said Michelle Pariset, Director of Legislative Affairs at Public Advocates. “As the governor said, ‘There’s no issue that impacts the state in more ways on more days than the issue of housing. This is the original sin in the state of California.’ One of the best ways to ensure Californians—seniors, families and workers—are not driven into homelessness is to make sure they are not displaced from their affordable homes by an outrageous rent increase. This bill is a win for everyone who cares about stemming our growing affordable housing crisis.”

“With the passage of AB 846, the California legislature has ordered the closure of a loophole that left some of our most vulnerable residents open to rent gouging, despite living in government-subsidized housing,” said Katie McKeon, Attorney with Western Center on Law & Poverty. “All California tenants deserve the ability to thrive in their neighborhoods without the fear of displacement by large rent increases. We look forward to working with CTAC to implement this important victory.”

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The California Rural Legal Assistance Foundation (CRLAF) is a statewide non-profit civil legal aid organization providing free legal services and policy advocacy for California’s rural poor and some of the most marginalized communities—the unrepresented, the unorganized, and the undocumented. CRLAF seeks to bring about social justice by working to address the most pressing needs of our community in labor, housing, education equity, healthcare access, worker safety, citizenship, immigration, and environmental justice, through education and outreach, impact litigation, legislative and administrative advocacy, and public policy leadership at the state and local level.

Public Advocates Inc. is a nonprofit law firm and advocacy organization that challenges the systemic causes of poverty and racial discrimination by strengthening community voices in public policy and achieving tangible legal victories advancing education, housing, transportation equity, and climate justice.

Through the lens of economic and racial justice, Western Center on Law & Poverty litigates, educates, and advocates in courts, cities, counties, the State Capitol, and the public arena to secure just housing, health care, economy, and legal systems for Californians with low incomes. For more information, visit www.wclp.org.