Economy White Paper Series

A recently published report that alleges there may be widespread violations of a California law capping rent increases on tenants critically fails to support its allegations and, in light of available public data, the allegations themselves are unlikely to be true.

This White Paper responds to that report and in addition to finding poorly supported allegations, also finds that the recent rise in rents across the state is being driven primarily by increases in tenant incomes and is not the broad crisis that the report attempts to paint.

The law, the California Tenant Protection Act of 2019 (Assembly Bill 1482), places a 5% plus consumer price index (CPI) inflation cap on rent increases for existing tenants in the state, or a 10% cap, whichever is smaller. The report, released by the UC Berkeley Terner Center for Housing Innovation in collaboration with TechEquity Collaborative, claims there may be pervasive violations of this cap, but its analysis only examines asking rents for vacant units, something the law does not apply to.

“Housing affordability is clearly one of California’s most urgent and long-term challenges, but reports like this one, which allege actual legal malfeasance using entirely inapplicable data, represent a step backwards in discussing this critical and complex issue,” said Christopher Thornberg, Director of the Center for Economic Forecasting and author of our latest White Paper. “Sadly, the report, seems designed more for stoking political outrage than for helping to guide California towards better solutions.”