Advocates for affordable housing say it’s not just the monthly rent that makes it expensive to live in Sacramento. It’s also the many upfront costs — like hefty security deposits required by landlords.
That’s why advocates like Herman Barahona with the Sacramento Environmental Justice Coalition support Assembly Bill 12, a proposal that would cap deposits at a maximum of one month’s rent. The bill is making its way through the California Legislature.
Under existing state law, landlords can ask for security deposits of up to two months’ rent for an unfurnished apartment and three months’ rent for a furnished apartment. Rental housing groups along with the California Association of Realtors oppose the bill, arguing it would limit landlords’ ability to cover costly repairs and damage.
But Barahona says renters need protection from high costs, too. Some must come up with several thousand dollars in security deposits just to move into an apartment, he said.
“It’s definitely a big problem here in the Sacramento Valley,” explained Barahona, who is the lead community organizer with the coalition, which advocates for tenant rights. “This is a way of discriminating against many families who are working poor.”
Barahona said landlords are also increasingly requiring prospective renters to verify that they earn a monthly income of two to three times the rent. He said there’s no law against this, but it presents another hurdle for lower-income residents as they seek safe, affordable housing.
Rents spiked across Sacramento during the pandemic, pricing out many tenants in a region that not long ago was considered affordable. Currently, the average rent in Sacramento is $1,854 for an 827-square-foot apartment, according to the listing website RentCafe.com.
Assembly member Matt Haney, a Democrat who represents San Francisco and authored AB 12, says his bill would lower one of the high barriers to housing. Haney noted that median rent in California has sharply increased in the past two decades. A 2021 report from the California Housing Partnership found that median rent increased 35% between 2000 and 2021, while median renter household income rose only 6% during the same period.
“When renters can’t afford deposits they often have to borrow from predatory lenders, go into debt, or just stay put,” Haney, who chairs the Assembly Renters Caucus, said in a press release in April.
Haney’s bill is opposed by landlords large and small who say it could hurt their business.
“Further limiting a property owner's ability to financially cover property damage or unpaid rent is an unfair imposition for rental housing providers,” the California Apartment Association, wrote in opposition to the bill. The association represents thousands of rental property owners, investors and developers across the state.
Folsom landlord Raja Jagadeesan owns seven rental properties in the Sacramento area. He said the bill could hurt small landlords like himself who rely on deposits to make costly and ongoing health and safety repairs at their rental properties. He said it could also pave the way for more corporate rental owners.
“I think there’s got to be some protections for small landlords,” Jagadeesan said. “Because we’re the ones that will take the risk on people that maybe [corporate landlords] won’t.”
A spokesperson for Haney said the lawmaker is willing to discuss creating greater flexibility for small landlords as the bill moves forward.
The Assembly passed AB 12 last month by a party-line vote of 51-14. Most Republicans voted against the bill, though none spoke against it on the floor. It heads to the Senate next.
Contact CapRadio news reporter Chris Nichols at [email protected]
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