Californians have complained, with good reason, about their astronomical rents. One obvious cause is the state’s inability to build new housing. Another reason, less often discussed, is that the state makes it increasingly difficult for landlords to earn money from renting to tenants or to remove unpaying ones.
Many of California’s rental housing woes trace back to the so-called Tenant Protection Act of 2019. The law requires landlords of properties more than 15 years old to have one of several specified “just cause[s]” for removing a tenant—even if he has stayed past the end of his lease. If landlords can’t meet the terms, they must help pay tenants’ moving costs or waive the final month’s rent. Last year, the state expanded the law, letting tenants sue landlords for up to three times any “damages” and attorneys’ fees. Tenants know they have the upper hand in any removal proceeding now.
The government’s response to the pandemic worsened landlords’ headaches. The Centers for Disease Control and Prevention had instituted a national eviction moratorium, which the Supreme Court struck down in August 2021. California, however, kept its eviction pause in place until June 2022, while locally, San Francisco and Oakland did so through much of 2023. Los Angeles’s special renter protections, including a rent freeze, didn’t expire until early this year.
The end of those moratoria created a predictable flood of eviction notices, which are still working their way through and delaying housing courts. That backlog, and the state’s absurdly byzantine rules, have enabled tenants and squatters to stick around indefinitely. According to California law, if someone has lived (even illegally) in a place for 30 days, a landlord must complete a formal eviction process to remove him. If a landlord serves the tenant notice to leave, and he contests it, the law says a hearing should be scheduled in a few days. In practice, however, hearings are often put off for months.
The court process itself often leads to further delays. State law gives tenants the right to request a jury trial, and some places, like L.A., allow them to demand a free lawyer. Even if the tenant loses the suit, landlords sometimes have to wait months for an eviction warrant to be issued. If the tenants convince the sheriff that they have a “humanitarian” reason for staying, they can get more time before they are forcibly removed. The result of this ordeal is that landlords must wait months to evict a nonpaying tenant, or even a squatter, while they fail to collect rent and their properties get degraded or destroyed.
The state’s tenant accommodations would be comic if they weren’t so destructive. Consider one Los Angeles owner who rented out his accessory-dwelling unit for six months. After the lease expired, the resident took advantage of state and local tenancy laws and lived there, rent-free, for more than a year. She said that she would move only if the landlord paid $100,000 in relocation costs.
Some California citizens are taking direct action. After squatters invaded his mother’s house, Flash Shelton started a business that gave them a taste of their own medicine. Shelton enters squatters’ “homes” and refuses to leave, setting up video cameras to record every moment; his presence often prompts them to move away. Another new California company, Squatter Squad, promises “fast and effective squatter removal.” It typically charges up to $10,000 for the service but notes that the costs of allowing squatters to stay can be higher.
Instead of coming to landlords’ defense, the state government seems increasingly intent on protecting scofflaw tenants and squatters. State Attorney General Rob Bonta, for example, proclaims, “If you live in a rented home in California, you have rights. California law protects tenants from San Diego to Siskiyou—regardless of immigration status or employment status, race, or gender identity.” When a radical squatting group took control of a vacant Oakland house, the city’s mayor and Governor Gavin Newsom helped negotiate a deal to buy and turn over the property to them. Similarly, when a group occupied and rented out rooms at a $4.5 million Beverly Hills mansion, a local administrator pushed back against attempts to evict them, claiming that “squatters have rights.” Even the Los Angeles County Sheriff’s Department admits that removing such derelicts can be hard. The department’s web page explains that the “best way to deal with squatters is to prevent them from moving in.”
Tenants’ advocates make big claims about the necessity of these eviction protections to stabilize households and reduce homelessness. The research does not support them. A recent study showed that while stronger tenants’ rights did reduce evictions, as expected, they also led to higher rents, fewer vacancies, and higher homelessness rates.
The California legislature, meantime, keeps finding new ways to punish landlords. Sacramento recently passed a law forbidding landlords from “discriminat[ing]” against tenants with government housing vouchers. The state in fact prohibits discrimination in renting across 15 categories, from “source of income” to “genetic information” to “gender expression,” with punishing costs for noncompliance. Last year, Sacramento passed a law limiting the amounts many landlords can charge for security deposits; previously, they could charge two months’ rent, or three months’ for furnished units. Now, they are limited to one month’s worth for any apartment. (Be prepared for furnished-apartment offerings to disappear and all rents to go up to compensate for losses.)
One of the most distressing aspects of California’s recent anti-landlord push is the resurgence of rent control. The Tenant Protection Act, besides limiting evictions on older properties, forbade increasing rent by more than 10 percent per year. Few policies are more universally condemned by economists, on the right, left, and center, than rent control. One study found that a 1994 San Francisco law that expanded rent control cut the effective rental supply by 15 percent, since landlords either redeveloped their buildings or sold them to owner-occupants. The supply reduction led to—you guessed it—higher rents.
For years, cities and counties in California have imposed their own special version of rent control for mobile homes. Since the pandemic, more cities, such as Santa Rosa, National City, and Petaluma, have created or expanded mobile-home rent control. The state is moving in, too. After extensive lobbying by residents, the legislature in 2021 passed a bill to prevent a single mobile-home park, Rancho La Paz, from raising rent by more than 5 percent annually. A proposal to take the 5 percent limit statewide was put on hold as the Rancho La Paz case winds through the courts.
Radical tenants’ advocates aren’t satisfied with existing laws punishing landlords. The statewide tenants’ union, Tenants Together, makes clear that its goal is the end of private ownership of housing. It argues that “housing is a human right, not a commodity” and that the fight for tenants is just part of an effort to overthrow “structural oppression” by seeking “racial, gender, economic, environmental, and disability justice; trans and queer liberation, and indigenous sovereignty.”
Tenants’ unions and their allies have pushed several ballot measures to overturn a state law preventing cities from expanding typical rent control for buildings. Their 2018 and 2020 ballot measures each lost by about 20 percentage points, but they garnered enough signatures to put them on the ballot again this year. Despite California voters’ sensible opposition, advocates want to keep making it harder to be a landlord.
The key to solving California’s rental crisis is straightforward: build more housing. But developers will not do that, and landlords will not let, if it is impossible to collect money from tenants and remove those who don’t pay. Subjecting landlords to ever more laws and ever more lawsuits is deepening California’s housing crisis. The only ones truly benefiting are the activists, who can keep lamenting high rents and limited supply.